Pete Stavros of KKR & Co. founded Ownership Works, a new initiative backed by 19 private equity firms, with the objective of reducing income inequality by increasing employee share ownership. The group has prominent backers and a lofty goal of creating $20 billion in wealth in 10 years. As a researcher who has worked on employee share ownership and the benefits it can create, I was encouraged by the news. But while I broadly support employee ownership, such initiatives also can raise red flags because of the risk they impose on employees. As such, it is worthwhile to think carefully through what we know and don’t know about such programs.
...firms to adopt the labor-saving technology. Finally, we predict these consequences will be unevenly felt by firms, and will primarily impact high growth firms with large needs for low- and...
Could new legislation help drive the development of local tech clusters – and the growth of corresponding economic power and development – beyond Silicon Valley? In this week’s Kenan Insight, our experts explore the gravitational pull of Big Tech along with what it could mean if startups across the U.S. were better able to remain and grow in the communities where they launch.
In a new study, researchers examine how the rising economic power of technology and finance firms has contributed to regional income disparities across America.
Economists and investors traditionally see uncertainty as a bad thing that suppresses growth and valuations, but new research shows that downstream uncertainty from customers in the U.S. supply chain can foretell expansion for firms and the economy.
Seventeen states have enacted salary transparency laws to combat pay gaps historically experienced by people of color and women, but the laws take different forms and have produced varying results. How does requiring companies to provide summary salary statistics compare with, for example, preventing companies from asking applicants about their previous salaries? Can such laws actually work against employees? Two experts address these questions and more in this week’s Kenan Insight.
The passage of U.S. tax reform legislation in 2017 had an effect not only on companies based in the U.S., but on foreign firms as well, with Chinese companies seeing the biggest negative impact and companies in South America generally benefiting, according to a new study that looks at daily stock market returns around key dates leading up to the passage of the Tax Cuts and Jobs Act of 2017 (TCJA).
Universal childcare reform implemented in Quebec, Canada, in the late 1990s boosted the careers and earnings of new mothers and produced positive outcomes for some companies as well.
As The Wall Street Journal reported this week, Congress is gearing up for a potential showdown with the largest tech companies in the U.S. And with a bipartisan group of representatives pushing for legislation that would dismantle the monopoly power of Big Tech, this week's Kenan Insight revisits research on how regulating Amazon, Apple and others may be key to reviving the economies of America’s held-back cities and regions.
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.
Since 1965, average idiosyncratic risk (IR) has never been lower than in recent years. In contrast to the high IR in the late 1990s that has drawn considerable attention in the literature, average market-model IR is 44% lower in 2013-2017 than in 1996-2000. Macroeconomic variables help explain why IR is lower, but using only macroeconomic variables leads to large prediction errors compared to using only firm-level variables. As a result of the dramatic change in the number and composition of listed firms since the late 1990s, listed firms are larger and older. Larger and older firms have lower idiosyncratic risk. Models that use firm char-acteristics to predict firm-level idiosyncratic risk estimated over 1963-2012 can largely or completely ex-plain why IR is low over 2013-2017. The same changes that bring about historically low IR lead to unusu-ally high market-model R-squareds.
The AI transformation has yet to happen, prompting uncertainty about potential impacts on the skills gap and the nature of work. Recognizing this will help us develop strategies for mitigating potential risks to workers, firms and the economy.
While technological advances have traditionally been a boon to the U.S. economy, the rapid rise of new platforms and the increased financialization of the economy in recent years have encouraged the growth of monopolies—driving an ever-widening geographic gap in the distribution of income across the country. New research from the Kenan Institute’s Professor Maryann Feldman explores the ramifications of this growing divide.
CEO pay is the latest point of contention in the political fight over ESG, but the arguments have become oversimplified. When we think about good corporate governance, what does the evidence say about CEO pay? The results may surprise you.
The Frontiers of Business: Building Business Resilience conference capped our 2024 Grand Challenge with stimulating discussions on what business resilience looks like in a world of rapid change. Here are three lessons we heard.
What can the corporate response to George Floyd’s murder teach us about today’s diversity challenges? Discover how meaningful actions on racial equity affected market valuations, through research from UNC Kenan-Flagler's Daniela De la Parra.
We examine the validity of the underlying assumption that the tax system favors superstar firms, using both forward-looking and backward-looking measures of firms’ tax burdens. Across multiple specifications, we find little empirical support for the idea that superstar firms are tax advantaged.
The executive labor market (ELM) is a topic of interest that spans several academic fields. The outcomes of the ELM, including executive selection, succession, and compensation, are important considerations as they influence executive decision making and other organizational outcomes. Yet, a comprehensive framework of ELM dynamics currently does not exist. To address this shortcoming, we reviewed the existing literature using five fundamental questions: (1) What executive jobs are available? (2) Who is available to fill executive jobs, and what is valued on the ELM? (3) Who signals interest in the executive jobs? (4) Who gets offered/accepts the executive job, and what is the agreed-upon compensation? (5) How do status and social capital influence ELM outcomes? By answering these questions, our review provides a framework for integrating existing research on the ELM while suggesting avenues for future research.
Stakeholders can and should play an important role in business decisions, but how can their interests be incorporated into business practices to create win-win solutions? In this week’s Insight, our experts dive into this question and discuss whether stakeholder capitalism models can help us find the right solution.