Measuring the impact of political risk on investment projects is one of the most vexing issues in international business. One popular approach is to assume that the sovereign yield spread captures political risk and to augment the project discount rate by this spread. We show that this approach is flawed. While the sovereign spread is influenced by political risk, it also reflects other risks that are likely included in the valuation analysis — leading to the double counting of risks. We propose to use “political risk spreads” to undo the double counting in the evaluation of international investment projects.
Several influential studies have concluded that earnings surprises just to the right or to the left of a hypothesized bright line produce distinct price reactions compared with surrounding earnings surprises because they convey special meaning. In this study, we examine whether previous inferences of asymmetric stock price reactions to bright-line surprises are observed when empirical tests are designed to be consistent with a rational expectations equilibrium.
The purpose of this paper is to provide insightful advice that can improve the practice of using consumers’ pre-launch awareness and preference (AP) changes to predict the sales of new movies.
A fundamental property of accrual accounting is to smooth temporary timing fluctuations in operating cash flows, indicating an inherent negative correlation between accruals and cash flows. We show that the overall correlation between accruals and cash flows has dramatically declined in magnitude over the past half century and has largely disappeared in more recent years.
On Wednesday, April 4, the Frank Hawkins Kenan Institute of Private Enterprise and UNC-Chapel Hill’s Kenan-Flagler Business School will present a lecture by private equity guru and philanthropist Steve Schwarzman. The event, which is part of the 2017-18 Dean’s Speaker Series, will take place at 2:30 p.m. at the Kenan Center in Chapel Hill.
...that support businesses and business activities. Access Dashboard Entrepreneurship Research Data Repository UNC’s Kenan Institute of Private Enterprise and the Duke University Innovation and Entrepreneurship (I&E) initiative have embarked on...
McNamee is the author of the New York Times best-selling book, “Zucked: Waking Up to the Facebook Catastrophe,” which chronicles his early mentorship of Mark Zuckerberg and other tech leaders, and his subsequent realization that the Facebook platform and its legitimate advertising tools were being manipulated by “bad actors.”
Commercial real estate is a major asset class, with an estimated value of more than $12 trillion in the U.S. alone. But the stay-at-home orders and business closures precipitated by the COVID-19 pandemic have the potential to negatively – and disastrously – affect commercial properties. What will the short- and long-term impacts be, which types of properties will be hardest hit and what policies can be put in place to help stem the tide of losses? UNC Kenan-Flagler Business School Professor and Leonard W. Wood Center for Real Estate Studies Faculty Advisor Andra Ghent and her colleagues examine these issues in this week’s Kenan Insight.
American Indian communities face a growing housing crisis, compounding long-standing social and economic challenges. In this Kenan Insight, we examine the structural and historic factors that underlie the current lack of affordable housing, and identify several promising options for both addressing the immediate crisis and improving the broader economic situation for tribal communities.
UNC Kenan-Flagler Business School Finance Professor Paige Ouimet has been named director of research for the Frank Hawkins Kenan Institute of Private Enterprise. Ouimet, who has been a member of the UNC Kenan-Flagler faculty since 2008 and who also serves as associate dean for the school’s Ph.D. program, officially assumed her new role July 1.
Immigration is one of the most contentious policy issues, and Congress has for decades failed to make any significant legislative progress. The result is an incoherent policy landscape and serious operational challenges on the ground. At the same time, immigration and immigrant integration are critical to U.S. workforce growth, government fiscal solvency, and innovation. I discuss key findings from the economics literature and their implications for where to focus immigration reform efforts.
As governments try to keep up with broadening economies and address new areas, such as climate change, data protection and artificial intelligence, the regulatory pace is increasing. This expansion creates new costs and requires increased business resiliency.
We investigate how partisanship influences interactions between politically divergent banks in the syndicated loan market. The idea is that banks with divergent political values differ in their perceptions of credit risk, where greater differences in partisan beliefs between banks increase coordination costs by impeding consensus. We find that as the political distance between a lead arranger and a participant bank increases, the difference in loan shares held by the lead and a participant bank increases.
Kenan Institute Chief Economist Gerald Cohen kicks off 2025 with a rundown of five issues that will be top of mind for business leaders and policymakers, accompanied by his analysis.
We look into how local consumers receive foreign cultures embedded in imported movies against customized local cultures in domestic movies in the Korean movie market. We theorize that imported movies (mostly, American movies), which often have bigger budgets and superior moviemaking techniques, suffer from cultural discount in appealing to local (Korean) viewers.
Organizations learn and adapt their aspiration levels based on reference points (prior aspiration, prior performance, and prior performance of reference groups). The relative attention that organizations allocate to these reference points impacts organizational search and strategic decisions.
We present a novel source of disagreement grounded in decision theory: ambiguity aversion. We show that ambiguity aversion generates endogenous disagreement between a firm's insider and outside shareholders, creating a new rationale for corporate governance systems.
A highlight of this semester for the Kenan Institute’s Kenan Scholars was their recent lunch and learn with UNC Kenan-Flagler Business School Dean Doug Shackelford.
Conquering these youth challenges will get us a little closer to realizing Dr. King’s dream.
Research, including our own studies, suggests that small tweaks can improve your commuting experience, leaving you happier and more productive.