Documentation of the File Drawer Problem in Academic Finance Journals

Abstract

The file drawer problem is a publication bias wherein editors of journals are much more likely to accept empirical papers with statistically significant results than those with nonsignificant results. As a result, papers that have nonsignificant results are not published and are relegated to the file drawer, never to be seen by others. In this article, the authors examine the prevalence of the file drawer problem in finance journals. To do this, they examine 29 finance journals for five years (2010–2014). These journals include A-ranked journals as well as B- and C-ranked journals. In an examination of over 5,740 empirical papers, they found that only 121, or 2.1% of the papers, had statistically nonsignificant results. Indeed, for some journals, there was not a single article that had nonsignificant results. Furthermore, their findings indicate that the file drawer problem is just as bad, if not worse, in lower-ranked journals compared with top-ranked journals. The percentage of papers with nonsignificant results is actually somewhat smaller in B- and C-ranked journals than in A-ranked journals. These results suggest that there is a publication bias in finance journals.

TOPICS: Legal/regulatory/public policy, portfolio theory, portfolio construction