Conservation,Discrimination, and Salvation: Investors’ Social Concerns in the Stock Market

Stocks appear to have investor clienteles based on their business practices and products. The variety in expressive benefits each individual receives from owning controversial stocks causes them to modify their portfolio to accommodate their beliefs. We examine the ownership of firms with social concerns and sin stocks (tobacco, alcohol and gambling). Women tilt their portfolios towards stocks with progressive labor policies for women and minorities. Younger investors avoid companies with poor environmental records but seek companies with progressive labor policies. Democratic voters favor stocks with progressive policies regarding women/minorities and gays/lesbians and are less likely to own sin stocks. Christian objections to homosexuality lead their members to invest less in stocks with progressive labor policies for gays and lesbians. The Christian denominations vary, though, in regard to sin stocks. Catholics are more likely while Mormons are less likely to own a sin stock relative to other investors. Socially responsible investors are clearly not all alike. Social characteristics that are important to one investor may not be important to another socially conscious investor.     

Using Housing Futures in Mortgage Research

Expectations of housing prices play an important role in real estate research. Despite their importance, obtaining a reasonable proxy for such expectations is a challenge. The existing literature on mortgage research either does not include housing expectation proxies in empirical models, or uses “backward-looking” proxies such as past housing appreciation or time series forecasts based on past housing appreciation. This paper proposes to use the transaction prices of Case-Shiller housing futures as an alternative “forward-looking” proxy. As an example, we compare the performances of four different expectation proxies in explaining mortgage default behavior. The loan level analysis shows that the futures based expectation proxy outperforms other proxies by having the highest regression model fit and being the only proxy that shows a significant negative effect on mortgage default behavior, as theory suggests. Out of sample predictions also show that futures have better prediction accuracy than other proxies. In addition, the paper shows that futures contain additional information that is not present in the backward-looking proxies.     

Strength in numbers or guilt by association? Intragroup effects of female chief executive announcements

We predict that the media reports on female CEOs as a coherent group, whereas male CEOs are treated as individuals by the media. We also suggest that the resulting investors' perceptions of group entitativity of female‐led firms may not only influence the succession event–performance relationship at the focal firm, but may also have a significant effect on the value of other female‐led companies. Results of a text analysis and an event study of appointments of female CEOs to Fortune 1000 firms provide support for these predictions. Copyright © 2013 John Wiley & Sons, Ltd.     

Utilizing a Value of Information Framework to Improve Ore Collection and Classification Procedures

This case study utilizes a value of information decision framework to provide mine managers guidance regarding the purchase of ore grade scanners. LKAB's Kiruna mine produces three types of iron ore to meet long-term contractual agreements on a monthly basis. There is a priori uncertainty regarding the ore type in any given mineable section of the orebody. In addition, there is extracted ore type uncertainty that is introduced by the mining process. These uncertainties are better understood by obtaining more precise (real-time) information. In addition, a better understanding of the uncertainties can improve the quality of operational decisions and increase the overall profitability of the mine. This case study provides a framework for measuring the economic impact of information purchases in a mining context and discusses the implications of those findings.     

On the competition enhancing effects of exclusive dealing contracts

Antitrust scholars have argued that exclusive contracts have anticompetitive, or at best neutral effects, if no efficiencies are generated. In contrast, this paper shows that exclusive contracts can have procompetitive effects, provided buyers are imperfect downstream competitors and contract breach is feasible. In that case, an efficient entrant is not necessarily foreclosed through exclusive contracts but induces buyers to breach. Because breaching buyers have to pay expectation damages to the incumbent, the downstream profits they obtain when breaching must be large enough. Therefore, the entrant needs to set a lower wholesale price than absent exclusive contracts, leading to lower final consumer prices and higher welfare.     

Cellular clouds

This paper progresses an analysis of what it means to be a cellular network operator and what form the ownership and control of future cellular networks may take. Alternative modes of ownership may allow for the creation of more flexible cellular networking environments in which competition for packages of resources, that is, the licenced spectrum, the RAN and core network, ensures that the most efficient and innovative architectures, services and applications are delivered to the consumer. This paper develops the concept of the Cellular Network Cloud and Utility Cellular Networking as a means to explore the possibilities for such revolution in the way in which cellular networks are owned and operated. Changes to current industry practices which would help to meet the objectives of more flexible and competitive network ownership and control are proposed.     

Implicit recourse and credit card securitizations: What do fraud losses reveal?

In this paper, we develop and test a model of implicit recourse in asset-backed securitizations. Fraud losses on securitized assets are generally incurred by the bank and do not affect the performance of securitization trusts, while credit losses do affect the trust’s performance and are potentially borne by the owner of the securitized assets. Thus, the classification of losses as either fraud or credit losses provides a potential avenue of implicit recourse to manipulate the performance of securitization trusts. Using annual data from 2001 to 2006, we find that the performance of the credit card securitization portfolio is negatively related to fraud losses reported by the bank. We examine these results in light of the proposed Basel II capital rules and argue that a bank’s incentive to provide implicit recourse will increase under the anticipated regime.