Journal Articles

Tuck faculty members publish their research in the world's best peer-reviewed journals.

Articles authored by Tuck professors may be found via the Tuck faculty directory or on the personal faculty websites. To locate a professor's profile, visit the Faculty Directory.


Highlights

B. Espen Eckbo

Merger Negotiations with Stock Market Feedback, The Journal of Finance, Vol. LXIX No. 4, August 2014 (with Sandra Betton, Rex Thompson and Karin S. Thorburn)
Do preoffer target stock price runups increase bidder takeover costs? We present model-based tests of this issue assuming runups are caused by signals that inform investors about potential takeover synergies. Rational deal anticipation implies a relation between target runups and markups (offer value minus runup) that is greater than minus one-for-one and inherently nonlinear. If merger negotiations force bidders to raise the offer with the runup—a costly feedback loop where bidders pay twice for anticipated target synergies—markups become strictly increasing in runups. Large-sample tests support rational deal anticipation in runups while rejecting the costly feedback loop.

Andrew B. Bernard

Multi-Product Exporters and the Margins of Trade, The Japanese Economic Review, v.65, No. 2, June 2014
The paper examines multi-product exporters in Belgium, considering their importance and the relationship between the margins of trade and firm productivity. We use proxies for trade costs to quantify the extensive and intensive margin adjustments of trade. Relatively few exporting firms account for the majority of Belgian exports and these large firms have greater productivity and value-added, more employees and more exported products than smaller exporters. Across firms, productivity is positively associated with firm exports. More productive firms export more products to more countries and have higher average product-country export flows. The extensive and intensive margins are equally important in total firm exports.

Richard C. Sansing

When Are Enhanced Relationship Tax Compliance Programs Mutually Beneficial? The Accounting Review, Nov. 2013, Vol. 88 Issue 6, p. 1971 (with Lisa De Simone and Jeri Seidman.)
This study investigates the circumstances under which ''enhanced relationship'' tax-compliance programs are mutually beneficial to taxpayers and tax authorities, as well as how these benefits are shared. We develop a model of taxpayer and tax authority behavior inside and outside of an enhanced relationship program. Our model suggests that, despite the adversarial nature of the relationship, an enhanced relationship program is mutually beneficial in many settings. The benefits are due to lower combined government audit and taxpayer compliance costs. These costs are lower because taxpayers are less likely to claim positions with weak support and the government is less likely to challenge positions with strong support inside the program. Further, we show that an increase in the ability of the tax authority to identify uncertain tax positions makes an enhanced relationship tax-compliance program more attractive to both the taxpayer and the tax authority.

Brian T. Tomlin

Incorporating Stochastic Lead Times into the Guaranteed Service Model of Safety Stock Optimization,” (with S. Humair, J. Ruark and S.P. Willems), Interfaces, Sep-Oct 2013, 43 (5), 421-434.
Effective end-to-end supply chain management and network inventory optimization must account for service levels, demand volatility, lead times, and lead-time variability. Most inventory models incorporate demand variability, but far fewer rigorously account for lead-time variability, particularly in multiechelon supply chain networks. Our research extends the guaranteed service model of safety stock placement to allow random lead times. The main methodological contribution is the creation of closed-form equations for the expected safety stock in the system; this includes a derivation for the early-arrival stock in the system. The main applied contributions are the demonstration of real stochastic lead times in practice and a discussion of how our approach outperforms more traditional heuristics that either ignore lead-time variability or consider the maximum lead time at each stage.

Rahul Kapoor and Ron Adner

"What firms make vs. what they know: How firms' production and knowledge boundaries affect competitive advantage in the face of technological change." Organization Science, Special issue on Organizational Economics and Organizational Capabilities, 23(5): 1227–1248, 2012.
Product innovation often hinges on technological changes in underlying components. We examine how firms' success in managing such component-enabled innovation is impacted by their knowledge and production strategies with respect to key components. We further consider how this relationship depends on whether the innovation is incremental or architectural. Using data on all firms in the DRAM industry across 12 technology generations from 1974 to 2005, we find that vertical integration into component production improves firms' success in managing technological change. Although non-integrated firms have lower performance, their disadvantage is muted by the extent of their component knowledge. We find that the relative advantage of extending production vs. knowledge boundaries is determined by two factors. The first is the nature of the innovation: integrated firms have a greater advantage over non-integrated firms when the change is architectural than when it is incremental. The second is the degree of integration: non-integrated firms derive greater benefit from their knowledge of external components than do integrated firms. Our results clarify the conditions under which extending knowledge boundaries can be a substitute for extending production boundaries in managing technological change.

Eugene F. Fama, Kenneth R. French

Luck versus Skill in the Cross Section of Mutual Fund α Estimates," Journal of Finance 65: 1915-1947, 2010.
The aggregate portfolio of actively managed U.S. equity mutual funds is close to the market portfolio, but the high costs of active management show up intact as lower returns to investors. Bootstrap simulations suggest that few funds produce benchmark-adjusted expected returns sufficient to cover their costs. If we add back the costs in fund expense ratios, there is evidence of inferior and superior performance (nonzero true α) in the extreme tails of the cross-section of mutual fund α estimates.

Simeon Djankov, Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer

Disclosure by Politicians. American Economic Journal: Applied Economics 2, 2010.
Abstract: We collect data on the rules and practices of financial and conflict disclosure by members of Parliament in 175 countries. Although two- thirds of the countries have some disclosure laws, less than one-third make disclosures available to the public, and less than one-sixth of potentially useful information is publicly available in practice, on average. Countries that are richer, more democratic, and have free press have more disclosure. Public disclosure, but not internal disclosure to parliament, is positively related to government quality, including lower corruption.

Judith B. White, W.L. Gardner

Think women, think warm: Stereotype content activiation in women with a salient gender identity, using a modified Stroop task. Sex Roles: A Journal of Research, 60, 247-260, 2010.
Abstract: We examined whether a salient gender identity activates gender stereotypes along the dimensions of sociability and ability (Fiske, Cuddy, Glick, & Xu, 2002). A sample of US undergraduates (40 men, 38 women) instructed to think about women subsequently took longer to name the colors of words associated with sociability than ability on a modified Stroop task. Solo women in another sample of US undergraduates (45 women) showed the same response pattern. Women in a third sample of US adults (20 men, 16 women) showed a similar pattern. Meta-analysis of the three samples suggests women with a salient gender identity experience relative activation of only the positive dimension of a stereotype (e.g. "woman" equals warm).