Business Commons^™

The Rationality Of Economic Voting Revisited, Motoshi Suzuki, Henry W. Chappell

Faculty Publications

Examines the rationality of economic voting, using post-World War II United States national election data.

Partners & Partnerships - Recent Developments, Annette M. Nellen, H. Burton

Faculty Publications

No abstract provided.

On The Information Content Of Calls Of Convertible Securities, Anthony K. Byrd, William T. Moore

Faculty Publications

Negative stock price reactions to conversion-forcing calls of convertible bonds and preferred stocks are reexamined, and most of the sample firms are shown to exhibit full price recovery by the end of the conversion period. In addition, analysts' earnings forecasts, both short-term and long-term, are found to be revised upward following call announcements for convertible bonds and preferred stocks. The combined findings cast doubt on the established belief that such capital structure decisions signal negative information about firm value.

Empirical Findings On The Aces Decision-Making Technique, Larry E. Pate, Troy R. Nielson

Faculty Publications

Over the past two years, we have conducted a series of empirical studies on the ACES Decision-making Technique, a normative procedure (Pate, 1987) based upon the Janis and Mann (1977) assertion that decision makers who fail to engage in sufficient information search often find themselves in defensive avoidance and are, thus, unable to be vigilant, resulting in problems of procrastination, shifting responsibility, and rationalization of decisions. ACES represents a mechanism for achieving greater information search through a structured process that involves (1) identifying and challenging Assumptions, (2) clarifying and establishing more accurate Criteria weights, (3) expanding the Evoked set of …

Impact Of Fundamental Tax Reform On Domestic Manufacturing, Annette M. Nellen

Faculty Publications

No abstract provided.

Impact Of Tax Reform On International Competitiveness, Annette M. Nellen

Faculty Publications

No abstract provided.

A Note On Internet Resources For The Entrepreneur: A Small Firm Finance Perspective, James C. Brau

Faculty Publications

This article concentrates on internet resources that are available to those interested in entrepreneurial and small firm finance. Specifically, I present web pages that focus on general entrepreneurial issues and different avenues for acquiring capital. The three main areas of external financing that I include are venture capital, going public, and loans. Additionally, the advantages of using electronic mail, distribution lists, and personal web page applications are discussed and several examples presented.

Health Insurance And Early Retirement: Evidence From The Availability Of Continuation Coverage, Jonathan Gruber, Brigitte C. Madrian

Faculty Publications

The dramatic postwar decline in the labor force participation of older men in the United States has motivated a sizable body of literature on retirement behavior. Three factors, in particular, have been studied extensively: the growth of the Social Security program (see, for example, Burtless 1986; Burtless and Moffitt 1984; Diamond and Hausman 1984; Hausman and Wise 1985; Sueyoshi 1989), the increased availability and generosity of private pensions (Stock and Wise 1990a, 1990b), and the expansion of federal disability insurance (Bound and Waidmann 1992). One potentially important factor that until recently has not received much attention is the availability of …

An Adaptive Learning Model Which Accommodates Asymmetric Error Costs And Choice-Based Samples, James V. Hansen, James B. Mcdonald, Rayman D. Meservy

Faculty Publications

This paper introduces an adaptive-learning model, EGB2, which optimizes over a parameter space to fit data to a family of models based on maximum-likelihood criteria. We also show how EGB2 can be modified to handle asymmetric costs of Type I and Type II errors, thereby minimizing misclassification costs. It has been shown that standard methods of computing maximum-likelihood estimators of qualitative-response models are generally inconsistent when applied to sample data with different proportions than found in the universe from which the sample is drawn. We investigate how a choice estimator, based on weighting each observation's contribution to the log-likelihood function, …

Geodemographic Approaches To Identifying U.S. Furniture Markets, Frank M. Howell, Larry Doolittle, Jarryl B. Ritchie, Melissa A. Barfield, Steven H. Bullard

Faculty Publications

Demand for household furniture is shaped by a multitude of dynamic forces, from the global economic situation to subtle changes in consumer preferences. Correspondingly, the academic disciplines employed to identify, analyze, and predict these forces range from macroeconomics to psychology, and include demography, sociology, geography, and several applied fields. The demographic characteristics of furniture consumers has been a particularly popular area of research, primarily because of the availability of secondary data from various public · agencies. Some of this research is reviewed in a subsequent section of this report.

Relationship Lending And Lines Of Credit In Small Firm Finance, Allen N. Berger, Gregory F. Udell

Faculty Publications

This article examines the role of relationship lending in small firm finance. It examines price and nonprice terms of bank lines of credit (L/Cs) extended to small firms. The focus on LICs allows the examination of a type of loan contract in which the hank- borrower relationship is likely to be an important mechanism for solving the asymmetric information problems associated with financing small enterprises. We find that borrowers with longer banking relationships pay lower interest rates and are less likely to pledge collateral.These results are consistent with theoretical arguments that relationship lending generates valuable information about borrower quality.

The Sbi Program And Student Outcomes: A Study Of Business Policy Classes, Larry R. Watts, William T. Jackson

Faculty Publications

This study represents a preliminary inquiry ID to determine the value of combining SBI and Policy into a singular curriculum. A comparison of this combined formal was made wi1h the traditional Policy course. A slightly modified Job Diagnostic Survey (Hackman & Oldham, 1975) and a skills/usefulness scale (Hoffman, Fon1eno1 & Viswanathan, 1990) was administered to assess the difference between the two groups. Results suggested that the combined format met or exceeded the ou1comes of the traditional Policy course.

Small Business Transformation: The Meds Approach, Ravi S. Behara, David E. Gundersen

Faculty Publications

In today's rapidly changing business environment, small businesses must gain a deeper understanding of the future to develop strategies that will provide them with sustainable competitive advantage. The traditional approaches to strategy formulation are inadequate in an environment that is complex and dynamic. This paper investigates a "new" approach that helps small businesses "see the future." It discusses an application of the multi­ equilibrium dissipative structures (MEDS) approach to strategy formulation within the context of a small business involved in medical management software development. The dissipative systems approach can be used to evaluate the critical discontinuities that a small business …

Case-Based Reasoning: Application Techniques For Decision Support, James V. Hansen, Rayman D. Meservy, Larry E. Wood

Faculty Publications

Decision-support systems can be improved by enabling them to use past decisions to assist in making present ones. Reasoning from relevant past cases is appealing because it corresponds to some of the processes an expert uses to solve problems quickly and accurately. All this depends on an effective method of organizing cases for retrieval. This paper investigates the use of inductive networks as a means for case organization and outlines an approach to determining the desired number of cases-or assessing the reliability of a given number. Our method is demonstrated by application to decision making on corporate tax audits.

Organizing Tax Instruction: Evidence Regarding The Way Students Organize Tax Knowledge, Stephen T. Limberg, Michael S. Schadewald, Brian C. Spilker

Faculty Publications

An important part of accounting curriculum reform is a movement away from traditional methods of organizing accounting courses toward improved organization schemes. Two basic approaches to organizing the content of tax courses are a transaction-based scheme and an entity-based scheme. This paper reports the results of an experiment that investigates which scheme is more consistent with how incoming masters in tax students organize tax knowledge and how different schemes affect the manner in which graduating students organize tax knowledge. Ninety students drawn from two full-time masters in taxation programs participated in the study. Subjects individually completed three separate tasks that …

Building A Sustainable World Through Tourism, Deirdre Gibbons, Brian Hill, Steve Illum, Turgut Var

Faculty Publications

The theme of trees and Peace Parks was common to this second global conference on Building a Sustainable World Through Tourism held in Montreal, Canada, in September 1994. The opening ceremony included a tree planting ceremony on top of Montreal's Mont Royal.

The objectives of the conference were to seek participation from over 80 countries; present 200 international success stories related to how tourism contributed to sustainable development; share ideas leading to a specific proposal for action, especially in regards to a millennium project; form International Institute for Peace Through Tourism (IIPT) as a membership organization; and reunite and celebrate …

Default Risk And The Effective Duration Of Bonds, David F. Babbel, Craig B. Merrill, William Panning

Faculty Publications

Basis risk is the risk attributable to uncertain movements in the spread between yields associated with a particular financial instrument or class of instruments, and a reference interest rate over time. There are seven types of basis risk: Yields on

• Long-term versus short-term financial instruments.
• Domestic currency versus foreign currencies.
• Liquid versus illiquid investments.
• Bonds with higher or lower sensitivity to changes in interest rate volatility.
• Taxable versus tax-free instruments.
• Spot versus futures contracts.
• Default-free versus non-default-free securities.

Basis risk makes it difficult for the fixed-income portfolio manager to measure the portfolio's exposure to interest rate risk, heightens the anxiety …

Basic Marketing Concepts For Forest And Conservation Nurseries, Brian J. Hill

Faculty Publications

Basic marketing concepts can be useful for forest and conservation nurseries especially as they transition into self-sustaining financial situations. These basic marketing concepts include marketing orientation, marketing plan development, market research, target marketing, SWOT analysis, marketing mix, promotional mix, and advertising mix. These concepts are explained and applied to forest and conservation nurseries.

Health Insurance Availability And The Retirement Decision, Jonathan Gruber, Brigitte C. Madrian

Faculty Publications

Because individuals aged 55-64 face large and uncertain medical expenditures without the guarantee of public insurance coverage provided by Medicare, the availability of post-retirement health insurance could be an important detenninant in the retirement decisions of this group. We investigate the effect of health insurance on retirement by focusing on state and federal "continuation of coverage" mandates which grant the retiree the right to continue purchasing health insurance through a previous employer for a specified number of months after leaving the firm. We exploit variation in the timing and generosity of these laws to identify the effect of the availability …

The Japanese Cooperative Sector, Mark A. Klinedinst, Hitomi Sato

Faculty Publications

No abstract provided.

Management Buyouts And Small Business Performance: An Exploratory Examination And Research Agenda, Garry D. Bruton, J. Kay Keels, Elton Scifres

Faculty Publications

Management buyout activity is increasingly shifting from large firms to small firms. However, to date, little is known about how such activities impact the performance of small firms. This research has identified a sample of small firms that have undergone a management buyout and found that, relative to other firms in their respective industries, these small buyout firms experienced performance gains similar to those experienced in buyouts of larger firms. Suggestions for extending this area of research are made.

Cost Overrun Optimism: Fact Or Fiction, David D. Christensen

Faculty Publications

Program managers are advocates by necessity, When taken to the extreme, program advocacy can result in the suppression of adverse information about the status of a program gram. Such was the case in the Navy's A-12 Program. In A-12 Administrative inquiry, Beach (1990) speculates that such abiding cultural problems were not unique to the Navy. To test that assertion, this paper examines cost overrun data on 64 completed acquisition contracts extracted from the Defense Acquisition Executive Summary database. Cost overruns at various contract completion points are compared with projected final cost overruns estimated by contractor and government personnel. 17 comparison …

Economic Performance - It's Only Part Of The Picture, Annette M. Nellen, K. Marucheck

Faculty Publications

No abstract provided.

The Effect Of Health Insurance On Retirement, Brigitte C. Madrian

Faculty Publications

FOR DECADES health insurance in the United States has been provided to most nonelderly Americans through their own or a family member's employment. This system of employment-based health insurance has evolved largely because of the substantial cost advantages that employers enjoy in supplying health insurance. By pooling large numbers of individuals, employers face significantly lower administrative expenses than do individuals. In addition, employer expenditures on health insurance are tax deductible, but individual expenditures are generally not.¹

Despite these cost advantages, there is widespread dissatisfaction with this system of employment-based health insurance. Many people are excluded because not all employers …

The Functions Of The Executive And The Republic: Exploring The Platonic Roots Of Chester Barnard, Paul C. Godfrey

Faculty Publications

This essay examines the similarities between Plato's Republic and Barnard's Functions of the Executive. The essay argues that comparisons between Barnard and Plato are not overstated in form or substance. Three major areas of each work are compared: the ethical foundations, the political foundations, and the role of education in achieving those political means. Implications arising from the comparison are discussed and the essay concludes by linking the Barnard- Plato dialogue with current issues in management theory and practice.

An Experiment With Electronic Mail And Constitutional Theory, I. Trotter Hardy

Faculty Publications

No abstract provided.

Employment-Based Health Insurance And Job Mobility: Is There Evidence Of Job-Lock?, Brigitte C. Madrian

Faculty Publications

This paper assesses the impact of employer-provided health insurance on job mobility by exploring the extent to which workers are "locked' into their jobs because preexisting conditions exclusions make it expensive for individuals with medical problems to relinquish their current health insurance. I estimate the degree of job-lock by comparing the difference in the turnover rates of those with high and low medical expenses for those with and without employer-provided health insurance. Using data from the 1987 National Medical Expenditure Survey, I estimate that job-lock reduces the voluntary turnover rate of those with employer-provided health insurance by 25 percent, from …

Omitted-Ability Bias And The Increase In The Return To Schooling, Mckinley L. Blackburn, David Neumark

Faculty Publications

Over the 1980s, there were sharp increases in the return to schooling estimated with conventional wage regressions. We explore whether the relationship between ability and schooling changed over this period in ways that would have increased the schooling coefficient in these regressions. Our empirical results reject the hypothesis that an increase in the bias of the schooling coefficient, due to a change in the relationship between ability and schooling, has contributed to observed increases in the return to schooling.We also find that the increase in the schooling return has occurred for workers with relatively high levels of academic ability.

An Exploration Of High-Risk Leisure Consumption Through Skydiving, Richard L. Celsi, Randall L. Rose, Thomas W. Leigh

Faculty Publications

A sociocultural approach is used to explore voluntary high-risk consumption Specifically, we examine the dynamics of individuals' motives, risk perceptions, and benefit/cost outcomes of participation in increasingly popular high-risk leisure activities such as skydiving, climbing, and BASE jumping (parachuting from fixed objects). An ethnography of a skydiving subculture provides the primary empirical data. We propose an extended dramatic model that explains both macroenvironmental and inter- and intrapersonal influences and motives for high-risk consumption. Key findings indicate (1) an evolution of motives that explains initial and continuing participation in high-risk activities and (2) a coinciding evolution of risk acculturation that leads …

Electronic Conferences: The Report Of An Experiment, I. Trotter Hardy

Faculty Publications

No abstract provided.