Rodney E. Hood, National Credit Union Administration board member, discusses recent ESG-related legislation and the role governments can play during a panel at the February 2023 Frontiers of Business Conference.
When policymakers implement a disinflation program directed at high inflation, the real dollar value of their country’s stock market index experiences a cumulative abnormal 12-month return of 48 percent in anticipation of the event. In contrast, the average cumulative abnormal 12-month return associated with disinflations directed at moderate inflation is negative 18 percent. The 66-percentage point difference between cumulative abnormal returns, along with descriptive evidence and case studies, suggests that unlike the swift eradication of past high inflations documented by Sargent (1982), the US will not experience a quick, low-cost transition from moderate inflation to the Fed’s two-percent target.
We use textual analysis of mandatory accounting filings to develop firm-level, time-varying measures of exposure to individual government agencies. The measures vary predictably across industries and with broad regulatory interventions that expanded the scope and power of different government agencies, but also include substantial firm-specific, time-varying components.
UNC Kenan-Flagler Assistant Professor Tim Kundro fields questions concerning how managers and firms can best foster a healthy working environment.
This study examines the spillover effect of environmental enforcement through private lending networks. Financial lending institutions face growing public and regulatory pressures to manage and reduce environmental risks relating to their lending activities and therefore are motivated to monitor corporate borrowers’ environmental practices.
Academics and innovators recently convened at the institute's wealth inequality conference to discuss the effects of income disparity and how education and research can create opportunities for more equitable access.
We investigate the role of information dissemination about cyberattacks through major newswires on municipal finance. Employing a difference-in-differences approach to identify causal effects, we find that county-level cyberattacks covered by the media cause increases in new offer yields and reduce bond issuance.
When a business model innovation (BMI) appears, incumbent firms experience great uncertainty about its potential ramifications and their capacity to assimilate the new business model. To resolve such uncertainty, incumbents seek to learn from industry peers, which can spark organizational herding. Organizational herding in BMI contexts is distinct, relative to product/technology adoption contexts, because in addition to peer behaviors, incumbents actively attempt to evaluate peer outcomes, and the importance of peer behaviors and outcomes likely vary, both over time and across types of peers.
Long depicted as a global melting pot, the United States is home to a collection of sharply divergent geographies, regions and cultures. An overlooked measure of our diversity, however, is economic. While national statistics tell a story of averages, they fail to account for the true drivers of economic expansion and contraction. It is only upon examining America’s microeconomies – our cities, towns, suburbs and rural communities – that we can begin to appreciate the myriad and complex determinants of broader U.S., and sometimes even global, economic trends.
Productivity is the single most important determinant of a society’s standard of living. But how can you gauge it, and why does it matter? In this second report from the American Growth Project, we examine the productivity levels of the 50 largest microeconomies in the United States along with how those productivity levels have shifted during the last 15 years.
To date, our work on the American Growth Project has focused on the United States’ most populous urban areas. Our previous analyses of growth and productivity in the 50 largest Extended Metropolitan Areas (EMAs) have served to illustrate the tremendous amount of economic diversity to be found within the United States, revealing stark variations in economic trends, major industries and migration patterns in the country’s largest cities. We turn now to the task of measuring and analyzing economic activity in the next largest set of EMAs: the top 100 midsize cities.
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.
In business markets, marketing and sales functions often conflict over customer acquisition. Marketers are seen to complain that sales representatives disregard the leads they generate, while sales representatives question the revenue potential of these leads. How should firms resolve such conflicts? We investigate these questions using relatively novel sequential principal-agent models with risk averse agents where asymmetry of information exists regarding leads’ revenue potentials.
We examine the consequences of corporate tax enforcement for business activity. Employing two different empirical approaches—a regional design and a firm-level design—we document that corporate tax enforcement is negatively associated with business activity. This association is economically significant and is robust to tests that mitigate concerns regarding endogeneity and measurement.
Lack of co-movement between consumption growth differentials and real exchange rates is a traditional indicator of a disconnect of foreign exchange markets from economic fundamentals (Backus-Smith 1993 anomaly). We present novel evidence for the (dis)connect between the volatilities, as opposed to the levels, of these variables. The volatility correlations are below one, but they are larger than the level correlations. In the cross-section of countries, the volatility disconnect weakens for countries with low amount of expected growth risk and high amount of volatility risk. We provide an explanation of our empirical findings based on international risk-sharing of both expected growth and volatility news shocks.
About 27% of diabetics also suffer from depression, and the presence of co-morbid depression could increase the cost of care for diabetes by up to 100%. Several randomized clinical trials have demonstrated that physical and mental health are more likely to improve for diabetes patients suffering from depression when regular treatment for depression is provided in a primary care setting (called Collaborative Care). An important operational lever in managing Collaborative Care is the allocation of the care manager's time to enrolled patients based on their requirements, which in turn influences the revenue, costs, and patient health outcomes. We present a mathematical modeling approach that determines the optimal allocation of care manager's time and quantifies the costs and benefits of Collaborative Care.
This study finds that voluntary non-earnings disclosure substitutes for redacted proprietary contract information. When firms redact contract information, they provide more voluntary disclosures and have higher information uncertainty and asymmetry. Although firms provide both voluntary non-earnings and earnings disclosures when they redact contract information, only non-earnings disclosures included in Forms 8-K mitigate the higher information uncertainty and asymmetry associated with redaction. These findings suggest earnings disclosures may not be specific enough to substitute for redacted contract information and contrast with the presumption in related research that firms provide earnings disclosures to substitute for withheld proprietary information.
We review the accounting literature on innovation, focusing on the attributes of innovation that collectively make it unique from other resources: novelty, nonrivalry, and partial excludability. These unique attributes help innovation drive economic growth but create information-based challenges that accounting researchers are well-suited to address. We discuss the definition and measurement of innovation, then review the accounting literatures on the disclosure, management, financial reporting, taxation, and contracting and financing of innovation. For each of these literatures we identify challenges and opportunities for future research.
Health care costs in the United States make up a larger proportion of gross domestic product (GDP) than in any other developed country and continue to rise. We examine whether the use of consistent metrics in costing information systems across hospitals provides one avenue to reduce these costs. We refer to such consistency as “costing information consistency” or CIC and empirically measure it by identifying whether hospitals in a multihospital system share the same costing system vendor. Using M&A activity among vendors as an instrument for exogenous changes in hospital CIC, we find that CIC is associated with a 13.3% reduction in operating expenses, suggesting that increased cost comparability from CIC helps hospitals identify ways to reduce operating expenses by identifying clinical and administrative best practices.
Co-brands are strategically advantageous partnerships which can also involve risk. For example, Papa John’s gained access to the largest television audience in the US by sponsoring the National Football League (NFL), but later blamed stagnant sales on how the NFL’s handled players’ well-publicized protests of inequitable policing. What implications did Papa John’s prioritization of sales over fairness have for NFL consumption? To answer this question, the current research tests for changes in Sunday watch party rituals (SWPR), when U.S. consumers gather to socialize while watching live NFL games.