Connecting book rate of return to risk and return: the information conveyed by conservative accounting

Review of Accounting Studies - This paper revises the standard interpretation of the book rate of return as a measure of profitability. Rather, due to conservative accounting, the book rate of...     

The impact of reporting frequency on the information quality of share price: evidence from Chinese state-owned enterprises

As a major global exchange, the Stock Exchange of Hong Kong (SEHK) only requires semi-annual reporting whereas other major exchanges including the ones in Chinese mainland require quarterly reporting. We argue against the traditional view that higher reporting frequency is necessarily more beneficial. The decision on reporting frequency depends on how the information is being processed by the recipient traders and the results are not obvious. Using a sample of Chinese companies dual-listed in both China A share market and SEHK (AH shares) as the experimental group and mainland’s companies listed on SEHK (H shares) only as the control group, we apply the difference-in-difference (DID) method to investigate the impacts of reporting frequency on stock information quality. The results suggest that after China A share market require quarterly financial reporting for all listed companies in 2002, the information asymmetry of the H tranche of AH stocks increases. Different from prior studies, the results suggest a negative association between stock information quality and financial reporting frequency. We argue that the increased information asymmetry in the H tranche is caused by the noise spilled over from the A tranche. We conduct multivariable GARCH tests and find evidence supporting this conjecture.     

Coping with coopetition—Facing dilemmas in cooperation for sustainable development: The case of the Dutch smart grid industry

This paper is amongst the first to examine coopetition strategy for sustainable development at the network level. Companies who want to successfully implement complex innovative technologies that support sustainable development need to collaborate with other actors of the innovation ecosystem, including their competitors, so that they can develop standards, interoperable products, pool knowledge, and resources and bundle forces to compete against other technologies. Collaboration with competitors brings benefits, but also many risks. We investigated how firms cope with these risks when establishing an innovation ecosystem to implement a new technology in society. We conducted research in the Dutch smart grids sector and explored how these firms minimize inherent risks of coopetition. We found that system‐building actors in the Dutch smart grid field not only minimize inherent risks, but from the start of their collaboration they implement so‐called enablers to prevent these risks upfront.     

The business cycle is alive and well

Business Economics - Have the dynamic relations among macro variables changed markedly since the financial crisis? A dynamic factor model provides consistent evidence of stability across 248...     

Family business goal formation: a literature review and discussion of alternative algorithms

Management Review Quarterly - Goals represent an organization’s desired outcomes, and family businesses are known to pursue multiple goals, which commonly include both financial and...     

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.     

Commercial Real Estate Market Property Level Capital Expenditures: An Options Analysis

The Journal of Real Estate Finance and Economics - Option pricing theory predicts that capital improvement expenditures are positively linked with high or increasing market lease rates. Ceteris...     

Online marketing: When to offer a refund for advanced sales

Advance selling is a marketing strategy commonly used by online retailers to increase sales by exploiting consumer valuation uncertainty. Recently, some online retailers have started to allow refunds on products sold in advance. On the one hand this reduces the net advance sales, but on the other hand it allows a higher advance sales price. This research is the first to explore the overall effect of allowing a refund on profits from advance sales, identifying conditions where advance selling with or without refunds (or no advance selling at all) is best. We analytically compare the profits of three advance selling strategies: none, without refund, and with refund. We show that selling in advance and allowing a refund is optimal for products with a relatively small profit margin and small strategic market size, and that the added profit can be considerable. Our results guide managers in selecting the right advance selling strategy. To facilitate this, we graphically display, based on the two dimensions of regular profit margin and strategic market size, under what conditions the different strategies are optimal.     

The role of cognitive ability and personality traits for men and women in gift exchange outcomes

We examine the role of cognitive ability and personality traits in a gift exchange experiment. Controlling for cognitive ability and personality characteristics, men offer higher wages than women, and men and women with greater cognitive ability and greater agreeableness on the Big Five personality scale offer higher wages as well. Men provide greater effort than women do, and respond to higher wage rates with greater increases in effort. For both genders, one standard deviation increases in agreeableness and in wages generate similar increases in effort. Serious biases arise from omitting cognitive ability and pooling men and women.