Research Highlights

Summer 2017

Andrew Bernard, the Kadas T’90 Distinguished Professor

Andrew Bernard, Kadas T’90 Distinguished Professor

"Exporter Dynamics and Partial Year Effects"
American Economic Review, Forthcoming
Motivated by the rapidly growing literature on firm export dynamics, Andrew Bernard, the Kadas T’90 Distinguished Professor, offers a deeper understanding of the performance of firms in their first years of exporting and their contribution to export growth by studying partial-year biases. Looking at Peruvian exporters, Bernard finds that the partial-year bias is large: first-year export levels are understated by 54 percent and the first year growth rate is overstated by 112 percentage points. Correcting the partial-year effect dramatically reduces first year export growth rates, raises initial export levels and almost doubles the contribution of net firm entry and exit to overall export growth.

"Two-Sided Heterogeneity and Trade"
Review of Economics and Statistics, Forthcoming
Bernard develops a multi-country model of international trade that provides a simple micro-foundation for buyer-seller relationships in trade. He explores a rich dataset that identifies buyers and sellers in trade and establishes a set of basic facts that guide the development of his theoretical model. Bernard uses predictions of the model to examine the role of buyer heterogeneity in a market for firm-level adjustments to trade shocks, as well as to quantitatively evaluate how firms’ marginal costs depend on access to suppliers in foreign markets.

Presentations & Events

  • “The Origins of Firm Heterogeneity: A Production Network Approach,” Globalization and New Technology: Effects on Firms and Workers, and the Society of Economic Dynamics Annual Meeting, June 2017
  • “Firm-to-Firm Connections,” Empirical International Trade and Investment Conference Keynote Speech, March 2017
  • U.S. Embassy Bern, U.S. Investment Delegation Honoree Dinner, April 2017

B. Espen Eckbo, Tuck Centennial Professor of Finance

B. Espen Eckbo, Tuck Centennial Professor of Finance; Founding Director, Lindenauer Center for 
​Corporate Governance

Recent Presentation

  • “How Costly is Forced Gender-Balancing of Corporate Boards?”
    Financial Management Association Annual European Conference Keynote Speech, June 2017

Kevin Lane Keller

Emily Blanchard, Associate Professor of Business Administration

Globalization and Human Capital Investment: Export Composition Drives Educational Attainment” 
Journal of International Economics, May 2017     
Human capital is among the most important drivers of long-run economic growth, but its macroeconomic determinants are still not well understood. Emily Blanchard, associate professor of business administration, and co-author demonstrates the importance of a key demand-side driver of education, using exogenously-driven changes in the composition of a country's exports as a lens to study how shifting patterns of production influence subsequent educational attainment. She finds that growth in less skill-intensive exports depresses average educational attainment while growth in skill-intensive exports increases schooling. These results provide insight into which types of sectoral growth are most beneficial for long-run human capital formation and suggest that trade liberalization could exacerbate initial differences in factor endowments across countries.

Renegotiating NAFTA: The Role of Global Supply Chains
Economics and Policy in the Age of Trump, June 2017
Blanchard discusses NAFTA and how the U.S. trying to leave NAFTA rather than renegotiate it could be harmful given the powerful role NAFTA has had in redefining how and where products are made. Her essay was one of 18 essays by leading economists published in a special edition e-book by VOX, the policy portal for the Center for Economic and Policy Research (CEPR). The essays highlight many of the most pressing domestic and international economic policy issues on the Trump docket. 

Special Accomplishment
Blanchard was invited to join the CEPR as a Research Fellow in June 2017. 


Joseph Gerakos, Associate Professor of Business Administration

Joseph Gerakos, Associate Professor of Business Administration; Harvey H. Bundy III T’68 Faculty Fellow

Audit Firms Face Downward-Sloping Demand Curves and the Audit Market Is Far from Perfectly Competitive
Review of Accounting Studies, Forthcoming 
Joseph Gerakos, associate professor of business administration and the Harvey H. Bundy III T’68 Faculty Fellow, explores how demand estimation can be applied in auditing research. He analyzes difficulties in the interpretation of the audit fee regression and discusses the mechanics of the discrete choice demand estimation approach. The findings from his work imply that audit firms have market power. 

Decomposing Value
Review of Financial Studies, Forthcoming
Gerakos finds that only those firms with high book-to-market (B/M) ratios that have decreased in size earn the value premium. These firms follow conservative investment policies, while those high B/M firms that do not earn the value premium generate low cash flows. His findings on the relation between the value premium and changes in firm size provides a testable restriction for theories of value: if a value premium within the model remains when controlling for changes in firm size, such a model is inconsistent with the data.

Do Risk Management Practices Work? Evidence from Hedge Funds
Review of Accounting Studies, Forthcoming
Gerakos looks at hedge fund risk management practices and their association with left-tail risk during the 2008 financial crisis. Consistent with risk management practices reducing left-tail risk, funds in his sample that use formal risk models performed significantly better in the extreme down months of 2008. He finds that funds employing value at risk models had more accurate expectations of how they would perform in a short-term equity bear market.

Hedge Fund Voluntary Disclosure
The Accounting Review, Forthcoming 
Using a dataset of 3,234 letters sent by 434 hedge funds to their investors during 1995-2011, Gerakos studies what motivates hedge fund managers to make voluntary disclosures. Contrary to the hedge fund industry's reputation for opacity, he observes that managers provide their investors with an array of quantitative and qualitative information about fund returns, risk exposures, holdings, benchmarks, performance attribution, and future prospects. He finds that the tensions between the agency costs faced by investors and the proprietary costs faced by managers affect fund disclosures.

Presentations

  • “Asset Managers: Institutional Performance and Smart Betas,” Q-Group Seminar and Center for Monetary and Financial Studies Asset Management Workshop, Spring 2017 
  • “Book-to-Market, Retained Earnings, and Earnings in the Cross Section of Stock Returns,” 14th Annual Interdisciplinary Center Herzliya Conference in Financial Economic Research, May 2017

Steven Kahl, Associate Professor of Business Administration

Steven Kahl, Associate Professor of Business Administration

The Discursive Perspective of Market Categorization: Interaction, Power, and Context” 
Research in the Sociology of Organizations, 2017 
Steven Kahl, associate professor of business administration, develops a discursive perspective of market categorization focused on how categories are constructed through communicative exchanges. The discursive perspective points to three under-researched mechanisms of category evolution: the interaction between market participants, the power dynamics among market participants and within the discourse, and the cultural and material context in which categories are constructed. 


Eesha Sharma, Associate Professor of Business Administration

Eesha Sharma, Associate Professor of Business Administration; Paul E. Raether T’73 Faculty Fellow

Context Dependent Drivers of Discretionary Debt Decisions: Explaining Willingness to Borrow for Experiential Purchases” 
Journal of Consumer Research, Forthcoming
Eesha Sharma, associate professor of business administration and the Paul E. Raether T’73 Faculty Fellow, finds that consumers are more willing to borrow for experiential versus material purchases, even though experiential purchases tend to have a shorter physical duration. She also finds that framing a purchase as more experiential than material increases consumer willingness to borrow. 

Presentations

  • “Drivers of Discretionary Debt Decisions: Explaining Willingness to Borrow for Experiential and Material Purchases,” Boulder Summer Conference for Consumer Financial Decision Making, May 2017
  • “Too Constrained to Converse: Financial Constraints Reduce Word-of-Mouth,” Marketing Science Conference, June 2017

Felipe Severino, Assistant Professor of Business Administration

Felipe Severino, Assistant Professor of Business Administration

Dynamics of Housing Debt in the Recent Boom and Great Recession
National Bureau of Economic Research Annual Conference on Macroeconomics Proceedings, April 2017
Felipe Severino, assistant professor of business administration, studies the evolution of home purchase debt, home ownership, and measures of debt
burden during the recent housing boom and Great Recession. He finds that the main drivers of mortgage debt during this period were rising home values and expectations of increasing prices.

Presentations

  • “Dynamics of Housing Debt in the Recent Boom and Great Recession,” National Bureau of Economic Research 32nd Annual Conference on Macroeconomics, April 2017
  • “How Does Student Debt Affect Mid-Career Choices?” with Ing-Haw Cheng, assistant professor of business administration, Boulder Summer Conference on Consumer Financial Decision Making, May 2017 

Awards

  • Michael J. Brennan Best Paper Runner Up: “Loan Originations and Defaults in the Mortgage Crisis: The Role of the Middle Class,” Review of Financial Studies
Ing-Haw Cheng, Assistant Professor of Business Administration

Ing-Haw Cheng, Assistant Professor of Business Administration


Paul Argenti, Professor of Corporate Communication

Paul Argenti, Professor of Corporate Communication

Reputation at Risk: The Social Responsibility of NGOs
Corporate Reputation Review, February 2017
Paul Argenti, professor of corporate communication, examines whether post-Soviet/post-communist NGOs funded by western governments and institutions act in a socially responsible manner and whether their impact on business reputation serves the societies in post-communist countries. He seeks to demonstrate the tendency (particularly of environmental NGOs) to focus on short-term goals that may in the long run hurt the investment reputation of the countries and NGOs themselves.


Paul Argenti, Professor of Corporate Communication

Ella L.J. Bell Smith, Professor of Business Administration

Easing Racial Tension at Work
Center for Talent Innovation, June 2017
Ella L.J. Bell Smith, professor of business administration, draws upon national survey data to show that employers and employees benefit when colleagues feel that they can talk about race at work. More than two out of three employees of color are currently uncomfortable discussing race relations, and 29 percent feel it is never acceptable at their company to speak about experiences of race-based bias. “Easing Racial Tensions at Work” measures not only the cost of this silence, but also offers a trove of tactical ways to break it—and quantifies the benefits of doing so.


Paul Argenti, Professor of Corporate Communication

Giles Chance, Adjunct Professor of Business Administration

"Could the People's Currency become the Global Currency?"
The Edward Elgar Handbook on China and Globalisation, Forthcoming
Giles Chance, adjunct professor of business administration, has been commissioned to write the chapter, "Could the People's Currency become the Global Currency?" in an updated handbook regarding perspectives on the globalization process of Chinese firms. The book is expected to be published in 2018.