Tim Loughran

Timothy Loughran

Tim Loughran
Professor of Finance
Faculty Page

Tim Loughran is the C.R. Smith Professor of Finance at the University of Notre Dame. Research areas explored by Professor Loughran include the long-run performance of new issues, payment form in corporate acquisitions, value versus growth investment strategies, and the use of textual analysis to gauge the tone of financial documents. Tim received a Ph.D. degree from the University of Illinois (Urbana). He received the Outstanding Teacher Award for the Executive MBA Chicago Program In 2006, a Joyce Award for Excellence in Undergraduate Teaching in 2008, and the MSF Outstanding Faculty in 2017. Currently, he is an Associate Editor at several different journals including the Journal of Financial Economics and Financial Analysts Journal. Professor Loughran currently teaches Security Analysis to the undergraduates and Equity Valuation to the MSF students.

Highlighted Research:
“When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10‐Ks” with Bill McDonald, Journal of Finance 2011.

Previous research uses negative word counts to measure the tone of a text. We show that word lists developed for other disciplines misclassify common words in financial text. In a large sample of 10 Ks during 1994 to 2008, almost three-fourths of the words identified as negative by the widely used Harvard Dictionary are words typically not considered negative in financial contexts. We develop an alternative negative word list, along with five other word lists, that better reflect tone in financial text. We link the word lists to 10 K filing returns, trading volume, return volatility, fraud, material weakness, and unexpected earnings.