Business Commons^™

The Market-Essential Role Of Corporate Climate Disclosure, George S. Georgiev

Faculty Articles

This Article focuses on capital market efficiency as an often-downplayed legal rationale for mandating corporate climate disclosure, and explores it alongside the notion of investor demand, which has assumed a prominent and, increasingly, contested role in debates on climate disclosure. Because market efficiency (encompassing both securities price accuracy and overall capital market allocative efficiency) is generally unobservable, many commentators have instead emphasized the highly visible investor demand for climate-related disclosure as evidenced by shareholder proposals, voting behavior, stewardship policies, and public statements. Unfortunately, investor demand can be disputed, fairly or unfairly, because investor preferences are heterogeneous, dynamic, and difficult to …

Disclosure Procedure, Andrew K. Jennings

Faculty Articles

Securities disclosure is a human process. Each year, public companies collectively spend over fifteen million hours producing disclosures that undergird an equities market with tens of trillions in market capitalization. The procedures they follow in doing so affect whether their disclosures contain misstatements or omissions—errors that can cause trading losses for investors, and litigation for issuers. Yet despite the importance of the disclosures that firms produce, the literature says little about how they do it, including whether they are spending too much, too little, or just enough on their disclosure procedures. To fill that gap, this Article uses original surveys …

The Managerial Factors Influencing The Retention Of Firms' It Capability, With Some Global Implications, Jinho Kim, Kayoung Park, Timothy Komarek, Li Xu

Mathematics & Statistics Faculty Publications

Researchers have explored firms’ IT capability and its effects on business performance, yet the factors influencing the long-term retention of this capability have not been fully investigated. Therefore, our study examines what managerial and financial factors influence the retention of firms’ IT capability by utilizing survival analysis. The results show that IT executives’ managerial power does not contribute to retaining the firms’ IT capability. However, the change of IT managers can introduce fresh insights and expertise to an organization, enabling firms to maintain their IT capability, and the degree of retaining IT competency in firms can vary based on industry-specific …

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 …

Data Visualization In 10-K Filings, Theodore E. Christensen, Karson E. Fronk, Joshua A. Lee, Karen K. Nelson

Faculty Publications

The Securities and Exchange Commission encourages the presentation of information or data in graphical form to improve users’ ability to understand financial disclosures. We find a dramatic increase in the disclosure of both qualitative and quantitative infographics in 10-K filings over time and substantial cross-sectional variation in firms’ choices regarding image types, data content, and the placement of infographics within 10-Ks. We provide evidence on factors associated with firms’ use of infographics and explore the persistence with which they are disclosed over time. Finally, we investigate the relation between the use of infographics and uncertainty in capital markets.

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 Economic Impact Of Bell’S Iceman Cometh Challenge 2022 Mountain Bike Race, Christian Glupker, Paul Isely

Other Faculty Publications

The 2022 Iceman Cometh Challenge mountain bike race is estimated to have generated or supported economic benefits for Grand Traverse County in the following ways:

• 16,569 total visitors, with 88% visiting from outside of Grand Traverse County. Over 36 states and four countries were represented.
• There were 38,047 total visitor days, with 95% coming from nonlocal visitors. These nonlocal visitors spent on average 2.5 days in the Traverse City area.
• Direct spending of all visitors was $4.7 million, with nonlocal visitors spending $4.5 million.
• The total economic impact of nonlocal visitors is estimated at $5.6 million in economic output supporting …

Momentum Crashes And The 52-Week High, Byoung-Hyun Jeon, Suk-Joon Byun

Finance Faculty Research and Publications

Momentum strategies suffer from occasional large drawdowns referred to as momentum crashes when the market rebounds. We find that a surge of investor speculation toward stocks far from their 52-week highs can partially explain the momentum crashes. If a momentum strategy is revised to be neutral on a 52-week high effect, momentum crashes are significantly attenuated and the revised strategy does not exhibit procyclical returns. Furthermore, the revised strategy generates a higher Sharpe ratio in different sub-periods and international stock markets.

Independence Reconceived, Claire Hill, Yaron Nili

Faculty Scholarship

What makes a director independent? Scholars, regulators, and investors have grappled for decades with the fleeting notion of director independence. Originally conceived as guardians of shareholder interests that could safeguard a corporate board’s ability to check management’s power, independent directors have become a marquee feature of modern corporate governance. But do the corporate actions of directors that are considered “independent” under current standards comport with what we think independence requires? In many cases, the answer would seem to be “no.” From a lack of observable financial impact to the unabated flow of corporate scandals, independent directors seem to keep failing …

The Lost Promise Of Private Ordering, Cathy Hwang, Yaron Nili, Jeremy Mcclane

Faculty Scholarship

The agency problem is corporate law’s most enduring challenge: when corporate managers spend investors’ money, how does the law protect investors from reckless management? Scholars of law, finance, and accounting have suggested that in one corner of corporate law—corporate debt—a powerful tool exists to mitigate the agency problem. Specifically, through loan covenants, lenders can force borrowers to comply with lenders’ preferences, thereby mitigating the agency problem in lending.

But loan covenants are disappearing. Over the last decade, loan covenants have become fewer and skinnier, and so called “covenant-lite” or “cov-lite” loans have become dominant. If loan covenants do such a …

Finance Against Law: The Case Of China, Shitong Qiao

Faculty Scholarship

Can there be a highly developed financial market without legal protection for investors and creditors? The influential law and finance literature is built on the assumption that legal protection is essential to the development of an impersonal financial market. This Article investigates how two financial markets of trillions of dollars have developed extralegally in the past two decades despite the risk of regulatory enforcement and contract defaults. Specifically, I examine (1) how Chinese internet companies from Sina to Alibaba have designed contracts to circumvent the Chinese government’s ban on foreign capital in its internet industry and (2) how Chinese entities …

Corporate Governance And Risk-Taking: A Statistical Approach, Steven L. Schwarcz

Faculty Scholarship

Because prudent corporate governance often requires managers to take risks based on statistically expected outcomes, corporate failures that have a small but finite chance of occurring cannot always be prevented. This Article makes three related claims about risk-taking in corporate governance.

This Article’s first claim is that managers should not automatically be presumed to be at fault for corporate failures that result from risk-taking decisions based on statistical methodologies that reasonably justify the decisions ex ante. Conceptually, the business judgment rule should protect corporate managers for engaging in a reasonable decision-making process, including one that is statistically based. Jurisdictionally, however, …

How Do Sustainability Stakeholders Seize Climate Risk Premia In The Private Cleantech Sector, Lingyu Li, Xianrong Zheng

Information Technology & Decision Sciences Faculty Publications

This paper explores the strategies and practices of capturing climate risk premia for venture capital (VC) fund managers and entrepreneurs in the private cleantech sector. It also examines the impact of the feed-in tariffs (FITs) policy on the management of cleantech investments. It is shown that a longer investment period, less investment capital in cleantech investment management strategies, and optimistic climate risk management practices will help investors to better capture climate risk premia. In fact, the FITs policy will give rise to VC fund managers and entrepreneurs having a positive view regarding the prospects of the cleantech sector, motivating them …

The Social Media Industry: Where Is It Heading?, Yanli Zhang, Huy Will Nguyen, Young Hoon Jung, Isabelle Yi Ren

Department of Management Faculty Scholarship and Creative Works

The social media industry has entered a new stage with intensifying competition and heightened uncertainty about future directions. The purpose of this paper is to provide analyses of the current challenges and to identify industry-wide trends that may offer a roadmap for the future. This study identified five major trends in the current social media industry: 1) content is king, and that content is moving to visual; 2) artificial intelligence is key to competitive advantage; 3) network effects still matter, but business model innovation can overcome that barrier; 4) the need to broaden revenue sources; and 5) the strive for …

2023-January-01-Etsu Student Finds Passion In Park And Recreation, University Marketing And Communication, East Tennessee State University

ETSU News

JOHNSON CITY – David Crockett High School graduate Evan Alvarado initially planned for a career in nursing.  

But after taking a course at East Tennessee State University about wildland firefighting, he had a change of heart.

“The day the class ended, I immediately changed my major to park and recreation management,” he said. “It has been fantastic, and I haven’t looked back.” 

Part of the Clemmer College at ETSU, a concentration in park and recreation management trains students how to plan, organize and lead a range of agencies and programs.  

Alvarado got a boost to his professional progression when …

2023-January-01-Etsu's Dr. Pamela Mims Part Of National Biotech Project, University Marketing And Communication, East Tennessee State University

ETSU News

JOHNSON CITY – Government, business and education leaders across the United States are working collaboratively to make clear to high school students and others that bio industrial manufacturing is a career path open to all.
 
Dr. Pamela Mims is one of several at East Tennessee State University powering this national endeavor. 
 
“We knew this movement was happening, and we knew it would be a huge area of job development in the future,” said Mims, a professor and associate dean of Research and Grants in the Clemmer College. “We also knew we needed to prepare students graduating from ETSU to …

Relative Corporate Social Performance And Cost Of Equity Capital: International Evidence, Benjamin Lynch, Martha O'Hagan-Luff

Articles

This research examines the relationship between firms' corporate social performance (CSP) and the implied cost of equity capital using a sample of 25,938 firm-year observation from 49 countries during the period from 2002 to 2021. Using estimates of the firms' ex ante cost of equity capital, we examine its relationship with industry-relative measures of the firms' CSP, its environmental and social pillars and sub-pillars. We find that increased overall CSP reduces a firm's cost of equity capital up until a point, beyond which the marginal benefits of further CSP investment decrease. We find that the social pillar is the main …

Ecb Unconventional Monetary Policy And Sme Access To Finance, Maria Finnegan, Supriya Kapoor

Articles

Small- and medium-sized enterprises (SMEs) account for two-thirds of employment in the euro area which makes them a priority for the transmission of monetary policy to the real economy. SMEs in Europe experienced a credit crunch following the sovereign debt crisis. Over the period 2014–2019, the European Central Bank (ECB) engaged in unconventional monetary policy (UMP) to restore funding conditions in the euro area, to support stronger economic growth and higher inflation. We use the ECB/EC Survey on the Access to Finance of Enterprises to examine the relationship between monetary policy and SME access to finance in countries that were …

Factor Substitution Possibilities, Labor Share Dynamics, And Inequality In An Age Of Intangibles, Adnan Velic

Articles

We examine the economy-wide degree of substitutability between intangible capital and other factor inputs in production using a large sample of advanced countries. In this context, we turn to studying the implications of intangible and tangible capital growth for labor income share dynamics. Compared to tangible capital, we find that intangible capital more strongly complements skilled labor. The analysis further indicates relative fungibility between tangible capital and a composite of intangible capital and skilled labor, in line with the rising prominence of knowledge-intensive tasks and AI-driven online platforms. The intrinsic nature of intangibles and their asymmetric effects across skilled and …

U.S. Travelers’ Perceived Image Of Latin America As Their Future Travel Destination, Maricela I. Montes-Guerra, Natalia Zapata-Cuervo, Miyoung Jeong

Faculty Publications

This study identified U.S. travelers’ perceptions toward Latin America as their future place to visit, based on their perceived destination attributes, activities, and overall affective image. Selecting nine attractive destinations, this study aimed, first, to develop U.S. travelers’ perceptual mapping of countries by using destination image attributes and activities, second, to determine comparative strengths and weaknesses, and third, to propose destination marketing strategies that will derive U.S. travelers' attention to the country. Overall, Americans have favorable affective image toward the nine tourism destinations in Latin America. Costa Rica was respondents’ most preferred country to visit, followed by Peru and Brazil.

2023-01-00 Newsletter, Morehead State University. Staff Congress.

Staff Congress Records

Staff Congress newsletter from January of 2023.

The Value Of Economic Freedom In Cross-Border Mergers, Vivek Pandey, Tanja Steigner, Ninon K. Sutton

Accounting, Finance, Information Systems, and Business-Law Faculty Publications and Presentations

This study examines the impact of economic freedom in mergers and acquisitions (M&A) using a global sample of 6159 takeovers involving acquirers from 56 different countries and foreign targets from 130 countries. The results reveal that acquirers with an economic freedom advantage over their targets experience higher short-run and long-run abnormal returns after controlling for other important country and merger characteristics. At the same time, the level of economic freedom in the target country relative to the bidder country positively impacts target shareholders’ announcement wealth effects and merger premiums. The results are robust to various control variables, industry, year and …

The Impact Of More Able Managers On Corporate Trade Credit, Hui Liang James, Thanh Ngo, Hongxia Wang

Accounting, Finance, Information Systems, and Business-Law Faculty Publications and Presentations

We investigate how high-ability managers affect trade credit policies of U.S. publicly traded companies from 2003 to 2016. Consistent with the prediction of an “Imbalance of power” in the supply chain, we find that firms with more able managers implement more favorable trade credit policies with both upstream and downstream business partners (i.e., fewer trade credit days in receivables, more trade credit days in payables, and lower net trade credit days), indicating that managerial ability is an important determinant of corporate trade credit. Our cross-sectional analyses provide further support for the bargaining power view of trade credit. The results are …

Covenant Violation And Operational Efficiency, Hui Liang James, Hongxia Wang, Zhimin Wang

Accounting, Finance, Information Systems, and Business-Law Faculty Publications and Presentations

We examine the impact of covenant violation on corporate operational efficiency. Using an aggregate measure of operational efficiency developed by Demerjian et al. (Management Science, 58, 2012, 1229–1248), we provide strong empirical evidence that covenant violations hinder firms from achieving operational efficiency. Our finding is robust to alternative definitions of operational efficiency and various model specifications to address potential endogeneity issues. Further analyses show that lower operational efficiency is attributable to covenant-violating firms' under-investments in capital and labour. In addition, the negative effect of covenant violation on operational efficiency is not universally the same, and is less evident in violating …

Should Pharma Companies Waive Their Covid-19 Vaccine Patents? A Legal And Ethical Appraisal, Tammy W. Cowart, Gregory L. Bock

Accounting, Finance, Information Systems, and Business-Law Faculty Publications and Presentations

Pharmaceutical companies, like many other types of companies, are incentivized to create, manufacture, and distribute new products, in part due to the legal protections of patent law. However, the tension between patent rights and the public good has been heightened as pharma companies developed new vaccines to combat the COVID-19 pandemic. Wealthy governments paid well for vaccines and received ample supplies, while low- and middle-income countries struggled to obtain access to any vaccines. Some countries called for pharmaceutical companies to waive their patent protections for vaccines in order to facilitate the worldwide manufacture and distribution of COVID-19 vaccines. This paper …

New Types Of Soft Sets: Hypersoft Set, Indetermsoft Set, Indetermhypersoft Set, And Treesoft Set, Florentin Smarandache

Branch Mathematics and Statistics Faculty and Staff Publications

This is a review paper, where we recall the definitions together with practical applications of the Soft Set and its extensions to HyperSoft Set, IndetermSoft Set, IndetermHyperSoft Set, and TreeSoft Set.

Lagrange Multipliers And Neutrosophic Nonlinear Programming Problems Constrained By Equality Constraints, Maissam Jdid, Florentin Smarandache

Branch Mathematics and Statistics Faculty and Staff Publications

Operations research science is defined as the science that is concerned with applying scientific methods to complex problems in managing and directing large systems of people, including resources and tools in various fields, private and governmental work, peace and war, politics, administration, economics, planning and implementation in various domains. It uses scientific methods that take the language of mathematics as a basis for it and uses computer, without which it would not have been possible to achieve numerical solutions to the raised problems, those that need correct solutions, when the solutions abound and the options are multiple, so we need …

New Similarity And Entropy Measures Of Temporal Complex Neutrosophic Set And Its Application In Multi-Criteria Decision Making, Luong Thi Hong Lan, Nguyen Tho Thong, Nguyen Long Giang, Florentin Smarandache, Vo Si Nam, Dinh Van Dzung

Branch Mathematics and Statistics Faculty and Staff Publications

The Temporal complex neutrosophic set (TCNS) is an effective structure for resolving information that has uncertain, indeterminate, and timerelated factors in decision-making problems. In the last decade, many researchers focused on estimating the vagueness and ambiguity in knowledge using the theory of neutrosophic sets or extensions of neutrosophic sets. Similarity and entropy measures are valuable tools to measure information with the aim of dealing with real-life multi-criteria decisionmaking (MCDM) problems. However, the existing method did not care or interest in the information measures of TCNS. This paper proposes several new similarity and entropy measures under the TCNS environment. The suggested …

The Use Of Neutrosophic Methods Of Operation Research In The Management Of Corporate Work, Maissam Jdid, Florentin Smarandache

Branch Mathematics and Statistics Faculty and Staff Publications

The science of operations research is one of the modern sciences that have made a great revolution in all areas of life through the methods provided by it, suitable and appropriate to solve most of the problems that were facing researchers, scholars and those interested in the development of societies, and the most beneficiaries of this science were companies and institutions that are looking for scientific methods that help them manage their work so that they achieve the greatest profit and the lowest cost, and one of the important methods that have been used in the management of companies we …

Complex Fermatean Neutrosophic Graph And Application To Decision Making, Said Broumi, Swaminathan Mohanaselvi, Tomasz Witczak, Mohamed Talea, Assia Bakali, Florentin Smarandache

Branch Mathematics and Statistics Faculty and Staff Publications

Original scientific paper Abstract: A new growing area of the neutrosophic set theory called complex neutrosophic sets (CNS) provides useful tools for dealing with uncertainty in complex valued physical variables that are observed in the actual world. A CNS takes values for the truth, indeterminacy and falsity membership functions in the complex plane's unit circle. In this research, a novel concept of complex fermatean neutrosophic graph (CFNG) is established and various basic graphical ideas such as the order, size, degree and total degree of a vertex of it are introduced. Also, set theoretical operations such as complement, union, join, ring-sum …