THE REGULATION EFFECT OF CREDIT RATINGS ON BOND INTEREST YIELD: THE CASE OF JUNK BONDS

This paper examines the 'regulation effect' of bond ratings of yield. It is shown that the high yield premia on 'speculative bonds' not only reflect the high probability of default, but also contain an effect of regulation. A multiple discriminant analysis (MDA) technique is used to separate the default component of yield premium from the regulation effect. The results in the study suggest that non-regulated investors, by taking advantage of the regulation effect, may earn an extra premium on a diversified portfolio of 'speculative bonds', at least for the period under this study (from January 1982-June 1987).     

The Denial of Slavery in Management Studies

abstract American slavery has been wrongfully excluded from histories of management. By 1860, when the historical orthodoxy has modern management emerging on the railroads, 38,000 managers were managing the 4 million slaves working in the US economy. Given slaves’ worth, slaveholders could literally claim ‘our people are our greatest asset.’ Yet a review of histories of management shows ante‐bellum slavery excluded from managerial modernity as pre‐capitalist, unsophisticated in practice, and without non‐owner managers identified as such. These grounds for exclusion are challenged. First, it is shown slavery is included within capitalism by many historians, who also see plantations as a site of the emergence of industrial discipline. Second, ante‐bellum slavery is demonstrated to have been managed according to classical management and Taylorian principles. Third, those doing the managing are shown to have been employed at the time as ‘managers’. In the idea of the manager, and of scientific and classical management slavery has therefore left an ongoing imprint in management practice and thought. A strong argument is made for not just for postcolonialist accounts of management, but for management histories in which anti‐African‐American racism is a continuing strand. The fundamental significance of the article however is its identification of slavery as of intrinsic, but hitherto denied, relevance to management studies.     

NONSTATIONARITY OF BETA AND TESTS OF MARKET EFFICIENCY

Conclusions from event type studies are usually supported by data generated from some form of the market model. This study examines the robustness of these conclusions to different static and dynamic estimates of beta when the event under investigation occurs during a period of changing systematic risk. The results indicate that when beta is nonstationary, the findings of market inefficiency (or efficiency) in previous studies may be an artifact of the static beta estimation method.     

Real or relevant beauty? Body shape and endorser effects on brand attitude and body image

Endorsements play an important role in marketing communications. For international marketing communications, marketers must be cognizant of how the portrayal of body ideals and cultural background of endorsers can affect marketing communications. Two experimental studies showed that body image comparisons and the effectiveness of endorsers varies according to the type of body shapes portrayed and the body mass index (BMI) of the respondents. In the first experiment, the success or failure of endorsements was found to be influenced by their body shape and to some extent the cultural background with respect to the type of product or service promoted. In a second experiment where more realistic or medium‐thin and medium‐fat body shapes were used, source attractiveness was not influenced by body shape, while interest in the advertised brand increased for a thinner model. This may have occurred because body image comparisons were more obtainable for those in the second study, where more realistic body shapes were viewed in advertisements. Body mass index (BMI) was also found to influence the results, particularly if a poor body shape comparison triggers a poor body image. Counterfactually, this seems to occur with women with lower BMIs who view advertisements for fatter women. It appears that the use of body image and ethnic type of models should be carefully considered by marketers so that they are relevant for their target audience. The use of more obtainable and ethnically relevant models may provide more effective advertising copy and be more socially responsible. In order to create interest in advertised brands, marketers may not need to use ultra‐thin models. Marketers must also balance the promotional effectiveness of the use of body shapes that may too thin or more realistic with the social outcomes and consider carefully the BMI of their target market. © 2011 Wiley Periodicals, Inc.     

A Wolf in Sheep’s Clothing: The Use of Ethics-Related Terms in 10-K Reports

We examine the occurrence of ethics- related terms in 10-K annual reports over 1994–2006 and offer empirical observations on the conceptual framework of Erhard et al. (Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics, and Legality (Harvard Business School, Harvard) 2007). We use a pre-Sarbanes-Oxley sample subset to compare the occurrence of ethics-related terms in our 10-K data with samples from other studies that consider virtue-related phenomena. We find that firms using ethics-related terms are more likely to be “sin” stocks, are more likely to be the object of class action lawsuits, and are more likely to score poorly on measures of corporate governance. The consistency of our results across these alternative measures of ethical behavior suggests that managers who portray their firm as “ethical” in 10-K reports are more likely to be systematically misleading the public. These results are consistent with the integrity-performance paradox.     

“招”“怕”“告”三个字论述上海品牌

战术的“招”一定要跟战略的整体策划集合在一起……做品牌需要有高层次意识，上升到承担社会责任……人有选择性，不是被动的，直观的……     

Shareholder authorized inside trading: A legal and moral analysis

This article evaluates inside trading from a legal and a moral perspective. From both of these points of view, the practice of inside trading is fraudulent whether it occurs in the traditional format or in the variation known as misappropriation. Fraud is a legal tort and a moral wrong consisting of a breach of duty that intentionally causes harm to persons that the insider can reasonably foresee. In defense against allegations of fraudulent inside trading, the defendant may argue that one or more elements of fraud are not evident, or, if the elements are clear, that the fraud was a justified means of avoiding some worse evil or of achieving some greater good. The article concludes that inside trading, under circumstances approved by shareholders, is neither fraudulent nor unfair. Bill Shaw is a Professor of Business Law at the University of Texas at Austin.     

Fuel Risk Management at American Electric Power

The senior management team and board of directors at American Electric Power (AEP) have emphasized the importance of an Enterprise Risk Management approach for dealing with the wide array of risk exposures that the firm faces. Senior management has put in place a risk governance structure that facilitates the identification of major risk exposures, assesses their impact on the firm's overall risk profile, and interacts the risk management process with the strategic planning process. Central to this structure is the firm's Risk Executive Committee, which includes the senior leadership of the firm and the Enterprise Risk Oversight staff. Members of the AEP Enterprise Risk Oversight group have just returned from a meeting of the Risk Executive Committee. The discussion at the meeting focused on an event that recently came to the firm's attention—an unexpected disruption in the firm's coal supply over the coming year due to necessary repairs in railroad facilities near the coal source. By the end of the week, the Enterprise Risk Oversight group needs to communicate with the relevant teams within the organization as part of its effort to identify the potential repercussions of the event for the enterprise. In addition, the Risk Executive Committee would like the groups to identify other possible adverse events that could occur and steps that should be taken now in preparation.     

Do US Corporate Governance Standards Effectively Discourage Risk in the Emerging Markets?

This study provides an examination of the effect of various corporate governance factors on the management of the risks inherent in business and the potential divergent impact of these factors on US firms and firms in emerging countries. In particular, the study scrutinises corporate governance and corporate risk‐taking behaviour across different political and socioeconomic environments. In a cross‐sectional time‐series setting, two‐step generalised least squares regression outcomes reveal that the impact of corporate governance on corporate risk taking demonstrates similar implications for US and emerging markets firms in several ways. Nonetheless, the findings also indicate that although some of the US governance standards are effective in the emerging markets, further strengthening of governance standards may be required. Specific governance aspects of the emerging markets, such as board and committee composition, are still lacking when compared to those of the US. Regardless of these differences, the outcomes reveal that those US governance standards adopted by the firms in the emerging markets strengthen governance structures and discourage corporate risk‐taking behaviour.