S5 Ep22: What is the purpose of a finance professor?

Episode Summary

Executive Summary: Alex Edmonds argues that finance professors should define success by creating and disseminating knowledge, not just by publications, tenure, or prestige. He urges academics to pursue topics they care about, treat teaching and public communication as central, credit others more generously, and publish rigorous research even when results are unpopular or counter to confirmation bias.

Main Topics: Purpose of a finance professor (Priority: 5/5): Edmonds frames a professor’s purpose as creating and disseminating knowledge, analogous to purposeful firms that create social value beyond profit. Passion over popularity in research (Priority: 5/5): He argues that scholars should follow topics they care about, because passion sustains long, uncertain publication processes and can lead to more impactful work. Luck, rejection, and academic resilience (Priority: 4/5): He emphasizes that publication outcomes depend partly on luck, so academics should focus on what they control: whether they are proud of their work and willing to persist through rejection. Collegiality and credit in academic debate (Priority: 4/5): Edmonds criticizes overly aggressive seminar and conference behavior and calls for more crediting of others’ work instead of rivalry and denigration. Teaching as under-rewarded but essential (Priority: 5/5): He says teaching is central to a professor’s mission but is weakly rewarded in tenure and evaluations often measure popularity rather than genuine educational value. Public communication and impact (Priority: 5/5): He wants academics to communicate more outside the profession, but argues that impact should be based on rigorous peer-reviewed research rather than sloppy consultancy-style confirmation bias. Finance research on major social problems (Priority: 4/5): He links the profession’s purpose to important areas like climate change, inequality, poverty, ESG, and China, arguing finance can contribute meaningfully through focused research.

Key Arguments: A finance professor’s purpose is the creation and dissemination of knowledge, not merely career advancement or citation counts. Teaching matters because it serves students directly, yet the system largely ignores teaching quality in tenure and promotion. Working on personally meaningful topics can be rational even in a publish-or-perish environment because luck strongly affects outcomes and passion sustains persistence. Academia should value disagreement but reject hostility, intimidation, and unnecessary bullying in seminars and refereeing. Scholars should give more credit to other researchers and use platforms like social media to disseminate interesting work. Teaching evaluations are flawed because they often reward entertainment and easiness rather than rigor or challenge. Academic work should be communicated to practitioners and the public when appropriate, but only if it is rigorous and not designed to flatter existing beliefs. Journals should reward important and scientifically sound questions, even when results are unpopular or counterintuitive. Finance professors can help address climate change, inequality, poverty, and sustainable finance by choosing topics they care about and pursuing them rigorously.

Data Points: Rejected from top finance journals: 2 - Edmonds says his ESG paper was rejected by two top finance journals before eventual publication. Publication outlet mentioned: Journal of Financial Economics - He says the employee satisfaction paper eventually appeared in JFE after early rejections. Teaching load mentioned: 6 hours straight - He describes teaching an elective on responsible business for six continuous hours as energizing. Special issue topics mentioned: 2 - He says the Review of Finance ran or is running special issues on sustainable finance and China. Rejections during tenure package era: Physical copies of papers stacked in chronological order - Used as anecdotal evidence about the tenure process and the emotional weight of academic output. Examples of research methods criticized: 90 regressions, zero significant - He cites a flawed diversity study that ran many regressions yet claimed results in its executive summary.

Pivotal Quotes: "What is the purpose of a finance professor?" — Tim Phillips: The framing question introducing Edmonds’ keynote and discussion. "The purpose of a professor is the creation and dissemination of knowledge." — Alex Edmonds: Core statement defining academic purpose and linking it to teaching and research. "We focus too much on disagreements." — Alex Edmonds: His critique of the tone and incentives in seminars, refereeing, and academic status competition.

Implications: The episode urges finance academics to value mission, rigor, and impact over status games. For listeners, it suggests better teaching, more honest public communication, and research choices driven by substance rather than fashion or incentives.