Eric Rasmusen’s Weblog

I received a rejection letter recently that puzzles me. My co- authors and I don’t really see how the criticisms below apply to our paper, apart from the single spacing and not citing any articles from that journal. We would welcome any comments. Don’t worry about being overly frank. We are especially interested in whether Empirical Finance has some customary style we are not following. Here is the paper’s abstract:

“Executive Compensation in Japan: Estimating Levels and Determinants from Tax Records” (with Minoru Nakazato and J. Mark Ramseyer). Most studies of executive pay have data on pay, but not on total income. Studies of executives in Japan do not even have good data on pay. We, too, lack direct data on Japanese executive salaries, but we do have data on the incomes of the richest executives, and some indication of which executives have substantial capital income. From this, we use tobit regression analysis to conclude that executive pay in Japan depends on firm size, and to a lesser extent on performance as measured by accounting indicators, but not on stock price. We find that corporate governance variables such as board composition, have mixed effects. Paper, data, and programs at http://www.rasmusen.org/papers/exec/exec.htm.

Here is the rejection letter:

Dear Professor Eric Rasmusen,

This email deals with your manuscript, Executive Compensation in Japan: Estimating Levels and Determinants from Tax Records. I have read the paper and at the moment it is not ready to send to a referee. It is potentially an interesting topic but you really test no hypotheses and the paper is in a form that is very difficult to read. You basically throw a lot of facts and some regressions at the readers. It is not in standard presentation style for finance journals (single spaced for one). The JCF has moved to a highly rated finance journal by providing papers that are readable, usuable and analyze an important question. You at most have the third. Plus you have not really placed your work in the context of JCF articles (we have several interesting articles on compensation).

Because the topic is interesting and important (assuming you are testing something), I am willing to consider a revision. I must also note the realities of the journal. In today’s environment the Journal of Corporate Finance must reject most papers. The number and quality of submissions has grown tremendously in the last year and unfortunately the rejection rate is becoming very high. We are able to accept only approximately 5 percent of submissions. Thus, we must reject some very good papers and usually do not work with papers that need major revisions. Two editors must accept the paper. It is a very high hurdle and this letter in no way promises publication.

This entry was posted on Friday, September 21st, 2007 at 7:00 pm and is filed under Economics, Writing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.