Using a dataset of 3,234 letters sent by 434 hedge funds to their investors during 1995–2011, we study what motivates hedge fund managers to make voluntary disclosures. Contrary to the hedge fund industry's reputation for opacity, we observe that managers provide their investors with an array of quantitative and qualitative information about fund returns, risk exposures, holdings, benchmarks, performance attribution, and future prospects.
This study examines the effect of the Jumpstart Our Business Startups Act (JOBS Act) on information uncertainty in IPO firms. The JOBS Act creates a new category of issuer, the Emerging Growth Company (EGC), and exempts EGCs from several disclosures required for non-EGCs. Our findings are consistent with proprietary cost concerns motivating EGCs to eliminate some of the previously mandatory disclosures, which increases information uncertainty in the IPO market, attracts investors who rely more on private information, and leads EGCs to provide additional post-IPO disclosures to mitigate the increased information uncertainty.
This study shows that initiation of CDS trading for an entity’s debt increases the share of loans retained by loan syndicate lead arrangers and increases loan spread. These findings are consistent with CDS initiation reducing the effectiveness of a lead arranger’s stake in the loan to serve as a mechanism to address the adverse selection and moral hazard problems in the loan syndicate.
Using a nested multiple-case study of participating ventures, directors, and mentors of eight of the original U.S. accelerators, we explore how accelerators’ program designs influence new ventures’ ability to access, interpret, and process the external information needed to survive and grow. Through our inductive process, we illuminate the bounded-rationality challenges that may plague all ventures and entrepreneurs—not just those in accelerators—and identify the particular organizational designs that accelerators use to help address these challenges, which left unabated can result in suboptimal performance or even venture failure.
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.
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.
We present preliminary work to construct a knowledge curation system to advance research in the study of regional economics. The proposed system exploits natural language processing (NLP) techniques to automatically implement business event extraction, provides a user-facing interface to assist human curators, and a feedback loop to improve the performance of the Information Extraction Model for the automated parts of the system.
This study examines whether key characteristics of analysts’ forecasts—timeliness, accuracy, and informativeness—change when investor demand for information is likely to be especially high, i.e., during periods of high uncertainty. Findings reveal that when uncertainty is high, analysts’ forecasts are more timely but less accurate. However, analysts’ forecasts are also more informative to the market, which is consistent with investors’ demand for timely information, even if it is less accurate.
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.
This study explores the process of organizational change by examining localized social learning in organizational subunits. Specifically, we examine participation in university technology transfer, a new organizational initiative, by tracking 1,780 faculty members, examining their backgrounds and work environments, and following their engagement with academic entrepreneurship.
We study the foreign externalities of the recent U.S. tax reform, commonly known as the Tax Cuts and Jobs Act (TCJA). Specifically, we examine foreign firms’ stock returns around key tax reform events. We find significant heterogeneity in market responses by country, industry, and firm.
This study analyzes whether fair value estimates of fund net asset values (NAVs) produced by private equity managers are accurate and unbiased predictors of future discounted cash flows (DCF). We exploit the fact that private equity funds have finite lives to compare reported NAVs to DCFs based on realized cash flows for 384 venture capital (VC) funds and 195 buyout funds spanning 1988-2016.
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.
Cardiovascular disease has become a leading cause of death for patients with paraplegia. Acute myocardial infarction in patients with paraplegia has not been described in the literature. This study investigates clinical features, management strategies, and outcomes of these patients.
We study how the government of a developing country optimizes its local content requirement (LCR) policy to maximize social welfare in a setting where foreign original equipment manufacturers (OEMs) produce and sell multicomponent products in the developing country. The foreign OEMs’ local sourcing of components is more costly than global sourcing because of technology gaps between local and global suppliers.
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.
Increased corporation regulation in recent decades has raised the likelihood of regulatory oversight spillovers-the extent to which one agency's interactions with a regulated firm affects firm behaviors under the purview of another agency. We study how such spillovers can affect the mission of a specific regulator-the tax authority-using a measure of firm-specific exposure to fragmented regulation.
This study examines the performance consequences of web personalization (WP), a type of personalization in which web content is personalized and recommendations are offered based on customer preferences. Despite the growing popularity of personalization, there is a dearth of research at the firm level on whether and how web personalization creates shareholder value. We develop and test a conceptual model that proposes that the impact of WP on shareholder value is mediated by (1) cash flow volatility and (2) premium price.