Real earnings management around CEO turnovers

Following CEO turnovers, US firms adjust real business activities to manage earnings downwards (REM bath). This effect is most pronounced in firms with low levels of institutional ownership. REM baths early in CEOs’ tenure can be confounded with legitimate adjustments to business activities. However, we show that they are not accompanied by increases in R&D or capital expenses, nor are they explained by restructuring expenses. CEOs with short tenure record more negative REM measures in their first year of tenure, when compared with CEOs with long tenure.     

Doing Good While Behaving Badly: Checkout Charity Process Mechanisms

Journal of Business Ethics - Companies are increasingly using cause-related marketing campaigns to engage consumers during the purchase process and highlight their own corporate social...     

Investigating Treatment Effects of Participating Jointly in SNAP and WIC when the Treatment Is Validated Only for SNAP

The U.S. Department of Agriculture operates several food assistance programs aimed at alleviating food insecurity. We study whether participation in both participation in both SNAP and WIC alleviates food insecurity compared with participation in SNAP alone. We bound underlying causal effects by applying nonparametric treatment effect methods that allow for endogenous selection and underreported program participation when validation data are available for one program (treatment) but not the other. We estimate average treatment effects using data from the National Household Food Acquisition and Purchase Survey (FoodAPS). FoodAPS includes administrative data to validate SNAP participation. Information on local food prices allows us to construct a food expenditure‐based monotone instrumental variable that does not require a typical instrumental variable exclusion restriction. Under relatively weak monotonicity assumptions, we identify that the impact of participating in both programs relative to SNAP alone is strictly positive, suggesting that the programs are nonredundant. This evidence can support improved design and targeting of food programs.     

HETEROGENEOUS EFFECTS OF THE ACA MEDICAID EXPANSION ON HOSPITAL FINANCIAL OUTCOMES

This study examines the effect of the Affordable Care Act's Medicaid expansion on hospital financial outcomes. A key innovation relative to prior studies is that we explicitly account for heterogeneity across states in the timing and extent of the expansion as well as across hospital types. We find that Medicaid expansion led to a decrease in uncompensated care expenditures and an increase in average operating margins. The effects were larger in states where the Medicaid expansion led to a greater increase in program eligibility. Operating margins improved most for public hospitals and facilities located in rural areas. (JEL I11, I13, I18)     

Contextualizing Corporate Political Responsibilities: Neoliberal CSR in Historical Perspective

This article provides a historical contextualization of Corporate Social Responsibility (CSR) and its political role. CSR, we propose, is one form of business–society interactions reflecting a unique ideological framing. To make that argument, we compare contemporary CSR with two historical ideal-types. We explore in turn paternalism in nineteenth century Europe and managerial trusteeship in early twentieth century US. We outline how the political responsibilities of business were constructed, negotiated, and practiced in both cases. This historical contextualization shows that the frontier between economy and polity has always been blurry and shifting and that firms have played a political role for a very long time. It also allows us to show how the nature, extent, and impact of that political role changed through history and co-evolved in particular with shifts in dominant ideologies. Globalization, in that context, is not the driver of the political role of the firm but a moderating phenomenon contributing significantly to the dynamics of this shift. The comparison between paternalism, trusteeship, and contemporary CSR points to what can be seen as functional equivalents—alternative patterns of business–society interactions that each correspond, historically, to unique and distinct ideological frames. We conclude by drawing implications for future theorizing on (political) CSR and stakeholder democracy.     

CPA credential perceptions: a case study of Hispanic accountants

One of the recommendations of The Pathways Commission report was to increase the number of diverse entrants into the accounting profession. While the Commission’s recommendation is commendable, the lack of diversity in the accounting profession is not a new problem. Hence, the accounting profession has attempted to address the underrepresentation of minority Certified Public Accountants (CPAs) for many years. To this end, organizations such as American Institute of CPAs (AICPA), National Association of Black Accountants (NABA), Association of Latino Professionals in Finance and Accounting (ALPFA), and the Ph.D. Project have provided different types of support to alleviate the problem. However, the numbers are still disturbingly low. This is particularly true for Hispanic accountants. Therefore, the purpose of this study was to examine Hispanic accountants’ perception of the CPA credential. While the results indicate that gender, exam affordability, and job incentives are positively associated with the likelihood of being a CPA, the 150-hour requirement was not perceived as a hindrance for certification.