Do analysts add value when they most can? Evidence from corporate spin‐offs

This article investigates how securities analysts help investors understand the value of diversification. By studying the research that analysts produce about companies that have announced corporate spin‐offs, we gain unique insights into how analysts portray diversified firms to the investment community. We find that while analysts' research about these companies is associated with improved forecast accuracy, the value of their research about the spun‐off subsidiaries is more limited. For both diversified firms and their spun‐off subsidiaries, analysts' research is more valuable when information asymmetry between the management of these entities and investors is higher. These findings contribute to the corporate strategy literature by shedding light on the roots of the diversification discount and by showing how analysts' research enables investors to overcome asymmetric information. Copyright © 2013 John Wiley & Sons, Ltd.     

The Low‐Pay No‐Pay Cycle: Are There Systematic Differences across Demographic Groups?

We investigate transitions between unemployment, low‐paid employment and higher‐paid employment using dynamic panel data methods applied to household panel data. We find state dependence in both unemployment and low‐paid employment and evidence of a low‐pay no‐pay cycle. However, we also find significant differences in effects across population subgroups. Typically, the young and better‐educated face lower penalties from unemployment and low‐paid employment. Further, low‐paid employment is preferable to unemployment for women regardless of their demographic characteristics, but for men who have only completed secondary schooling, low‐paid employment actually decreases the chances of entering higher‐paid employment by more than does unemployment.     

Foreign Acquisitions,Domestic Multinationals,and R&D

Our aim in this paper is to evaluate the causal effect of foreign acquisition on research and development (R&D) intensity in targeted domestic firms. We are able to distinguish domestic multinational enterprises (MNEs) and non‐MNEs, which allows us to investigate the fear that the change in ownership of domestic MNEs to foreign MNEs leads to a reduction in R&D activity in the country. Overall, our results give no support to the fears that foreign acquisition of domestic firms leads to a relocation of R&D activity in Swedish MNEs. Rather, in this paper, we find robust evidence that foreign acquisitions lead to increasing R&D intensity in acquired domestic MNEs and non‐MNEs.     

See Tourist Sites before Your Meetings Begin

Most every Chinese person I have met has tried to teach me something.So many wonderful teachers,such a poor student.Yet,they continue to share their culture and for that I am extremely grateful.Think ing about it a     

The demand for and the supply of distribution services: A basis for the analysis of customer satisfaction in retailing

This paper brings together two bodies of literature. One of them is a literature on the special role of the consumer in retailing. The other one is the literature on customer satisfaction. This joining of literatures is accomplished by identifying distribution services as outputs of retail firms and fixed inputs into the production functions of consumers and relaxing the standard assumption that the demand for these services is always equal to the supply of these services. The result is a new conceptual framework for the analysis of customer satisfaction in retailing. This framework extends the basic ideas on customer satisfaction developed for manufacturing in a homogeneous single product setting to the heterogeneous multi-product setting relevant for many retailers. The paper illustrates one approach to the implementation of this framework with data for a set of supermarkets in Pamplona, Spain, that measure distribution services by asking consumers questions explicitly identifying these services. The five main categories of distribution services identified by the conceptual framework and measured in the data are economically important and statistically robust determinants of customer satisfaction with supermarkets. These results are obtained controlling for other variables typical of the customer satisfaction literature and measuring customer satisfaction in a manner consistent with that literature. The results are robust to corrections for sample selection and alternative estimation methods. Perhaps our most interesting novel result is that the effect of the determinants of customer satisfaction on future purchase intentions in the supermarket case is different when measured directly in a one stage process than when measured indirectly in a two stage process through the attributes/satisfaction/ purchase intentions chain.

An experimental study of blind proficiency tests in forensic science

We conducted a series of sender?Creceiver experiments to study the consequences of implementing a regime of blind proficiency tests in forensic science to reduce error rates and improve the criminal justice system. Senders are our surrogate for forensic laboratories and receivers, for the judge or jury. Our experimental surrogate (random audits with a penalty) for blind proficiency tests reduced sender error rates by as much as 46% depending on the level of experimentally induced bias. When penalties improve information quality, receiver error rates fell by as much as 26% depending on the level of the sender bias. We also find that the penalty must be large relative to the payoff to induce the reduction in errors. Our results suggest that a regime of blind proficiency testing has the potential to reduce forensic science errors.     

An Equity-based Redefinition of Underemployment and Unemployment and Some Measurements

An attempt is made in this article to redefine underemployment and unemployment without making reference to an excess supply of labor or any causal mechanism of unemployment. Instead, underemployment and unemployment are defined in terms of equity which draws upon the individual's preferences. A specific proposal is that underemployment be defined by the presence of contribution inequity relative to at least half the persons employed in a field that the underemployed person might prefer to move into. Empirically, most recent survey data on preferences for contingent and other nontraditional employment are used to illustrate the application of the concept. The major finding is that nearly 10 million Americans in the nontraditional workforce are underemployed.     

WHO REALLY WANTS TO BE A MILLIONAIRE? ESTIMATES OF RISK AVERSION FROM GAMESHOW DATA

This paper estimates the degree of risk aversion from one of the most popular TV gameshows ever. The format of the show is straightforward; it involves no strategic decision making; we have a large number of observations; and the prizes are cash, which is paid immediately and covers a large range: from £100 up to £1 million. We provide non‐parametric estimates of the utility function and then we test some parametric restrictions. We find that, although the restriction to CRRA utility is statistically rejected, a log function approximates the utility function quite well over a large range of potential winnings. Copyright © 2013 John Wiley & Sons, Ltd.     

Why Dick and Jane don’t ask: Getting past initiation barriers in negotiations

Negotiation is an essential skill for personal well-being and professional success, a skill that begins with identifying and acting on one's wants and needs. Many individuals, however, lack the confidence, motivation, or training to simply ask for what they want in certain situations; for example, when negotiating with an important client. Still others are reluctant to initiate requests in general. This article discusses the personal characteristics and situational factors that influence an individual's likelihood of engaging another party in a negotiation, making a request, and optimizing that request. Herein, specific suggestions are offered for managing this critical phase of the negotiation process via three steps: mental preparation prior to the engagement; positioning prior to, and at the point of, the engagement; and verbal craftsmanship during the delivery of one's request.