University of Toledo Professor Makes Major Strides in Financial Research
March 25, 2024 | John B. and Lillian E. Neff College of Business and Innovation News
By John Anderson III
Dr. Marc Simpson, professor of finance and the John B. Neff Endowed Chair at The University of Toledo's John B. and Lillian E. Neff College of Business and Innovation, continues to solidify himself as a leading voice in the field of financial research.
Over the past year, Dr. Simpson has authored and co-authored a series of groundbreaking research papers published in top academic journals.
These works have garnered significant acclaim, including the prestigious Best Paper
in Finance Award at the Academy of Economics and Finance Meetings 2024.
Dr. Simpson's research investigates critical aspects of financial markets, offering valuable insights for both academics and practitioners.
One of his most impactful studies, co-authored with Axel Grossmann, titled "The Resurrected Size Effect Still Sleeps in the (Monetary) Winter," sheds new light on the interaction between monetary policy and the "size effect" – the tendency of smaller stocks to outperform larger ones.
This study reveals that fluctuations in monetary policy significantly influence the size premium, with implications for investment strategies.
In another significant contribution, Dr. Simpson, alongside Axel Grossmann and Thanh Ngo, explored the surprising link between a country's level of secrecy and the success of American Depositary Receipts (ADRs) in their paper "Societal Secrecy and ADR IPOs Underpricing."
This research, spanning decades of data, suggests that firms from secretive countries experience greater success when issuing ADRs in transparent markets.
These findings offer valuable insights into global investment strategies.
Dr. Simpson's research extends beyond market behavior.
His collaborative work with Axel Grossmann titled "The Role of Restrictive Covenants in Moody's and Standard and Poor's Debenture Credit Ratings" offers valuable insights for credit rating agencies.
This study demonstrates the positive impact of restrictive covenants on credit ratings, particularly for bonds on the cusp of investment grade.
Dr. Simpson, along with Dr. Gary Moore, professor emeritus in UToledo’s Neff College, further tackled the challenging task of predicting future earnings in their paper "Which Sustainable Growth Rate is Best at Forecasting Actual Growth?"
Published in the American Journal of Business, this study analyzes various growth rate models and their efficacy in forecasting future performance, providing valuable tools for businesses seeking accurate financial planning.
Dr. Simpson's collaborative efforts with Axel Grossmann continue in their paper "Predictability and Forecasting Performance of Major Euro Exchange Rates Using a Relative PPP-Based Equilibrium Model," published in Research in International Business and Finance.
This research proposes an innovative technique for forecasting currency movements based on deviations from purchasing power parity, offering valuable tools for investors and economists navigating periods of market volatility.
In addition to his remarkable research achievements, Dr. Simpson has recently joined the editorial team at the Journal of Economics and Finance as an Associate Editor, further solidifying his commitment to academic excellence and contributing to the advancement of financial scholarship.