Professors on the Board: Do They Contribute to Society Outside the Classroom?

According to our data, 38.5 % of S&P 1500 firms have at least one professor on their boards. Given the lack of research examining the roles and effects of academic faculty as members of boards of directors (professor–directors) on corporate outcomes, this study investigates whether firms with professor–directors are more likely to exhibit higher corporate social responsibility (CSR) performance ratings. Results indicate that firms with professor–directors do exhibit higher CSR performance ratings than those without. However, the influence of professor–directors on firm CSR performance ratings depends on their academic background—the positive association between the presence of professor–directors and firm CSR performance ratings is significant only when their academic background is specialized (e.g., science, engineering, and medicine). Finally, this positive association weakens when professor–directors hold an administrative position at their universities.     

With friends like these: the art of managing complementors

Intel and Microsoft neither buy from nor sell to each other directly, but they are undeniably in business together. They are probably the world's most widely known pair of complementors--companies that independently provide complementary products or services to mutual customers. Complementors increase the value of each other's offerings and the size of the total market. So it's not surprising that so many just assume that their interests are aligned. Nothing could be further from the truth. Discord can develop in many areas, such as pricing, technology, standards, and control of the market--both in terms of which company has the most influence over customers and which one gets the biggest slice of the pie. The issue of pricing perfectly captures this tension. Ideally, you'd like to price your goods high while your complementors price theirs low. Airlines, for instance, would be happy to see vacation lodgings go for a song, while destination resorts could raise rates and still fill their rooms if customers could fly there for free. The first step in managing relationships with complementors is to develop a deep understanding of their economics, their strategies and goals, their existing capabilities, their incentives for cooperation, and any potential areas of conflict. Then, to gain the upper hand, companies can use a variety of tools that fall into two main categories: hard power (inducements or coercion to get what you want) and soft power (persuasion through indirect means to get others to want what you want). The authors explain how to build both hard power and soft, illustrate the strengths and limits of each, and offer guidelines for choosing one over the other. Conflict among complementors is inevitable, but together, hard and soft power can help companies manage the dark side of complementor relationships and take full advantage of the opportunities that cooperation should create.     

Human Resource Allocation in a CPA Firm: A Fuzzy Set Approach

The review of existing human resource allocation models for a CPA firm shows that there are major shortcomings in the previous mathematical models. First, linear programming models cannot handle multiple objective human resource allocation problems for a CPA firm. Second, goal programming or multiple objective linear programming (MOLP) cannot deal with the organizational differentiation problems. To reduce the complexity in computing the trade-offs among multiple objectives, this paper adopts a fuzzy set approach to solve human resource allocation problems. A solution procedure is proposed to systematically identify a satisfying selection of possible staffing solutions that can reach the best compromise value for the multiple objectives and multiple constraint levels. The fuzzy solution can help the CPA firm make a realistic decision regarding its human resource allocation problems as well as the firm's overall strategic resource management when environmental factors are uncertain.     

Characteristics of internationally educated nurses in the United States

Among an estimated 2.7 million U.S. nurse workforce in March 2000, about 4% were internationally educated nurses. This secondary analysis of the 2000 National Sample Survey of Registered Nurses profiles this unique segment of the U.S. nurse workforce. Findings indicate that internationally educated nurses have distinctive demographical, educational, and employment characteristics when compared to U.S.-trained nurses. Implications of the findings are elaborated in lieu of the present U.S. nurse shortage.     

Earnings Management Surrounding CEO Turnover: Evidence from Korea

This article examines the empirical relation between chief executive officer (CEO) turnover and earnings management in Korea using a sample of 403 CEO turnovers and 806 non‐turnover control firms during the period 2001–2010. We classify CEO turnovers into four types depending on whether the departure of the outgoing CEO is peaceful or forced and whether the incoming CEO is promoted from within or recruited from outside the firm. We measure earnings management by both discretionary accruals and real activities management. We also control for the endogeneity of CEO turnover and a potential selection bias using 2SLS and Heckman's two‐stage approach. After controlling for corporate financial performance and governance structure, we find upward earnings management by the departing CEO only when the departure is forced and the new CEO is an insider. In this case, the new CEO also engages in downward earnings management using both discretionary accruals and real activities management. We also find some evidence that the new CEO recruited from outside the firm manages discretionary accruals upward following the peaceful departure of his predecessor. In all other types of CEO turnover, we do not find evidence of significant earnings management by either CEO.     

Treating and Pruning: New approaches to forecasting model selection and combination using prediction intervals

We propose a new way of selecting among model forms in automated exponential smoothing routines, consequently enhancing their predictive power. The procedure, here addressed as treating, operates by selectively subsetting the ensemble of competing models based on information from their prediction intervals. By the same token, we set forth a pruning strategy to improve the accuracy of both point forecasts and prediction intervals in forecast combination methods. The proposed approaches are respectively applied to automated exponential smoothing routines and Bagging algorithms, to demonstrate their potential. An empirical experiment is conducted on a wide range of series from the M-Competitions. The results attest that the proposed approaches are simple, without requiring much additional computational cost, but capable of substantially improving forecasting accuracy for both point forecasts and prediction intervals, outperforming important benchmarks and recently developed forecast combination methods.     

CEO and Outside Director Equity Compensation: Substitutes or Complements for Management Earnings Forecasts?

Abstract

This study examines how the equity compensation of chief executive officers (CEO) and that of outside directors affect management earnings forecasts (MFs) and the relationship between these two positions in terms of compensation. Our evidence reveals that CEO (director) equity compensation is positively associated with MF likelihood, frequency, and accuracy when director (CEO) equity compensation is not high. However, an increase in director (CEO) equity compensation is not effective in improving disclosure quality when the level of CEO (director) equity compensation is already high. These results suggest that the two incentive mechanisms act as substitutes when both are intensively used in the context of MF disclosure.     

Explanation for market response to seasoned equity offerings

In this paper, we use a multivariate framework to extend the recent univariate seasoned equity offering (SEO) research that investigated the valuation impact of inside ownership. Our multivariate findings re-enforce and add to the univariate findings as we show that the inside ownership level is a consistent factor in accounting for short-run and long-run returns around SEOs, while the decrease in inside ownership has no impact on short-run returns but influences long-run returns in a manner inconsistent with signaling theory. Compared to prior research, our regression tests do a much better job of accounting for returns associated with SEO announcements. For short-run regression tests, the four major factors associated with superior stock returns are: lower underpricing; greater profitability prior to SEO; lower inside ownership level; and, less stock price variability prior to SEO. For long-run regression tests, the four major conditions linked to superior returns are: greater profitability prior to SEO; smaller inside ownership level; relative size of the offering; and, greater decrease in inside ownership level.     

Trends in the use of statistics in major advertising journals over four decades

The use of statistical techniques in data-based articles appearing in the International Journal of Advertising, Journal of Advertising, Journal of Advertising Research and Journal of Current Issues & Research in Advertising was analysed over four decade intervals (i.e., 1980s, 1990s, 2000s and 2010s) and by journal. Among the trends, the study found: (1) nearly seven of every 10 journal articles reported statistical analyses (68.8% or 541 of 786); (2) the trend for statistically based articles was remarkably consistent over the time intervals and held true for the different advertising journals with one exception; (3) the use of different statistical techniques changed over time, with statistical techniques becoming more diverse and sophisticated through the years, but more so in some advertising journals than in others; (4) statistics were correctly applied in the majority of the research reports relative to ‘study purpose’; (5) the use of different statistical techniques varied by method of data collection generally and within articles appearing in three of the four journals; and (6) the presence or absence of hypotheses and/or research questions in the advertising studies was differentially associated with the application of different statistics. The inquiry serves to move advertising research forward in two ways: first, it documents how statistical analyses have changed over time and, second, it provides insight into where the field might be headed regarding the use of statistical techniques.