The Dimensional Fund Advisors Prizes are among the most prestigious in the field of finance. Winners are selected by the associate editors of the Journal of Finance, and the Distinguished Paper Prize carries with it a $10,000 award.
By John Moist
Qiping Xu, assistant professor of finance at Gies College of Business, has been awarded the Dimensional Fund Advisors Distinguished Paper Prize for her research into the asset market for industrial pollution. The Dimensional Fund Advisors Prizes award recognize the top three papers published in the Journal of Finance in an area other than corporate finance.
Xu received the honor for her paper “Sustainability or Greenwashing: Evidence from the Asset Market for Industrial Pollution,” coauthored with Ran Duchin (Boston College) and Janet Gao (Georgetown University). Their study reveals a “greenwashing” maneuver by which firms divest their most pollutive assets in response to market or public pressure without actually reducing the environmental footprint of those facilities.
The Dimensional Fund Advisors Prizes are among the most prestigious in the field of finance. Winners are selected by the associate editors of the Journal of Finance, published by the American Finance Association, and the Distinguished Paper Prize carries with it a $10,000 award.
“Winning the Dimensional Fund Advisors Distinguished Paper Prize is incredibly meaningful to me,” said Xu. “As an early-career researcher, this recognition is both motivating and affirming. I’m among the first cohort of financial researchers to actively engage in interdisciplinary work that connects finance with environmental and climate-related issues, and it’s been exciting to watch this area grow so rapidly in recent years. Receiving this award makes me feel encouraged to continue research connecting financial theory with real-world environmental challenges.”
As environmental, social, and governance pressures mount, many firms face intense scrutiny to go green. Xu and her coauthors found that when firms face that high pressure, they often sell their “dirty” plants to buyers experiencing less pressure – frequently entities with whom the seller already has an established relationship. Those transactions afford the seller the ability to appear more sustainable, but the researchers found that actual pollution levels don’t decline following the sale.
“What means the most to me is knowing that this research is reaching and engaging a broad audience,” said Xu. “The questions that motivate my work – how financial markets interact with environmental risks and sustainability challenges – are topics I care deeply about. It really means a lot that something I’m genuinely excited to study is being recognized and shared.”
Xu is part of a cohort of researchers bringing fresh insight into how financial markets can – and sometimes fail to – address environmental risks. Her portfolio includes analyzing the productivity challenges to local manufacturing during extreme temperature shocks, as well as the role corporate financing plays in reducing internal earnings inequality.
That wide-ranging investigative scope – from the impact of financial constraints on corporate environmental policies to the financial costs of judicial inexperience – has earned Xu numerous best-paper nods and awards. She brings that cutting-edge perspective into the classroom in FIN 321 and FIN 521: Advanced Corporate Finance, where she helps Master of Science in Finance students navigate the theoretical and practical aspects of firm-level decision-making.
The Dimensional Fund Advisors Prize places Xu’s work at the forefront of corporate sustainability and accountability, demonstrating the value of rigorous data analysis in identifying real-world consequences to market moves.
More Gies Research:
- Read more about Qiping Xu’s research on Illinois Experts
- Read about Xu’s work on the financial costs of judicial inexperience in the Wall Street Journal
- Explore Julia Fonseca’s award-winning research on mortgage lock-in in the Journal of Finance
