“If we properly observe celestial phenomena we may demonstrate the laws which regulate them.” -Aristotle
This quote from Aristotle has always captured David Ikenberry’s interest and inspired his approach to scholarship. It was carved in the wall of the main campus gate at Rice University, where Ikenberry had his first academic appointment as an Assistant Professor of Finance.
As a financial economist, David Ikenberry’s research program has followed that same observational journey. Dr. Ikenberry is an empiricist. In other words, he studies and observes the financial world to better understand and describe how it functions. For many of his papers, this has meant looking at how markets (or investors) behave and how they incorporate company information.
As a young scholar, much of David Ikenberry’s work looked at long-horizon stock returns subsequent to various information events. In the early 1990s, this type of scholarship was not widely accepted or appreciated, and many of his findings contradicted a key paradigm in financial economics known as “market efficiency”. Today, these early findings are often classified by some as part of a broader canon of work referred to as Behavioral Finance.
After publishing a couple papers in this area, David and a team of colleagues began to look carefully at a single type of corporate event known as a “share repurchase.” Back then, it was quite common for companies when announcing these buyback programs to also add editorial color to their press releases, often stating their stock was undervalued. This enticing language spurred the team into publishing one of the most empirically thorough papers of its time. They found that many of these companies had a point when they claimed their stock was mis-priced – a result that was of keen interest both inside and outside academia.
While David Ikenberry has not intentionally focused on risky or controversial work, much of his inquiries have ended up pushing the edge of what was accepted as mainstream paradigm. The concept of tenure is intended to liberate faculty to take on the tough questions that challenge the understanding of respective disciplines. David believes the best scholarship is that which tries to do the same – to challenge current understandings and perceptions.
Additionally, a key research value David has tried to live by is to share findings more broadly by making sure the work is accessible to many people. Quite frequently, once papers find their way into respected journals, scholars tend move on to their next pressing project while their published work begins to “collect dust.” With David’s papers, he has spent substantial time with corporate finance executives, government officials, professional investors and journalists to broaden the impact not only of his own work but the work of others, so that we might better understand the world around us.
David believes scholarly work needs to be disseminated more broadly and admires schools which are more aggressive in making the work of their faculty more accessible. Moreover, in today’s news-hungry world there are ever more outlets eager to share the findings of impactful work. There are ultimately many ways research can reach audiences, particularly with the technology available today. David shares more examples of that on the Service page.
A comprehensive archive of David’s research and published work is available at Ikenberry Academics.com.