The Top Five ECGI Finance Working Papers of 2025

In 2025, corporate finance research sat at the centre of major structural shifts—rising consolidation pressures, rapid advances in AI, renewed scrutiny of investor behaviour, and growing demands for transparency in how boards are formed. Engagement with the ECGI Finance Working Papers reflected this moment, concentrating on scholarship that re-examined foundational assumptions about how takeovers create value, how technology alters governance incentives, how investors express sustainability preferences, and how directors are actually selected in practice.

The papers highlighted here represent the finance research that drew the strongest engagement across the ECGI platform in 2025 (the ranking reflects the best-performing papers in the ECGI Finance Series, determined using click-rate analytics and platform engagement statistics).

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Top 5 Finance Working Papers of 2025

1. Corporate Takeovers: Theory and Evidence - Finance Working Paper No. 1030/2025

B. Espen Eckbo, Andrey Malenko & Karin S. Thorburn 

The top finance paper of 2025 is a sweeping synthesis of takeover theory and evidence, showing how the market for corporate control reallocates assets through a strategic sequence of initiation, bidding, negotiation, and regulatory constraint. It argues that most takeover behaviour can be understood through an auction framework in which target boards act as pivotal sellers, shaping competition, premiums, and deal structure. 

The findings show that high-productivity bidders tend to acquire lower-productivity targets, post-merger efficiency typically rises, and payment method choices reflect information sorting rather than opportunistic exploitation. The review resolves several longstanding puzzles—low bidder returns, rare toehold bidding, target stock runups—largely in favour of rational, competitive explanations. 

2. Artificial Intelligence in the Boardroom - Finance Working Paper No. 1087/2025

Daniel Ferreira & Jin Li

As AI systems become embedded in corporate decision-making, this paper shows that they fundamentally reshape the information flow between CEOs and boards, weakening the board’s ability to monitor while altering the balance between advice and oversight. By allowing CEOs either to substitute for board guidance or to solve more problems independently, AI reduces CEOs’ incentives to share information, prompting shareholders to respond with less independent boards to keep communication alive. This shift lowers monitoring intensity, increases CEO entrenchment, and compresses incentive pay, with skill-augmenting AI raising productivity but problem-solving AI eroding governance quality and destroying value. 

While AI adoption by boards can soften these effects, only improvements disproportionately favouring directors can restore stronger monitoring. The analysis highlights a structural tension at the heart of AI-enabled governance: technological gains elevate managerial capability but simultaneously undermine the very mechanisms designed to hold executives accountable.

3. Sustainability Preferences of Index Fund Investors - Finance Working Paper No. 1031/2025

Rob Bauer, Bin Dong & Peiran Jiao

This experimental study offers rare direct evidence on how real index-fund investors value sustainability. Using a discrete-choice design, the authors estimate investors’ willingness-to-pay for ESG attributes when faced with realistic portfolio trade-offs. On average, participants exhibit a positive—but modest—willingness to pay for sustainability, with a strong preference for negative screening over more technical ESG-integration approaches. Notably, investors show weak sensitivity to the “intensity” of ESG scoring: they value sustainability, but not in proportion to incremental improvements.

The paper uncovers rich heterogeneity: some investors are strongly motivated by ESG considerations, while others show little or no willingness to sacrifice returns. These findings challenge assumptions that retail ESG demand is uniform and demonstrate the value of behavioural, choice-based tools for assessing preferences in line with evolving EU suitability rules. 

4. Searching for Directors - Finance Working Paper No. 1081/2025

Fabrizio Ferri, Zeyu Ou & Yini Wang

This paper hits at the core question of how independent directors are selected. Using SEC-mandated disclosures, the authors document widespread non-compliance, yet among the cases that are disclosed between 2010 and 2019, they identify the primary sources of recommendations for new independent directors: search firms (42%), current directors (29%), and CEOs or other executives (20%).

The recommending source matters. Search-firm candidates bring greater executive expertise and improve board diversity, reflecting the broader networks these firms can access. CEO-recommended directors, by contrast, are more common in firms with powerful CEOs and tend to behave more management-friendly once appointed. The paper argues that stronger SEC enforcement and clearer disclosure requirements are needed to give investors meaningful visibility into how boards are actually built.

5. Beyond the Shareholders: The Impact of M&A on Other Stakeholders - Finance Working Paper No. 1080/2025

Andrey Golubov 

Rounding out the finance series, the paper shows that while M&A reliably generates positive combined shareholder gains, these outcomes rarely stem from systematic harm to other stakeholders. Surveying evidence across consumers, suppliers, creditors, employees, managers, and public finances, it argues that most mergers create value through efficiencies, better asset allocation, and operational restructuring rather than through wealth transfers. 

Where negative effects do appear—such as higher prices in highly concentrated markets or workforce reductions tied to redundancy—they are context-specific rather than pervasive. The review shows that target CEOs and senior managers often lose positions but receive substantial payouts, creditors are largely protected by covenants, and suppliers and consumers typically experience neutral impacts, underscoring that the economic consequences of M&A are heterogeneous and mechanism-dependent.

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These papers chart a financial environment marked by strategic restructuring, AI-driven disruption, and shifting investor priorities. As the conversation moves into 2026, the Finance Series will continue to illuminate how markets respond to these forces and what they mean for corporate decision-making.

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To discover the Top 5 Law Working Papers of 2025, click here.