Mediating Identity: A Study of Media Influence on Organizational Identity Construction in a Celebrity Firm

This paper reports a longitudinal field study on the effects of positive media coverage on the reconstruction of organizational identity. The study highlights how intense positive coverage – to the point of turning an organization into a ‘celebrity’– influences both the way members understand their organization (sensemaking effect) and the gratification they derive from its positive representation (self‐enhancement effect). Our findings suggest that positive media representations foster members' alignment around an emergent new understanding of what their organization is. Over time, however, celebrity may ‘captivate’ members' organizational identity beliefs and understandings, and impede further identity work as media persist in the replication of representations that differ from members' experienced reality, but are too appealing to them to be publicly contradicted.     

Predictability of stock returns and asset allocation under structural breaks

This paper adopts a new approach that accounts for breaks to the parameters of return prediction models both in the historical estimation period and at future points. Empirically, we find evidence of multiple breaks in return prediction models based on the dividend yield or a short interest rate. Our analysis suggests that model instability is a very important source of investment risk for buy-and-hold investors with long horizons and that breaks can lead to a negative slope in the relationship between the investment horizon and the proportion of wealth that investors allocate to stocks. Once past and future breaks are considered, an investor with medium risk aversion reduces the allocation to stocks from close to 100% at short horizons to 10% at the five-year horizon. Welfare losses from ignoring breaks can amount to several hundred basis points per year for investors with long horizons.     

Learning In A Constellation of Interconnected Practices: Canon or Dissonance?

In this paper we argue that the learning of safety in a constellation of communities of practice is mediated by comparison among the perspectives of the world embraced by the co‐participants in the production of this practice. Our discussion is based on two empirical research projects in which we investigated the accounts of the causes of accidents provided by the members of three different communities of practice (engineers, site foremen and main contractors), in a medium sized building firm. In the paper we suggest that comparison among perspectives is made possible by a discursive practice targeted on the alignment of elements both mental and material, within mutually accountable discursive positions. These alignments are provisional and unstable, they produce tensions, discontinuities and incoherence (cacophony) just as much as they produce order and negotiated meanings (consonance).     

Distribution Dynamics and Nonlinear Growth

This paper extends the distribution dynamics approach to the study of the shape of the growth process of a cross-section of countries. We first identify some empirical implications of a nonlinear Solovian growth model with multiple equilibria. These implications are then tested by a novel definition of the state space, which jointly considers income and growth rate. The main findings are that nonlinearity is a salient feature of the overall picture, and that the cross-section dynamics is compatible with the existence of multiple equilibria. We also discuss how the hypothesis of conditional convergence may be challenged in the light of our results.     

Firms’ exporting and importing activities: is there a two-way relationship?

The literature on firm heterogeneity and trade has highlighted that most trading firms tend to engage in both importing and exporting activities. This paper provides some evidence that helps understanding to what extent this is the result of a two-way relationship. Using firm-level data for a group of 27 Eastern European and Central Asian countries from the World Bank Business Environment and Enterprise Performance Survey (BEEPS) over the period 2002–2008, we estimate a bivariate probit model of exporting and importing. After controlling for size (and other firm-level characteristics) we find that firms’ exporting activity does not increase the probability of importing, while the latter has a positive effect on foreign sales. This effect is mainly channeled through an increase in firm productivity and product innovation.     

Time‐Varying Spot and Futures Oil Price Dynamics

In this paper, we investigate the role of crude oil spot and futures prices in the process of price discovery by using daily data over the period from January 1992 to September 2012. We provide evidence that futures markets play a more important role than spot markets, but their relative contributions turn out to be highly unstable, especially for the most deferred contracts. Furthermore, considering the time‐varying dynamics provides evidence of a smaller role for futures markets and a greater role for fundamental factors in driving oil prices during the global financial turmoil of 2007–2008. The implications of the main results for hedging and forecasting crude oil spot prices are also discussed.     

Collective action clauses: How do they affect sovereign bond yields?

We study the effects of the adoption of collective action clauses (CACs) on government bond yields by exploiting secondary market data on sovereign bonds quoted in international markets from March 2007 to April 2011. CACs are assessed security by security. Using a panel data approach, we find a U-shaped effect of CACs on yields according to the credit rating of the issuer. While the impact is negligible for the highest ratings, a significant yield discount emerges for mid-range ratings, which is smaller for bad ratings and possibly insignificant for the worst ratings. This relationship appears fairly robust across a number of checks. This evidence may reflect the fact that CACs are valuable because they help with orderly restructuring unless the perceived probability of default is too small. Nevertheless, at low ratings, this effect can be weakened by an increasing risk of moral hazard.     

A first look at online reputation on Airbnb,where every stay is above average

Marketing Letters - Judging by the millions of reviews left by guests on the Airbnb platform, this trusted community marketplace for accommodations is fulfilling its mission of matching travelers...     

Distribution of wealth and incomplete markets: Theory and empirical evidence

This paper analyses the equilibrium distribution of wealth in an economy where firms’ productivities are subject to idiosyncratic shocks, returns on factors are determined in competitive markets, households have linear consumption functions and government imposes taxes on capital and labour incomes and equally redistributes the collected resources to households. The equilibrium distribution of wealth is explicitly calculated and its shape crucially depends on market incompleteness. With incomplete markets it follows a Paretian law in the top tail and the Pareto exponent depends on the saving rate, on the net return on capital, on the growth rate of population, and on portfolio diversification. The characteristics of the labour market crucially affects the bottom tail, but not the upper tail of the distribution of wealth in the case of completely decentralized labour market. The analysis also suggests a positive relationship between growth and wealth inequality. The theoretical predictions find a corroboration in the empirical evidence of United States in the period 1989-2004.