Professor of Finance
London Business School

Mercers School Memorial
Emeritus Professor of Business
Gresham College

American Finance Association

Non-Executive Director
The Investor Forum

Welcome to my website! I’m Alex Edmans, a Professor of Finance.

I focus on purposeful business, sustainable investing, corporate governance, and behavioural finance. 

This website contains both academic research and resources for practitioners. The latter include newspaper articles, submissions to policy consultations, blog posts and talks.

For materials on purposeful business or sustainable investing, please view my sister website


New book: Grow the Pie: How Great Companies Deliver Both Purpose and ProfitFT Business Books of the YearFT/ISFFC Award for Excellence in Sustainable Finance Education
– Preface to the Updated and Revised paperback edition

Apr 23: New paper, Diversity, Equity, and Inclusion. Perceptions of DEI by employees are unrelated to the standard measures of demographic diversity focused on by academics and practitioners. DEI is correlated with superior future accounting performance but demographic diversity is not.

Apr 23: Employee Satisfaction, Labor Market Flexibility, and Stock Returns Around The World forthcoming in Management Science. Companies with high employee satisfaction outperform peer firms, but only in countries with high labor market flexibility. ESG strategies should take institutional context into account.

Mar 23The End of ESG published in Financial Management. ESG is both very important and nothing special. It’s very important for long-term value, and thus relevant for everyone, not just ESG folks. It’s nothing special versus other drivers of value and shouldn’t be put on a pedestal.

Feb 23: Applying Economics – Not Gut Feel – To ESG. ESG is no different from any other investment that generates financial and social value. Thus, we can apply decades of academic research on corporate finance, asset pricing, and welfare economics to ESG issues rather than shooting from the hip.

Jan 23: Learnings From 1,000 Rejections. Common themes from rejection letters for nearly 1,000 manuscripts at the Review of Finance, which aim to provide guidance for future research.

Dec 22: New paper, A Theory of Fair CEO Pay. Optimal executive pay when CEOs are motivated not only by consumption incentives but notions of fairness.

June 22: New paper, Socially Responsible Divestment. Blanket exclusion of “brown” industries provides no incentives for brown firms to take corrective actions, as they will be divested regardless. We show that the most effective strategy is often “tilting” – underweighting a brown industry but being willing to hold best-in-class firms.

Spring 22: The Purpose of a Finance Professor published in Financial Management. Based on my keynote speech at the 2021 FMA Annual Meeting.

Jan-Feb 22: When People Listen to Happy Songs, the Market OutperformsHarvard Business Review magazine “Defend Your Research” interview.

Jan 22: How Should Performance Signals Affect Contracts? published in Review of Financial Studies. The informativeness principle demonstrates that a contract should depend on informative signals. This paper studies how they should do so.

Sept 21: The Long-Term Consequences of Short-Term Incentives forthcoming in Journal of Accounting Research. Vesting equity is associated with a higher likelihood of M&A and share repurchases, and higher short-term returns but lower long-term returns to these actions.

Jul 21: Music Sentiment and Stock Returns Around the World forthcoming in Journal of Financial Economics. We introduces a real-time, continuous measure of national sentiment – the positivity of songs that citizens listen to – and link it to abnormal stock returns (which subsequently reverse), volatility, and mutual fund flows.

Jul 21: New paper, When Is (Performance-Sensitive) Debt Optimal? Existing theories of debt assume output is the only contractible performance measure available. We show that debt continues to be optimal when the firm has access to other performance signals – and how these signals should affect the debt repayment, leading to performance-sensitive debt.

Jun 21: New paper, CEO Compensation: Evidence From the Field. We survey directors and investors on how they set CEO pay in practice, revealing a number of departures from mainstream academic models.

May 22: The Pie-Growing Mindset TEDx talk

Nov 21: ESG: Do We Need It and Does It Work? Talk hosted by European Corporate Governance Institute / Indiana Institute for Corporate Governance

Oct 21The Purpose of a Finance Professor. Keynote speech at the 2021 Financial Management Association annual meeting. Write-up.

Oct 21: The Promise of Stakeholder Capitalism: Illusory or Real. Debate with Lucian Bebchuk, moderated by the FT’s Gillian Tett

Jan 21: Is Short Termism Really a Problem? Talk at the American Finance Association 2021 annual meeting (special session on “Short-Termism and Investment”)

Dec 20: The Case For Stakeholder Capitalism. ebate with Lucian Bebchuk, moderated by the FT’s Gillian Tett

Nov 20: Critique of European Commission’s Study on Sustainable Corporate Governance. Talk at European Corporate Governance Institute