jfe-identification
Identification & Endogeneity (jfe-identification)
When to trigger
- The empirical core is OLS + controls with endogeneity hand-waved away
- A DID uses two-way fixed effects with staggered adoption and you have not addressed the heterogeneous-treatment-effects bias
- Your IV's exclusion restriction or relevance is undefended
- Selection into the sample or treatment is plausible and unaddressed
- A referee could say "your X is endogenous to your Y"
The JFE identification bar
JFE referees expect endogeneity and selection to be treated explicitly, and they expect every plausible alternative explanation to be ruled out — not waved away. Corporate-finance papers are held to a credible-design standard; asset-pricing papers to a disciplined-inference standard (see jfe-empirical-design). This skill covers the corporate-finance causal side; the design/estimator side lives in jfe-empirical-design.
JFE corporate finance descends from Jensen & Meckling (1976), "Theory of the firm: Managerial behavior, agency costs and ownership structure" — the agency-cost foundation and the journal's single most-cited paper. Modern reviewing keeps that demand for an economic mechanism but layers on a hard requirement for credible identification: a correlation between a governance/financing variable and an outcome will not survive review unless the endogeneity is convincingly handled. The best corporate-finance paper each year wins the Jensen Prize.