When a celebrity endorser is disgraced: A twenty-five-year event study

This paper investigates how the announcement of negative information about a celebrity endorser impacts firm value, as measured by abnormal stock returns. The unique data sample consists of 93 celebrity disgraces that occurred between 1986 and 2011, affecting firms listed on US stock exchanges. Some evidence is documented of negative and statistically significant abnormal returns around these events. Returns are lower when the disgrace attracts much media attention, or when the celebrity itself is prominent. No significant returns are observed when a firm decides to terminate its endorsement contract with the disgraced celebrity. Endorsement contracts for “edgy” products, for which consumers may actually be attracted by negative publicity, are less likely to be terminated.     

How Economic Tropes Affect Attitudes Toward Social Welfare Policies

We offer a framework for understanding public responses to social programs designed to alleviate disadvantages experienced by some sectors of the U.S. population. The framework is built on 2 key tropes of generalized exchange theory: mutuality and possessive individualism. Using the Affordable Care Act (ACA) as a public sector context, we show how marketing messages can be manipulated to affect consumer likelihood to participate in and support the public policy. Consistent with cognitive attitude models, we find that beliefs regarding individual and mutual benefits are significant, positive predictors of ACA attitudes. In contrast, when messages are framed with ideological economic tropes—possessive individualism or mutuality—ACA attitudes diverge. Priming possessive individualism negatively affects program attitudes relative to a mutuality prime or a no-prime control condition. We conclude with policy advice for those tasked with effective implementation of public sector programs.     

Sad-Loser contests

We consider asymmetric winner-reimbursed contests. It turns out that such contests (Sad-Loser) have multiple internal pure-strategy equilibria (where at least two players are active). We describe all equilibria and discuss their properties. In particular, we find (1) that an active player is indifferent among all her non-negative choices and her expected payoff is zero in any internal equilibrium, (2) that a higher-value (stronger) player always spends less than a lower-value (weaker) player and therefore always has a lower chance to win a Sad-Loser contest in any internal equilibrium, and (3) a sufficient condition for a net total spending to be higher in a Sad-Loser contest than in the corresponding asymmetric contest.     

A dominant archetype of the HRM system in Russian industrial companies in post-recession times

Russian human resource management (HRM) practices remain durable even with the onslaught of economic change and exposure to global HRM practices and international competition. Based on survey results of 201 CEOs of domestic industrial companies located in central regions of Russia we identify the resilient archetype of Russian HRM system. Even companies that have achieved high levels of profitability or those that engage in innovations continue to practice retrograde HRM techniques left over from an earlier era. We are able to identify strategic misfits that are a direct result of the continuation of rigid HRM system that prevents the development of an organizational climate to support innovative or dynamic firms.     

The influence of follower cultural orientation on attitudinal responses towards transformational leadership: evidence from the Chinese hospitality industry

In addition to extending the empirical investigation of the relationship between transformational leadership and follower affective commitment to the Chinese hospitality industry, this study makes a theoretical contribution by investigating the influence of individually held cultural values on this relationship. Building on previous research which has examined whether collectivism moderates the transformational leadership/affective commitment relationship, this study investigates the moderating effects of two additional cultural value orientations, namely power distance and uncertainty avoidance. Hierarchical regression analysis was utilized to analyse survey data from 398 employees of four Chinese hotels in Zhejiang Province. In addition to finding a positive relationship between transformational leadership and affective commitment, data analysis revealed that followers low in power distance exhibited higher levels of affective commitment when working under a transformational leader than those high in power distance. In addition, followers high in uncertainty avoidance and collectivism exhibited greater commitment when working under a transformational leader than those low in uncertainty avoidance and collectivism. These findings clearly indicate the importance of within-country cultural differences to the effectiveness of leaders in the workplace.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

Tax-based Own Resources to Finance the EU Budget

Intereconomics - In the current negotiations about the European Union’s next medium-term Multiannual Financial Framework (MFF) for the period 2021 to 2027, the system of own resources...     

Scott E. Page: The model thinker—what you need to know to make data work for you

Financial Markets and Portfolio Management -     

Economic and Noneconomic Factors Influencing Geographic Differentials in Homelessness: An Exploratory State-Level Analysis

In this exploratory state-level empirical study for the United States, the authors estimate a pooled time-series/cross-section framework, with control variables for population size and population growth, for the years 2015–2016. Within this context, the least squares estimates lead to the following tentative findings: (1) homelessness is positively associated with the overall cost of living, on the one hand, and the average rent level, on the other hand; (2) homelessness appears to be an increasing function of the percent of the population without a high school diploma but a decreasing function of the percent of the population with a bachelor’s degree or a higher level of formal education; (3) homelessness is a decreasing function of labor market freedoms reflecting the degree of union density and union power, on the one hand, and excessive government employment beyond that needed solely for productive and protective services, on the other hand; (4) homelessness is positively associated with personal freedom from incarceration and arrest; and (5) homelessness is negatively associated with income, as higher income reduces homelessness. Based on these findings, preliminary policy implications are also provided.