Does the availability of health insurance for young adults affect entrepreneurial behavior? This paper proposes that policy effects may go beyond the binary, and shape choices around entrepreneurial form, such as incorporation. I use the adoption of 38 dependent coverage mandates in 31 states, passed from 1986 to 2013, and the adoption of a federal mandate in 2010 to analyze the relationship between non-employer provided insurance and entrepreneurial activity.
We examine when anomaly returns occur. We use a powerful database that contains the precise date on which accounting information is first made public. Despite recent findings to the contrary, once timing is considered, anomalies exist in the data.
We examine a brick-and-mortar retailer’s choice of which product to include in a promotional display (e.g., an “endcap” display). The display provides a visibility advantage to both the featured product and its category, but it also has consequences for customer traffic and substitution.
A central idea in the feedback seeking literature is that there should be a positive relationship between self-efficacy and the likelihood of seeking feedback. Yet empirical findings have not always matched this theoretical claim. Departing from current theorizing, we argue that high self-efficacy may sometimes decrease feedback seeking by making people undervalue feedback and that perspective taking is an important factor in determining whether or not this occurs.
The objective of this paper is to introduce the emergent concept of marketing agility and develop an organizing framework that systematically captures the antecedents and consequences of marketing agility. Given the sparse literature on the topic, we use a grounded theory approach to tap into the mental models of managers. Synthesizing insights from 22 interviews with senior managers in diverse industries, we first define marketing agility, discuss its importance to various stakeholders in the field of marketing, and distinguish the concept from related constructs in the domains of strategy, information systems and marketing. Following this, we develop an organizing framework to guide the systematic study of marketing agility. We offer propositions related to organizational culture, organizational structure and marketing technology (martech) characteristics as antecedents of marketing agility.
We investigate the spatial dependence between commercial and residential mortgage defaults. A new class of observation-driven frailty factor models is introduced to do so. The idea of dynamic parameters embedded in the class of GAS models is utilized to estimate dynamic models of default risk with potentially multiple factors which are driven by stratified grouping of large panels of mortgage loan records. The score dynamics in the models is driven by so-called generalized residuals, and have therefore a fairly intuitive interpretation of ARMA-like dynamics. The proposed models are computationally easy to implement and therefore attractive in big data applications, something that gives them a considerable advantage in comparison to the typical latent factor frailty models proposed in the literature.
This study examines the performance consequences of web personalization (WP), a type of personalization in which web content is personalized and recommendations are offered based on customer preferences. Despite the growing popularity of personalization, there is a dearth of research at the firm level on whether and how web personalization creates shareholder value. We develop and test a conceptual model that proposes that the impact of WP on shareholder value is mediated by (1) cash flow volatility and (2) premium price.
In a recent paper, “Demystifying Illiquid Assets – Expected Returns for Private Equity,” Ilmanen, Chandra and McQuinn (of AQR) give a perspective on the past, present, and expected future performance of private equity. They conclude that “private equity does not seem to offer as attractive a net-of-fee return edge over public market counterparts as it did 15-20 years ago from either a historical or forward-looking perspective.” This analysis provides our perspective based on more recent and, we think, more reliable data and performance measures – the historical perspective is more positive than Ilmanen et al. portray.
Following 2 decades of discussion, the border adjustment tax (BAT) briefly emerged as part of proposed US corporate tax reform in early 2017. While heavily debated, little empirical evidence exists regarding the BAT. We take advantage of the period during which the BAT was under strong consideration to examine its effects on shareholder value.
Certification by online analysts and early investors can generate excitement among potential token investors, leading to successful initial coin offerings (ICOs). We test the general notion of "wisdom of crowds" using novel data on nearly 3,400 ICOs, including sequential investor subscriptions during token sales.
This monograph provides a structured overview of costing system research that can explain the variation in the characteristics and properties of costing systems found in practice based on firms’ source(s) of their demand for cost information. Costing systems are not developed in a vacuum but are designed to fulfill a purpose. In order to have a meaningful decision on the various demands for cost information, I start in Part 1 by exploring the different techniques firms can use to supply cost information to its managers and employees.
African American older adults face a major retirement crisis (Rhee, 2013; Vinik, 2015)). Owing to a legacy of racial discrimination in education, housing, employment, and wages or salaries, they are less likely than their white counterparts to have accumulated wealth over the course of their lives (Sykes, 2016). In 2013, the median net worth of African American older adult households ($56,700) was roughly one-fifth of the median net worth of white older adult households ($255,000) (Rosnick and Baker, 2014). Not surprising, given these disparities in net worth, African American older adult males (17%) and females (21%) were much more likely than their white male (5%) and female (10%) counterparts to live in poverty (Johnson and Parnell, 2016; U.S. Department of Housing and Urban Development, 2013a). They also were more likely to experience disabilities earlier in life and to have shorter life expectancies (Freedman and Spillman, 2016).
Why do managers act unfairly even when they recognize the significant organizational benefits of treating employees fairly? Prior research has explained this puzzling phenomenon predominantly through an “actor-centric” perspective, proposing that managers’ just behavior is an outcome of their own individual differences.
This article examines at‐the‐market (ATM) equity programs as an additional source of financial flexibility. We find that firms with higher market‐to‐book ratios and greater institutional ownership are more likely to announce an ATM program. Firms using ATM programs are also more likely to issue shares when they have exhausted other viable financing alternatives, have timely investment opportunities and when market conditions are favorable. Finally, we document a significant negative announcement effect around the establishment of an ATM program, though the magnitude of this effect is significantly less negative than that of a comparable SEO.
We investigate how auditor alignment, i.e. parent and subsidiary are audited by auditors from the same audit firm network, affects the quality of the internal information environment of groups and their subsidiaries decision making and performance management processes. We predict that auditor alignment improves internal information quality via better information coordination across the group, and via lower internal information asymmetry between parent and subsidiaries.
Voice, or employees’ upward expression of challenging but constructive concerns or ideas on work-related issues, can play a critical role in improving organizational effectiveness. Despite its importance, evidence suggests that many managers are often hesitant to solicit voice from their employees.
We propose a new theory of systemic risk based on Knightian uncertainty (“ambiguity”). Because of uncertainty aversion, bad news on one asset class worsens investors’ expectations on other asset classes, so that idiosyncratic risk creates contagion, snowballing into systemic risk.
This study analyzes whether fair value estimates of fund net asset values (NAVs) produced by private equity managers are accurate and unbiased predictors of future discounted cash flows (DCF). We exploit the fact that private equity funds have finite lives to compare reported NAVs to DCFs based on realized cash flows for 384 venture capital (VC) funds and 195 buyout funds spanning 1988-2016.
Rapid advances in artificial intelligence (AI) and automation technologies have the potential to significantly disrupt labor markets. While AI and automation can augment the productivity of some workers, they can replace the work done by others and will likely transform almost all occupations at least to some degree. Rising automation is happening in a period of growing economic inequality, raising fears of mass technological unemployment and a renewed call for policy efforts to address the consequences of technological change. In this paper we discuss the barriers that inhibit scientists from measuring the effects of AI and automation on the future of work.
This paper aims to advance the use of numerical experiments to investigate issues that surround the design of cost systems. As with laboratory and field experiments, researchers must decide on the independent variables and their levels, the experimental design, and the dependent variables. Options for dependent and independent variables are ample, as are the ways in which we can model the relations among these variables.
When multinational corporations face foreign marketing crises, the psychic distance between the home and host country represents a distinct challenge. This paper examines the curvilinear relationship between psychic distance and firm performance during marketing crises, and the moderating role of marketing capabilities.
A roadmap for inclusive and equitable development is proposed which has four core elements that will lead to greater shared prosperity in Durham: a sustainability scorecard; a collective ambition community mobilization strategy; a more inclusive entrepreneurial/business ecosystem; and an equitable community economic development innovations fund. These activities aim to support historically underutilized businesses and invest in workforce development partnerships that support working poor civil servants at-risk of being priced out of and displaced from Durham’s housing market. Utilizing these tools and leveraging the four corners of intellectual assets that exist at Duke University, University of North Carolina at Chapel Hill, North Carolina State University, and North Carolina Central University should strategically position Durham to be one of the most inclusive, equitable, and sustainable cities in America.
We hypothesized that individuals in cultures typified by lower levels of relational mobility would tend to show more attention to the surrounding social and physical context (i.e., holistic vs. analytic thinking) compared with individuals in higher mobility cultural contexts. Six studies provided support for this idea. Studies 1a and 1b showed that differences in relational mobility in cultures as diverse as the U.S., Spain, Israel, Nigeria, and Morocco predicted patterns of dispositional bias as well as holistic (vs. analytic) attention.
We study the foreign externalities of the recent U.S. tax reform, commonly known as the Tax Cuts and Jobs Act (TCJA). Specifically, we examine foreign firms’ stock returns around key tax reform events. We find significant heterogeneity in market responses by country, industry, and firm.
When financially distressed firms have overwhelming debts, a prominent option for survival is to file for Chapter 11 bankruptcy protection. We empirically study the effect of Chrysler’s Chapter 11 bankruptcy filing on the quantity sold by its competitors in the U.S. auto industry.
Motivated by challenges faced by firms entering an unknown market, we study a strategic investment problem in a duopoly setting. The favorableness of the market is unknown to both firms, but firms have prior information about it. A leader invests first by choosing its investment size. Then, in a continuous-time Bayesian setting, a competitive follower dynamically learns about whether the market is favorable or not by observing the leader’s earnings, and chooses its investment size and timing. In this setting, we characterize equilibrium strategies of firms.
We study dynamic decision-making under uncertainty when, at each period, a decision-maker implements a solution to a combinatorial optimization problem. The objective coefficient vectors of said problem, which are unobserved prior to implementation, vary from period to period.
We examine trends in the use of predictive analytics for a sample of more than 25,000 manufacturing plants using proprietary data from the US Census. Comparing 2010 and 2015, we find that use of predictive analytics has increased markedly, with the greatest use in younger plants, professionally-managed firms, more educated workforces, and stable industries.
This paper presents an easy-to-use measure of patent scope that is grounded both in patent law and in the practices of patent attorneys. We validate our measure by showing both that patent attorneys’ subjective assessments of scope agree with our estimates, and that the behavior of patenters is consistent with it.
Past research has shown that founders bring important capabilities and resources from their prior employment into their new firms and that these intergenerational transfers influence the performance of these ventures. However, we know little about whether organizational practices also transfer from parents to spawns, and if so, what types of practices are transferred? Using a combination of survey and registrar data and through a detailed identification strategy, we examine these two previously unaddressed questions.
On January 31 and February 1, 2019, the Frank H. Kenan Institute of Private Enterprise (Kenan Institute) hosted its Frontiers of Entrepreneurship Conference at The Breakers Palm Beach Resort. The conference brought together more than 150 academic research scholars, policy experts and private sector professionals to discuss and debate the most challenging current issues in the field of entrepreneurship in order to set the agenda for future research and policy.
This article utilizes a unique database (PLACE, the PLatform for Advancing Community Economies) to explore relationships between founders’ prior work experiences and the outcomes of their entrepreneurial firms.
In many service operations, customers have repeated interactions with service providers. This creates two important questions for service design. First, how important is it to maintain the continuity of service for individuals? Second, since maintaining continuity is costly and, at times, operationally impractical for both the organization (due to potentially lower utilization) and providers (due to high effort required), should certain customer types, such as those with complex needs, be prioritized for continuity?
Marketers create social media, in the form of firm-generated content (FGC), to ignite interest in new products such as movies; in turn, there is a clear need to understand whether and how FGC influences demand. With a descriptive study, the authors investigate two potential mechanisms by which FGC may drive box office revenues.
In this paper, we propose a research agenda for psychologists in general, and scholars of culture and negotiations in particular, to address the key challenges of dealing with an increasingly globalized world from a psychological perspective. Building on an understanding of globalization in terms of cultural and subjective matters, we propose three research domains in which psychology scholars can contribute to a further understanding of our global society: (a) the effects of global contact on cognition and behavior; (b) hybridization and human agency; and (c) new forms of cooperation.
In the past decade, coworking spaces have emerged as a new and promising phenomenon within entrepreneurship. Due to its prevalence, popularity and potential for disruptive change, coworking is increasingly relevant to theory, practice and policy in entrepreneurship, yet its implications are largely unstudied given its rapid rise. Overall, more data and analysis is needed to inform owners, policy makers and entrepreneurs about the effects of coworking. This paper is meant to increase understanding about the nature and value of this new phenomenon. In other words, it attempts to address the question: Does coworking work?
We explore the theoretical relation between earnings and market returns as well as the properties of earnings frequency distributions under the assumption that managers use unbiased accounting information to sequentially decide on real options their firms have and report generated earnings truthfully, with the market pricing the firm based on those reported earnings. We generate benchmarks against which empirically observed earnings‐returns relations and aggregate earnings distributions can be evaluated.
Using U.S. venture capital investment data from 1985 to 2008 and qualitative interviews, we examine how group dynamics influence the growth of interorganizational collaborations through the addition of new members.
We examine whether changes to corporate governance arising from board reforms affect corporate tax behavior. While the relation between corporate governance and tax behavior has been the subject of intense interest in the literature, prior research has been hampered by a lack of exogenous variation.
High rates of opioid abuse have had a significant impact on the United States including implications for firms which must now contend with a lower pool of available and productive workers. This paper documents a negative effect of instrumented opioid prescriptions and subsequent individual employment outcomes.
In the last few decades, many healthcare institutions converted their ownership type from nonprofit to for-profit, contributing to an increased presence of for-profit ownership in the U.S. healthcare sector. There have been opposing views on whether such ownership conversions benefit the public. Employing a large panel dataset of U.S. nursing homes from 2006 to 2015, we conduct a difference-in-differences analysis on converted facilities’ financial performance, operating policies, and quality of care. We observe that converted facilities significantly increased their post-conversion profit margins, compared to propensity-score-matched controls.
In this study, we ask if it is desirable to give greater freedom to firms in their choices of class shares. Making use of the 2011 Commercial Act amendment that significantly relaxed the regulation on class shares in Korea, we study the motivation and the effect of adopting two newly emerged class shares.
Using a large database of U.S. equity position-level holdings for hedge funds, we measure the degree of securitylevel crowdedness. The crowdedness factor is related to downside “tail risk" as stocks with higher exposure to crowdedness experience relatively larger drawdowns during periods of market distress. This tail risk extends to hedge fund portfolio returns as the crowdedness factor explains why some funds experience relatively large drawdowns.
We examine whether the contribution of firm-level accounting earnings to the informativeness of the aggregate is tilted towards earnings with specific financial reporting characteristics. Specifically, we investigate whether considering the smoothness of firm-level earnings increases the informativeness of aggregate earnings for future real GDP, and if so, whether macroeconomic forecasters use this information efficiently. Using recently-developed mixed data sampling methods, we find that the aggregate is tilted towards firms with smoother earnings and that this composition of aggregate earnings outperforms traditional weighting schemes.
Pump-and-dump schemes (P&Ds) are pervasive in the cryptocurrency market. We find that P&Ds lead to short-term bubbles featuring dramatic increases in prices, volume, and volatility. Prices peak within minutes and quick reversals follow. The evidence we document, including price run-ups before P&Ds start, implies significant wealth transfers between insiders and outsiders.
The UNC Energy Center and the Kenan Institute of Private Enterprise hosted a conference on "Meeting the Renewables Intermittency Challenge" on April 13-14, 2018. The conference, and resulting white paper, examined the true cost of integrating renewable energy generation into the electric grid and explore ways to address the challenges posed by wind and solar energy intermittency.
As firms mature, their founders are often replaced with seasoned executives. When founders are retained, the surrounding top management team (TMT) members are viewed as critical resources in helping compensate for the founder's managerial deficiencies. Surprisingly, however, little is known about how TMT members affect a founder‐led firm's performance later in a firm's life.
We find that although team structure has a significant impact on the performance of nonfounder‐led firms (consistent with past literature), it has little to no effect on the operating performance of founder‐led firms, suggesting that founder chief executive officers (CEOs) may exert too much control. Thus, the irony is that founders are retained to propel progress but their very retention may prevent progress.
Customer care employees (CCEs) are an excellent source of ideas for new and enhanced services for customers. By serving many customers, CCEs have the ability to see patterns in unserved and underserved needs. By being inside rather than external to the firm, CCEs have the ability to offer suggestions that build on existing capabilities, which result in ideas that are more easily implementable. There is a long history of research and practice for soliciting suggestions from employees, but little of this work has described how CCEs can be organized into a temporary online crowd to cocreate innovative ideas.
