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.
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.
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.
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.
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 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.
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.
To increase revenue or improve customer service, companies are increasingly personalizing their product or service offerings based on their customers' history of interactions. In this paper, we show how call centers can improve customer service by implementing personalized priority policies.
The idea that new ventures are simple mimetic reflections of the organizational practices of existing organizations contradicts the recognized importance of organizational diversity for innovation. There is an inherent contradiction in the literature between the persistence implied by the inheritance of practices from prior employment, and the experimentation prevalent in the organizational practices contributed by new organizations. This paper first accounts for mechanisms that may drive heritage of practices from parent organizations to their spawns.
This paper studies how corporate tax cuts in developed countries affect economies in the developing world. We focus on one of the most prominent fiscal policies – the corporate income tax regime – and study a major U.K. tax cut as an exogenous shock to foreign investment in Africa.
This paper experimentally tests the Fox-Tversky (1995) source preference hypothesis as axiomatized in Chew and Sagi (2008) where people may have preference between equally distributed risks depending on the underlying sources of uncertainty.
In this paper, we develop new methods for analyzing high-dimensional tensor datasets. A tensor factor model describes a high-dimensional dataset as a sum of a low-rank component and an idiosyncratic noise, generalizing traditional factor models for panel data. We propose an estimation algorithm, called tensor principal component analysis (PCA), which generalizes the traditional PCA applicable to panel data.
Factor analysis is a widely used tool to summarize high dimensional panel data via a small dimensional set of latent factors. Applications, particularly in finance, are often focused on observable factors with an economic interpretation. The objective of this paper is to provide a formal test for the question whether the factor spaces of latent and observable (economic) factors are equal.
This paper investigates how bank supervisors’ enforcement decisions and orders (EDOs) influence the allocation of mortgage lending across demographic groups underlying a banks’ borrower base. Specifically, we investigate how banks’ mortgage lending to minority borrowers relative to white borrowers changes following the resolution of severe EDOs.
Entrepreneurs making decisions under uncertainty are encouraged to evaluate their initial ideas through hypothesis testing, but entrepreneurial approaches vary in their emphasis on ex-ante theory development prior to collecting evidence. In this paper, we examine whether and how entrepreneurs benefit from adopting an evidence-based approach or a theory-and-evidence-based approach to decision-making.
It is common wisdom that practice makes perfect. And, in fact, we find evidence that when given a choice between practicing a task and reflecting on their previously accumulated practice, most people opt for the former. We argue in this paper that this preference is misinformed. Using evidence gathered in ten experimental studies (N = 4,340) conducted across different environments, geographies, and populations, we provide a rich understanding of the conditions under which the marginal benefit of reflecting on previously accumulated experience is superior to the marginal benefit of accumulating additional experience.
This paper uses transaction-level import data at the shipment level to examine how multinational companies importing to the US have restructured their supply chains during the COVID-19 pandemic. We find that companies sourced from fewer locations, reduced the share of imports from China, and increased the share of imports from other Asian countries, such as India and Vietnam, and North American countries, such as Canada and Mexico. For managers, our results imply that a one-size-fits-all mentality regarding supply chain disruption responses is not appropriate, and companies’ disruption-response strategies need to be tailored to individual supply chains’ circumstances.