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.
We contribute to the emerging literature on strategic corporate social responsibility (CSR) and its antecedents by undertaking a systematic analysis of the effect of rivalry on firm and industry CSR. We deal with the codetermination of competition and CSR by using instrumental variables in the firm-level analysis and by modeling it directly in the industry-level analysis.
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.
We examine firms' technological investments during an industry's incubation stage—the period between a technological breakthrough and the first instance of its commercialization. We develop stylized findings regarding knowledge evolution preceding product evolution in an industry's life cycle, and highlight the importance for managers to think about “success” and “failure” across multiple yardsticks of performance, rather than only as product commercialization.
One of the most significant empirical findings of the behavioral finance literature is that investor sentiment affects asset prices. Baker and Wurgler (2006) finds that shares of certain firms — those that are difficult to value — are more affected by shifts in investor sentiment. We examine whether the accounting information of firms that are inherently difficult to value can mitigate sentiment-related mispricing. Our findings indicate that sentiment-related mispricing is in fact diminished in the subset of firms with high-quality accounting information.
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.
We have little knowledge about the prevalence of irreproducibility in the accounting literature. To narrow this gap, we conducted a survey among the participants of the 2019 JAR Conference on their perceptions of the frequency, causes, and consequences of irreproducible research published in accounting journals.
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.
What do accelerators do? Broadly speaking, they help ventures define and build their initial products, identify promising customer segments, and secure resources, including capital and employees. More specifically, accelerator programs are programs of limited-duration—lasting about three months—that help cohorts of startups with the new venture process.
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 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.
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.
The tools for crowdsourcing have been a research focus for quite some time. However, even today, crowdsourcing platforms have remained rather technologically rudimentary as simply idea dropboxes and discussion forums. Our research has indicated that technical modifications to current crowdsourcing platforms are needed for crowds to generate more novel and useful solutions.
Workplace relationships are a cornerstone of management research. At the same time, there remain pressing calls for work relationships to be front and center in management literature, demanding an organizationally specific “relationship science.” This article addresses these calls by unifying multiple scholarly fields of interest to develop a comprehensive understanding of interpersonal workplace relationships.
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.
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.
This study explores the role of knowledge interdependencies on the termination of patented inventions. Termination refers to the abandonment of inventive efforts that are no longer deemed promising. We argue that high interdependencies between an inventive effort and the other inventions in the same research program will increase the cognitive burden on managers and decrease the likelihood of termination.
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.
Markets today are flooded with an increasing number of products and brands, making it difficult for companies to track how their products compete in the market. In this article, the authors describe how they used clickstream data to visualize competition in product categories containing more than 1,000 products.