9/1/2016 — In the U.S. automobile industry, manufacturers distribute products through dealers and rental agencies. To mediate direct competition between the two intermediaries, manufacturers adopted buyback programs to repurchase used rental cars from rental agencies and redistribute them through dealers. 

• KEYWORD(S):
• supply chain

9/1/2016 — This article presents a reduced-form model that contains frailty factors to predict mortgage default and develops a novel framework to model systematic risk of mortgages. We match default rates along multiple dimensions by extending the generalized autoregressive score (GAS) models.

• KEYWORD(S):
• commercial real estate

8/26/2016 — During the 2000s, over a dozen U.S. states passed laws that prohibit healthcare employers from mandating overtime for nurses. Using a nationwide panel data set from 2004 to 2012, we find that these mandatory overtime laws reduced the service quality of nursing homes, as measured by an increase in deficiency citations. This outcome can be explained by two undesirable changes in the staffing hours of registered nurses: decreased hours of permanent nurses and increased hours of contract nurses per resident day. We observe that the increase in deficiency citations concentrates in the domains of administration and quality of care rather than quality of life, and the severity levels of the increased citations tend to be minor rather than major.

• KEYWORD(S):
• healthcare
• operations

8/23/2016 — A firm's growth and survival depends on the ability of its managers to explore for new business and knowledge; yet, exploration is challenging for most large, established firms. Extending prior research into networks and exploration, we propose that a key characteristic of managers' external networks – the extent to which their networks include relationships built using predominately individual rather than firm resources – is positively related to managers' abilities to explore for new business and knowledge in large firms.

• KEYWORD(S):
• data project
• management
• strategy and entrepreneurship

8/16/2016 — When modeling economic relationships it is increasingly common to encounter data sampled at different frequencies. We introduce the R package midasr which enables estimating regression models with variables sampled at different frequencies within a MIDAS regression framework put forward in work by Ghysels, Santa-Clara, and Valkanov (2002).

• KEYWORD(S):
• data project
• finance

8/11/2016 — In 2008, the majority of U.S. airlines began charging for the second checked bag, and then for the first checked bag. One of the often cited reasons for this action by the airlines’ executives was that this would influence customers to travel with less baggage and thus improve cost and operational performance.

• KEYWORD(S):
• operations

8/2/2016 — The panel invited women scholars to consider how feminist approaches have—and have not—made a difference in economic geography.

• KEYWORD(S):
• bias
• gender

8/2/2016 — We develop a multi-period theoretical model to characterize the relationship between a publication that ranks universities and prospective attendees -- high school students -- who might view the ranking and use it to help decide which university to attend.

• KEYWORD(S):
• marketing

8/1/2016 — Private equity funds hold assets that are hard to value. Managers may have an incentive to distort reported valuations if these are used by investors to decide on commitments to subsequent funds managed by the same firm.

• KEYWORD(S):
• private equity
• venture capital

8/1/2016 — This article examines the consequences of accounting policy choices for individual banks' downside tail risk, for the codependence of such risk among banks, and for regulatory forbearance, or the decision by a regulator not to intervene.

• KEYWORD(S):
• accounting
• risk management

8/1/2016 — We document that the first and third cross-sectional moments of the distribution of GDP growth rates made by professional forecasters can predict equity excess returns, a finding that is robust to controlling for a large set of well-established predictive factors.

• KEYWORD(S):
• asset pricing

8/1/2016 — Many time series are sampled at different frequencies. When we study co-movements between such series we usually analyze the joint process sampled at a common low frequency.

• KEYWORD(S):
• finance

8/1/2016 — Because security analysts, who serve as brokers between public firms and investors, arrive at their forecasts by incorporating guidance from managers, there is immense pressure on the managers to meet or beat analyst earnings forecasts; moreover, investors reward (penalize) firms for exceeding (missing) analyst forecasts.

• KEYWORD(S):
• earnings
• marketing

7/24/2016 — We examine how the strategy field is defined in the literature and find that most conceptualizations focus on financial metrics as measures of performance and only provide guidance on the strategic management of a corporation’s economic context. We then review the externalities and corporate social responsibility literatures and find that environmental and social performance is examined either in isolation or by assuming a strong form of independence from financial performance.

• KEYWORD(S):
• corporate social responsibility

7/23/2016 — We examine the relationship between MIDAS regressions and the estimation of state space models applied to mixed frequency data. While in some cases the binding function is known, in general it is not, and therefore indirect inference is called for. The approach is appealing when we consider state space models which feature stochastic volatility, or other non-Gaussian and nonlinear settings where maximum likelihood methods require computationally demanding approximate filters.

• KEYWORD(S):
• data project
• finance

7/1/2016 — We investigate the number of and reasons for errors and questionable judgments that sell-side equity analysts make in constructing and executing discounted cash flow (DCF) equity valuation models. For a sample of 120 DCF models detailed in reports issued by U.S. brokers in 2012 and 2013, we estimate that analysts make a median of three theory-related and/or execution errors and four questionable economic judgments per DCF.

• KEYWORD(S):
• accounting
• equity markets

7/1/2016 — Task conflict has been the subject of a long-standing debate in the literature—when does task conflict help or hurt team performance? We propose that this debate can be resolved by taking a more precise view of how task conflicts are perceived in teams.

• KEYWORD(S):
• organizational behavior

7/1/2016 — The authors study the drivers and performance implications of retailers’ branding strategies for their premium and economy private-label tiers. Retailers can opt for store-banner branding and use their store-banner name and/or logo to reveal their ownership, or they can use stand-alone branding and avoid an explicit link between store brand and retail banner.

• KEYWORD(S):
• global business
• marketing

7/1/2016 — Firms spend billions of dollars on advertising every year but remain uncertain about allocation across various advertising vehicles. Allocation decisions are even more complex as online advertising has proliferated and consumers' media usage patterns have become more fragmented.

• KEYWORD(S):
• marketing

7/1/2016 — On April 1-2, 2016, the Energy Center at the Kenan-Flagler Business School, University of North Carolina at Chapel Hill convened a conference on “Global Frac’ing, What has to Change for it to be a Game Changer?” It was an invitation only event with attendance limited to industry experts, leading consultants and responsible government officials. Attendees and speakers came from the U.S., UK, Poland, Mexico and Canada. This report summarizes the main points which emerged from the speaker presentations and subsequent discussion. It does not attempt to be a comprehensive treatment of Global Frac’ing. Rather, it raises four sets of questions and presents the conclusions which developed. The Executive Summary provides an overview of these conclusions. The appendices share details on two matters much discussed – what would be a model regulatory regime for unconventional development, and what would constitute a model fiscal regime?

• KEYWORD(S):
• energy
• global business
• oil
• sustainability

6/29/2016 — In this paper, we empirically examine differences in subprime borrower default decisions by Census tract characteristics in order to clarify how the subprime foreclosure crisis played out in minority areas. An innovation in our modeling approach is that we do not constrain the impact of neighborhood composition to be identical across diverse decision-making settings.

• KEYWORD(S):
• finance

6/21/2016 — The extent to which federal investment in research crowds out or decreases incentives for investment from other funding sources remains an open question. Scholarship on research funding has focused on the relationship between federal and industry or, more comprehensively, non-federal funding without disentangling the other sources of research support that include nonprofit organizations and state and local governments. This paper extends our understanding of academic research support by considering the relationships between federal and non-federal funding sources provided by the National Science Foundation Higher Education Research and Development Survey.

• KEYWORD(S):
• economic development policy

6/1/2016 — We conducted a noninferiority, randomized controlled trial to compare first-time HIV testing rates among men who have sex with men (MSM) and transgender individuals who received a crowdsourced or a health marketing HIV test promotion video.

• KEYWORD(S):
• global business
• healthcare
• marketing
• strategy and entrepreneurship

6/1/2016 — In emerging-market countries, commercial institutions do not always develop sufficiently quickly or effectively to support ambitious entrepreneurs. How might intermediaries remedy these problems? We address this question by drawing on institutional literatures to develop the concept of “open system intermediaries.” Our research design involves examining business incubators in emerging markets as a form of open system intermediary.

• KEYWORD(S):
• emerging markets
• entrepreneurial ecosystems
• global business

6/1/2016 — Exploiting a 2004 reduction in a unique capital gains withholding tax for foreign investors in U.S. publicly traded REITs, this paper explores both the sensitivity of real estate investors to changes in their own taxes and the reaction of real estate managers to changes in their investors' taxes. We find that both foreign investors and REIT managers responded to the tax change.

• KEYWORD(S):
• accounting
• global business
• investments
• tax

6/1/2016 — We find evidence of systematic optimism and pessimism among credit analysts, comparing contemporaneous ratings of the same firm across rating agencies. These differences in perspectives carry through to debt prices and negatively predict future changes in credit spreads, consistent with mispricing. Moreover, the pricing effects are the largest among firms that are the most opaque, likely exacerbating financing constraints.

• KEYWORD(S):
• c-suite
• economics
• emerging markets

5/6/2016 — Using the approach of Ghysels, Santa-Clara, and Valkanov (2005), after correcting a coding error pointed out to us, we find that the Merton model holds over samples that exclude financial crises, in particular the Great Depression and/or the subprime mortgage financial crisis and the resulting Great Recession. We find that a simple flight to safety indicator separates the traditional risk-return relationship from financial crises which amount to fundamental changes in that relationship.

5/2/2016 — Determining how best to route work is a key element of service system design. Not surprisingly then, many analytical models have identified various optimal routing algorithms for service operations management. However, in many settings, humans make routing decisions dynamically, either because algorithms don't exist, decision support tools have not been implemented, or existing rules are not enforced.

• KEYWORD(S):
• operations
• strategy and entrepreneurship
• supply chain
• technology

5/1/2016 — Real estate private equity (REPE) funds are often differentiated by risk class: Core, Value-Added, or Opportunistic. Fund class is used by investors and managers to allocate funds and to describe investment policies. In this paper, we use REPE fund cash flow data from Burgiss that allow us to calculate a variety of performance metrics.

• KEYWORD(S):
• private equity

5/1/2016 — The purpose of this paper is to provide insightful advice that can improve the practice of using consumers’ pre-launch awareness and preference (AP) changes to predict the sales of new movies.

• KEYWORD(S):
• strategy and entrepreneurship

5/1/2016 — We develop Granger causality tests that apply directly to data sampled at different frequencies. We show that taking advantage of mixed frequency data allows us to better recover causal relationships when compared to the conventional common low frequency approach.

• KEYWORD(S):
• data project
• finance

4/29/2016 — Building on Miller's (1977) short sales constraints insight, we construct a model showing that investors should disagree less about the valuation of a conglomerate than about the valuations of its individual divisions. Disagreement, combined with short sales constraints, increases asset prices and thereby implies a conglomerate discount.

• KEYWORD(S):
• data project
• finance
• investments

4/28/2016 — This paper investigates whether greater competition increases or decreases individual bank and banking system risk. Using a new text-based measure of competition, and an instrumental variables analysis that exploits exogenous variation in bank deregulation, we provide robust evidence that greater competition increases both individual bank risk and a bank's contribution to system-wide risk.

• KEYWORD(S):
• accounting
• innovation

4/5/2016 — Real estate private equity (REPE) funds are often differentiated by risk class: core, value-added, or opportunistic. Fund class is used by investors and managers to allocate funds and to describe investment policies. In this paper, we use REPE fund cash flow data from Burgiss that allow us to calculate a variety of performance metrics. For a subset of the data, we also observe characteristics of underlying fund holdings. Despite evidence that Value-Added and Opportunistic funds differ in investment composition, we show that class does not do a good job of predicting differences in performance. Unsurprisingly, greater investment in development (as assessed ex post), predicts poor performance for funds raised just before the Great Recession.

• KEYWORD(S):
• commercial real estate
• private equity

4/4/2016 — Several influential studies have concluded that earnings surprises just to the right or to the left of a hypothesized bright line produce distinct price reactions compared with surrounding earnings surprises because they convey special meaning. In this study, we examine whether previous inferences of asymmetric stock price reactions to bright-line surprises are observed when empirical tests are designed to be consistent with a rational expectations equilibrium.

• KEYWORD(S):
• accounting
• equity markets
• investments

4/1/2016 — Measuring the impact of political risk on investment projects is one of the most vexing issues in international business. One popular approach is to assume that the sovereign yield spread captures political risk and to augment the project discount rate by this spread. We show that this approach is flawed. While the sovereign spread is influenced by political risk, it also reflects other risks that are likely included in the valuation analysis — leading to the double counting of risks. We propose to use “political risk spreads” to undo the double counting in the evaluation of international investment projects.

• KEYWORD(S):
• finance
• global business
• investments
• risk management

4/1/2016 — Do firms learn from their failed innovation attempts? Answering this question is important because failure is an integral part of exploratory learning. In this study, we consider whether and under what circumstances firms learn from their small failures in experimentation. Building on organizational learning literature, we examine the conditions under which prior failures influence firms' R&D output, in terms of amount and quality. Our findings contribute to the organizational learning literature by providing a nuanced view of learning from failures in experimentation.

• KEYWORD(S):
• healthcare
• organizational behavior

4/1/2016 — We empirically investigate the effect of uncertainty on corporate hiring. Using novel data from the labor market for MBA graduates, we show that uncertainty regarding how well job candidates fit with a firm’s industry hinders hiring and that firms value probationary work arrangements that provide the option to learn more about potential full-time employees.

• KEYWORD(S):
• finance
• organizational behavior

4/1/2016 — Taylor Guitars purchased an ebony mill in Cameroon to ensure corporate social and environmental responsibility (CSER) in sourcing, and shared the responsibly-sourced supply of ebony with competitors through horizontal sourcing. Inspired by this case, we investigate vertical integration as an alternative strategy for CSER in sourcing in which a firm can vertically integrate with its supplier in order to ensure responsible practices in the supply chain.

• KEYWORD(S):
• corporate social responsibility
• operations
• supply chain
• sustainability

3/25/2016 — Successful initial public offerings (IPOs) provide firms with access to valuable resources, but also put pressure on firms to impress potential investors with evidence of their current well-being and prospects for future growth.

• KEYWORD(S):
• equity markets
• marketing

3/15/2016 — Stocks in a momentum portfolio, which contribute to momentum profits, do not experience reversal in the long run. Conversely, stocks that do not contribute to momentum profits exhibit subsequent reversals. Merging these separate securities into a single portfolio causes momentum and reversal patterns to appear linked.

• KEYWORD(S):
• finance
• investments

3/9/2016 — We present evidence that some firms pursue mergers with an objective of acquiring and retaining the target firm’s employees. Acquirers wishing to obtain employees via an acquisition will likely pursue firms with an important set of skilled employees who are difficult to obtain elsewhere and may possess unique skills. We identify such target firms by the language used to describe employees in their 10-K statements. Specifically, we focus on references to “skilled” employees.

• KEYWORD(S):
• labor

3/5/2016 — We present preliminary work to construct a knowledge curation system to advance research in the study of regional economics. The proposed system exploits natural language processing (NLP) techniques to automatically implement business event extraction, provides a user-facing interface to assist human curators, and a feedback loop to improve the performance of the Information Extraction Model for the automated parts of the system.

• KEYWORD(S):
• entrepreneurial ecosystems

3/1/2016 — A fundamental property of accrual accounting is to smooth temporary timing fluctuations in operating cash flows, indicating an inherent negative correlation between accruals and cash flows. We show that the overall correlation between accruals and cash flows has dramatically declined in magnitude over the past half century and has largely disappeared in more recent years.

• KEYWORD(S):
• accounting
• financial reporting

3/1/2016 — Many online retail firms (e-tailers) do not collect sales tax from the majority of their customers, providing these firms a potential competitive advantage over traditional retailers. We examine stock market returns and analysts’ sales forecast revisions surrounding federal legislative proposals, such as the Marketplace Fairness Act, that could erode this alleged competitive advantage for e-tailers. Following events that indicated an increased likelihood of federal sales tax legislation, we find negative abnormal stock returns for e-tail firms relative to traditional retail firms. We also find that analysts forecast a future reduction in sales revenue for e-tailers. These findings imply the existence of a competitive advantage for e-tailers, which advantage will potentially diminish with the enactment of federal sales tax legislation.

• KEYWORD(S):
• federal tax
• state and local tax

3/1/2016 — We use a shock to the public scrutiny of firm subsidiary locations to investigate whether that scrutiny leads to changes in firms’ disclosure and corporate tax avoidance behavior. ActionAid International, a non-profit activist group, levied public pressure on noncompliant U.K. firms in the FTSE 100 to comply with a rule requiring U.K. firms to disclose the location of all of their subsidiaries.

• KEYWORD(S):
• global business
• international tax

3/1/2016 — In academia, citations received by articles are a critical metric for measuring research impact. An important aspect of publishing in academia is the ability of the authors to navigate the review process and despite its critical role very little is known about how the review process may impact the research impact of an article.

• KEYWORD(S):
• data project
• knowledge management
• strategy and entrepreneurship

3/1/2016 — Using an integrative approach, the authors incorporate the four mechanisms in their empirical model specification. Specifically, to model the interplay among CSR, CSI, and firm performance and to test the four mechanisms simultaneously, they propose a structural panel vector autoregression specification.

• KEYWORD(S):
• corporate social responsibility
• management
• marketing

2/25/2016 — We examine firms' technological investments during an industry's incubation stage—the period between a technological breakthrough and the first instance of its commercialization. We develop stylized findings regarding knowledge evolution preceding product evolution in an industry's life cycle, and highlight the importance for managers to think about “success” and “failure” across multiple yardsticks of performance, rather than only as product commercialization.

• KEYWORD(S):
• commercialization
• strategy and entrepreneurship
• technology

2/16/2016 — In this paper, we study the effect of a firm’s local channel exits on prices charged by incumbents remaining in the marketplace. Exits could result in higher prices due to tempered competition or lower prices due to reduced co-location or agglomeration benefits. The net effect of these two countervailing forces remains unknown. In addition, little is known about how this effect could change depending on incumbents’ geographic locations.

• KEYWORD(S):
• economic development
• innovation
• marketing