2/25/2019 — 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.

• KEYWORD(S):
• strategy and entrepreneurship
• venture capital

2/22/2019 — 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.

• KEYWORD(S):
• federal tax

2/19/2019 — 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.

• KEYWORD(S):
• labor
• pharmaceutical
• workforce development

2/16/2019 — 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.

• KEYWORD(S):
• healthcare
• operations

2/8/2019 — 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.

• KEYWORD(S):
• finance
• investments

2/2/2019 — 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.

• KEYWORD(S):
• hedge funds

2/1/2019 — 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.

• KEYWORD(S):
• accounting
• economics
• finance

2/1/2019 — 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.

• KEYWORD(S):
• cryptocurrency

1/31/2019 — 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.

• KEYWORD(S):
• energy
• sustainability

1/29/2019 — 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.

• KEYWORD(S):
• decision making
• management
• strategy and entrepreneurship

1/29/2019 — 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.

• KEYWORD(S):
• corporate finance

1/23/2019 — 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.

• KEYWORD(S):
• innovation
• strategy and entrepreneurship

1/20/2019 — We study how an improvement in contracting institutions due to the 1999 U.S.-China bilateral agreement affects U.S. firms’ innovation. We show that U.S. firms operating in China decrease their process innovations—innovations that improve firms’ own production methods—following the agreement.

• KEYWORD(S):
• global business
• innovation
• labor
• policy
• technology

1/15/2019 — Little is known about how TMT members affect a founder-led firm’s performance later in a firm’s life. Using novel methods and a sample of over 2,000 firms, we find that although team structure has a significant impact on the performance of non-founder-led firms (consistent with past literature), it has little to no effect on the operating performance of founder-led firms, suggesting that founder CEOs may exert too much control.

• KEYWORD(S):
• accounting
• c-suite

1/14/2019 — We examine the implications of less powerful forward guidance for optimal policy using a sticky-price model with an effective lower bound (ELB) on nominal interest rates as well as a discounted Euler equation and Phillips curve. We find that, under a wide range of plausible degrees of discounting, it is optimal for the central bank to compensate for the reduced effect of a future rate cut by keeping the policy rate at the ELB for longer.

• KEYWORD(S):
• economics
• finance

1/11/2019 — In this paper, we compare several approaches of producing multi-period-ahead forecasts within the GARCH and RV families – iterated, direct, and scaled short-horizon forecasts. We also consider the newer class of mixed data sampling (MIDAS) methods.

• KEYWORD(S):
• economics
• finance

1/11/2019 — Although the level of power held by the marketing department can determine key organizational outcomes, including firm performance, this power often is modest and, in many firms, diminishing. To address this apparent disconnect, the authors propose that the board of directors is a critical but overlooked driver of marketing department power.

• KEYWORD(S):
• knowledge management
• management
• marketing

1/5/2019 — We derive asymptotic properties of estimators and test statistics to determine - in a grouped data setting - common versus group-specific factors. Despite the fact that our test statistic for the number of common factors, under the null, involves a parameter at the boundary (related to unit canonical correlations) we derive a parameter-free asymptotic Gaussian distribution. We show how the group factor setting applies to mixed frequency data. As an empirical illustration we address the question whether Industrial Production (IP) is still the dominant factor driving the U.S. economy using a mixed-frequency data panel of IP and non-IP sectors. We find that a single common factor explains 89% of IP output growth and 61% of total GDP growth despite the diminishing role of manufacturing.

• KEYWORD(S):
• data project

1/1/2019 — In this paper, we empirically analyze the determinants of excess inventory announcement and the stock market reaction to the announcement in the US retail sector. We examine if the firm’s operational competence, as measured by total factor productivity (TFP), can explain the retailer’s excess inventory announcement. We also investigate if the stock market reaction to such announcements is conditional on the operational competence of the announcing firm. We use a combined dataset on excess inventory announcements, annual financial statements, and daily stock prices of publicly traded retailers in the USA between 1990 and 2011.

• KEYWORD(S):
• equity markets
• operations
• retail

12/21/2018 — Brand naming challenges are more complex in logographic languages (e.g., Chinese), compared with phonographic languages (e.g., English) because the former languages feature looser correspondence between sound and meaning.

• KEYWORD(S):
• brands
• marketing

12/3/2018 — Retailers routinely indulge in comparative pricing where they post two different prices (e.g., regular price and sale or posted price) on the price tag of a product. Previous literature shows that comparing the posted price to a higher reference price, also known as the advertised reference price (ARP), increases consumer’s likelihood to purchase. In this paper, we study the effect of ARP on transacted prices (conditional on purchase) in settings where consumers can negotiate on prices.

• KEYWORD(S):
• decision making
• marketing

12/1/2018 — Whether fair value accounting should be used in financial reporting has been the subject of debate for many years. A key dimension to this debate is whether fair value earnings can provide information to financial statement users that is helpful in making their economic decisions.

• KEYWORD(S):
• accounting
• earnings

12/1/2018 — This study investigates the determinants of goodwill impairment decisions by firms applying IFRS based on a comprehensive sample of stock-listed firms from 21 countries. Multivariate logistical regression findings indicate that goodwill impairment incidence is negatively associated with economic performance, but also related to proxies for managerial and firm-level incentives.

• KEYWORD(S):
• accounting
• financial reporting
• global business

11/29/2018 — We examine the uncertainty in households' expectations regarding macroeconomic outcomes, namely, inflation and the rate of nationwide home price growth. We document that people extrapolate from the instability of their personal and local environment when assessing the future volatility of these macroeconomic variables.

• KEYWORD(S):
• decision making
• finance
• socioeconomics

11/29/2018 — This paper examines corporations’ actions, and statements about actions, following the tax law change known as the Tax Cuts and Jobs Act (TCJA). Specifically, we examine four different outcomes—bonuses (or other actions that benefit workers), announcements of new investments, share repurchases, and dividend announcements.

• KEYWORD(S):
• economic development policy
• federal tax

11/20/2018 — In business-to-business (B2B) markets, the success of key account management (KAM) teams depends on how they are structured and how they handle customer relationships.

• KEYWORD(S):
• marketing

11/16/2018 — Innovation, the implementation of creative ideas, involves a dialogue between two roles: creators - who generate creative ideas, and evaluators-who determine which ideas to implement. Although each role aids innovation, we reveal that each role may also shape creativity assessments in different ways. In two experiments, participants randomly assigned to either an evaluator or creator role rated the same idea described as having low or high levels of novelty.

• KEYWORD(S):
• innovation
• organizational behavior

11/15/2018 — We explore the impact of Knightian uncertainty on contracting within a multi-layered firm. We study a setting where, absent uncertainty, division managers should be paid based on their division performance, but not other divisions' performance.

• KEYWORD(S):
• decision making
• earnings
• management

10/19/2018 — We provide the first large‐scale empirical evidence of banks functioning as tax planning intermediaries. We posit that some banks specialize in assisting corporate clients with tax planning. In this role, banks make use of their centrality in financial relationships; access to private information; and ability to structure, execute, and participate in tax planning transactions for clients. We measure bank‐client relationships using loan contracts and measure client tax planning using either the cash effective tax rate or the unrecognized tax benefit balance. Using a difference‐in‐differences design, we find that firms experience meaningful tax reductions when they begin a relationship with a bank whose existing clients engage in above‐median tax planning.

10/13/2018 — On September 30, 2018, California became the first U.S. state to set quotas for women directors on corporate boards. The passage of this law resulted in a significant decline in shareholder value for firms headquartered in California. The decline in shareholder value is directly related to the number of female directors that firms are required to add under these quotas.

• KEYWORD(S):
• c-suite
• corporate finance
• diversity
• policy

10/12/2018 — We model leverage cycles in the natural laboratory of a mature asset class, namely US Commercial Real Estate. In this setting we can observe entrepreneurs' asset values as well as debt balance and thus model capital-market yields, as conditioned by market-wide leverage, which indicates debt availability. Using a VAR framework, we examine variance decompositions and impulse-response functions. We show that leverage constitutes the primary driver of innovations in capital-market yields and vice versa. We further find evidence for flight to quality as well as knock-on effects that affect low-leverage entrepreneurs in the market.

• KEYWORD(S):
• finance
• innovation
• real estate

10/11/2018 — Like anyone trying to get something done with limited time and resources, economic developers have a lot of options to weigh when formulating a strategy to attract and retain businesses in their local economy. Over the years, economic development researchers have espoused a succession of theories as they’ve learned more about the many factors that influence economic growth. Historically, practitioners have tended to respond by focusing their efforts around what they perceive as the latest and greatest thinking, often at the expense of previously favored approaches. In practice, this has led to waves in which economic developers have focused on recruiting large, established companies or on fostering home-grown start-ups—but rarely both.

• KEYWORD(S):
• economic development policy
• entrepreneurial ecosystems
• workforce development

10/10/2018 — We undertake the first large-sample analysis of foreign tax holiday participation by U.S. firms.

• KEYWORD(S):
• international tax

10/4/2018 — This trial will provide evidence on the impact of a behavioral intervention to implement huddles as a key component of team-based care models. Knowledge gained from this trial will be critical to broader deployment and successful implementation of team-based care models.

• KEYWORD(S):
• healthcare
• operations

10/3/2018 — This paper studies the investment decisions and price impact of non-resident foreigners in the Paris housing market, employing unique micro-level transaction data over the period 1992–2016. We find that these “out-of-country” buyers generally purchase relatively small but high-quality properties in desirable neighborhoods and in areas with high ratios of compatriots.

• KEYWORD(S):
• real estate

10/2/2018 — Servicization is a business strategy to sell the functionality of a product rather than the product itself. It has been touted as an environmentally friendly strategy as it encourages manufacturers to take more responsibility for their products. We study when servicization results in a win-win outcome where it can simultaneously increase a firm’s profits and decrease its environmental impact compared with selling products.

• KEYWORD(S):
• operations
• sustainability

10/1/2018 — This paper examines price discovery and liquidity provision in the secondary market for bitcoin -- an asset that has no observable fundamentals and is associated with a high level of speculative trading. Based on a comprehensive dataset of the full limit order book of BTC-e over the 2013-2014 period, we find that order informativeness generally increases with order aggressiveness within the first 10 tiers, but that this pattern reverses in the outer layers of the book. In a high volatility environment, aggressive orders seem to be more attractive to informed agents, as reflected by the increased information content of such orders, although market liquidity appears to migrate outward in response to the information asymmetry.

• KEYWORD(S):
• asset pricing
• cryptocurrency

10/1/2018 — Although teams benefit from developing plans and processes that boost efficiency and reduce uncertainty, they may become too attached to these plans and escalate commitment when an alternative response is needed. Drawing on theories of team leadership, team processes and escalation of commitment, we propose that a change in leadership can help the team reduce commitment to outdated plans and avoid further escalation over time.

• KEYWORD(S):
• operations
• organizational behavior
• workforce development

10/1/2018 — Arabs represent a major cultural group, yet one that is relatively neglected in cultural psychology. We hypothesized that Arab culture is characterized by a unique form of interdependence that is self-assertive. Arab cultural identity emerged historically in regions with harsh ecological and climatic environments, in which it was necessary to protect the survival of tribal groups.

• KEYWORD(S):
• global business
• organizational behavior

9/29/2018 — This chapter investigates the pricing of key contract provisions of Puerto Rican debt. In doing so, the chapter contributes to a body of research that asks the questions: do investors price contract provisions? Does the pricing of contract provisions vary with credit risk? To our knowledge, this is the first study to address these questions for the case of Puerto Rico or any municipal issuer. Puerto Rico’s unique status as a U.S. territory implies that its subsidiaries, such as municipalities, cannot file for bankruptcy under Chapter 9 of the U.S. Bankruptcy Code.

• KEYWORD(S):
• economics
• finance
• global business

9/28/2018 — I develop a theory of credit relationships in an economy subject to search frictions and limited enforceability. The model features a dynamic contracting problem embedded within a directed search equilibrium with aggregate and creditor-specific uncertainty.

9/27/2018 — Electricity end-users have been increasingly generating their own electricity via rooftop solar panels. We study the impact of such distributed renewable energy (DRE) on utility profits and social welfare under net metering, which is a widespread policy in the United States. Utilities have been lobbying against net-metered distributed solar based on the common belief that it harms utility profits. We find that when wholesale market dynamics are considered, net-metered DRE may be a positive for utilities.

• KEYWORD(S):
• energy
• operations
• sustainability

9/24/2018 — The contemporary workplace is characterized by transience: Organizational members frequently turn over and careers span multiple organizations. Consequently, workplace friendships that were once close become less close and intimate, that is they become peripheral and can deteriorate. While research has examined the benefits for employees who move on to new opportunities, less clear is how stayers, or employees who remain behind in the work setting, are affected. To understand stayers’ experiences and how they manage, we draw on theories of belongingess and to offer a three-part episodic process model, which explains how stayers’ engagement in the task and social domains are influenced.

• KEYWORD(S):
• organizational behavior
• workforce development

9/23/2018 — We investigate a novel determinant of financial distress, namely individuals' self-efficacy, or belief that their actions can influence the future. Individuals with high self-efficacy are more likely to take precautions that mitigate adverse financial shocks. They are subsequently less likely to default on their debt and bill payments, especially after experiencing negative shocks such as job loss or illness. Thus, non-cognitive abilities are an important determinant of financial fragility and subjective expectations are an important factor in household financial decisions.

• KEYWORD(S):
• corporate finance
• decision making
• demographics

9/19/2018 — Widespread adoption of electronic medical record (EMR) systems is increasing. EMR implementation can be costly and typically requires workflow redesign. To our knowledge, no studies to date have examined the impact of EMR implementation using advanced cost accounting methods or the impact of its implementation on orthopaedic surgeons in an outpatient setting. Time-driven activity-based costing (TD-ABC) was used to evaluate the effect of EMR implementation in an outpatient adult reconstruction clinic.

• KEYWORD(S):
• accounting
• healthcare
• technology

9/18/2018 — We argue that behavioral strategy can learn a great deal from the Theory of Computational Complexity and Artificial Intelligence. Also, a concept of “organizational intractability” may be useful in determining what analytical decision technologies are actually intractable in real organizations with constraints on time and managerial attention.

• KEYWORD(S):
• organizational behavior
• technology

9/8/2018 — We study the role of hedge fund activists in curbing empire building. We show that firms with poor acquisition records are more likely to become activist targets. Following activist intervention, targeted firms make fewer acquisitions but obtain substantially higher abnormal returns. These firms avoid large transactions, diversifying deals, and refrain from announcing deals during merger waves.

• KEYWORD(S):
• corporate social responsibility
• finance
• hedge funds

9/1/2018 — Marketing activities that influence shoppers along the various stages of their path-to-purchase are gaining attention from both manufacturers and retailers. Using a dataset with detailed information on 105 new products (NPs) launched in the U.K. by 44 leading brands and sold across 13 major retail banners, we provide strong support for the prominent role of both upper- and lower-funnel marketing actions that influence consumers before (upper) or during (lower) their shopping trip.

• KEYWORD(S):
• global business
• marketing

9/1/2018 — This study addresses whether voluntary IFRS adoption is associated with increased comparability of accounting amounts and capital market benefits. We find that after firms voluntarily adopt IFRS (“adopting” firms), their accounting amounts are more comparable to those of firms that previously adopted IFRS (“adopted” firms) and less comparable to those of firms that apply domestic standards (“non-adopting” firms). Adopting firms exhibit increased liquidity, share turnover, and firm-specific information relative to adopted and non-adopting firms. Neither adopted nor non-adopting firms suffer capital market consequences. Adopting firms with higher comparability with adopted firms have greater capital market benefits after adopting IFRS than adopting firms with lower comparability, and capital market benefits for adopting firms in countries with a relatively high percentage of firms that apply IFRS enjoy greater capital market benefits.

• KEYWORD(S):
• accounting

9/1/2018 — This study examines the relation between audit personnel salaries and office-level audit quality. We measure audit personnel salaries at the associate, senior, and manager ranks for Big 4 audit offices from 2004 to 2013, using unique individual-auditor-level data obtained from the U.S. Department of Labor.

• KEYWORD(S):
• tax