Research Highlights Archive

Fall 2017

"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


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

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


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. 


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


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. 


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


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

Awards


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.


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.


"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. 


Spring 2017

"Are Stock-Financed Takeovers Opportunistic?"
Journal of Financial Economics, Forthcoming
B. Espen Eckbo, the Tuck Centennial Professor of Finance, presents new evidence on an old question: are stock-financed takeovers opportunistic? He tests the prediction that the more the target knows about the bidder, the more difficult it is for the bidder to pay with overpriced shares, and finds the opposite to be true: the better the target’s skill in valuing the bidder, the greater the likelihood that the deal is paid in bidder stock.

"Unlocking the Power of Integrated Marketing Communications: How Integrated is Your IMC Program?"
Journal of Advertising, July 2016 
Kevin Lane Keller, the E. B. Osborn Professor of Marketing, discusses how the future of advertising and marketing communications will be marked by an increasingly diverse collection of new digital options added to the traditional media and communication options already available. His paper describes seven choice criteria that marketers can use to judge how effectively and efficiently they have assembled their integrated marketing communications programs and outlines five priority areas for future research.

"A Penny Saved Is Not a Penny Earned: When Decisions to Earn and Save Compete for Consumer Resources"
Journal of the Association for Consumer Research, January 2017
Punam Anand Keller, associate dean for innovation and growth and the Charles Henry Jones Third Century Professor of Management, and Eesha Sharma, assistant professor of business administration, examine how people think about and decide between opportunities to earn and save. They also study whether perceived financial deprivation interacts with preferences for earning and saving opportunities.

Recent presentation
Eesha Sharma, assistant professor of business administration

"The Effects of Advertised Quality Emphasis and Objective Quality on Sales"
Journal of Marketing, March 2017
Praveen Kopalle, associate dean for the MBA program and the Signal Companies’ Professor of Management, examines the effectiveness of quality-based advertising messages. He demonstrates that it is not beneficial for low-quality products to emphasize quality in their advertising, and that it is effective for high-quality products to do so.

"Spontaneous Neural Encoding of Social Network Position"
Nature Human Behavior, April 2017
Adam Kleinbaum, associate professor of business administration, pairs network data with pattern analysis to show that social network position information is accurately perceived and spontaneously activated when upon encountering familiar individuals. His findings explain how the human brain encodes the structure of its social world, and emphasize the importance of integrating an understanding of social networks into the study of social perception.

Recent presentation
Kusum Ailawadi, the Charles Jordan 1911, Tu'12 Professor of Marketing

"Will Opendoor Revolutionize the Sale of Residential Real Estate?"
The Real Estate Finance Journal, Spring 2017
Research by John Vogel, adjunct professor of business administration and associate faculty director for the Center for Business, Government & Society, analyzes Opendoor, a startup real estate platform that offers sellers an alternative to listing their homes with brokers. Vogel discusses the challenges the company will confront in the housing market and what the impact will be if Opendoor and its imitators are successful.

Winter 2016

"Technology and Production Fragmentation: Domestic versus Foreign Sourcing"
Review of Economic Studies, August 2016
Teresa Fort, assistant professor of business administration, analyzes the relation between technology and firms’ global sourcing strategies. Her findings suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing.

"Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution"
American Economic Review, forthcoming
Erin Mansur, the Revers Professor of Business Administration, examines the effects of the horizontal drilling and hydrofracturing boom in oil and natural gas production in the U.S. and how the technological shift interacted with local economies to create exogenous shocks to income and employment. His work finds that new oil and gas extraction increased aggregate U.S. employment by as many as 640,000 jobs, implying a 0.43 percentage point decrease in the unemployment rate during the Great Recession assuming no general equilibrium effects.

"The Role of Big Data and Predictive Analytics in Retailing"
Journal of Retailing, forthcoming
Praveen Kopalle, associate dean for the MBA program and the Signal Companies’ Professor of Management, examines the opportunities in and possibilities arising from big data in retailing, particularly along five major data dimensions—data pertaining to customers, products, time, (geo-spatial) location, and channel. He discusses the relevance and uses of Bayesian analysis techniques, predictive analytics, and field experiments. In addition, he examines the ethical and privacy issues that may arise from the use of big data in the retail context.

"Extending Industry Specialization through Cross-Border Acquisitions"
Review of Financial Studies, forthcoming
Gordon Phillips investigates the role of industry specialization in horizontal cross-border mergers and acquisitions. He finds that acquirers from more specialized industries in a country are more likely to buy foreign targets in countries that are less specialized in these same industries. His results are consistent with an internalization motive for foreign acquisitions, through which acquirers can apply localized intangibles on foreign assets.

"Conglomerate Industry Choice and Product Language"
Management Science, forthcoming
Gordon Phillips analyzes the words that firms use to describe their products to examine the determinants of which industries conglomerate firms operate within. His findings show that most conglomerates are not truly diversified, since most firms that operate across multiple industries choose industries with high language overlap and potential synergies.

“When Bigger is Better (and When it is Not): Implicit Bias in Numeric Judgments”
Journal of Consumer Research, forthcoming
Ellie Kyung, associate professor of business administration, and co-authors analyze the notion of “bigger-is-better” and the culturally determined numerical association embedded in memory. Her research demonstrates that these strong associations between numeric direction and quality become entrenched in one’s automatic, implicit memory, and thereby spontaneously bias judgments about a product, person, or situation that has been rated using a rating system with an opposite rating polarity.

"The Necessity, Logic, and Forms of Replication"
Strategic Management Journal, November 2016
Constance Helfat, the J. Brian Quinn Professor in Technology and Strategy, discusses different types of replication studies, comparing replications with other approaches to cumulating knowledge and providing guidelines toward producing high-quality replication studies. Her work shows that replication studies can help to establish the range of applicability of prior studies and better support what implications can be drawn for managerial practice.

“Managing Multi- and Omni-Channel Distribution: Metrics and Research Directions”
Journal of Retailing, forthcoming
Kusum Ailawadi presents a framework and the metrics—both old and new—that suppliers and retailers should monitor and that academic researchers should incorporate in their models. Her article lays out the important questions that multi- and omni-channel marketers are grappling with, refers the reader to what existing academic research has to say about them, and suggests how future research can build off this framework and metrics to supplement what is known and address what is not.

“Reorganization and Tie Decay Choices”
Management Science, forthcoming
Adam Kleinbaum, associate professor of business administration, examines the impact of tie decay choices in the evolution of networks. When opportunity structures get reorganized, social actors make choices about which ties to retain and which to allow to decay, informed by their past experience of those ties. Kleinbaum argues that conditional on changes in opportunity, people choose to retain ties to valuable contacts, reciprocated ties, and socially embedded ties.

"Rethinking Deindustrialization”
Economic Policy, forthcoming
Andrew Bernard, the Jack Byrne Professor of International Economics, looks at whether we are measuring deindustrialization properly and what the implications are for understanding the future path of an advanced economy. His findings emphasize that the focus on employment at manufacturing firms overstates the loss in manufacturing-related capabilities that are actually retained in many firms that switch industries.

“Global Firms”
Journal of Economic Literature, forthcoming
Andrew Bernard and coauthors develop a new theoretical framework for internationally traded firms to decide whether to export to foreign markets. Since trade is dominated by a few “global firms,” the new framework allows firms to have large market shares and to decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using U.S. transactions data, the authors offer strong evidence in support of the framework's main predictions.

Fall 2016

"Occupational Survival Through Task Integration: Systems Men, Production Planners, and the Computer, 1940s-1990s"
Organization Science, October 2016
Steven Kahl, associate professor of business administration, examines how occupational groups survive the introduction of a new technology and associated jurisdictional changes. His comparative historical analysis shows that taking an integrative approach with other occupations at the field level can help occupations survive long term.

"Text-Based Network Industries and Endogenous Product Differentiation"
Journal of Political Economy, October 2016
Gordon Phillips, the C.V. Starr Foundation Professor, studies how firms differ from their competitors using new time-varying measures of product similarity based on text-based analysis of firm 10-K product descriptions.

"Technology Scalability and Endogenous Market Segmentation”
Strategy Science, September 2016
Ron Adner, professor of strategy and entrepreneurship, examines competitive strategy and where firms choose to position themselves within an industry by characterizing when generalists desegment markets, and when they are “stuck in the middle” because they are outcompeted by specialists.

"Financing and New Product Decisions of Private and Publicly Traded Firms"
The Review of Financial Studies, Forthcoming
Gordon Phillips, the C.V. Starr Foundation Professor, and co-author exploit Medicare national coverage reimbursement approvals as a quasi-natural experiment to investigate how the financing decisions of private and publicly traded firms respond to changes in investment opportunities. Phillips’ research finds that publicly traded companies increase their external financing, and their subsequent product introductions, by more than private companies in response to national coverage approvals.

"Inferring Quality from Wait Time"
Management Science, October 2016
Laurens Debo, associate professor of business administration, and co-author studied the impact of wait time on consumers’ purchasing behavior when product quality is unknown to some consumers (“uninformed consumers”) but known to others (“informed consumers”). Debo’s research found that uninformed consumers’ purchasing probability during short wait times decreases in the presence of informed consumers, and relatively few informed consumers suffice to create this effect.

Summer 2016

"Technology and Production Fragmentation: Domestic versus Foreign Sourcing"
Review of Economic Studies, August 2016
Teresa Fort, assistant professor of business administration, analyzes the relation between technology and firms’ global sourcing strategies. Her findings suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing.

"Strategic Communication in the C-Suite"
International Journal of Business Communication, Forthcoming
In a working paper for the International Journal of Business Communication, professor of corporate communication Paul Argenti explores the ways in which C-suite executives are using corporate communications to execute strategy. He discusses the shift from a tactical and superficial focus on speeches and media placements to a more strategic and elevated level. “Given that strategic approaches to communication are much more important in organizations than ever before, we as academics have an obligation to help the business leaders of tomorrow find ways to be more effective communicators and leaders,” says Argenti.

"The Companies That Narcissists Are Attracted To"
The Sydney Morning Herald, August 2016
A study co-authored by Alexander Jordan, adjunct assistant professor of business administration, finds that people with narcissistic tendencies are more likely to support hierarchies. The study was co-authored with Emily Zitek of the Cornell School of Industrial and Labor Relations.

"How Credit Constraints Impact Job Finding Rates, Sorting & Aggregate Output"
Equitable Growth, June 2016
In a working paper for the Washington Center for Equitable Growth, C.V. Starr Professor Gordon Phillips and two co-authors examine how credit access affects displaced workers. Their findings indicate that an increase in credit limits allows individuals to take .15 to 3 weeks longer to find a job. That extra time allows them to find more lucrative and more productive employment.

“Why the Dynamics of Competition Matter for Category Profitability"
Journal of Marketing, Forthcoming
Praveen Kopalle, associate dean for the MBA program and the Signal Companies’ Professor of Management, and co-authors discuss the widespread trade practice of category management, presenting a competition framework that reconciles cross-sectional breadth (large numbers of SKUs in any given period) with longitudinal depth (demand effects across time).

"How Costly Is Corporate Bankruptcy for the CEO?"
Journal of Financial Economics, March 2016
B. Espen Eckbo, the Tuck Centennial Professor of Finance, and co-authors Karin Thorburn, visiting professor of finance, and Wei Wang, associate professor at Smith School of Business, examine CEO career and compensation changes for firms filing for Chapter 11. Eckbo's research found that the likelihood of leaving decreases with profitability and CEO share ownership. Furthermore, creditor control rights during bankruptcy (through debtor-in-possession financing and large trade credits) are associated with CEO career change. The research also found that despite large equity losses, the median incumbent does not reduce his stock ownership as the firm approaches bankruptcy.

"Are There Environmental Benefits from Driving Electric Vehicles? The Importance of Local Factors"
American Economic Review, Forthcoming
Erin Mansur, the Revers Professor of Business Administration, and co-authors combine a theoretical discrete-choice model of vehicle purchases, an econometric analysis of electricity emissions, and the AP2 air pollution model to estimate the geographic variation in the environmental benefits from driving electric vehicles. Mansur's research found that geographically differentiated subsidies can reduce deadweight loss, but only modestly.

"The Impact of Consumer Credit Access on Employment, Earnings, and Entrepreneurship"
National Bureau of Economic Research, July 2016
On July 18, Gordon Phillips, the C.V. Starr Foundation Professor, presented his paper, “The Impact of Consumer Credit Access on Employment, Earnings, and Entrepreneurship,” at a conference in Cambridge, Massachusetts, organized by the National Bureau of Economic Research. Phillips’ research looks at the effect of increased credit access after bankruptcy events are removed from individuals’ credit reports. He has found that increased credit access leads to higher earnings, more borrowing, and greater rates of entrepreneurship.

"When Remembering Disrupts Knowing: Blocking Implicit Price Memory"
Journal of Marketing Research, Forthcoming
Research by Ellie Kyung, associate professor of business administration, finds that contrary to previous research findings and popular consumer belief, attempting to remember old prices for products in order to compare prices across time can actually backfire, making consumers less accurate in their comparative price decisions. Kyung’s paper looks at the mechanics of why this occurs and how to overcome this effect.

"Reflections on Customer-Based Brand Equity: Perspectives, Progress, and Priorities"
AMS Review, May 2016
In "Reflections on Customer-Based Brand Equity: Perspectives, Progress, and Priorities,” Kevin Lane Keller, the E. B. Osborn Professor of Marketing, reflects back on his 1993 paper, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity,” explaining how the 1993 paper was developed and highlighting some of its main contributions—such as a comprehensive bridge between the theory and practice of branding.

"Saving the Masses: The Impact of Perceived Efficacy on Charitable Giving to Single vs. Multiple Beneficiaries"
Organizational Behavior and Human Decision Processes, June 2016
Much evidence suggests that it is not easy to increase giving to groups of people because giving is driven by emotional concern, which is muted for multiple beneficiaries. "Saving the Masses: The Impact of Perceived Efficacy on Charitable Giving to Single vs. Multiple Beneficiaries," by Eesha Sharma, assistant professor of business administration, shows that by enhancing perceived efficacy, organizations can increase both emotional concern and giving to multiple beneficiaries.