We examine the effect of higher wages on firm performance during the 2008 financial crisis. To identify variation in wages, we rely on heterogeneity in the timing of long-term wage agreements for a sample of UK firms. We instrument for firms signing long-term agreements overlapping with the crisis by the presence of a contract signed in 2006 or earlier and expiring before September 2008.
Consumer boycotts of products offer a unique context to understand the nature of consumer preferences and market dynamics. We focus on the 2012 nationwide boycott of Japanese products in China triggered by a territorial dispute and heavily influenced by historical animosity between citizens of the two countries.
The New Oxford Handbook of Economic Geography is the most comprehensive and significant statement about the value and potential of economic geography in 2017. Sixty-six leading economists and geographers from around the world investigate the rival theories and perspectives that have sustained the development of economic geography. The Handbook also focuses on linkages, including those between inequality, instability, and sustainability in the global economy; economic behavior, strategies, and practices; mobility and creativity; resources and development; and distribution and consumption.
This paper seeks to improve our understanding of how intermediaries operate to advance the commercialization of science by providing a set of specialized services. We review five intermediaries commonly mentioned in the ecosystem literature: university technology transfer and licensing offices; physical space (incubators, accelerators, and co-working spaces); professional services providers; networking, connecting, and assisting organizations; and finance providers (including venture capital, angel investors, public financing, and crowdfunding).
Firms should disclose information on material cyber-attacks. However, because managers have incentives to withhold negative information, and investors cannot discover most cyber-attacks independently, firms may underreport them. Using data on cyber-attacks that firms voluntarily disclosed, and those that were withheld and later discovered by sources outside the firm, we estimate the extent to which firms withhold information on cyber-attacks.
By almost any measure, marketing academia is in a better shape than it has ever been. Job prospects for PhD students have improved substantially in recent years. According to the 2017 Marketing Academia Labor Report, there were 1.83 candidates per new assistant professor (“rookie”) position compared to 2.85 to 1 in 2010. Moreover, there are 37 open positions for advanced assistant professors with only 14 people looking for such positions. The median 12-month salary for entry-level positions is $190,000, up from $162,260 in 2010. Colleagues in the School of Arts & Sciences, as well as most people in the government or private sector, would gladly enjoy such opportunities.
Although subsidiary disclosures in firms’ filings with the Securities and Exchanges Commission (SEC; Exhibit 21) represent the most granular required public disclosure of a firm's geographic footprint, little is understood about the quality of the disclosure, and anecdotal evidence suggests firms may not fully comply with the disclosure requirements. We use data provided by multinational firms to the Internal Revenue Service regarding their foreign subsidiary locations to explore the accuracy of public subsidiary disclosures on Exhibit 21 of Form 10‐K per SEC rules.
This paper investigates the extent to which the expiration of a temporary tax law makes corporate earnings harder to predict and understand. Examining evidence from eight separate expirations of the R&D tax credit, I find that analysts’ forecast errors and abnormal volume increase surrounding quarterly earnings announcements for firms affected by the R&D tax credit.
We use US Census administrative data to document important facts about wages at entrepreneurial firms. As in earlier studies, we confirm lower average wages at new firms. However, nearly two thirds of this decline can be attributed to differences in worker quality at new firms. Moreover, once we control for firm fixed effects, absorbing time invariant firm quality, the wage difference between new and established firms further declines.
Backhanded compliments seem like praise but can leave a sting. This study explores the psychology of backhanded compliments. Flatterers deploy backhanded compliments to garner liking while conveying social status. Recipients view praise of this kind as strategic put-downs and penalize would-be flatterers even as the backhanded compliment undermines their motivation and perseverance.
In this paper, we introduce the role of big data in humanitarian settings and discuss data streams which could be utilized to develop descriptive, prescriptive and predictive models to significantly impact the lives of people in need.
Since 1965, average idiosyncratic risk (IR) has never been lower than in recent years. In contrast to the high IR in the late 1990s that has drawn considerable attention in the literature, average market-model IR is 44% lower in 2013-2017 than in 1996-2000. Macroeconomic variables help explain why IR is lower, but using only macroeconomic variables leads to large prediction errors compared to using only firm-level variables. As a result of the dramatic change in the number and composition of listed firms since the late 1990s, listed firms are larger and older. Larger and older firms have lower idiosyncratic risk. Models that use firm char-acteristics to predict firm-level idiosyncratic risk estimated over 1963-2012 can largely or completely ex-plain why IR is low over 2013-2017. The same changes that bring about historically low IR lead to unusu-ally high market-model R-squareds.
We use changes in real estate prices to study the sensitivity of CEO compensation to luck and to responses to luck. Pay for luck can be optimal when CEOs are expected to react to luck.
On average, competing retailers near Lidl stores set their prices approximately 9.3% lower than in markets where Lidl is not present, which is more than three times as much as was typically reported in other academic work on Walmart’s entry in a new market. This price reaction results, on average, in substantial dollar savings for customers.
Financial intermediaries often provide guarantees that resemble out-of-the-money put options, exposing them to tail risk. We present a model in the context of the U.S. life insurance industry in which variable annuity (VA) guarantees and associated hedging operate within the regulatory capital framework to create incentives for insurers to overweight high-risk and illiquid bonds (“reach-for-yield”).
Operational systems increasingly rely upon specialized experts who can provide high-quality service. However, these experts, by definition, only address one part of an overall problem and so individuals are needed to coordinate the overall service provision. In many services, this coordination responsibility may be shared across multiple parties serving in the role of a gatekeeper.
We use industry valuation differentials across European countries to study the impact of membership in the European Union as well as the Eurozone on economic and financial integration. In integrated markets, discount rates and expected growth opportunities should be similar within one industry, irrespective of the country, implying narrowing valuation differentials as countries become more integrated. Our analysis of the 1990 to 2007 period shows that membership in the EU significantly lowers discount rate and expected earnings growth differentials across countries. In contrast, the adoption of the Euro is not associated with increased integration.
We examine the trading behavior of particularly intensive traders, those who contribute the most to daily trading volume, and provide new evidence that is consistent with the presence of informational advantages. Using a unique Chinese data set of the most active daily market participants for each stock, we demonstrate that intensive traders’ buying (selling) predicts large positive (negative) abnormal returns, both unconditionally and, in particular, around key, value-relevant announcements.
Accelerators are entrepreneurial programs that attempt to help ventures learn, often utilizing extensive consultation with mentors, program directors, customers, guest speakers, alumni and peers. While accelerators have rapidly emerged as prominent players in the entrepreneurial ecosystem, entrepreneurs, policy makers, and academics continue to raise questions about their efficacy.
We show that in the years following a large broad-based employee stock option (BBSO) grant, employee turnover falls at the granting firm. We find evidence consistent with a causal relation by exploiting unexpected changes in the value of unvested options. A large fraction of the reduction in turnover appears to be temporary with turnover increasing in the third year following the year of the adoption of the BBSO plan. The increase three years post-grant is equal in magnitude to the cumulative decrease in turnover over the three prior years, suggesting that long-vesting BBSO plans delay, instead of prevent, turnover.
This article integrates relevant literature to develop a conceptual model on the potential avenues to achieve service excellence at low unit costs, which we term cost-effective service excellence (CESE). To gain a deeper understanding of these strategies, their applicability and interrelatedness, we analyze how 10 organizations have achieved CESE. Our findings show that CESE can be achieved through three core strategies.