Finance Research Graz (FiRe)

FiRe Graz is a loosely organized research platform, affiliated with the University of Graz. Founded and operated by the Institute of Banking and Finance and the Institute of Finance, the platform is open to all finance researchers with a connection to the University of Graz and is intended to reach out across organisational boundaries. Its main areas of interest are empirical and experimental research in finance. (more...)

Upcoming events:

FiRe Research Day, 15.12.2022

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New paper on biases in the peer review publication process


In a new study in the Proceedings of the National Academy of Sciences, FiRe member Stefan Palan and co-authors document bias in the peer review process that precedes the publication of research articles in scientific journals. Even if they are of equal quality, articles authored by prominent researchers get better ratings than articles authored by less well-known researchers.

Implementing an idea by Jürgen Huber (University of Innsbruck), leader of the research team, the authors conducted a simple experiment: Vernon Smith (Professor at Chapman University and Nobel Memorial Prize Laureate in Economics 2002) and Sabiou Inoua (junior post-doc researcher at Chapman University), who were both members of the research team, jointly authored a research article and submitted it to the Journal of Behavioral and Experimental Finance for review. As the editor of this Journal, Stefan Palan sent invitations to review the article to a total of 3300 experts in the field. A total of 534 accepted the invitation to review and submitted a review report. While all reviewers received the same article for their evaluation, they received different information about who had authored the article. One group was informed that Nobel prize laureate Vernon Smith was one of the authors. Another group was informed that junior researcher Sabiou Inoua was one of the authors. A third group did not receive any information about the authors.

Reviewers with different types of information about the article’s authors evaluated the quality of the research article markedly differently. Of the reviewers who had received no information about the article’s authors ("AA" in the figure below), 48.2% recommended against publishing the article. This proportion was even higher among the reviewers who had been informed that one of the authors was the relatively unknown junior researcher ("AL"); here 65.3% recommended against publication. Yet of the reviewers who had been informed that one of the authors was Nobel prize laureate Vernon Smith ("AH"), only 22.5% recommended against publication.

Rudolf Kerschbamer (University of Innsbruck), another member of the research team, traces the source of the different evaluations to the “halo-effect”. This term from social psychology describes the phenomenon that we tend to evaluate the actions and work of someone more favorably when we are favorably disposed towards this person. Christian König genannt Kersting (University of Innsbruck), also a member of the research team, considers the results to constitute an important trigger to start rethinking the scientific review process: “As researchers, we are constantly working on improving our methods and processes. Our results have met great interest from the academic community and many editors of scientific journals are already testing new methods for evaluating and ensuring the quality of research findings.”

Huber, J., Inoua, S., Kerschbamer, R., König-Kersting, C., Palan, S., Smith, V. L. (2022): Nobel and novice: Author prominence affects peer review, Proceedings of the National Academy of Sciences. DOI: 10.1073/pnas.2205779119

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New paper on the determinants of cryptocurrency exchange liquidity


Liquidity on cryptocurrency exchanges is an important factor influencing the attractiveness of investing into this new asset class. Since there are important differences between cryptocurrencies and traditional financial instruments, it is plausible that these differences affect the determinants of cryptocurrency liquidity.

In a recent paper platform members Alexander Brauneis, Roland Mestel and Erik Theissen together with their co-author Ryan Riordan (Queen’s University and LMU Munich) study bitcoin to US dollar (BTCUSD) liquidity and liquidity determinants using order book data from three large cryptocurrency exchanges. They find that these BTCUSD markets are more liquid than US equity markets with bid–ask spreads often below 1 basis point. The analysis of the determinants of liquidity reveals that bitcoin liquidity is decoupled from the liquidity of other asset classes such as equities and foreign exchange. In fact, bitcoin liquidity largely depends on factors specific to cryptocurrencies and the blockchain. Specifically, bitcoin market liquidity is driven by the recent past of risk and returns for cryptocurrencies, and the costs with which the blockchain is clearing on-chain transactions. These results are generally consistent with what one would expect based on classic economics models. Market microstructure theory has identified adverse selection costs and, to a lesser extent, inventory holding costs as the main drivers of bid–ask spreads. Thus, to the extent that the time series variation in the degree of informational asymmetry and the inventory holding cost is driven by cryptocurrency-specific variables, we would expect that bitcoin liquidity depends on those variables rather than on general financial market variables.

The paper was presented at the FiRe Research Day in Graz in June 2019 and has recently been accepted for publication in the Journal of Empirical Finance.

Brauneis, A., Mestel, R., Riordan, R.; Theissen, E. (2022). Bitcoin unchained: Determinants of cryptocurrency exchange liquidity, Journal of Empirical Finance, DOI:

Talk about the Matthew Effect in peer-review


Stefan Palan recently gave an online talk in the METRICS International Forum seminar at Stanford University, presenting "Testing the Matthew Effect in peer-review". You can watch the recording using the link below.

Link to the recording

Title slide of the talk Stefan Palan gave in Stanford. It carries the title of the talk ("Testing the Matthew Effect in peer-review"), the authors (Jürgen Huber, Sabiou Inoua, Rudolf Kerschbamer, Christian König-Kersting, Stefan Palan and Vernon Smith), their affiliations and the logos of the universities and funding agencies.

Berivan Gürel joins research platform


Berivan Gürel recently joined the research platform as a PhD student under the supervision of Prof. Stefan Palan. Berivan completed her Master's in Accounting & Finance at the University of Edinburgh. Besides her PhD studies, Berivan works in asset management in an insurance company.

In her PhD thesis, she plans to study the financial risk tolerance and risk perception of genders and sexes when making investment decisions.

Field trip to Frankfurt


Following a successful academic year, about 25 students and members of the Institute of Banking and Finance at the University of Graz used the first days of summer break for a field trip to Frankfurt, Germany. As Germany's most important financial center, the city hosts various commercial banks, the European Central Bank, the Deutsche Bundesbank, and Europe’s third largest stock exchange. This concentration of interesting institutions in one place ensured a program packed with insightful visits and engaging discussions that were focused, among other topics, on macroprudential supervision, the newest developments in (digital) finance, and the link between science and practice.

Day 1:

- European Central Bank: Mandate and functions of the European Central Bank.

- Deutsche Bundesbank: Financial stability, supervision.

Day 2:

- DZ Bank: Security issuances, macroeconomic developments.

- Deutsche Boerse: Regulatory environment, digitalization, ESG.

We want to thank all of our hosts in Frankfurt for the time and effort they invested into making our visit a memorable event! Furthermore, we also want to thank Raiffeisen-Landesbank Steiermark for funding our bachelor and master students’ travel expenses in a continuation of the long-standing good partnership with the Institute of Banking and Finance at the University of Graz.

Photos: ©

Journal impact factor


The Journal of Behavioral and Experimental Finance (JBEF), which platform member Stefan Palan has co-edited since 2018 and which platform member Roland Mestel serves as associate editor for, received its first impact factor of 8.222 at the end of July. This places the journal at rank 5 out of 111 finance journals and rank 13 out of 379 economics journals.

Successful FiRe Lecture with Josef Zechner


In this years FiRe Lecture, Josef Zechner talked about the impact of pandemics and wars on financial markets.

Photo of the audience at the FiRe Lecture 2022. © Mayr

Photo: © Mayr

Successful on-site research seminar with Dirk Schiereck


For the first time since the start of the Covid pandemic, we were able to hold an on-site research seminar, in which Dirk Schiereck presented recent results of the paper CFO Overconfidence and Shareholder Activism.

Photo of Dirk Schiereck and the audience.

New Paper on Insider Trading and Short Selling Regulation


Modern capital markets are subject to many interventions and regulations, some of which curtail the implementation of specific trading strategies in a market. While we understand much of these regulations’ individual effects, the picture is less clear about their joint effects. A new paper, jointly authored by platform researchers Robert Merl and Stefan Palan (both University of Graz) and Thomas Stöckl (MCI Management Center Innsbruck) considers the interaction of two regulations, namely rules limiting shorting of assets and cash, and rules limiting insider trading. For these regulations, prior research shows spikes in short-selling activity around the revelation of insider information, which different studies trace to different causes. Among other results, the authors find that both allowing short positions and allowing informed trading causes informed traders to increase their market activity and causes mispricing and spreads to diminish. Nevertheless, they find no evidence for significant interaction effects between the two regulations.

The paper was presented at the FiRe Research Day in June 2019 and has recently been accepted for publication in The Journal of Banking and Finance.

Merl, R., Stöckl, T., Palan, S., 2022. "Insider trading regulation and shorting constraints. Evaluating the joint effects of two market interventions", Journal of Banking and Finance, 106490, DOI:

New Paper on the Reactions of a Change in Make/Take Fees on Liquidity and Trading Activity under (almost) Zero Tick Size


Trading venues compete for order flow by offering various order types, access s peeds, and fee schedules. Fee schedules outline the fees, and rebates traders should expect to pay, or receive, for submitting orders to trade.

In a recent paper platform members Alexander Brauneis, Roland Mestel and Erik Theissen together with their co-author Ryan Riordan (Queen’s University) analyze the impact on liquidity and trading activity of the introduction of maker fees (and simultaneous reduction of taker fees) on a leading cryptocurrency trading platform. Cryptocurrency markets are special because they are non-intermediated and highly fragmented. Furthermore, for the currency pair the authors analyze (BTC-USD) the relative minimum tick size is negligible, a feature which allows them to derive predictions from the Colliard and Foucault (RFS; 2012) model which assumes a zero minimum tick size. Consistent with the model the paper finds that quoted spreads increase after the fee change. However, the increase is overcompensated by the decrease in taker fees. Quoted depth and the number of transactions decrease while the average trade size increases.

The paper was presented at the FiRe Research Day in Graz in June 2019 and has recently been accepted for publication in the Journal of Empirical Finance.

Brauneis, A., Mestel, R., Riordan, R.; Theissen, E. (2022). The anatomy of a fee change - evidence from cryptocurrency markets, Journal of Empirical Finance, DOI:

Cover image of the Journal of Empirical Finance

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