Business Commons^™

An Analysis Of Selling Concessions, Reallowance Fees, And Price Changes In The Marketing Of Ipos, James C. Brau, Joseph J. Henry

Faculty Publications

This paper provides an economic model resulting in two distinct marketing strategies available to investment bankers. First, we hypothesize that an increased selling effort by brokers is used most effectively when the investment clientele is uninformed. Second, adjusting the offer price of the issue is hypothesized to be employed primarily in large IPOs with a clientele of sophisticated investors, consistent with Shiller’s Impresario Hypothesis. Our pre-IPO bubble (1981-1996) empirical results yield evidence supporting both selling mechanisms. Under-demanded small IPO issues are ‘pushed’ by the brokers, while some under-demanded large IPO issues instead increase the offer price, with large first-day turnover …

A Comparison Of Ncreif, Inrev, And Anrev Open-End Core Fund Indices, Barrett A. Slade, Jeffrey D. Fisher, Joe D’Alessandro

Faculty Publications

Cross-border investment in non-listed real estate is on the rise. This article aims to compare the U.S. NFI-ODCE index with the European INREV ODCE index and the recently released Asian ANREV ODCE index with the hope that this study will be helpful to cross-border investors in these major markets. From 2016 through 2020 (five years), we found that the NCREIF fund count remained relatively flat, but the INREV and ANREV fund count increase steadily. At the end of 2020, NCREIF’s GAV was 270 billion dollars compared with INREVs 39 billion dollars and ANREV’s 16 billion dollars, a considerable size difference …

Can Gambling Increase Savings? Empirical Evidence On Prize- Linked Savings Accounts, Shawn Cole, Benjamin Iverson, Peter Tufano

Faculty Publications

This paper studies the adoption and impact of prize-linked savings (PLS) accounts, which offer lottery-like payouts to individual account holders in lieu of interest. Using microlevel data from a bank in South Africa, we show that PLS is attractive to a broad group of individuals, with financially constrained individuals and those with no other deposit accounts particularly likely to participate. Individuals who choose to use PLS increase their total savings on average by 1% of annual income. Exploiting the random assignment of prizes,we present causal evidence that PLS substitutes for lottery gambling but is a complement to standard savings.

The Path Of The Righteous: Using Trace Data To Understand Fraud Decisions In Real Time, Markus Weinmann, Joe Valacich, Christoph Schneider, Jeffrey Jenkins, Martin Hibbeln

Faculty Publications

Trace data—users’ digital records when interacting with technology—can reveal their cognitive dynamics when making decisions on websites in real time. Here, we present a trace-data method—analyzing movements captured via a computer mouse—to assess potential fraud when filling out an online form. In contrast to incumbent fraud-detection methods, which analyze information after submission, mouse-movements traces can capture the cognitive dynamics of a decision to be fraudulent as it is happening. We report two controlled studies using different tasks, where participants could freely commit fraud to benefit themselves financially while we captured mouse-cursor movement data. We found that participants who entered fraudulent …

Brokerage Relationships And Analyst Forecasts: Evidence From The Protocol For Broker Recruiting, Braiden Coleman, Michael S. Drake, Joseph Pacelli, Brady Twedt

Faculty Publications

We offer novel evidence on how the nature of brokerage-client relationships can influence the quality of equity research. We exploit a unique setting provided by the Protocol for Broker Recruiting to examine whether relaxed broker noncompete agreement enforcement generates spillover effects on sell-side analysts. Entry into this agreement reassigns ownership of the client relationship from the brokerage to individual brokers, potentially generating a greater standard of care. Using a generalized difference-in-differences research design, we provide evidence consistent with brokers reducing pressure on analysts to produce optimistic research following protocol entry. This effect is concentrated among less experienced and non-All Star …

Fool Me Once, Shame On You; Fool Me Twice, Shame On Me: The Long-Term Impact Of Arthur Andersen’S Demise On Partners’ Audit Quality*, Feng Guo, Ling Lei Lisic, Jeffrey Pittman, Timothy Seidel, Mi Zhou, Ying Zhou

Faculty Publications

Although recent evidence suggests that individual audit partners explain a substantial portion of the variation in audit quality proxies, much less is known about what determines an audit partner’s quality. Psychology and behavioral economics theories hold that an individual’s experiences can have enduring impacts on subsequent behavior. We examine whether auditors’ direct exposure to Arthur Andersen’s collapse has a long-term impact on the quality of their audits. Our evidence implies that audit partners who directly experienced Andersen’s demise impose stricter monitoring evident in their clients exhibiting a lower propensity for misstatements and small profits, and paying higher audit fees. Importantly, …

Tax Boycotts, H. Scott Asay, Jacob Thornock, Jeffrey L. Hoopes, Jaron H. Wilde

Faculty Publications

To what extent do consumers boycott in response to corporate tax activities? Anecdotes suggest potential consumer backlash is a meaningful deterrent to corporate tax planning, and the tax literature has developed expectations that these boycotts happen. But empirical evidence on their existence and impact is limited. We undertake a comprehensive study to examine how consumers’ purchase behavior relates to corporate tax activities, triangulating across several designs, samples, and measures. First, we survey a representative sample of U.S. consumers to examine the reported relationship between corporate tax planning and consumer behavior; we find that consumers report that precisely zero have ever …

Discussion Of ‘The Effect Of Changes In Income Shifting On Affiliate Managers’ Internal Reporting Decisions, Zackery D. Fox, Ryan J. Wilson

Faculty Publications

Klassen and Valle Ruiz (hereafter KVR) investigate an interesting question that has not been explored in existing research. Specifically, they look at the effect of a change in income shifting strategy on affiliate managers’ internal reporting choices. The paper adds to a growing category of the tax accounting literature examining the consequences of multinational enterprises (MNEs) tax-motivated income shifting for various stakeholders. KVR turn their focus within the firm by testing whether distortions caused by tax-motivated income shifting alter affiliate managers’ internal reporting behavior.

The Relevance Of Non-Income Tax Relief*, Michael S. Drake, Ryan V. Hess, Jaron H. Wilde, Braden M. Williams

Faculty Publications

Governments regularly offer non-income tax relief to attract business investment. However, it is unclear whether or how markets impound information about the relief into security prices. We use novel data from retrospective public records to examine the information content of non-income tax relief. We predict and find that the receipt and magnitude of this relief are both strongly associated with recipients’ future accounting performance and future abnormal returns. We further find that abnormal returns associated with the relief cluster around future earnings information events. In combination, this evidence suggests that non-income tax relief is value-relevant but is incorporated into prices …

Social Media Analysts And Sell‑Side Analyst Research, Michael S. Drake, James R. Moon Jr., Brady J. Twedt, James D. Warren

Faculty Publications

We examine how research posted by “social media analysts” (SMAs)—individuals posting equity research online via social media investment platforms—is related to research subsequently produced by professional sell-side equity analysts. Using data from Seeking Alpha, we find that the market reaction to sell-side analyst research is substantially reduced when the analyst research is preceded by the report of an SMA, and that this is particularly true of sell-side analysts’ earnings forecasts. We further find that this effect is more pronounced when SMA reports contain more decision-useful language, are produced by SMAs with greater expertise, and relate to firms with greater retail …

A Tale Of Two Index Funds: Full Replication Vs. Representative Sampling*, Travis Dyer, Nicholas Guest

Faculty Publications

We examine the two approaches used by equity index funds to track their benchmark index. The first, full replication, mimics the index with exactness. The second, representative sampling, holds a subset of the index. We find that samplers trade 3-4 times more, have 30-50% higher expenses and fees, and earn 50-70 basis points lower annual returns, which is substantial given index funds’ mandate to limit tracking error to a few basis points. Besides higher expenses and transaction costs, poor stock picking also seems to contribute to samplers’ return underperformance. Overall, our analyses suggest representative sampling is associated with underperformance.

Financially Constrained Mortgage Servicers, Darren Aiello

Faculty Publications

Financially constrained mortgage servicers destroyed substantial MBS investor value during the financial crisis through their management of delinquent mortgages. Servicers advance to investors monthly payments missed by borrowers. In order to minimize this obligation to extend financing to distressed borrowers, constrained servicers aggressively pursued foreclosures and modifications at the expense of investors, borrowers, and future mortgage performance. When agency frictions between the servicer and the investor are higher, the servicer’s financial constraints matter more. IV regressions suggest that, on average per defaulted loan, servicers’ financial constraints are responsible for 20% of the total investor value reduction during the financial crisis.

Demystifying The Roles Of Organisational Smart Technology, Artificial Intelligence, Robotics And Algorithms Capability: A Srategy For Green Human Resource Management And Environmental Sustainability, Samuel Ogbeibu, Jude Emelifeonwu, Vijay Pereira, Raphael Oseghale, James Gaskin, Uthayasankar Sivarajah, Angappa Gunasekaran

Faculty Publications

With growing climate change concerns, and constant advancements in smart technology, artificial intelligence, robotics, and algorithms (STARA), organisations in emerging economies are becoming more compelled to go green, develop and deploy their STARA capability to boost profits more effectively, and their environmental sustainability (ES). Likewise, with governments increasingly calling for ES, organisations' human resource management (HRM) is further pressured to ensure their programmes aid realisation of environmental objectives without compromising profit maximisation. However, it remains unclear how complementary Green HRM (GHRM) programmes can be supported by organisational STARA capability (OSC) to bolster ES. Accordingly, we investigate how OSC and GHRM …

Young Firms, Old Capital, Song Ma, Justin Murfin, Ryan Pratt

Faculty Publications

Across a broad range of equipment types and industries, we document a pattern of local capital reallocation from older firms to younger firms. Start-ups purchase a disproportion- ate share of old physical capital previously owned by more mature firms. The evidence is consistent with financial constraints driving differential demand for vintage capital. The local supply of used capital influences start-up entry, job creation, investment choices, and growth, particularly when capital is immobile. Meanwhile, as suppliers of used capital, in- cumbents accelerate capital replacement in the presence of younger firms. The evidence suggests previously undocumented benefits to co-location between old and …

Information Filtering In Electronic Networks Of Practice: An Fmri Investigation Of Expectation (Dis)Confirmation, Kelly J. Fadel, Thomas O. Meservy, C. Brock Kirwan

Faculty Publications

Online forums sponsored by electronic networks of practice (ENPs) have become an important platform for technology-mediated knowledge exchange, yet relatively little is known about how ENP participants filter and evaluate the information they encounter on these forums. This study integrates perspectives from expectation confirmation theory, prospect theory, and neuroscience research to explore how ENP forum filtering judgments are influenced when expectations formed on the basis of contextual cues are confirmed or disconfirmed by the examination of solution quality. We summarize six different models of expectation confirmation explored in previous IS literature and report the results of a neuroimaging experiment using …

What Problem Do Intermediaries Solve? Evidence From Real Estate Markets, Darren Aiello, Mark Garmaise, Taylor Nadauld

Faculty Publications

We study intermediation in the housing market. Using data from an online platform used by real estate agents to generate leads, we identify exogenous intermediary attention arising from the quasi-randomized ordering of potential listings. Greater intermediary attention leads to an increased probability of listing with an agent and selling quickly, and a higher transaction price. The listing and transaction probabilities of neighboring properties decrease in intermediary attention. These results provide causal evidence supporting search theories of intermediation, contrast sharply with endogenous correlations, and indicate that agents in this market serve mainly to facilitate search rather than to reduce information asymmetries.

When Is Enough, Enough? An Examination Of Student Engagement When Watching Online Group Project Presentations, Manasvi Kumar, Joseph S. Valacich, Jeffrey L. Jenkins, David Kim

Faculty Publications

In traditional face-to-face classes, conventional wisdom suggests that delivering and watching group project presentations is a valuable learning experience. In this research, we examine the limits of student engagement and learning in an asynchronous online context. Specifically, 249 undergraduate students were assigned to perform peer evaluations of multiple ten-minute project presentations. The online learning platform collected objective viewing behavior for each student, allowing us to use viewing time as a proxy for engagement. We also collected self-reported attitudes towards the assignment, finding that while students value providing feedback, they do not consider it a valuable use of their time. Students …

Measuring Social Connectedness During Shared Leisure Activities Using Oxytocin: A Comparison Of Sampling Urine Versus Saliva, Karen K. Melton, Camilla Hodge, Madeline L. Haron, Maria Boccia

Faculty Publications

Leisure experiences are often associated with social connectedness. One measure of social connection underutilized in leisure studies is the neurohormone oxytocin. This methodological note considers issues researchers need to address when incorporating oxytocin in their study design. Noninvasive sources for sampling oxytocin include saliva and urine; however, the decision about which method to employ is not well documented. This study provides the first methodological note on collecting oxytocin in leisure studies and provides a comparison of urine vs. saliva measures for oxytocin in the context of leisure activities. Our findings indicate that urine samples are more sensitive to oxytocin change …

Ecology Of Family Experiences: Contextualizing Family Leisure For Human Development & Family Relations, Camilla Hodge, Kelly D. Chandler, Karen K. Melton, Kelly L. Hoke, Jennifer Blodgett

Faculty Publications

Research on family communication in the leisure context has been limited to retrospective survey reconstructions of perceptions of communication patterns. This study examines the validity of sociometric badges for measuring family communication in real-time. Seven families (married, two-parent families with at least one child ages 4–17 years) wore sociometric badges during a 30-minute leisure activity in a lab setting. We compared mean badge estimates of family communication duration to mean coded video data from the same 30-minute sessions. Intraclass correlation coefficients indicated sociometric badges are not as reliable as video-coded estimates of speech; however, among parents, non-significant mean comparisons partially …

A Chatbot Tutor Can Lessen The Gender Confidence Gap In Information Systems Learning, Cherileigh Leavitt, Madison Corbin, Mark Keith, Ryan Schuetzler, Degan Kettles, Greg Anderson

Faculty Publications

Women are underrepresented in the information systems discipline as well as other STEM fields. A common explanation for the significant gender gap is the difference in women’s and men’s self-efficacy concerning information systems (IS) tasks and roles during their secondary education. As a potential solution, this study explores how chatbot tutors impact confidence differently between 136 women and men in an introductory programming course. Our findings confirmed prior research showing that while men have greater confidence in information systems tasks, there is no difference in performance in those tasks between women and men. Next, we found that a chatbot used …

Challenges Of Ecological Momentary Assessments To Study Family Leisure: Participants’ Perspectives, Kelly D. Chandler, Camilla Hodge, Kara Mcelvaine, Ericka J. Olschewski, Karen K. Melton, Pascal Deboeck

Faculty Publications

Scholars have documented the research tradeoffs of using ecological momentary assessments (EMA) to study daily life. Less is known about participants’ perspectives. The aim of this research note was to delineate the challenges of participating in a 14-day EMA study of family leisure described by 41 individuals (mothers, fathers, and adolescents) from 14 families to inform future family leisure studies using EMA. Participants identified three potential challenges: repetitive questions, inconvenient signals, and short response windows. Despite these challenges, the majority of participants indicated that they would recommend a similar study to others. The reality that so many families feel squeezed …

Changing The Business Narrative: A Guide To Successful Experience Offerings, J. Robert Rossman, Mat D. Duerden

Faculty Publications

Purpose

Design/methodology/approach

Experience Design In Leisure And Recreation Curriculum, Madie Neeley, Sydney Burgess, Mat D. Duerden, Neil Lundberg

Faculty Publications

Experience design is a term that has risen to the forefront in a variety of professional fields and has relevance for the field of park and recreation. Park and recreation professionals are primarily focused on providing experiences and thus could naturally consider themselves experienced designers. Surprisingly, experience design is not a topic often discussed within park and recreation publications or curriculum. This absence is at least in part attributable to the fact that experience design is an emerging field that has grown independently out of multiple disciplines. Consequently, the fields of park and recreation and experience design overlap in a …

Environmental Corporate Social Responsibility And Pro-Environmental Behavior: The Effect Of Green Shared Vision And Personal Ties, Badar Latif, Nuwan Gunarathne, James Gaskin, Tze San Ong, Mohsin Ali

Faculty Publications

Environmental corporate social responsibility (ECSR) has recently gained traction among academics, practitioners, and policymakers as a critical driver of sustainable development. However, the impact of ECSR on actual pro-environmental behavior remains unclear in the literature, particularly in the context of developing countries. Grounded in the social exchange and social network theories, this study examines the effect of ECSR on proenvironmental behavior via the mediation of a green shared vision and the moderation of two types of personal ties (business ties and political ties). Data was collected and analyzed from 375 manufacturing sector employees in Pakistan at two time periods. The …

What Makes Health Data Privacy Calculus Unique? Separating Probability From Impact, Mark Keith, Autumn Clark, Tamara Masters, Curtis Wigington

Faculty Publications

Patient health data is heavily regulated and sensitive. Patients will sometimes falsify data to avoid embarrassment resulting in misdiagnoses and even death. Existing research to explain this phenomenon is scarce with little more than attitudes and intents modeled. Similarly, health data disclosure research has only applied existing theories with additional constructs for the healthcare context. We argue that health data has a fundamentally different cost/benefit calculus than the non-health contexts of traditional privacy research. By separating the probability of disclosure risks and benefits from the impact of that disclosure, it is easier to understand and interpret health data disclosure. In …

Experience Journey Map: A New Experience Design Tool For Structuring Youth Activities, Gary D. Ellis, Jingxian Jiang, Darlene Locke, Patti A. Freeman, Kaylee Jorgensen

Faculty Publications

We introduce a new experience design tool, an experience journey map, to assist youth professionals in planning engagement, immersion, and absorption activities. Experience journey maps are based on customer journey maps, which are widely used in business service design. This new approach highlights strategies for engendering deep structured experiences during the activity. An experience journey map is a matrix of columns and rows. Columns represent the sequence of activity stages. Rows are experience-structuring strategies derived from the theory of structured experience. These strategies include service performance strategies, deep structured experience strategies, and engagement, immersion, and absorption strategies. We present a …

Borrowing To Save? The Impact Of Automatic Enrollment On Debt, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, William L. Skimmyhorn

Faculty Publications

Does automatic enrollment into a retirement plan increase financial distress due to increased borrowing outside the plan? We study a natural experiment created when the U.S. Army began automatically enrolling newly hired civilian employees into the Thrift Savings Plan. Four years after hire, automatic enrollmentincreases cumulative contributions to the plan by 4.1% of annual salary, but we find little evidence ofincreased financial distress. Automatic enrollment causes no significant change in credit scores, debt balances excluding auto debt and first mortgages, or adverse credit outcomes, with the possible exception of increasedfirst-mortgage balances in foreclosure.

Asynchronous Video Interviews And Artificial Intelligence: A Multi-Study Exploration, Tanner Skousen, Jacob Steffen, Cherileigh Chandler, Warren Rosengren, James Gaskin, Thomas O. Meservy

Faculty Publications

Asynchronous video interviews (AVIs) provide scalable, low-cost opportunities for matching interviewees and organizations. However, the implications of a shift from synchronous interviews aren’t fully understood, especially when design choices such as AI evaluations are employed. To better understand the impact of AVIs, we undertook an exploratory qualitative study in addition to an experiment. The first study involves 100 qualitative responses and exploratory quantitative tests on the relationships between coded values and demographic and trait variables of the respondents. Our second study tests the impact of AI feedback using a large online AVI service while accounting for various disadvantaged groups that …

Back From The Future: Mediation And Prediction Of Events Uncertainty Through Event-Driven Models (Edms), Samuel Ogbeibu, James Gaskin

Faculty Publications

The event-driven model (EDM) is an emerging concept in human behavioural research, and understanding how EDMs can promote theory development remains a fundamental quest of predictive science. Traditionally, researchers have heavily depended upon theory confirmation and the inclusion of mediating constructs to clarify uncertainty associated with plausible events (e.g. political, socio-economic, technological, environmental). Though this approach has pushed the field forward, it has also steered mediation research towards largely ignoring the fundamental role of prediction as a key for better understanding future events represented by EDMs. Additionally, emerging research using partial least squares structural equation modelling to execute prediction-oriented analysis …

Impressions Matter More Than Privacy: The Moderating Roles Of Affordances In The Relation Between Social Anxiety And Online Safety- Seeking Behaviors, Xue-Qin Yin, Sebastian Scherr, Lin Jin, James Gaskin, Jin-Liang Wang

Faculty Publications

Though socially anxious individuals tend to seek safety, little is known about whether this relationship depends on context, including the affordances of social networking sites (SNSs) to provide anonymity and publicness, and whether safety-seeking can be explained by impression management, privacy calculus or both. Based on the psychobiological model of social anxiety, we conducted two studies (Study 1: N = 103, Study 2: N = 1,184) to examine the contextual dependence of safety-seeking behaviors and to disentangle which types of concerns mediate the effect of social anxiety on safety-seeking behaviors. Results indicated that socially anxious individuals tend to seek safety …