Thursday, April 16, 2015

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Measuring a Prolific Career
G. William Schwert

Eugene Fama (left) receives his Nobel Prize in 2013
from Sweden’s King Carl XVI Gustaf at the awards ceremony
in Stockholm. Fama was named the 2013 Nobel Prize Laureate
in Economic Sciences.
The remarkable career of Eugene Fama gets a by-the-numbers look in a new paper coauthored by Simon professor G. William Schwert.

“Gene Fama’s Impact: A Quantitative Analysis,” written by Schwert and Rene Stulz of The Ohio State University, will be a chapter in an upcoming book about Fama’s career to be published by the University of Chicago Press.

Fama, the Robert R. McCormick Distinguished Service Professor of Finance at Chicago, is widely recognized as the father of empirical finance. He won the Nobel Prize in Economic Sciences in 2013 and has published highly cited papers over six decades. His most cited papers were published in 1970, 1983, and 1993.

“Those papers were notable because they opened up new ways for financial economists to think about their field,” writes Schwert, who is a Distinguished University Professor and professor of finance and statistics. Fama’s work on efficient capital markets is so ingrained in the profession that he now is rarely cited in papers that incorporate it.

It is the rare scholar who stays involved with research at the forefront of his or her field for 50 years, Schwert says. Fama got busy early on and kept at it, making big contributions in his twenties and producing work in his fifties cited by the Nobel Prize committee.

Schwert’s analysis found more than 140,000 Google citations for Fama’s work. By comparison, the median number of citations for fellows in the American Finance Association is 32,792.

Also eye-opening are the quantity and quality of Fama’s students—and the resulting reach of his influence in the finance profession. Among his students are a Nobel Prize winner, six AFA presidents, and four editors of top finance journals. Fama advised 102 students as chair or as a member of their dissertation committees. Of these, 57 have more than 1,000 Google Scholar citations. Eleven have more than 10,000.

Fama’s influence is evident at Simon. He served on the dissertation committees of Michael Jensen, Ross Watts, Ray Ball, and Schwert himself; he also taught Jerold Warner and Charles Plosser. As editor of the Journal of Financial Economics, Schwert is particularly fond of Fama’s history of quick and thorough work as a referee. “Throughout the last 20 years, he’s been one of the most frequent and one of the fastest referees for the Journal of Financial Economics, not typical of academicians over the age of 50,” Schwert says.

“He’s a Nobel Prize winner. He could be focused on himself and not take time out to read others’ papers. Besides that, referee reports are anonymous. You don’t even get any personal honor for giving somebody a good idea.

“It’s a good role model for the rest of us on how important the intellectual part to being an academic is,” Schwert concludes.

—Sally Parker


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