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Finance and Financial Management Commons™
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Articles 1 - 4 of 4
Full-Text Articles in Finance and Financial Management
Beyond Numbers: How Investment Managers Accommodate Societal Issues In Financial Decisions, Diane-Laure Arjaliès, Pratima Bansal
Beyond Numbers: How Investment Managers Accommodate Societal Issues In Financial Decisions, Diane-Laure Arjaliès, Pratima Bansal
Business Publications
Investment managers use financial numbers to assess the quality of their portfolios, which requires them to estimate the market value of their assets—i.e., the priced trading of such assets. Prior research has shown that investment managers tend to disregard information that does not easily integrate into financial numbers, such as environmental, social and governance (ESG) criteria. We argue that when investment managers use visuals to incarnate ESG criteria, they are more likely to accommodate societal issues in their financial decisions. We undertook a three-year ethnography of an asset management company to better understand how investment managers respond to ESG criteria. …
Industry Tournament Incentives, Zhichuan Li
Industry Tournament Incentives, Zhichuan Li
Business Publications
We empirically assess industry tournament incentives for CEOs, as measured by the compensation gap between a CEO at one firm and the highest-paid CEO among similar (industry, size) firms. We find that firm performance, firm risk, and the riskiness of firm investment and financial policies are positively associated with the external industry pay gap. The industry tournament effects are stronger when industry, firm, and executive characteristics indicate high CEO mobility and a higher probability of the aspirant executive winning.
Risk-Adjusted Inside Debt, Zhichuan Li, Shannon Lin, Shuna Sun, Alan Tucker
Risk-Adjusted Inside Debt, Zhichuan Li, Shannon Lin, Shuna Sun, Alan Tucker
Business Publications
Compensation theory holds that executive aggression is related to both the level and riskiness of “inside debt” - promises from firms to pay their executives fixed sums of cash in the future, including pensions and deferred compensation. However, previous researchers have only examined the level of inside debt. We provide an inside debt metric that is conceptually superior to previously used metrics, as it incorporates the riskiness of inside debt. For the entire sample, our metric offers modest improvement in fit over past metrics, where the dependent variable is future equity return volatility. Furthermore, the relation between future volatility and …
Risk-Adjusted Inside Debt, Frank Li, Shannon Lin, Shuna Lin, Alan Tucker
Risk-Adjusted Inside Debt, Frank Li, Shannon Lin, Shuna Lin, Alan Tucker
Business Publications
Compensation theory holds that executive aggression is related to both the level and riskiness of “inside debt” - promises from firms to pay their executives fixed sums of cash in the future, including pensions and deferred compensation. However, previous researchers have only examined the level of inside debt. We provide an inside debt metric that is conceptually superior to previously used metrics, as it incorporates the riskiness of inside debt. For the entire sample, our metric offers modest improvement in fit over past metrics, where the dependent variable is future equity return volatility. Furthermore, the relation between future volatility and …