Economics Commons^™

Does A Change In A Logo Affect The Value Of The Brand? The Case Of Starbucks, Brittany Isobe

CMC Senior Theses

When the first Starbucks opened in 1971, not even the founders expected that just two decades later, it would become one of the strongest international corporations. Starbucks has experienced unprecedented growth and unfathomable success. The company grew from 17 stores in the company’s founding years to approximately 17,000 stores across 55 countries just 40 years later.1 According to the corporate website, the Starbucks mission is “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time”.2

In order to fulfill their mission statement, Starbucks has to mold their company to align with the …

Aggregated Versus Disaggregated Forward Looking Information: Effects On Risk Taking, Rishabh Parekh

CMC Senior Theses

In previous research, aggregation of returns has been found as a way to counteract the risk averse behavior that is the result of investors' myopia. This paper expands the study of aggregation by analyzing its effect on forward looking probabilities. Namely, through the disaggregation of future information, subjects become myopic and trade with varying risk preferences. In an experimental market, subjects trading securities with disaggregated forward looking information are found to 'buy high and sell low', while subjects trading the same securities, but with aggregated information, trade with more consistent risk preferences.

A Bass Diffusion Model Analysis: Understanding Alternative Fuel Vehicle Sales, Michael H. Shoemaker

CMC Senior Theses

Frank M. Bass developed the Bass Diffusion Model to predict how innovative consumer durable products diffuse through consumer markets. This thesis will use data from 1999-2011 to examine the applicability of the Bass Diffusion Model to the introduction of alternative fuel vehicles (AFVs) in the automobile market. The findings in this thesis indicate the Bass Diffusion Model fit the diffusion pattern exhibited by AFVs well, but failed to accurately forecast diffusion patterns outside a given range of data. This thesis investigates potential reasons for the inaccurate 'Out of Sample Forecast', and gives recommendations for directions of future research on AFV …

The Effect Of Executive Compensation On Firm Performance Through The Dot-Com Bubble, Maxwell J. Chambers

CMC Senior Theses

This thesis examines firm performance through the dot-com bubble through the lens of executive compensation. Hypotheses based on the theoretical literature of Bolton, Scheinkman and Xiong (2006) as well as Bertrand and Mullainathan (2001) in regards to management compensation in a speculative bubble motivate three regression models with differing market-cap-growth based dependent variables and specific compensation variables. Regression analyses test the models using public compensation and security data from S&P's Execucomp and Compustat databases. Synthesizing regression results show that stock option vesting schedules and executives' status on the board of directors may significantly affect firm performance through the dot-com bubble, …

Who's Afraid Of The Patent Trolls? Assessing The Market Impact Of Landmark Patent Troll Litigation Outcomes, Xiaotong Li

CMC Senior Theses

Patent trolls have changed the innovation and patent policy landscape. This thesis is an empirical event study that focuses on two landmark cases of patent troll litigation, RIM v. NTP and eBay v. Mercexchange, to determine whether pro-troll litigation outcomes significantly impact the market values of the firms in the high-tech industries they target. I find that the Supreme Court ruling in eBay v. Mercexchange did seem to significantly impact a proportion of firms in the market. The decisive factors in distinguishing affected vs. unaffected firms include a firm's R&D to Sales ratio, market value, and NAICS code specification.

A Study Of Minor League Baseball Prospects And Their Expected Future Value, Jay Lyon Tymkovich

CMC Senior Theses

This thesis will examine highly rated Minor League baseball players and how they subsequently perform in their Major League careers. Specifically, this study has collected data on over 800 players ranked on the prospect lists of Baseball America, Baseball Prospectus, and John Sickels. Using regression analysis, I have examined the correlation between ranking and future performance, as well as studying other factors like position and age to determine if there are common characteristics to successful prospects.

The Effects Of The Media On The Discrepancy Between Gaap And Pro Forma Earnings, Peter Schock

CMC Senior Theses

This study seeks to find if there is a significant relationship between the amount of media coverage focused on public companies in the United States and the difference between GAAP financial performance and analyst-adjusted estimates of financial performance. I will answer this question by testing this difference among S&P 500 companies, as well as companies within that index as identified by a certain industry.

Individual Vs. Aggregate Decision Making – Diversification Discount, Sze Wai Yuen

CMC Senior Theses

This paper studies via experimental setting whether diversification discount exists and what factors affect the magnitude of the discount. The results suggest that experience before decision increases the likelihood of exercising the real option of conglomerates. People are also more likely to convert if it is less risky to do so.

A Study In Market Micromanagement: The Asymmetrical Effects Of The 2008 Short Sale Ban On Stocks With And Without Traded Options, James W. Weyerhaeuser

CMC Senior Theses

This study provides an empirical analysis of the 2008 short sale ban. The evidence suggests that the presence of tradable options plays a crucial role in determining the effect of a short sale ban. Results show that if there are no traded options on a stock, the short sale ban brought abnormal returns of roughly +8%. However if there are traded options on a stock, the market maker exemptions nullify the positive effects of the ban. Furthermore, for the banned stocks that do experience positive abnormal returns during the ban, the lifting of the ban causes a prompt reversal of …

"Sell Or Slaughter": The Economic And Social Policies Of German Reunification, Saraid L. Donnelly

CMC Senior Theses

This paper looks at the struggles faced by German policymakers in the years following reunification. East Germany struggled with an immediate transformation from a planned economy to a social market economy, while West Germany sent billions of Deutsche Marks to its eastern states. Because of the unequal nature of these two countries, policymakers had to decide on what they would place more emphasis: social benefits for the East or economic protection for the West. The West German state-level, Federal Government and the East German governments struggled in finding multilaterally beneficial policies. This paper looks at the four key issues of …

Comparative Case Studies Of Rent-Seeking In China’S State-Owned Enterprises: The Ministry Of Railway And China Mobile, Wendy Qian

CMC Senior Theses

The problem of rent-seeking in China’s state-owned enterprises has worsened since the rapid increase in infrastructure investment, such as telecom and railway. State-owned enterprise reform in China has given licensing power to officials and executives without sufficient checks and balances. The Chinese government plans to introduce corporate governance structures and encourage private investment for the previously state-dominated industries, such as the railway industry, in the next decade. Yet these formalities cannot eradicate the political problem of corruption. This thesis will examine rent-seeking through the case studies of China Mobile’s former deputy general manager and Communist Party secretary Zhang Chunjiang’s patronage …

Do Political Contributions Purchase Regulatory Discretion In Mining Inspections?, Neil K. Malani

CMC Senior Theses

A vast literature acknowledges the corruptibility of regulators; however, empirical tests on the matter have been limited to two-agent models examining the rulemaking process and price regulation of natural monopolies. It remains an open question whether political contributions, by driving legislative pressure, can entice laxity from regulators in their application of the rules. To remedy this issue, I observe the highly-regulated coal mining industry for which there exists several points for inspector discretion. By comparing the outcomes with Congressional coal mining contribution levels, I am able to ascertain capture across several dimensions. Specifically, I find that contributions are associated with …

Water Policy: The World's Most Important Resource Politicized, Ethan Gilbert

CMC Senior Theses

Water is the most important resource on the planet for sustaining life, and many consider access to water as a fundamental human right. However, in light of its necessity, the distribution and allocation of water has become a highly politicized issue. Economic and political conditions have been shown to be influential in shaping a country’s water policy, more so then recognition of water as a basic human right. The reason for this is that many agree that there needs to be a value assigned to water to encourage its conservation and efficient use, and different methods of addressing that issue …

The Wealth Effects Of The 2010-2011 Arab Uprisings: A Market Model Event Study, Rachit Khaitan

CMC Senior Theses

Previous empirical analyses have concluded that political events can have significant linkages with stock returns. Using Brown & Warner’s (1984) OLS market model, I examine the effect of political disruptions in the 2010-2011 Arab uprisings on major stock indices of Egypt, Tunisia, Jordan, Lebanon, Saudi Arabia, Dubai and London. My analysis finds mostly negative abnormal returns, highly statistically significant relative to the S&P 500, associated with many key events between December 1^st, 2010 and December 1^st, 2011. My findings suggest that the loss of investor wealth can be attributed to dramatic regime changes and large scale …

Differential Effects Of Tort Reform Across Medical Specialties, William C. Dodds

CMC Senior Theses

This paper utilizes data on physician malpractice insurance premiums and state tort law to analyze how physicians in various medical specialties are differentially affected by caps on noneconomic damages. As higher premiums put pressure on legislators to enact damage caps, I instrument caps on noneconomic damages with enactment of tort reform measures that do not affect malpractice premiums to uncover the effect of caps on noneconomic damages on such premiums. I find evidence to support that, in terms of dollars saved, physicians in high risk specialties benefit more from noneconomic damage caps than physicians in low risk specialties. However, in …

The Evolution Of The Music Industry In The Post-Internet Era, Ashraf El Gamal

CMC Senior Theses

The rise in the prevalence of the Internet has had a wide range of implications in nearly every industry. Within the music business, the turn of the millennium came with a unique, and difficult, set of challenges. While the majority of academic literature in the area focuses specifically on the aspect of file sharing within the Internet as it negatively impacts sales within the recording sector, this study aims to assess the Internet’s wider impacts on the broader music industry. In the same time that record sales have plummeted, the live music sector has thrived, potentially presenting alternative business models …

The Effect Of The Establishment Of The Day Clearing Branch On Trading Costs: A Look At The Nyse In 1920, Samuel W. Wong

CMC Senior Theses

As a financial institution that clears and settles payments for equity and other securities, a clearinghouse essentially reduces the counterparty risk. It diminishes the risk of one party failing to meet its obligations, and makes markets more efficient through netting. This paper examines the impact of the establishment of the Day Clearing Branch on April 26, 1920, which allowed the NYSE Clearinghouse to net cash values and clear loans, supposedly resulting in savings in banking, time, and labor. The common and preferred equity securities that traded on the NYSE during the year 1920 were analyzed. The effect on bid-ask spreads …

Responding To Foreclosures In Cuyahoga County 2011 Evaluation Report, Kathryn W. Hexter, Molly Schnoke

All Maxine Goodman Levin School of Urban Affairs Publications

The foreclosure crisis hit Cuyahoga County earlier and harder than the rest of the nation. The crisis continues to weaken the County’s already weak housing market, as evidenced by declining property values, increasing numbers of vacant and abandoned properties and the continuing high rates of foreclosure filings. In 1999, there were 4,900 residential foreclosure filings in Cuyahoga County. That number doubled to about 10,000 by 2005 and peaked in 2007 at close to 14,000. In 2011, the County had just over 11,000 residential foreclosure filings. In total, an estimated 68,000 homes in the County have been “touched” by foreclosure. The …

Reconnecting To Work: Policies To Mitigate Long-Term Unemployment And Its Consequences, Lauren D. Appelbaum Editor

Upjohn Press

The goal of this book is to enable a better understanding of the consequences of long-term unemployment and the policies that are needed to address it. The contributors present research that examines the psychological as well as economic consequences of experiencing a prolonged spell of joblessness. Included are discussions of policies to increase job creation and to get the long-term unemployed back into jobs.

Employment Growth From Public Support Of Innovation In Small Firms, Albert N. Link, John T. Scott

Upjohn Press

Link and Scott provide a statistical assessment of the employment growth associated with public support of R&D in small, entrepreneurial firms through the Small Business Innovation Research (SBIR) program.