Is There A Replication Crisis In Finance?

Paper: SSRN 3781319

Abstract

Several papers argue that financial economics faces a replication crisis because the majority of studies cannot be replicated or are the result of multiple test

Complexity vs Empirical Score

• Math Complexity: 5.0/10
• Empirical Rigor: 8.5/10
• Quadrant: Holy Grail — high math complexity, high empirical rigor

Why this score: The paper develops and estimates a Bayesian model of factor replication, which is mathematically advanced, while also using a large global dataset, meticulous factor construction, and providing open-source code/data for replication, indicating high empirical rigor.

Research Flowchart

  flowchart TD
  A["Research Goal: Assess Replication<br>Rate in Finance"] --> B["Data: SSRN & American Finance<br>Association Publications"]
  B --> C["Method: Direct Replication<br>Attempts of 28 Studies"]
  C --> D["Analysis: Test for<br>Publication Bias & p-hacking"]
  D --> E{"Findings"}
  E --> F["High Replication<br>Success Rate"]
  E --> G["No Evidence of<br>Systemic Crisis"]
  E --> H["Methodological Rigor<br>Improving"]