Abstract

Academic finance faculty earn a premium relative to other business school faculty. We show that the rewards to publishing outside of the top journals (JF, JFE, RFS) are significantly lower in finance relative to a broader set of journals in other business school fields. Revealed preferences from a journal submission survey suggest these incentives influence behavior. We estimate a lower unconditional probability of a top publication in finance, which raises its marginal value, leading to higher compensation. The opportunity cost of academic finance versus industry is also larger relative to other departments. Our results complement a number of recent studies on the rise of finance industry wages and suggest a novel channel that raises the production costs of finance-educated workers.