We find that Credit Rating Agencies (CRAs) see through transitory shocks to credit risk that stem from transitory shocks to equity prices, while market-based measures of credit risk do not. For a given stock return, CRAs are significantly less likely to downgrade firms with transitory shocks than those with permanent shocks. However, credit default swap spreads and model-implied default probabilities do not distinguish between such shocks. 

Community banks are the central financial institution in many places. They have the capacity to alleviate credit constraints of small firms. This may increase economic resilience, delaying or mitigating the effects of the Great Recession. We estimate how the county-level banking access and community bank market share affect both the timing and duration of the Great Recession. Using the Cox Proportional Hazards Model, we find that communities with a higher community bank market share are either less likely to experience recession conditions, or experience these conditions later. Using the Heckman Selection model, we confirm these results, and show that communities with a higher community bank market share are less likely to experience recession conditions. This research provides the first link between local financial institutions, and economic resilience.

E-commerce platforms, such as Amazon, Alibaba and Flipkart, that match sellers and consumers at an unprecedented scale, operate their internal search engines to help buyers find relevant products from a large number of sellers, and also allow sellers to advertise to consumers for positions in the search listing. Determining an optimal ranking of products in response to a search query is a challenging problem for the platform because sellers have certain private information about their products that the platform does not have. Using a theoretical model, we show that sellers’ bids in ad auctions, through which sponsored slots are typically allocated, can reveal (some of) this private information to the platform (“information effect”), which it can optimally combine with information that it has about consumers to improve the placement of organic results, a practice we call “strategic listing”.

The essence of a brand is that it delivers on its promises. However, consumers’ trust in brands (CTB) has declined around the world in recent decades. As a result, CTB has become a major concern for managers. The authors examine whether CTB is influenced by marketing-mix activities (i.e., advertising, new product introduction, distribution, price, and price promotion) implemented by brands.

We survey the properties of commercial real estate (CRE) as an asset class. We first illustrate its importance relative to the US economy and to other asset classes. We then discuss CRE ownership patterns over time.

We study differences in the effects of prices, non-price promotions, and brand line length on brand shares at different retail formats. Our conceptual framework rests on the presence of trip level fixed and category level variable utility components and shows how the trade-off between these components results in (i) different formats visited on different types of shopping trips; and (ii) differential marginal sensitivities of brand shares to changes in marketing mix variables across trip types.

This study examines the antecedents and consequences of knowledge sharing and monitoring based governance strategies on emissions reduction. We theorize, and empirically test, the impact of supply base diversity in industry and geographic locations on the governance strategy choices. We find that sector and regional diversity both have a significant impact on emissions reduction strategies, yet their direct and interactive impacts are different. Regarding consequences, we find that engaging suppliers is associated with GHG emissions reduction for both buyers and suppliers.

Scholars have long been interested in new industry emergence, highlighting that it could often be impeded by uncertainty across four dimensions: technology, demand, ecosystem, and institutions. Building on the insight that uncertainty stems from partial knowledge, we develop a conceptual framework that utilizes a temporal and a process perspective for knowledge generation and aggregation.

A consumer's decision to engage in search depends on the beliefs the consumer has about an unknown product characteristic such as price. In this paper, we elicit the distribution of price beliefs and explicitly study their role in a consumer's decision to search.

Empirical research in operations management has increased steadily over the last 20 years. In this paper, we discuss why this is good for our field and offer some comments on the qualities we admire in an empirical operations management paper.

This study examines the importance of social perception of corporate social responsibility (CSR) and irresponsibility (CSI). Drawing from social psychology literature on stereotypes, we argue that two fundamental dimensions of social perception—warmth and competence—help explain the underlying processes and conditions under which CSR leads to specific outcomes.

The last 20 years have been a period of tremendous growth for the PE industry. From its roots in the 1970s and 80s in the buyout and venture capital spaces, private capital has expanded dramatically in both scope and scale. Funds have gotten larger, the investor pool has broadened and the largest players have transformed themselves into fully diversified alternative asset managers, with offerings across a wide range of geographies and asset classes.

Many of the most prosperous places in the U.S. are hotbeds of technology and also the home bases of companies which exercise monopoly power across much larger territories – nationally, or even globally. This paper makes four arguments about regional income disparities.

What is the impact of higher technological volatility on asset prices and macroeconomic aggregates? I find the answer hinges on its sectoral origin. Volatility that originates from the consumption (investment) sector drops (raises) macroeconomic growth rates and stock prices.

Channels have traditionally been viewed as intermediaries that facilitate the transfer of products from manufacturers to consumers. Innovations in digital technologies help firms to integrate the customer experience across channels and devices. This new phenomenon is referred to as “omnichannel marketing.”

How do cities attract mobile firms? The answer, frequently, involves beer. Dr. Maryann Feldman has recently published an editorial describing how cities are increasingly selling themselves on quality of life metrics, talent, and trendy amenities that appeal to young professionals. Responding to Amazon’s HQ2 contest, cities across the country listed breweries among their city’s assets while wooing the technology giant. The article is based on a paper that three of her students wrote under her guidance, and the inspirations for which evolved out of a seminar Dr. Feldman taught on science and technology policy.

This article’s objective is to inspire and provide guidance on the development of marketing knowledge based on the theories-in-use (TIU) approach.

The autonomous car began as an opportunity that required breaking all kinds of limits: engineering, navigation, adjusting to traffic conditions, distinguishing objects, predicting what those objects might do, reacting in time, calculating quickly and juggling a vast number of ever-changing variables. The developers used more and more computer power to address these needs. But the initial bounding limit turned out to be very fundamental; rule-based computers don’t have pattern power.

Using a novel database on venue short sales and market design characteristics, we ask: Where do short sellers exploit their information advantage?

Governments often subsidize startups with the goal of spurring entrepreneurship using tax incentives. Exploiting the staggered implementation of angel investor tax credits in 31 U.S. states from 1988 to 2018, we find that these programs increase the number of angel investments and average investment size.

Marketing academics are keenly aware of the seismic shifts in today's marketing environment caused by digital (dis)intermediation. In this article, we discuss four types of digital (dis)intermediation, and how they affect branding activities of incumbents and new firms.

We directly test the reliability and relevance of investee fair values reported by listed private equity funds (LPEs). In our setting, disaggregated fair value measurements are observable for funds’ investees; and investee accounting fundamentals are also publicly disclosed. We find that LPE fair value measurements reflect equity book value and net income in a manner consistent with stock market pricing of listed companies.

We investigate tax planning by privately-held corporations. Privately-held firms are commonly believed to face lower costs of tax planning relative to publicly-held firms, and thus are believed to engage in greater tax planning. 

We examine how firms’ accounting quality affects their reaction to monetary policy. The balance sheet channel of monetary policy predicts that the quality of firms’ accounting reports plays a role in transmitting monetary policy by affecting information asymmetries between firms and capital providers.

This study finds that greater asymmetric timeliness of earnings in reflecting good and bad news is associated with slower resolution of investor disagreement and uncertainty at earnings announcements. These findings indicate that a potential cost of asymmetric timeliness is added complexity from requiring investors to disaggregate earnings into good and bad news components to assess the implications of the earnings announcement for their investment decisions.

We study multi-period sales-force incentive contracting where salespeople can engage in effort gaming, a phenomenon that has extensive empirical support. Focusing on a repeated moral hazard scenario with two independent periods and a risk-neutral agent with limited liability, we conduct a theoretical investigation to understand which effort profiles the firm can expect under the optimal contract. We show that various effort profiles that may give the appearance of being sub-optimal, such as postponing effort exertion (“hockey stick”) and not exerting effort after a bad or a good initial demand outcome (“giving up” and “resting on laurels,” respectively) may indeed be induced optimally by the firm.

Networks of serial entrepreneurs, investors, and their affiliated companies play a critical role in driving entrepreneurial behavior, investor focus, and innovation hot spots within specific industry sectors and are critical for shaping the character of robust regional economies.

In the run up to the financial crisis, the essential functions financial intermediaries played seemed to become less important. Commercial and industrial loans, as well as residential mortgages, the quintessential banking products, were securitized and sold.

CEO successions represent critical junctures for firms. Although extant research explores the performance consequences resulting from different succession types, what remains underexplored is what happens when the firm rehires a former CEO (e.g., a “boomerang CEO”).

The pricing of prescription drugs comes under persistent public scrutiny, yet limited empirical evidence details the determinants of these price levels. This study provides a price function specification for newly launched drugs, with marginal cost and pricing power components.

I investigate the exit outcomes of start-ups backed by government VCs (GVCs) and private VCs (PVCs), using a sample of 8,106 start-ups in China funded by VCs between 1991 and 2013 and exit information updated in 2018. I find that start-ups backed by GVCs are less likely to exit through domestic Initial Public Offerings (IPOs), oversea IPOs, and M&As. GVC backed start-ups are also less likely to list on the intermediate public market before companies go to IPOs.

Employee cynicism is on the rise, and thus is increasingly part of the social fabric in modern workplaces. In this paper, we investigate whether interactions with cynical others may produce undesirable effects on employee energy.

Using a novel dataset on global private equity investments in 19 industries across 52 countries, we find that labor productivity, employment, profitability, and capital expenditures increase for publicly-listed companies in the same country and industry as private equity investments. Our results show that positive externalities created by private equity firms are absorbed by other companies within the same industry.

Why do young firms pay less? Using confidential microdata from the US Census Bureau, we find lower earnings among workers at young firms. However, we argue that such measurement is likely subject to worker and firm selection. Exploiting the two-sided panel nature of the data to control for relevant dimensions of worker and firm heterogeneity, we uncover a positive and significant young-firm pay premium. Furthermore, we show that worker selection at firm birth is related to future firm dynamics, including survival and growth. We tie our empirical findings to a simple model of pay, employment, and dynamics of young firms.

We examine how product market competition affects the disclosure of innovation. Theory posits that product market competition can cause firms to increase their disclosure of innovation to deter competitors. Consistent with this reasoning, we find that patent applicants in more competitive industries voluntarily accelerate their patent disclosures, which are credibly disclosed via the United States Patent and Trademark Office.