Business Commons^™

Corporate Political Activism And Information Transfers, Dane M. Christensen, Hengda Jin, Joshua A. Lee, Suhas A. Sridharan, Laura A. Wellman

Faculty Publications

Prior research suggests that: (1) politically active firms have an information advantage over firms that do not engage in the political process, but also that (2) politically active firms are more likely to disclose policy-related information. We examine whether there are externalities associated with the processing of political information by politically active firms. We study this question in the setting of intra-industry information transfers around earnings announcements. Measuring firms’ political activism using campaign contributions, we find stronger intra-industry information transfers from politically active firms to their industry peers. These information transfers are stronger when there is more discussion during conference …

Ethnic Minority Analysts’ Participation In Public Earnings Conference Calls, Rachel W. Flam, Jeremiah Green, Joshua A. Lee, Nathan Y. Sharp

Faculty Publications

We investigate ethnic minority and non-minority sell-side analysts’ participation in public earnings conference calls. We find that minority analysts are underrepresented in conference call Q&A sessions, and minority analysts who do participate on the calls experience lower levels of prioritization than do nonminority analysts. Minority analysts’ lower participation rates are partially but not fully mediated by characteristics such as experience, work environment, and stock rating favorability. Additionally, firm and conference call fixed effects mediate approximately half the magnitude of lower minority participation rates. Extroverted minority analysts participate at higher rates, but the negative association between minority status and conference call …

Innovations In Ipo Deal Structure: Do Up-C Ipos Harm Public Shareholders?, Mary Brooke Billings, Kevin Hsueh, Melissa F. Lewis-Western, Gladriel Shobe

Faculty Publications

This paper examines an innovation in capital formation that has spurred contentious debate: the Umbrella Partnership Corporation (“Up-C”) IPO. Advisors and underwriters argue that the Up-C deal structure is a driver of post-IPO value and, thus, is a value-enhancing means of raising capital that may be one solution to concerns regarding the drop in the number of publicly traded companies. Consistent with these claims, recent research suggests that organizing soon-to-be public businesses as pass-through entities (as is the case for Up-Cs) leads to superior future performance. Yet, broadening the analysis to consider abnormal stock performance and post-IPO litigation of a …

The Spillover Effect Of Sec Comment Letters Through Audit Firms, Kenneth L. Bills, Ryan Cating, Chenxi Lin, Timothy Seidel

Faculty Publications

This study examines whether auditors serve as a conduit for disseminating Securities and Exchange Commission (SEC) views on reporting and disclosure matters as the result of being privy to clients’ SEC comment letters. This examination is important because auditors’ involvement in, and private access to, clients’ comment letters can enhance the timeliness of dissemination and have a constraining influence on reporting or disclosure choices that diverge from SEC views. Among clients with a greater expectation of impaired goodwill that do not receive a comment letter with a goodwill-related comment, we find a greater likelihood of goodwill impairment when the audit …

Balancing Loyalties: A Behavioral Study On How The Quality Of Supervisor-Subordinate Relationships Affects Whistleblowing Intentions, Jace B. Garrett, Douglas F. Prawitt, Kyle Sopp

Faculty Publications

While high-quality relationships among employees yield many benefits to organizations, they may have unintended consequences for whistleblowing. In a first experiment, we investigate whether high-quality employee-supervisor relationships reduce employees’ willingness to report supervisor wrongdoing through an internal hotline. We also investigate whether the quality of such relationships mitigates the effect of evidence strength on reporting intention. In a second experiment, we test the robustness of the effects of relationship quality and evidence strength on employees’ willingness to report wrongdoing identified in our first experiment, but to an external auditor. We also examine two factors that may mitigate the negative effect …

Current Issues Faced By Controllers, Anthony C. Bucaro, T. Jeffrey Wilks, Christopher Yust

Faculty Publications

We conduct a series of semi-structured interviews with controllers and chief accounting officers from large public and private companies—over half are Fortune 500—to identify the current issues faced by the controllership function. We map these issues into the Institute of Management Accountants (IMA®) Management Accounting Competencies and highlight recent research that addresses these issues and where there are gaps. Our findings suggest three IMA competencies that weigh heavily on controllers’ minds: (1) collaboration, teamwork, and relationship management; (2) information systems and technology; and (3) talent management. Finally, we describe how the insights from controllers suggest important improvements to accounting curriculum …

Human Connection: A Crucial Ingredient In Vacation Experience, Ondrej Mitas, Moji Shahvali, Peter Ward, Mat Duerden, Marcel Bastiaansen

Faculty Publications

The past decade (2012–2022) has seen a blossoming of research on tourists’ quality of life. Frameworks such as subjective well-being (Diener & Seligman, 2002), the PERMA wellbeing theory (Seligman, 2012) and eudaimonia (Filep & Deery, 2010) have been used to document the numerous positive psychological effects of tourist experiences. One of the most robust findings from this literature is that engaging in tourism triggers emotions. Ranging from the excitement of hobby-focused competitions and tours (Mitas et al., 2012a) to the relaxation of a spa (Strauss-Blasche et al., 2004a), dozens of studies have now documented salubrious emotional profiles over the course …

The Impact Of Reflection On Experience Type Perceptions, Mat D. Duerden, Camilla Hodge, Karen Melton, Aubrey Rushton, Lexi Anderson, Madison Bagley

Faculty Publications

Whether an experience is perceived as ordinary or extraordinary (i.e., memorable, meaningful, transformational) (Duerden et al., 2018) depends on a variety of potential factors including but not limited to time, social connection, and reflection. The purpose of this experimental study was to assess how activity type, social connection, and reflection type influences exper ience type, ordinary versus extraordinary, perceptions overtime. Data was collected from 209 undergraduates using a 4x4 experimental design. Participants engaged in one of four different 20-minute activities based upon Melton's (2017) family activity model (e.g., core:parallel, core:joint, balance:parallel, and balance:joint). Each activity was run for four different …

Category Versus Labeled Magnitude Scale Measures Of Immediate Conscious Leisure Experiences: Engagement, Immersion, And Absorption, Gary D. Ellis, Patti A. Freeman, Brian J. Hill, Jingxian Jiang

Faculty Publications

We developed and validated single-item category (CAT) and labeled magnitude (LM) scales of three recalled immediate conscious leisure experiences: engagement, immersion, and absorption. These minimally invasive scales are suitable for use in experiments, surveys, and evaluations in the travel and leisure industries. The CAT scales followed a familiar Likert-type format, while the LM scales involved calibration by 169 judges using two modalities (drawing lines of differing lengths and providing numeric magnitude judgments) to establish empirically determined ratio-scaled distances among seven modifiers (not at all, slightly, somewhat, quite, very, greatly, and extremely). We collected 3,821 experience observations from 621 visitors to …

The Audit Quality Effects Of Small Audit Firm Mergers In The United States, Brant E. Christensen, Kecia Williams Smith, Dechun Wang, Devin Williams

Faculty Publications

Increased audit regulation, coupled with reports of frequent mergers among smaller audit firms, creates a dynamic environment in which to assess changes in the U.S. audit market. We examine the audit quality consequences of audit firm mergers between small audit firms that audit public clients, a topic about which little is known. Using a sample of small audit firms each involved in a single merger during 2004-2016, we find consistent evidence that post-merger audit quality decreases when PCAOB-identified audit deficiencies and audit fees are used as proxies for audit quality. In addition, we find weak evidence of lower post-merger audit …

Does Audit Regulation Improve The Underlying Information Used By Managers? Evidence From Pcaob Inspection Access And Management Forecast Accuracy, Brant E. Christensen, Lijun (Gillian) Lei, Sydney Qing Shu, Wayne Thomas

Faculty Publications

Survey evidence and academic research raise the possibility that audit regulation can impact not only the information contained in external financial reports but also the internal information used by management. We investigate this possibility by examining the improvement in management forecast accuracy around initiation of the Public Company Accounting Oversight Board's (PCAOB) international inspection program. Consistent with managers having improved information, we find that managers issue more accurate forecasts following PCAOB inspection access. Multiple additional analyses support that an improved information environment is the mechanism underlying our results, and this effect is distinct from, and incremental to, any effects of …

The Impact Of Audit Technology On Audit Task Outcomes: Evidence For Technology-Based Audit Techniques, Marc Eulerich, Adi Masli, Jeffrey Pickerd, David A. Wood

Faculty Publications

As audit technology becomes more widespread, practice and academia are raising concerns about the costs and benefits of these technologies. We examine how internal auditors use technologybased audit techniques (TBATs) and how TBATs impact the efficiency and effectiveness of their audits. We use two surveys and interviews of individual auditors and chief audit executives (CAE) to examine their perceptions of TBATs. Auditors perceive TBATs as beneficial. Specifically, an increase in the use of TBATs is associated with completing more audits, finding more risk factors, providing more recommendations, and decreasing audit days. However, CAEs also perceive TBATs to be costly. An …

The Gatekeeper’S Dilemma: 'When Should I Transfer This Customer?', Brett A. Hathaway, Evgeny Kagan, Maqbool Dada

Faculty Publications

In many service encounters, front-line workers (often referred to as gatekeepers) have the discretion to attempt to resolve a customer request or to transfer the customer to an expert service provider. Motivated by an incentive redesign at a call center of a mid-size US-based bank, we formulate and solve an analytical model of the gatekeeper's transfer response to different incentive schemes and to different congestion levels. We then test several model predictions experimentally. Our experiments show that human behavior matches the predictions qualitatively, but not always in magnitude. Specifically, transfer rates are disproportionately low in the presence of monetary penalties …

Discussion Of "Why Can’T I Trade? Exchange Discretion In Calling Halts", Michael S. Drake

Faculty Publications

Liquidity is an important feature of well-functioning capital markets. While many market frictions exist that constrain liquidity, none are as dramatic as trading halts when trading is suspended altogether. Trading halts became a common feature of US securities markets in the aftermath of Black Monday (October 19, 1987). The hope of regulators was that system-wide trading halts, so-called market circuit breakers, would decrease the likelihood of dramatic sell-offs by allowing markets to cool off. Regulators further argued that security-specific trading halts implemented in advance of a material news release could also reduce volatility and help level the playing field between …

The Development Of The Process Mining Event Log Generator (Pmelg) Tool, Steven R. Hawkins, Jeffrey Pickerd, Scott L. Summers, David A. Wood

Faculty Publications

Process mining is an emerging technology that allows users to visualize all potential variations of business processes within an organization. It holds significant potential for impacting the field of accounting. However, training professionals and students in its use is challenging due to a lack of event data applicable to accounting and auditing scenarios. To address this issue, we developed an easy-to-use tool called the Process Mining Event Log Generator (PMELG) for generating process mining data files for the order-to-cash process. With the PMELG tool, users can create realistic datasets that incorporate key accounting and auditing concepts, such as segregation of …

Check Your Attitude: An Examination Of Companies’ Adversarial Disclosures About Tax Enforcement, Hannah W. Judd, Sean T. Mcguire, Connie D. Weaver, Junwei Xia

Faculty Publications

This study examines companies’ voluntary disclosures of an adversarial stance toward tax enforcement in income tax footnotes, where companies express disagreement with tax authorities or a willingness to litigate unresolved audit issues. We find that larger companies, industry leaders, and companies in industries with high litigation risk are more likely to make adversarial disclosures toward tax enforcement, and companies’ tax planning activities do not solely determine such disclosures. We examine the implications of adversarial disclosures on future tax audit outcomes and find that future settlement outcomes are more unfavorable for companies with such disclosures relative to those without. Finally, our …

Life After Death: A Field Experiment With Small Businesses On Information Frictions, Stigma, And Bankruptcy, Shai Bernstein, Emanuele Colonnelli, Mitchell Hoffman

Faculty Publications

In an RCT with US small businesses, we document that a large share of firms are not well-informed about bankruptcy. Many assume that bankruptcy necessarily entails the death of a business and do not know about Chapter 11, where debts are renegotiated so that the business can continue operating. Firms also exhibit bankruptcy-related stigma, believing that bankruptcy is embarrassing, a sign of failure, and a negative signal to employees and customers. Short educational videos that address information or stigma increase knowledge and decrease stigma, both immediately and durably over 4 months. Videos increase reported interest in using Chapter 11 bankruptcy …

Key Success Factors For “Real World” Projects: A Principal- Agency Theory Perspective, Degan Kettles, Dan Mazzola, Mary Sumner, Mahesh Raisinghani

Faculty Publications

“Real world” projects are an important component of MIS academic programs. These “real world” projects provide students with problem-based learning opportunities which enable them to address “real world” problems and opportunities. The purpose of this research-in-progress is to determine the key success factors for “real world” projects. The concept of Principal-Agency Theory provides a theoretical lens for understanding these success factors from the viewpoint of students, faculty, and industry sponsors. The SIM academic research team will collect data from project teams across ten universities and for over 250 projects. Having multiple perspectives will contribute to an understanding of how to …

Explaining Racial Disparities In Personal Bankruptcy Outcomes, Bronson Argyle, Sasha Indarte, Benjamin Iverson

Faculty Publications

We document substantial racial disparities in consumer bankruptcy outcomes and investigate the role of racial bias in contributing to these disparities. Using data on the near universe of US bankruptcy cases and deep-learning imputed measures of race, we show that Black filers are 21 and 3 percentage points (pp) more likely to have their bankruptcy cases dismissed without any debt relief in Chapters 13 and 7, respectively. We uncover strong evidence of racial homophily in Chapter 13: Black filers are 10 pp more likely to be dismissed when randomly assigned to a white bankruptcy trustee. To interpret our findings, we …

Fintech Lending With Lowtech Pricing, Mark J. Johnson, Itzhak Ben-David, Jason Lee, Vincent Yao

Faculty Publications

FinTech lending—known for using big data and advanced technologies—promised to break away from the traditional credit scoring and pricing models. Using a comprehensive dataset of FinTech personal loans, our study shows that loan rates continue to rely heavily on conventional credit scores, including 45% higher rates for nonprime borrowers. Other known default predictors are often neglected. Within each segment (prime/nonprime) loan rates are not very responsive to default risk, resulting in realized loan-level returns decreasing with risk. The pricing distortions result in substantial transfers from nonprime to prime borrowers and from low- to high-risk borrowers within segment.

Who Invests In Crypto? Wealth, Financial Constraints, And Risk Attitudes, Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di Maggio, Mark J. Johnson, Jason Kotter

Faculty Publications

We provide a first look into the drivers of household cryptocurrency investing. Analyzing consumer transaction data for millions of U.S. households, we find that, except for high income early adopters, cryptocurrency investors resemble the general population. These investors span all income levels, with most dollars coming from high-income individuals, similar to equity investors. High past crypto returns and personal income shocks lead to increased cryptocurrency investments. Higher household-level inflation expectations also correlate with greater crypto investments, aligning with hedging motives. For most U.S. households, cryptocurrencies are treated like traditional assets.

Measuring State And Trait Attention Control Using Mouse Movements, David W. Wilson, Jeffrey Jenkins, J. S. Valacich

Faculty Publications

Attention is a scarce resource in an increasingly distracting world. Although computing devices might well be blamed for much of the distraction we experience, these devices also afford an opportunity for feedback and improvement, as seen in a variety of contexts. This paper provides initial evidence that mouse movement data can be used to measure users’ attention control. Attention control refers to the ability to maintain top-down attention to goal-relevant stimuli and resist the distracting influence of irrelevant stimuli competing for attention. During a controlled experiment with conditions of varying levels of distraction, we captured participants’ mouse movements to determine …

The Critical Need For Human Capital Measurement Standards And Transparency In Healthcare, Heather Whiteman, Solange Charas, Hieu Bui, Lee S. Webster, James Gaskin

Faculty Publications

Despite long histories, the disciplines of healthcare performance analytics and human capital analytics followed parallel but separate tracks during the 19th and 20th centuries. Little has been done to integrate these two analytic disciplines to improve the delivery of medical care and the sustainability of healthcare organizations. Today, there is an increased demand for healthcare to meet the aging world population, spiraling healthcare costs, and a shortage of human resources to meet patient needs. It is imperative that healthcare professionals apply innovations to explore and optimize value from a combined discipline of healthcare human capital measurement and reporting.

Typing Fast Versus Typing Slow: Using Typing Dynamics To Reveal Authentic And Imposter Users, David Kim, Joseph S. Valacich, Jeffrey L. Jenkins, Manasvi Kumar

Faculty Publications

Real-time assessment of users' cognitive states has practical importance, allowing organizations to infer user behaviors. Realizing its importance, prior studies – specifically those using mouse cursor movements – have applied various theories to answer a similar question, i.e., how does a high cognitive load influence the users' device usage behavior? While numerous activities can increase cognitive load, we argue that the mechanisms behind how humans process information can more holistically be explained using Dual Process Theory (DPT) (i.e., when cognitive load is either low or high) and can be applied under a broad range of usage contexts. Using a within-participant …

Charting A Course To The Top: Insights From The Fortune 500 Cios And How They Differ From Other C-Suite Executives, Benjamin Richardson, Degan Kettles, Daniel Mazzola

Faculty Publications

No abstract provided.

The Mediating Effect Of The Covid-19 Pandemic On The Relationship Between Technology And Organizational Performance: Evidence From Ghana Banking Industry, Manaseh Tsekpo, Williams Kwasi Peprah

Faculty Publications

This study aimed to investigate the mediating effect of the COVID-19 pandemic on the relationship between technology and organizational performance, using evidence from the Ghana banking industry. The study adopted a correlation and mediation research design, with 232 respondents conveniently sampled from eight indigenous Ghanaian Banks. The data were analyzed using correlation, regression, and mediation techniques. The results show that technology serves as a catalyst for improving organizational performance and alleviating the negative effects of COVID-19 on organizational performance. The findings also revealed that the COVID-19 pandemic highly mediates technology and organizational performance with a significant positive relationship between technology …

The Effects Of Brand Relationships On Justice Perceptions In Service Recovery, Cid Gonçalves Filho, Kip Kiefer, Marc Fetscherin, Alexander Blandina, Marcelo Nacif Rocha, Plínio Rafael Reis Monteiro

Faculty Publications

Purpose: This paper explores how brand relationship quality (BRQ) influences consumers’ perceived sense of justice in the context of service recovery situations.

Design/methodology/approach: We conducted a survey of 368 consumers who experienced an automotive service recovery.

Findings: Stronger BRQ led to higher levels of perceived justice (distributive, procedural, and interactional), which in turn led to higher customer satisfaction of complaint handling. Ultimately, higher customer satisfaction led to lower complaining, lower retaliation, and higher purchase intention. Our alternative model tested the effects of BRQ sub-dimensions on justice perception. Interestingly, trust produced a “love-is-blind” effect, while intimacy revealed a “love-becomes-hate” effect.

Originality: …

Interrelationships In Inventory Turnover Performance Between Supplier And Customer Firms, Joseph J. Henry, Peter Christensen, James C. Brau

Faculty Publications

Using inventory turnover to measure the efficiency of corporate inventory management, we perform econometric analyses to verify whether the inventory efficiency of a firm’s supply chain partners is a statistically significant driver of the firm’s own inventory efficiency. We test two mutually exclusive hypotheses. First, suppliers hold inventory on behalf of customers, effectively displacing inventory up the supply chain and resulting in a negative correlation between supplier and customer inventory turnover. Alternatively, inventory efficiency is integrated along the supply chain, resulting in a positive correlation between supplier and customer inventory turnover. Our bivariate and multivariate analyses of both firm- and …

The Impact Of Weibo Features On User’S Information Comprehension: The Mediating Role Of Cognitive Load, Ying Xu, Jia-Qiong Xie, Fu-Xing Wang, Rebecca L. Monk, James Gaskin, Jin-Liang Wang

Faculty Publications

Social media, such as Microblogs, have become an important source for people to obtain information. However, we know little about how this would influence our comprehension over online information. Based on the cognitive load theory, this research explores whether and how two important features of Weibo, which are the feedback function and information fragmentation, would increase cognitive load and may in turn hinder users’ information comprehension in Weibo. A 2 (feedback or non-feedback) × 2 (strong-interference or weak-interference information) between-participants experimental design was conducted. Our results revealed that the Weibo feedback function and interference information exerted a negative impact over …

Theming, Service Performance, And Downstream Effects Of Subjective Leisure Experiences, Brian J. Hill, Patti Freeman, Gary Ellis, Emily Catalan

Faculty Publications

We examined determinants (i.e., theming and service performance) and results (proclivity to recommend, enjoyment, perceived value of time spent) of structured leisure experiences. Structured leisure experiences were measured in terms of intensity of engagement (focus on unfolding narrative), absorption (focus on sensory stimuli), and immersion (focus on performance) during participation. Experience measures (n=310) reported by 168 young adults upon exiting a variety of leisure, recreation, and hospitality venues supported the research hypotheses.