Other 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 …

Equality Offshore, Martin W. Sybblis

Faculty Articles

Global governance architecture, crafted by wealthy nations, has perpetuated the subordination of developing jurisdictions. The Article offers a novel and surprising analysis of governance tools used by wealthy countries and inter-governmental organizations to constrain offshore financial centers (OFCs) by focusing on the tools’ disparate impacts on tax havens whose populations comprise predominantly Black and Brown people. With tax haven issues garnering increasing attention, this Article provides a pathbreaking conceptual framework for examining the international tax, crime, and business discourse on OFCs. It also illuminates how the actions of powerful international actors, such as the Organization for Economic Cooperation and Development …

An Empirical Analysis Of The Impact Of Certificate Of Need Law On Utilization Of Inpatient Services, Jomon Aliyas Paul, Huan Ni, Aniruddha Bagchi

Faculty Articles

We investigate the impact of Certificate of Need (CON) Law and its stringency on Inpatient service utilization measured by hospital occupancy. We show that on average the CON legislation reduces utilization in Inpatient units. Besides, we do not find sufficient statistical evidence to reject the exogenous assumption of CON and its features. Furthermore, we confirm the qualitative nature of these key findings by an analysis featuring Inpatient length of stay (LOS). Other findings include the following: Inpatient utilization is positively related to proportion of females in a state and the proportion of Asian-Americans; a statistically significant positive relationship exists between …

How Do Business Students In The U.S. And In Cameroon Perceive Faculty Attributes? A Comparative Study, Donald L. Ariail, Muhammad A. Obeidat, Guy Laurent Fondjo

Faculty Articles

This study investigates student perceptions of ten selected attributes embedded in faculty behavior. These attributes are classified as primary and secondary attributes. The 4 primary attributes include effective communication (ability to communicate information effectively), ability to combine knowledge and application in real world cases and examples, high level of knowledge in presented materials, and substantial business experience in the area taught. The 6 secondary attributes include active association with the business community, active participation in academic organizations, active participation in business organizations, extensive publication of business research in scientific/scholarly journals, extensive publication of business articles in practitioner/trade oriented journals, and …

An Experimental Examination Of The House Money Effect In A Multi-Period Setting, Lucy Ackert, Narat Charupat, Bryan K. Church, Richard Deaves

Faculty Articles

There is evidence that risk-taking behavior is influenced by prior monetary gains and losses. When endowed with house money, people become more risk taking. This paper is the first to report a house money effect in a dynamic, financial setting. Using an experimental method, the authors compare market outcomes across sessions that differ in the level of cash endowment (low and high). Their experimental results provide strong support for a house money effect. Traders' bids, price predictions, and market prices are influenced by the amount of money that is provided prior to trading. However, dynamic behavior is difficult to interpret …

The Impact Of Enterprise Risk Management On The Internal Audit Function, Mark S. Beasley, Richard Clune, Dana Hermanson

Faculty Articles

This exploratory study provides evidence about factors associated with the overall impact of enterprise risk management (ERM) on the internal audit function’s activities. Based on responses from 122 organizations in several countries, we find that ERM has the greatest impact on internal audit’s activities when (a) the organization’s ERM process is more completely in place, (b) the CFO and audit committee have called for greater internal audit activity related to ERM, (c) the chief audit executive’s (CAE) tenure is longer, (d) the organization is in the banking industry or is an educational institution, and (e) the internal audit function has …

Project Management Issues In It Offshore Outsourcing, Kathy Schwaig, Stephen Gillam, Elke M. Leeds

Faculty Articles

Global partnerships are forming to take advantage of the cost savings associated with offshoring as well as other strategic benefits. Not all information technology offshoring projects, however, are successful. Cost overruns, increased complexity and defective code cause organizations to rethink their offshoring strategy and their methods for managing these projects. In this paper, project management issues associated with offshore information technology outsourcing projects are identified and specific recommendations for addressing these issues are presented.

Asset Prices And Information Traders’ Abilities: Evidence From Experimental Asset Markets, Lucy F. Ackert, Bryan K. Church, Ping Zhang

Faculty Articles

This study reports the results of fifteen experimental asset markets designed to investigate the effects of forecasts on market prices, traders’ abilities to assess asset value, and the link between the two. Across the fifteen markets, the authors investigate alternative forecast-generating processes. In some markets the process produces an unbiased estimate of asset value and in others a biased estimate. The processes generating the biased forecasts, though, are less variable than the process generating the unbiased forecast. The authors find that, in general, periodend asset price reflects private forecasts, regardless of the forecast-generating process. Subsequently, they investigate whether traders’ abilities …

An Experimental Study Of Circuit Breakers: The Effects Of Mandated Market Closures And Temporary Halts On Market Behavior, Lucy Ackert, Bryan K. Church, Narayanan Jayaraman

Faculty Articles

This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. We find that the presence of a circuit breaker rule does not affect the magnitude of the absolute deviation in price from fundamental value or trading profit. The primary driver of price behavior is information. By comparison, trading activity is significantly affected by the presence of a circuit breaker. Market participants advance trades when a trading interruption is imminent.

An Empirical Examination Of The Price-Dividend Relation With Dividend Management, Lucy F. Ackert, William C. Hunter

Faculty Articles

Some recent empirical evidence suggests that stock prices are not properly modeled as the present discounted value of expected dividends. In this paper, we estimate a present value model of stock price that is capable of explaining the observed long-term trends in stock prices. The model recognizes that firm managers control cash dividend payments. The model estimates indicate that stock price movements may be explained by managerial behavior.

Evidence Of The Efficiency Of Index Options Markets, Lucy F. Ackert, Yisong S. Tian

Faculty Articles

Index options have been one of the most successful of the many innovative financial instruments introduced over the last few decades, as their high trading volume indicates. Given their prominence, the pricing efficiency of these markets is of great importance. ; Detecting inefficient pricing, or mispricing, requires comparing a theoretically efficient price with prices of options traded in financial markets. One popular approach to deriving pricing relationships is based on a principle called no-arbitrage, which simply assumes that arbitrageurs enter the market and quickly eliminate mispricing if a profit opportunity without risk exists. However, in a well-functioning economy there is …

Workable Antitrust Law: The Statutory Approach To Antitrust, Thomas C. Arthur

Faculty Articles

This Article will demonstrate the superiority of the statutory approach for producing more stable and consistent antitrust law. Part I details the development of the constitutional approach to antitrust, demonstrating how the rise of the pragmatic and instrumentalist view of law led to the displacement of the original statutory approach to antitrust. Part II illustrates that the constitutional approach fundamentally cannot produce workable antitrust law. It summarizes both the doctrinal disarray that continues to plague each major area of antitrust law and the irreconcilable policy prescriptions of the contending antitrust "schools." Part III presents an alternative, statutory approach to antitrust …