Business Commons^™

The Impact Of Stakeholder Orientation On Tax Avoidance: Evidence From A Natural Experiment, Gary Chen, Ani Manakyan Mathers, Bin Wang, Xiaohong Wang

Finance Faculty Research and Publications

We study the effect of stakeholder orientation on corporate tax avoidance. Using the staggered passage of constituency statutes across U.S. states between 1983 and 2006, we show that greater stakeholder orientation results in increased tax avoidance. We further find greater tax avoidance among firms with limited financial resources and that employees benefit from the change. Our results are consistent with stakeholder salience theory that resource-constrained managers prioritize the claims of salient stakeholders, such as employees, at the expense of secondary stakeholders, such as the government.

Litigation Risk Management Through Corporate Payout Policy, Matteo Arena, Brandon Julio

Finance Faculty Research and Publications

Firms modify their payout policy in anticipation of future litigation costs. We examine a comprehensive sample of U.S. corporate lawsuits and find that firms facing significant litigation risk pay lower dividends, and in some cases omit dividends while distributing more cash through share repurchases. Litigation risk changes the distribution of payouts but not the total payout yield as the increase in share repurchases offsets the decrease in dividends. Cash-poor firms cut share repurchases when settlement costs are incurred. The results suggest that firms at a higher risk of litigation increase their payout flexibility.

Who They Are Versus What They Want: How Dominance, Influence, Steadiness, And Compliance Profiles Can Aid In Developing Employability, Bonnie S. O'Neill, Jason Fertig, Pamela Wells, Carelle B. Bassil

Management Faculty Research and Publications

This paper draws attention to a behavior-based assessment instrument that is frequently utilized in industry settings but less utilized in the academic classroom. The authors argue that this instrument, the dominance, influence, steadiness, and compliance (DISC) profile, can be useful in training and developing soft skills desired by employers. They also examine the effects of gender and work experience on the various DISC patterns to better understand how this instrument may be useful for coaching and mentoring in those academic and organizational contexts. In this study, DISC pattern data were gathered from 1547 undergraduate and graduate students across multiple universities …

What Exactly Is Marketing And Public Policy? Insights For Jppm Researchers, J. Craig Andrews, Scot Burton, Gregory T. Gundlach, Ronald Paul Hill, Jeremy Kees, Richard G. Netemeyer, Kristen L. Walker

Marketing Faculty Research and Publications

In this article for the 40th Anniversary of the Journal of Public Policy & Marketing (JPPM), the authors first share what is meant by “policy,” “public policy,” and “marketing and public policy” for researchers in our field. The authors then offer examples of JPPM research informing policy across different stages of the policy-making process: problem identification, agenda setting, policy formulation, budgeting, implementation, and evaluation. They also discuss important sources of public policy (e.g., federal, state, and international agencies; self-regulation; the courts; nonprofits; society; industry standards; company policies; personal ethics) and their role in the marketing and public policy …

Perception Of Internal Controls Helps Explain Whistleblowing, Andrea M. Scheetz, Tonya D.W. Smalls, Joseph Wall, Aaron B. Wilson

Accounting Faculty Research and Publications

The nonprofit sector may suffer financially from inconsistency in regulations and polices surrounding internal control implementation. To address this issue, our study explores how perceived internal control strength differs between nonprofit and for-profit organizations. Furthermore, we examine three components of the Committee of Sponsoring Organization framework to determine which components might significantly influence whistleblowing for nonprofit organizations. As expected, all three components appear to significantly influence whistleblowing for those in for-profit organizations. For those in nonprofit organizations, the perception of control activities and monitoring activities significantly mediates the relationship between organization type and whistleblowing intentions. Finally, the data indicate that …

Does Corporate Lobbying Benefit Society?, Rami Kaplan, David L. Levy, Kathleen Rehbein, Brian Kelleher Richter

Management Faculty Research and Publications

Lobbying, defined as an effort to influence policy through strategic communication, has grown dramatically in recent years. This paper presents three viewpoints regarding the societal impact of corporate lobbying on society: one perspective argues that lobbying will be primarily beneficial, an alternative perspective contests this viewpoint and suggests that it is generally harmful, and the third argues that the impact is contingent on a number of factors. Proponents of lobbying argue that it is a vital mechanism to transmit valuable information and expertise to policymakers, leading to substantive legislative solutions for resolving complex societal issues. Critics, on the other hand, …

Influence Of Social Media Posts On Service Performance, Carol L. Esmark Jones, Stacie F. Waites, Jennifer Stevens

Marketing Faculty Research and Publications

Purpose

Much research regarding social media posts and relevancy has resulted in mixed findings. Furthermore, the mediating role of relevancy has not previously been examined. This paper aims to examine the correlating relationship between types of posts made by hotels and the resulting occupancy rates. Then, the mediating role of relevancy is examined and ways that posts can increase/decrease relevancy of the post to potential hotel users.

Design/methodology/approach

Within the context of the hotel industry, three studies were conducted – one including hotel occupancy data from a corporate chain – to examine the impact of social media posts on relevancy …

Navigating The Ethically Complex And Controversial World Of College Athletics: A Humanistic Leadership Approach To Student Athlete Well-Being, Jay L. Caulfield, Felissa K. Lee, Catharyn Baird

Management Faculty Research and Publications

The college athletics environment within the USA is ethically complex and often controversial. From an academic standpoint, athletes are often viewed as a privileged class receiving undue benefit. Yet closer inspection reveals that student athletes are at risk psychologically, physically, and intellectually in ways that undermine development and flourishing. This reality stands in troubling contrast to the prosocial, virtue-based goals expressed by university mission statements. Given the role of sport in many university business models, college athletics invites scrutiny from a business ethics standpoint. Using a humanistic leadership perspective (Pirson in: Humanistic management: protecting dignity and promoting well-being, Cambridge University …

Prosocial Messaging During The Covid-19 Pandemic: A Longitudinal Examination Of Email Advertisements, Ashley Deutsch Cermin, Ashton Mouton

Marketing Faculty Research and Publications

Purpose

This study aims to evaluate how brands communicate with consumers through the COVID-19 pandemic and how messaging has shifted over time. The authors identify a typology drawn from extant literature and use it to understand how brands shape consumers’ behavior.

Design/methodology/approach

Through a mix of interpretive and thematic analysis, the authors examine 858 US email advertisements and how these messages have evolved throughout the pandemic.

Findings

The authors findings demonstrate brand communication ranges from prosocial to brand messaging and brands employed different strategies at different phases of the pandemic. Specifically, while brands started out emphasizing socially desirable behavior before …

Retaining College Students Experiencing Shocks: The Power Of Embeddedness And Normative Pressures, David B. Wangrow, Kristie M. Rogers, Delia Saenz, Peter W. Hom

Management Faculty Research and Publications

Why do college students persist with their education, especially when facing challenges? We answer this question by exploring the complexities surrounding college student retention, using the organizational research lenses of job embeddedness, normative pressures, and the unfolding model of turnover. We first developed a college embeddedness scale and adapted a measure of normative pressures on college persistence. Then, we surveyed 287 first-year students from a broad range of racial and ethnic groups to understand their re-enrollment intentions and behavior. We found a positive relationship between re-enrollment intentions and normative pressures. Additionally, both college embeddedness and normative pressures predicted actual re-enrollment. …

Executive Dismissal Or Retention? A Study Of Performance, Power, And Survival For College Basketball Coaches, David B. Wangrow, Evan Schwartz, Margaret Hughes-Morgan

Management Faculty Research and Publications

This study applies upper echelons theory associated with executive dismissal and power to examine the relationships of performance and four types of executive power—structural, prestige, expert, and governance concentration—with dismissal. Using the context of National Collegiate Athletic Association college basketball, in which coaches are completely responsible for strategies and human capital acquisition and retention, a curvilinear relationship between performance and dismissal is found. Significant relationships for prestige and expert power with dismissal are also found, but the “honeymoon period” is longer than prior studies of executive and coach dismissal have shown. Surprisingly, concentrated governance is found to …

The Foreign Corrupt Practices Act: How Investors Respond When Violation Severity And Corresponding Penalty (Mis)Match, Wioleta Olczak

Accounting Faculty Research and Publications

The Foreign Corrupt Practices Act (FCPA) has become a major focus for corporations, the Securities and Exchange Commission (SEC), and the Department of Justice (DOJ), as indicated by the dramatic increase in the number of FCPA enforcement actions and the level of civil and criminal penalties. Prior regulatory practice shows that the SEC and the DOJ struggle not only to evaluate the severity of a company's FCPA violation, but also to establish the penalty amount. Given the difficulty in assessing penalties, the severity of a company's FCPA violation at times appears mismatched with the size of the penalty. Leveraging signaling …

Toward An Understanding Of Year-Over-Year Changes In Municipal Management Discussion And Analysis Disclosures, Kevin Rich, Brent L. Roberts, Joseph Wall, Jean X. Zhang

Accounting Faculty Research and Publications

Using a unique setting in which the standard setter (the Governmental Accounting Standards Board) provides guidance on the content of Management Discussion and Analysis (MD&A) disclosures, we investigate the determinants of content changes in municipal government MD&A. We do so in terms of economic changes, turnover, and regulatory characteristics. We use a sample of 1142 municipal MD&A disclosures from fiscal year 2011 to 2015 to calculate a difference score based on the degree to which municipal MD&As change from the previous year. Our empirical analysis highlights that MD&A content changes vary directly with changes in the unemployment rate, fund balance …

Linguistic Tone Of Management Discussion And Analysis Disclosures And The Municipal Debt Market, Kevin T. Rich, Brent L. Roberts, Jean X. Zhang

Accounting Faculty Research and Publications

Purpose

As the management discussion and analysis (MD&A) section contains discretionary narrative disclosures regarding a government's yearly financial changes and status, the authors investigate several municipal debt market consequences of linguistic tone within these disclosures.

Design/methodology/approach

The authors textually analyze municipal MD&As with Linguistic Inquiry and Word Count (LIWC) software and develop narrative tone measures based on existing financial-specific dictionaries. Using a final sample of 446 municipal bond issuances from 2012 to 2016, the authors modify the current bond regression models to examine the association between MD&A disclosure tone and future bond interest costs or rating disagreements.

Findings

This study’s …

Review Of Before March Madness: The Wars For The Soul Of College Basketball, Paul M. Mcinerny

Management Faculty Research and Publications

No abstract provided.

Identifying And Selecting Effective Graphic Health Warnings To Prevent Perceptual Wearout On Tobacco Packaging And In Advertising, Scot Burton, J. Craig Andrews, Richard G. Netemeyer

Marketing Faculty Research and Publications

Graphic visual health warnings (GHWs) on cigarette packaging are used in more than 120 countries globally. Because there are concerns about the effectiveness of using the same visual warnings over many years due to wearout, a primary issue is how to identify the most effective visual stimuli. Adolescent smokers and nonsmokers provided more than 2000 ratings of different visual warnings. Cluster analysis and follow-up analyses are used to identify a high-performing visual stimuli group from the larger group of GHWs. Subsequent analyses also show that compared to other pictorial stimuli, the high-performing group is perceived as effective in preventing adolescent …

Toward A Doctrine Of Socially Responsible Marketing (Srm): A Macro And Normative-Ethical Perspective, Gene R. Laczniak, Clifford Schultz

Marketing Faculty Research and Publications

In this conceptual article, the authors use a macro-level analysis and normative ethical theory to delineate and to explicate a doctrine of socially responsible marketing (SRM). Applying a theory-in-formation approach, we postulate a literature-informed definition of SRM. We discuss why a macro and normative-ethical rather than a micro and positive-descriptive perspective is essential to justifying the elements of SRM. We explore and explain why the roots of an authentic doctrine of SRM can be discerned from the literatures of marketing history, corporate social responsibility, institutional economics and moral philosophy. In so doing, the mandate to engage in socially responsible marketing …

Corporate Social Responsibility And Information Flow, Gary Chen, Bin Wang, Xiaohong Wang

Finance Faculty Research and Publications

We find that a firm's greater commitment to corporate social responsibility (CSR) increases firm- specific information incorporated into stock prices. We further show that information searches increase around major disclosure events for firms that are more socially responsible, as observed through requests for newly released annual (10-K) filings on EDGAR and company ticker searches on Google around earnings announcements. Using alternative empirical specifications, we establish a robust and positive relation between CSR and stock price informativeness. Our results are consistent with the ethical and reputational view that a commitment to CSR encourages information acquisition and facilitates information flow into stock …

Independent Directors' Dissensions And Firm Value, Wonseok Choi, Monika K. Rabarison, Bin Wang

Finance Faculty Research and Publications

Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.

Rise Up: Understanding Youth Social Entrepreneurs And Their Ecosystems, Melissa G. Bublitz, Lan Nguyen Chaplin, Laura A. Peracchio, Ashley Deutsch Cermin, Mentor Dida, Jennifer Edson Escalas, Meike Eilert, Alexei Gloukhovtsev, Elizabeth G. Miller

Marketing Faculty Research and Publications

This research focuses on youth social entrepreneurs who are leading ventures that address pressing societal problems including climate change, gun reform, and social justice. It answers Journal of Public Policy & Marketing’s call for more research in marketing on social entrepreneurship. Consistent with the mission of Transformative Consumer Research to enhance individual and societal well-being, this research explores how the dynamic ecosystem of youth social entrepreneurs empowers them to rise up to transform people, communities, and the future for the better. The authors partnered with 20 established youth social entrepreneurs who have founded social impact initiatives as well as …

Option Trading And Reit Returns, George D. Cashman, David M. Harrison, Hainan Sheng

Finance Faculty Research and Publications

This article examines the relation between option trading volume and real estate investment trust (REIT) market performance. Specifically, we find that option volume increases are followed by decreases in returns. Furthermore, the portion of option volume that is orthogonal to REIT characteristics drives the observed return predictability relation, thereby suggesting that the return predictability of option trading is (at least partially) attributable to information-based explanations. Finally, consistent with informed traders favoring option market activities due to short-sale costs and/or constraints, we find option based return predictability is more evident within REITs than non-REITs, even though firms within this industry are …

The Role Of Female Directors In The Boardroom: Examining Their Impact On Competitive Dynamics, Kalin Kolev, Margaret Hughes-Morgan, Kathleen Rehbein

Management Faculty Research and Publications

This study contributes simultaneously to research on women board members and competitive dynamics by investigating two unresolved research questions: What is the effect of female directors on the firm’s competitive repertoire? Under what conditions is this effect more pronounced? Leveraging the “Awareness-Motivation-Capability” (AMC) framework, we predict that having women on the board of directors should impact the complexity, heterogeneity, and volume of the firm’s competitive moves. Relying upon a sample of U.S. pharmaceutical firms for the years 2000 to 2017, we find that adding female directors on the board positively affects the complexity and volume of a firm’s competitive moves, …

From Student To Professional: Teaching Professionalism In The Marketing Classroom, Hulda G. Black, Rebecca Dingus, Alexander Milovic

Marketing Faculty Research and Publications

Developing professionalism skills in the classroom is vital to the business college experience as educators strive to ensure preparedness and success of their graduates. Marketers especially need enhanced professionalism training, as their careers involve interactions with many constituents. In this paper, the authors develop a semester-long emphasis on professionalism that introduces the concept, embeds its importance throughout the course with discussion and relevant exercises, and includes a component to monitor and evaluate professional behavior. Assessments at the beginning and end of the semester provide evidence for learning outcomes, both quantitatively and qualitatively, that speak to the effectiveness of its implementation.

Laudato Si’ – A Macromarketing Manifesto For A Just And Sustainable Environment, Thomas A. Klein, Gene R. Laczniak

Marketing Faculty Research and Publications

This paper posits that Pope Francis’ 2015 encyclical on environmental climate change, Laudato si’ (“Praise be to you, my Lord”), or LS for short, provides a compelling and multi-faceted framework for co-creating a just and sustainable environment. LS includes considerable commentary about how markets and marketing impact the physical and social environment. Additionally, the document provides religion-inspired ethical norms for market conditions, actions, and performance that reflect both (a) the social teachings of the Catholic Church as they have evolved over the past 125 years and, as we will explain, (b) a foundational predicate of macromarketing scholarship – that is, …

Building Toward A Solid Foundation: The Effect Of Thinking Concretely About The Future, Stacie F. Waites, Adam Farmer, Carol L. Esmark Jones

Marketing Faculty Research and Publications

According to construal level theory, consumers tend to think about their future abstractly, making it unclear and inexact. Here, a new approach is developed to help people enhance their future‐oriented outcomes by priming them to think about their future concretely. Two experiments show that priming a concrete mindset about the future leads to enhanced future‐oriented outcomes. Specifically, the studies show that participants discounted current funds in favor of future gains less when they were primed with a concrete mindset. Opportunity cost consideration is shown to be the mechanism driving this effect. Though research suggests that most consumers do not consider …

Securities Litigation And Corporate Tax Avoidance, Matteo Arena, Bin Wang, Rong Yang

Finance Faculty Research and Publications

We examine whether litigation risk is systematically related to corporate tax avoidance. We find that the exogeneous reduction in the threat of securities class action litigation due to the 1999 ruling of the Ninth Circuit Court of Appeals effectively increases corporate tax avoidance, which is consistent with the notion that the threat of shareholder litigation plays a disciplinary role in curbing managerial rent extraction from tax avoidance activities. This finding is robust to alternative model specifications including two placebo tests and propensity score matching. We further find that labor union and alternative external governance mechanisms such as analyst coverage and …

Specialization And Institutional Investors’ Performance – Evidence From Publicly Traded Real Estate, Eli Beracha, George D. Cashman, Hilla Skiba

Finance Faculty Research and Publications

We examine the extent to which 50,620 global institutional investors’ specialization in publicly traded real estate securities is related to their investment performance. Consistent with the information advantage theory (Merton Journal of Finance 42, 483–510, 1987; Van Nieuwerburgh and Veldkamp Journal of Finance, 64, 1187–1215, 2009), we show a positive relation between the percentage of the institution’s portfolio invested in real estate securities and the return generated on those securities. Moreover, we present evidence that the institution’s level of active share to real estate securities is positively related to performance. Additionally, we find that the benefits related to …

Leadership As An Art: An Enduring Concept Framed Within Contemporary Leadership, Jay L. Caulfield, Felissa K. Lee, Bret A. Richards

Management Faculty Research and Publications

Purpose

The aim of this viewpoint paper is to refine the meaning of “leadership as an art” in the context of wicked (complex) social problems and in the realm of contemporary leadership research and practice.

Design/methodology/approach

In this paper we explore the meaning of “leadership as an art,” a concept often alluded to but rarely defined concretely. The authors examine the concept by comparing artistic and scientific knowledge paradigms, identifying descriptors of the “leadership as art” concept appearing in the literature and illustrating key attributes of the “leadership as art” concept with real-world examples.

Findings

Leadership as an art is …

How To Not Disappear Completely: Using Video-Based Discussions To Enhance Student Social Presence In An Online Course, Alexander Milovic, Rebecca Dingus

Marketing Faculty Research and Publications

This paper proposes a video-based discussion learning exercise to consider in addition to the traditional online discussion board format. While the traditional written interaction between students in an online classroom is beneficial, the mass adoption of video technology, along with limitations associated with online discussion boards, led to the development of a new way to facilitate group communication using video communication technology. Utilizing the theory of social presence, we demonstrate the effectiveness of this video discussion format, allowing students to virtually "get to know" each other and collaborate in an environment that more closely resembles a traditional face-to-face classroom experience. …

Corporate Innovation In A World Of Common Ownership, Cheng-Huei Chiao, Bin Qiu, Bin Wang

Finance Faculty Research and Publications

Purpose

The purpose of this paper is to examine the impact of common ownership on corporate innovation, including innovation input, innovation output and postgrant patents.

Design/methodology/approach

This paper uses the ordinary least square model and the difference-in-differences technique to evaluate the effect of institutional interlocking shareholdings on the life cycle of corporate innovation.

Findings

The results show that common ownership impedes innovation measured by patent grants and citations through reduced R&D expenditures. However, common ownership protects postgrant patents by lowering the likelihood that a co-owned firm gets involved in patent litigation and by accelerating the settlement of lawsuits between co-owned …