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.
A new research paper provides a framework for companies to respond to pressures on issues from global warming and sustainability to child labor and discrimination.
Each of the Kenan Institute's 2023 Distinguished Fellows has written a paper as part of their work to support our exploration of workforce disruption. Learn more about our fellows and read their papers, along with key takeaways from each.
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.
Director of the Digital Enterprise & Innovation Laboratory, Kenan Institute of Private Enterprise
Michael W. Haley Distinguished Professor of Accounting and Area Chair of Accounting, UNC Kenan-Flagler Business School
As the middle class shrinks and consumer debt, education and healthcare costs increase, a national conversation has focused on the wealth gap within America and the realities of the American Dream.
On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. Within two months, nearly half a million people fled hard-hit New York City. Will they return once the crisis has passed? In this Kenan Insight, we explore how the ongoing pandemic is raising questions about the future attractiveness of large cities as places to live and do business.
Isabelle and Scott Black Professor of Political Economy, Harvard Kennedy School, and 2025 Kenan Institute Distinguished Fellow
Does the quality of startups increase when the quantity drops? Does entrepreneurial experience help or hurt a corporate job candidate? Do diverse teams make for better startups? The 2022 Trends in Entrepreneurship report brings together our global network of affiliated experts to address these questions and more – with key findings highlighted in this week’s insight.
Associate Professor of Strategy and Entrepreneurship, UNC Kenan-Flagler Business School; Sustainability Distinguished Fellow and Faculty Director, Ackerman Center for Excellence in Sustainability and 2022 Kenan Institute Distinguished Fellow
Professor of Operations and Sarah Graham Kenan Scholar, UNC Kenan-Flagler Business School
The growth of the venture capital market should not blind one to its limitations as an engine of innovation. Kenan Institute Distinguished Fellow Josh Lerner lays out three areas of concern worthy of more research.