LBS logo London experience. World impact.

Search for faculty

James Dow

Professor of Finance


MA (Cambridge), PhD (Princeton)

Professor James Dow’s main research interests are executive compensation and the role of financial markets on corporate resource allocation decisions. He has served as Editor of the Review of Economic Studies – the only leading economics journal to have an editorial home outside the US.


Before becoming Professor of Finance at London Business School he held positions at the University of Pennsylvania and the European University Institute in Florence.


Professor Dow has published in the Journal of Political Economy, The Review of Economic Studies, Econometrica, The Journal of Finance, and The Review of Financial Studies.


His consulting experience has included advice on valuation, the cost of capital, corporate governance, and expert testimony.

2017

Incentives for information production in markets where prices affect real investment

Dow J; Goldstein I; Guembel A

Journal of the European Economic Association 2017 Vol 15:4 p 877-909

2015

Contractual incompleteness, limited liability and bubbles

Dow J; Han J

Journal of Financial Economics 2015 Vol 116:2 p 383-409

2013

Boards, CEO entrenchment, and the cost of capital

Dow J

Journal of Financial Economics 2013 Vol 110:3 p 680-695

2008

Noise trade

Dow J; Gorton G

in the New Palgrave Dictionary of Economics, Durlauf S N and Blume L E (eds.)

2006

European corporate bond markets: transparency, liquidity, efficiency

Biais B; Declerck F; Dow J; Portes R; Thadden E-L von

City of London and CEPR, May 2006, pp75

2005

CEO compensation, change and corporate strategy

Dow J; Raposo C

Journal of Finance 2005 December Vol 60:6 p 2701-2727

Equilibrium investment and asset prices under imperfect corporate control

Dow J; Krishnamurthy A; Gorton G

American Economic Review 2005 June Vol 95:3 p 659-681

2004

Is liquidity self-fulfilling?

Dow J

Journal of Business 2004 October Vol 77:4 p 895-908

2003

Informed trading, investment and economic welfare

Dow J; Rahi R

Journal of Business 2003 Vol 76:3 p 439-454

2000

Should speculators be taxed?

Dow J; Rahi R

Journal of Business 2000 January Vol 73:1 p 89-107

What is systematic risk?: moral hazard, initial shocks and propagation

Dow J

Monetary and Economic Studies 2000 December Vol 18:1 p 1-24

1998

Arbitrage, hedging and financial innovation

Dow J

Review of Financial Studies 1998 Vol 11:4 p 739-755

Comments on 'Banks, markets and the allocation of risk in an economy' by M Hellwig

Dow J

Journal of Institutional and Theoretical Economics 1998 Vol 154:1 p 346-351

1997

Stock market efficiency and economic efficiency: is there a connection?

Dow J; Gorton G

Journal of Finance 1997 July Vol 52:3 p 1087-1129

Noise trading, delegated portfolio management and economic welfare

Dow J; Gorton G

Journal of Political Economy 1997 October Vol 105:5 p 1024-1050

1995

Profitable informed trading in a simple general equilibrium model of asset pricing

Dow J; Gorton G

Journal of Economic Theory 1995 November Vol 67:2 p 327-369

Lending resumption in a reputational model of sovereign debt

Dow J; Cole H L; English W B

International Economic Review 1995 May Vol 36:2 p 365-385

1994

Arbitrage chains

Dow J; Gorton G

Journal of Finance 1994 July Vol 49:3 p 819-849

Nash equilibrium under Knightian uncertainty: breaking down backward induction

Dow J; Werlang S R da C

Journal of Economic Theory 1994 December Vol 64:2 p 304-324

1993

Return on the market and the social discount rate: a note on welfare in an overlapping generations model

Dow J; Gorton G

Economics Letters 1993 November Vol 43:1 p 23-26

Trading, communication and the response of asset prices to news

Dow J; Gorton G

Economic Journal 1993 Vol 103:418 p 639-646

1992

Ex-ante non-optimality of the Dempster-Shafer updating rule for ambiguous beliefs

Dow J; Werlang S R da C

in Moses Y ed., Proceedings of the 4th Conference on Theoretical Aspects of Reasoning about Knowledge, p 163-166, Morgan Kaufman, 1992

Excess volatility of stock prices and Knightian uncertainty

Dow J; Werlang S R da C

European Economic Review 1992 January Vol 36 p 631-638

Homothetic preferences

Dow J; Werlang S R da C

Journal of Mathematical Economics 1992 Vol 21 p 389-394

Uncertainty aversion, risk aversion and the optimal choice of portfolio

Dow J; Werlang S R da C

Econometrica 1992 January Vol 60:1 p 197-204

1991

Search decisions with limited memory

Dow J

Review of Economic Studies 1991 January Vol 58:1 p 1-14

2014

Betting on rare and common events

Bond P; Dow J

Working Paper

Optimal contract duration for CEOs

Dow J; Raposo C

IFA Working Paper

Resistance to change

Dow J; Perotti E

IFA Working Paper

2006

Commitment to overinvest and price informativeness

Dow J; Goldstein I; Guembel A

IFA Working Paper

1999

Financing Securities Trading

Dow J; Rossiensky N

IFA Working Paper

1994

Laws of Large Numbers for Non-Additive Probabilities

Dow J; Ribeiro S

IFA Working Paper

1990

No Trade Theorems and Non-Bayesian Behaviour

Dow J; Madrigal V; Ribeiro S

1986

Arbitrator and Negotiator Behaviour Under an Appellate System

Aschenfelter O; Dow J; Gallagher D

Research Interests


  • Corporate finance
  • Executive compensation and succession
  • Organisational change
  • Arbitrage, information and financial markets