Business Commons^™

The Fair Market Value-Fair Value Dichotomy: Valuation Discounts In Recent Shareholder Dissent Cases, Danny A. Pannese, Benoit Boyer, Paul N. Iannone

WCBT Faculty Publications

Many business owners offer some form of minority equity—real equity, not phantom arrangements (e.g., stock appreciation rights)—in their companies either in exchange for investment funding or as awards to key employees or important independent contractors.

Low-Cost Pm2.5 Sensors Can Help Identify Driving Factors Of Poor Air Quality And Benefit Communities, Tim Keyes, Rea Domingo, Samantha Dynowski, Royal Graves, Martha Klein, Melissa Leonard, John Pilgrim, Alison Sanchirico, Kate Trinkaus

WCBT Faculty Publications

Air quality is critical for public health. Residents rely chiefly on government agencies such as the Environmental Protection Agency (EPA) in the United States to establish standards for the measurement of harmful contaminants including ozone, sulfur dioxide, carbon monoxide, volatile organic chemicals (VOCs), and fine particulate matter at or below 2.5 μm. According to the California Air Resources Board [1], “short-term PM2.5 exposure (up to 24-h duration) has been associated with premature mortality, increased hospital admissions for heart or lung causes, acute and chronic bronchitis, asthma attacks, emergency room visits, respiratory symptoms, and restricted activity days”. While public agency resources …

The National Basketball Association’S (Nba) Digital Transformation: An Explanatory Case Study, James Santomier, Harald Dolles, Reinhard Kunz

WCBT Faculty Publications

Purpose. Digital transformation in the global sport industry has resulted in digitally focused business strategies, innovative business models, targeted social media marketing strategies, increased consumer, and sponsor demand, accelerated growth in women’s sports, and streaming media (OTT) worldwide. This paper aims to study the case of the U.S.-based National Basketball Association’s (NBA) digital transformation, including multiple interactions of actors in the digital transformation process. A key aim is understanding the synergies resulting from the league’s integration of digital technologies, its business strategy, the evolution of its hybrid business model and the increase in revenue and global branding.

Design/methodology/approach. An explanatory …

Thinking Local With Original Data In Ai And Machine Learning Research, David G. Taylor, Robert Mccloud

WCBT Working Papers

Sacred Heart University spent significant funds to establish an AI lab. Initially there is no ongoing research and no real plan for a research agenda. This paper details how the Jack Welch College of Business and Technology created and implemented an active meaningful research plan. It involves two key elements: thinking local and using business connections to foster active, impactful research. Surrounding communities, business connections, area environment, and other Sacred Heart University departments all played a part. The research plan also identifies a specific issue in working with local and business contact sources: the AI researcher almost never gets data …

Perceived Employability Of Skilled Migrants: A Systematic Review And Future Research Agenda, Ali Farashah, Tomas Blomqusit, Akram Al Ariss, Chun (Grace) Guo

WCBT Faculty Publications

This review examines the perceived employability of skilled migrants (SMs) through an analysis of 88 management and organisational research articles published over 2009-2019 period. We find the extant literature characterised by context-specific studies featuring considerable variety in terms of levels of analysis, theory, and content. Using the notion of perceived employability, key themes in the literature are identified and presented in an integrative framework. The framework encompasses individual, organisational, occupational, and institutional components of the perceived employability of SMs, different forms of work transition and associated mediators (broadening strategies) and moderators (transition conditions). Proposing adoption of process thinking for future …

Wirecard And Potential U.S. Audit Issues, Benoit Boyer, Danny A. Pannese, Paul N. Iannone

WCBT Faculty Publications

The German company Wirecard saga is yet to be fully written. Similar in scope to Enron and others in the early 2000’s, many lessons will be learned for company executives, regulators, and especially auditors worldwide. For U.S. companies and auditors, the PCAOB (Public Company Accounting Oversight Board) has promulgated comprehensive audit standards and procedures designed for public companies, but these standards also could have ancillary application to private companies for auditors when planning the audit engagement. The red flags and audit issues that manifested in the Wirecard events will provide the financial and academic communities with robust case studies as …

Predictors Of Covid-19 Vaccination Rate In Usa: A Machine Learning Approach, Syed M. I. Osman, Ahmed Sabit

WCBT Faculty Publications

In this study, we examine state-level features and policies that are most important in achieving a threshold level vaccination rate to curve the effects of the COVID-19 pandemic. We employ CHAID, a decision tree algorithm, on three different model specifications to answer this question based on a dataset that includes all the states in the United States. Workplace travel emerges as the most important predictor; however, the governors’ political affiliation (PA) replaces it in a more conservative feature set that includes economic features and the growth rate of COVID-19 cases. We also employ several alternative algorithms as a robustness check. …

Forecasting Variance Swap Payoffs, Jonathan Dark, Xin Gao, Thijs Van Der Heijden, Federico Nardari

WCBT Faculty Publications

We investigate the predictability of payoffs from selling variance swaps on the S&P500, US 10-year treasuries, gold, and crude oil. In-sample analysis shows that structural breaks are an important feature when modeling payoffs, and hence the ex post variance risk premium. Out-of-sample tests, on the other hand, reveal that structural break models do not improve forecast performance relative to simpler linear (or state invariant) models. We show that a host of variables that had previously been shown to forecast excess returns for the four asset classes, contain predictive power for ex post realizations of the respective variance risk premia as …

10 Good Reasons Why Llcs Should Not Elect To Be S Corporations, Paul N. Iannone, Danny A. Pannese

WCBT Faculty Publications

Since 2004, the IRS has administratively made S elections for limited liability companies (LLCs) very easy. An LLC that is otherwise eligible to be an S corporation that is classified as a partnership or a disregarded entity can simultaneously elect to be classified as both a corporation and an S corporation by timely filing Form 2553, Election by a Small Business Corporation, without the need to also file Form 8832, Entity Classification Election. The Treasury regulations treat the "one-stop-shop" rule as a "deemed election" under the entity classification regulations.

Gender Differences In The Impact Of Worklife On Executives’ Psychological Health, Marcus B. Mueller

WCBT Faculty Publications

The Impact of Worklife on Executives’ Psychological Health Purpose: This is the first scientific research studying the impact of worklife factors on executives’ psychological health by gender. The study has a particular focus on the factors of ‘Community’ and ‘Work-life balance’.

Design: Survey data were collected from N=481 senior executives to measure seven worklife factors and psychological health. Standardized regression analysis was performed for each worklife in a regression model predicting psychological health by gender.

Findings: Results showed significant differences between female and male senior executives in the profiles of seven worklife factors in terms of their relationship with …

Co-Jumps, Co-Jump Tests, And Volatility Forecasting: Monte Carlo And Empirical Evidence, Weijia Peng, Chun Yao

WCBT Faculty Publications

This study classifies jumps into idiosyncratic jumps and co-jumps to quantitatively identify systematic risk and idiosyncratic risk by utilizing high-frequency data. We found that systematic risk occurs more frequently and has larger magnitudes than the idiosyncratic risk in an individual asset, which indicates that volatilities from one sector are largely derived from the contagious effect of other sectors. We further investigated the importance of idiosyncratic jumps and co-jumps to predict the sector-level S&P500 exchange-traded fund (ETF) volatility. It was found that the predictive content of co-jumps is higher than that of idiosyncratic jumps, suggesting that systematic risk is more informative …

The New Accounting For Operating Leases: Unintended Consequences In The Airline Industry, Renata Bandeira, Bridget M. Lyons, Carolyn Trabuco

WCBT Faculty Publications

By 2020, new accounting rules for operating leases were applicable to publicly traded companies reporting under either the US Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The accounting authorities under both standards noted that the new rules were developed to increase the transparency of lease transactions to provide more relevant and comparable information. We compare two Brazilian airlines reporting under IFRS, Azul and Gol, with an operationally similar US airline reporting under US GAAP, JetBlue, to determine whether the new standards improve the ability to understand, evaluate, and compare performance, managerial decision making and credit metrics. …

Valuation Challenges Arising From The New Leasing Standard Asc 842: A Teaching Note, Bridget M. Lyons

WCBT Faculty Publications

Accounting Standards Codification (ASC) Topic 842, the new accounting standard on leasing, aims to improve transparency related to leasing and to enable users of financial statements to more readily compare firms that lease with firms that borrow to buy assets. The standard is effective for 2020 and has had a significant impact on the balance sheets of many firms. This note provides an overview of the accounting changes and highlights key issues related to financial analysis and valuation with guidance on how to avoid common errors and accurately calculate and compare enterprise value, EBIT, EBITDA, valuation multiples and key valuation …

How Do Consumers In General Evaluate, Judge, And Act Toward Shoplifting? The Moderating Effects Of Personal Characteristics And Motives Shoplifting?, Juehui Shi, Ngoc (Cindy) Pham, Claudio Schapsis, Tofazzal Hossain, Arturo Z. Vasquez-Párraga

WCBT Faculty Publications

Despite the seriousness of shoplifting, consumers’ evaluations, judgements, and intentions toward shoplifting remain underexplored by scholars from business ethics, marketing, retailing, and consumer behavior. We propose a new shoplifting ethics model, which integrates Hunt and Vitell’s theory of ethics with Nadeau, Rochlen, and Tyminski’s typology of shoplifting, by incorporating the moderators of consumers’ personal characteristics (i.e., age, gender, marital status, income) and shoplifting motives (i.e., social, experiential, economic, emotional) onto the relationships among deontological evaluation, teleological evaluation, ethical judgment, and intention. Based on a two-by-two randomized experimental design, two shoplifting cases (i.e., swapping price tags, stealing products) are investigated in …

The Coronavirus Shopping Anxiety Scale: Initial Validation And Development, Ruchika Sachdeva

WCBT Faculty Publications

Purpose

The purpose of this study is to develop a scale to measure coronavirus shopping anxiety. Numerous studies have developed a scale for measuring coronavirus anxiety and fear, notably absent is a concerted effort to review and assess the impact of coronavirus on the shopping anxiety of consumers. This scale fulfills this gap.

Design/methodology/approach

The steps taken for checking the various psychometrics of the scale include item generation, followed by exploratory factor analysis (EFA) through SPSS and confirmatory factor analysis through AMOS. The data were collected from over 208 respondents.

Findings

This study resulted in the development of a nine-item …

Pandemic, Perceived Risk, And Cognitive Dissonance As Antecedents To Need For Cognitive Closure, Ruchika Sachdeva

WCBT Faculty Publications

The purpose of this article is to examine the influence of the pandemic, perceived risk, and cognitive dissonance on the need for cognitive closure. A consumer today wants an aversion towards the ambiguity that is created due to this pandemic. The data is collected using Amazon’s Mechanical Turk panel. All of the filled questionnaires are analyzed using stepwise regression. The findings suggest that perceived risk, pandemic, and cognitive dissonance influence the need for cognitive closure, and perceived risk is the major predictor of cognitive closure. These results enrich our understandings with regards to the importance of designing the marketing strategies …

Quantifying The Evidential Value Of Celebrity Endorsement: A P-Curve Analysis, Shiyun Chloe Tian, Ruoyu Sun, Qian Huang, John Petit

WCBT Faculty Publications

Celebrity endorsements have long been used as a promotional tool in marketing communication. However, literature has documented inconsistent findings on the effects of celebrity endorsements compared to no endorsement or noncelebrity endorsements, suggesting a close examination about the reliability and robustness of celebrity endorsements is needed. This study conducted a p-curve analysis among two sets of published studies based on different comparison groups (celebrity endorsements vs. no celebrity endorsement; celebrity endorsements vs. noncelebrity endorsements) to investigate if both sets of studies contain an evidential value. The significantly right-skewed p curve suggests that both sets of published studies have some integrity. …

Entrepreneurship Education And Founding Passion: The Moderating Role Of Entrepreneurial Family Background, Younggeun Lee, Andrés Felipe Cortés, Minjoo Joo

WCBT Faculty Publications

In this paper, we examine the relationship between entrepreneurship education and entrepreneurial passion. Despite the advancement of entrepreneurship education literature and the increasing focus on entrepreneurship education in business schools, we lack empirical exploration on how entrepreneurship education can impact students’ passion for founding new organizations. We hypothesize that students who take entrepreneurship classes would develop high levels of founding passion due to a great perception of skills and abilities that increase positive emotions and decrease negative emotions about the entrepreneurship process. Moreover, we draw on the literature on role models to suggest that students’ entrepreneurial family background (students whose …

Entrepreneurial Orientation In Supply Chain Management: A Systematic Review, Andrés Felipe Cortés, Younggeun Lee, Juan David Cortes, Isidro Liñan

WCBT Faculty Publications

Companies around the world need to reconcile the need to differentiate their offerings and remain entrepreneurial in a competitive environment while also running extremely efficient and effective operations. Surprisingly, however, limited studies have provided a synthesis and overview of existing research exploring important links between the entrepreneurship and supply chain management (SCM) fields. In this paper, we aim to address this issue by developing a systematic review of research exploring the link between entrepreneurial orientation (EO) and SCM, while synthesizing the most relevant findings in this intersection. We also aim to promote the development of this topic by providing relevant …

Entrepreneurship Education And Founding Passion: The Moderating Role Of Entrepreneurial Family Background, Younggeun Lee, Andrés Felipe Cortés, Minjoo Joo

WCBT Faculty Publications

In this paper, we examine the relationship between entrepreneurship education and entrepreneurial passion. Despite the advancement of entrepreneurship education literature and the increasing focus on entrepreneurship education in business schools, we lack empirical exploration on how entrepreneurship education can impact students’ passion for founding new organizations. We hypothesize that students who take entrepreneurship classes would develop high levels of founding passion due to a great perception of skills and abilities that increase positive emotions and decrease negative emotions about the entrepreneurship process. Moreover, we draw on the literature on role models to suggest that students’ entrepreneurial family background (students whose …

Current State Of Captive Hotels: Usa Point Of View, Kirsten Tripodi, Miguel Bendrao Baltazar, Reg Foucar-Szocki

WCBT Faculty Publications

The importance of on-campus hotels, also called captive hotels, is explored as a case study through three lenses: the academic institution and faculty, the student learner, and the hotel operator. The three populations are defined with specific benefits, opportunities, and barriers detailed for each community. A database of current hotels-on college campuses with Tourism & Hotel Management (T&HM) programs of study in the United States is presented as an Appendix to the chapter.

Carbon Management Strategy And Carbon Disclosures: An Exploratory Study, Kathy K. Dhanda, Mahfuja Malik

WCBT Faculty Publications

Corporate Social Responsibility (CSR) is a concept aimed to ensure that corporations conduct their business in an ethical manner by taking care of their environment and human resources in addition to their economic impact. Often times, CSR refers to the steps undertaken by a corporation to measure its efforts to improve the environment and social well-being. One of the aspects of CSR pertains to the disclosure of emission information and carbon management strategy (CMS). Carbon Management refers to analyzing and focusing on those areas within the corporation where cost reductions can be made via energy reductions, waste management and reduced …

Wcbt Newsletter, May 2020, Welch College Of Business & Technology

News, Magazines and Reports

Contents:

First Techstars/SHU Startup weekend a success! --Welch Scholars for 20/21 --May Startup Weekend -- Fireside Chats --Summer Courses

Incorporating Financial Statement Information To Improve Forecasts Of Corporate Taxable Income, Danielle H. Green, Erin E. Henry, Sarah M. Parsons, George A. Plesko

WCBT Faculty Publications

We contribute to the research on the information content of earnings as it applies to the forecasting of economic activity across reporting models. We examine whether publicly available financial statement information is incrementally useful in forecasting confidentially reported taxable income. More precise firm-level taxable income forecasts can improve policymakers’ modeling of the tax system and their ability to analyze the effect of proposed changes in corporate tax law. When aggregated, improved micro-forecasts can also yield more accurate macro-forecasts of corporate taxable income, a significant component of the federal budget. We find that financial statement information improves firm-level estimates of future …

The ‘Store Of The Future’ In Popular Culture: Trends In Press Coverage Of Experiential Retailing, David Loranger, Marla Greene

WCBT Faculty Publications

Since the introduction of the iPhone in 2007, the global retail market has witnessed massive demographic and technological changes that have re-defined consumer experience. Such changes include the rise of the millennial consumer cohort, and the introduction of retailers implementing enhanced artificial intelligence (AI) data methodology to analyse business, augmented reality (AR) and virtual reality (VR) to enhance experience and co-customization interfaces. Two seminal pieces of literature regarding consumer experience are Ballantine and Parson’s analysis of consumer experience factors and Pine and Gilmore’s (1999) Experience Economy. However, these studies were conducted nearly a decade ago, leaving a void in the …

It’S Who You Know That Counts: Board Connectedness And Csr Performance, Abu S. Amin, Lamia Chourou, Syed Kamal, Mahfuja Malik, Yang Zhao

WCBT Faculty Publications

Highlights:

• We examine whether and how board connections affect the firm's corporate social responsibilities (CSR).
• We find that board connectedness is positively associated with CSR performance.
• Our findings suggest firms that operate in a complex business environment or require more advising benefit more from a well-networked board.
• Firms that are poorly governed, have high stock return volatility, low market capitalization, or low institutional ownership tend to benefit more from the well-connected board when the cost of acquiring information is higher.
• In addition, we show that independent directors’ abilities to gather information and resources from their networks can facilitate the transmission …

Digital Transformation And Strategic Sponsorship: The Case Of Bbva, James Santomier, Sten Soderman, Reinhard Kunz

WCBT Faculty Publications

The overall purpose of this paper is to describe and explain the strategic sponsorship program of Banco Bilbao Vizcaya Argentaria (BBVA) and, specifically, the partnership of its U.S. subsidiary, BBVA Compass (BBVAC), with the American National Basketball Association (NBA) using a case study method. This paper demonstrates how BBVA, initially through the transformational leadership of former BBVA Group Executive Chairman Francisco González, has leveraged digital transformation and strategic sponsorship to increase its brand equity and revenue. BBVA’s effective sponsorship strategy represents an innovative, agile, and digitally focused model for marketing executives and sport marketers considering a long-term investment in strategic …

The Effectiveness And Effects Of Alcohol Regulation: Evidence From India, Dara Lee Luca, Emily Owens, Gunjan Sharma

WCBT Faculty Publications

We provide quasi-experimental evidence on the effects of alcohol regulation on alcohol consumption and associated public health outcomes using detailed individual level and aggregate data from India, where state-level laws regulating the minimum legal drinking age generate substantial variation in the availability of commercially produced alcohol across people of different ages. We find that despite significant law evasion, men who are legally allowed to drink are substantially more likely to consume alcohol. Further, men who are legally allowed to drink are significantly more likely to commit violence against their partners, suggesting a causal channel between alcohol consumption and domestic violence. …

Do Institutional Investors Exploit Market Anomalies? New Evidence From Alternative Mutual Funds, Xin Gao, Ying-Chih Wang

WCBT Faculty Publications

This paper investigates the anomaly trading behavior of a sample of mutual funds mimicking hedge fund strategies, namely alternative mutual funds (AMFs), based on both of their long and short equity positions. We document that AMFs trade on anomalies by buying underpriced stocks and short-selling overpriced peers. While AMFs’ buys and sells based on their long positions do not generate superior performance, their short-selling and covering activity based on their short positions significantly negatively predicts future abnormal returns. However, this predictability is mainly attributed to size and the nine anomaly characteristics considered. Overall, the results suggest that AMFs are sophisticated …

The Value Perspective: The Case Of Warren Buffet And His Investment Behavior Towards Apple, Walmart And Amazon, Shanhong Wu, Kermit Kuehn, Jing Jiang

WCBT Faculty Publications

In this paper, we use metrics of Ben Graham’s value investing principle to examine the actions taken by Warren Buffet toward three prominent stocks: Amazon, Apple and Walmart. We find that decisions of investment/dis-investment and not-investment by Buffet toward the stocks are largely in line with Graham’s view on value investing. This paper provides in-depth analysis of value for three stocks and relates to research on the book-to-market anomaly in the finance literature.