Over the last two decades, executive compensation research has focused primarily on equity-based pay and incentives emanating from executives’ firm-specific equity portfolios, while generally ignoring cash-based bonus plans as a second order effect. Exploiting access to new data sources, there has been a revival of interest by accounting researchers in more deeply understanding the value adding roles played by bonus plans. Earlier research viewed accounting measures in bonus plans through the lens of effort incentives-risk premium trade-offs derived from classical principal-agent theory. In contrast, the recent literature emphasizes the idea that cash-based bonus plans play an important communication role in which a board’s performance measure choices reveal to outsiders the firm’s commitment to specific strategic objectives and facilitate the coordination of behavior across executives inside the firm. Public observability of bonus plans then provides a basis for investors and competitors to assess a firm’s strategic direction, and for investors to hold managers accountable for strategy execution. Building on my discussion of Bloomfield, Gipper, Kepler and Tsui (2021) in the 2020 Journal of Accounting and Economics Conference, my objective in this paper is to synthesize and critique key results from this recent literature and offer ideas for future research.
We examine the impact of four classes of workplace interruptions on short-term (working hours) and long-term (across-shifts) worker performance in an agribusiness setting. The interruptions are organized in a two-by-two framework where they result (or do not result) in a physical task requirement and lead to a varying degree of attention shift from the primary task.
The ways in which media news is slanted can shape beliefs about the economy, thereby affecting the decision to start a new business. Using exogenous variation in the introduction of Fox News Channel across US counties, I find that increased exposure to a pro-Republican slant during a Republican administration is positively associated with new firm creation.
Public opinion polls reveal Americans are turning to companies with purpose and ethics to lead us through the profound anxiety and crises we are currently experiencing as a nation. We developed a corporate reputational equity checklist that will enable firms to brand or rebrand themselves as inclusive and equitable places to work, as well as position their companies as a collective of civically engaged corporate citizens poised and willing to address society’s most pressing ills, including systemic racism.
The patent system grants inventors temporary monopoly rights in exchange for a public disclosure detailing their innovation. These disclosures are meant to allow others to recreate and build on the patented innovation. We examine how the quality of these disclosures affects follow-on innovation.
Business owners and leaders need real ways to think about diversity, equity, and inclusion in their workplace. No matter how early you are in your business, building a strong foundation of inclusivity should always be top priority. Join Launch Chapel Hill to discuss how to define workplace inclusion in your business. This session will be led by Dee McDougal, Senior Vice President, Diversity & Inclusion at Pacific Western Bank.
Faced with demand uncertainty in a nascent industry, entrants often consider which customer segments to serve by tailoring the usage breadth and coherence of their product portfolios. Portfolios have high or low usage breadth, which is the extent to which they target customers in many segments, and high or low coherence, which measures how much the portfolios’ products overlap in targeted customer segments.
We find that equity loan fees are the best predictor of cross-sectional returns. When compared to 102 other anomalies, the loan fee anomaly has the highest monthly long-short return (1.17%), has the highest monthly Sharpe Ratio (0.40), and unlike other anomalies, exhibits strong persistence throughout the sample.
This paper characterizes the implications of risk-on/risk-off shocks for emerging market capital flows and returns. We document that these shocks have important implications not only for the median of emerging markets flows and returns but also for the left tail.
We examine the impact of logistics performance metrics such as delivery time, and customer’s requested delivery speed on logistics service ratings and third-party sellers’ sales on an e-commerce platform.
We compare several approaches for generating a prioritized list of products to be counted in a retail store, with the objective of detecting inventory record inaccuracy and unknown out-of-stocks. We consider both "rule-based" approaches, which sort products based on heuristic indices, and "model-based" approaches, which maintain probability distributions for the true inventory levels updated based on sales and replenishment observations.
Angel investor tax credits are commonly used around the world to spur entrepreneurship. Exploiting the staggered implementation of these tax credits in 31 U.S. states, we find that while they increase angel investment, marginal investments flow to relatively low-growth firms.