Accounting rules, through their interactions with capital regulations, affect financial institutions’ trading behavior. The insurance industry provides a laboratory to explore these interactions: life insurers have greater flexibility than property and casualty insurers to hold speculative-grade assets at historical cost, and the degree to which life insurers recognize market values differs across U.S. states. During the financial crisis, insurers facing a lesser degree of market value recognition are less likely to sell downgraded asset-backed securities. To improve their capital positions, these insurers disproportionately resort to gains trading, selectively selling otherwise unrelated bonds with high unrealized gains, transmitting shocks across markets.
We examine the role of general counsel (GC) in firms' financial reporting quality. GCs have a broad oversight role within the firm, including keeping the firm in compliance with laws and regulations and dealing with potential violations with respect to financial reporting. Several high-profile U.S. Securities and Exchange Commission (SEC) investigations have resulted in lawsuits or indictments against GCs for perpetrating financial fraud and caused many to ask: where were the gatekeepers?
We identify a new channel for the transmission of shocks across international markets. Investor flows to funds domiciled in developed markets force significant changes in these funds' emerging market portfolio allocations. These forced trades or “fire sales” affect emerging market equity prices, correlations, and betas, and are related to but distinct from effects arising purely from fund holdings or from overlapping ownership of emerging markets in fund portfolios. A simple model and calibration exercise highlight the importance to these findings of “push” effects from funds' domicile countries and “co-ownership spillover” between markets with overlapping fund ownership.
Focusing on the ten countries with the most-traded currencies, we provide novel empirical evidence about the existence of significant heterogenous exposure to global growth news shocks.
The Hawthorne Effect is a prevalent observer effect that causes behavioral changes among participants of epidemiological studies or infection control interventions. The purpose of the review is to describe the origins of the Hawthorne Effect, to understand the term in relation to current scientific literature, to describe characteristics of the Hawthorne effect, and to discuss methods to quantify and overcome limitations associated with the Hawthorne Effect.
Many managers today are spending more and more time working cross-functionally. For example, a recent Corporate Executive Board survey of over 20,000 employees found that 60-70% reported working in groups that involve individuals from other internal functional areas or other external stakeholders. Similarly, a Best Companies for Leadership survey, jointly sponsored by Businessweek.com and the Hay Group, found that more than 96% of managers in the top 20 performing global companies agreed with the statement, "My organization operates in a highly matrixed structure," where one of the main goals behind matrix structures is to pull together representatives from different functional groups to make decisions.
Using a survey of 393 employees who were natives and residents of China, Japan, and South Korea, we examined the extent to which employees from different countries within East Asia experience distributive justice when they perceived that their work outcomes relative to a referent other (i.e., someone with similar “inputs” such as educational background and/or job responsibilities) were (1) equally poor, (2) equally favorable, (3) more poor, or (4) more favorable.
Grounded in a social functional perspective, this article examines the conditions under which group affect influences group functioning. Using meta-analysis, the authors leverage heterogeneity across 39 independent studies of 2,799 groups to understand how contextual factors— group affect source (exogenous or endogenous to the group) and group life span (one-shot or ongoing)—moderate the influence of shared feelings on social integration and task performance.
Impression management research suggests variability in the effectiveness of self-promotion: audiences grant self-promoters more status in some situations than others. We propose that self-promotion effectiveness depends on the audience’s cognitive resources.
We provide empirical evidence for the existence, magnitude, and economic cost of stigma associated with banks borrowing from the Federal Reserve's Discount Window (DW) during the 2007-2008 financial crisis.
We examine the effects of mixed sampling frequencies and temporal aggregation on the size of commonly used tests for cointegration, and we find that these effects may be severe.
We consider a firm that can use one of several costly learning modes to dynamically reduce uncertainty about the unknown value of a project. Each learning mode incurs cost at a particular rate and provides information of a particular quality. In addition to dynamic decisions about its learning mode, the firm must decide when to stop learning and either invest or abandon the project.
We greatly expand the space of tractable term structure models (TTSM). We find that the early stages of a recession have distinct effects on yield volatility. Upon entering a recession when yields are far from the lower bound, (1) the volatility term structure becomes flatter, (2) the level and slope of yields are nearly uncorrelated, and (3) the second principle component of yields plays a larger role.
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.
The New York Times examines the views of David Autor, Ford Professor of Economics at MIT and a 2024 Kenan Institute Distinguished Fellow, on artificial intelligence and potential benefits for the middle class.
We see six clear trends that Census 2010 will likely confirm with hard and reliable data. In this report, we describe these emergent trends and discuss their implications for business, consumer markets, and the nation’s competitiveness in the global marketplace via analyses of intercensal statistics and reviews of scholarly demographic research. Because the specific population shifts discussed here will dramatically transform all of the nation’s social, economic, and political institutions, we refer to them collectively as disruptive demographic trends—borrowing and broadening the application of a term coined by Massachusetts Institute of Technology Professor Joseph Coughlin.
The United States Association for Small Business and Entrepreneurship (USASBE) has named Ted Zoller a Justin G. Longenecker Fellow. Zoller, T.W. Lewis Clinical Professor of Strategy and Entrepreneurship at UNC Kenan-Flagler Business School and director of the Kenan Institute-affiliated Entrepreneurship Center, was inducted into the fellowship on Jan. 25 at the USASBE’s annual conference in St. Petersburg, Florida.
Jeff Hoopes, a research scholar with the Kenan Institute-affiliated UNC Tax Center and an assistant professor of accounting at UNC Kenan-Flagler Business School, provided insight on company tax breaks under President Trump's Tax Cuts and Jobs Act to NBC News.
Professor Jim Johnson, director of the Kenan Institute-affiliated Urban Investment Strategies Center, recently penned an op-ed for the Raleigh News and Observer on the importance of immigrants in an aging U.S. economy. Johnson co-authored the piece with Cedar Grove Institute for Sustainable Communities Vice President Allan M. Parnell.