Private Information and the Exercise of Executive Stock Options

This paper finds strong evidence that executives use private information when exercising their stock options. The most informed executives tend to exercise early, do not exercise on the vest date, do not exercise to capture dividends, exercise a high percentage of their options, and exercise when the option is the least in‐the‐money. We also find that exercises around resignation and retirement are followed by significant negative abnormal returns. Furthermore, the operating performance of firms following exercises motivated by private information is significantly worse than that of firms in which the exercises are not motivated by private information.     

When do firms invest in offensive and/or defensive marketing?

Market conditions may lead firms to increase offensive marketing activities aimed at attracting new customers, and/or to enhance defensive relationship building intended to retain current customers. Characteristics of the marketing environment are examined, including firms' interest in technology adoption and perceived need to apply it to provide structure for the supply chain, product development, quality control, and social impact. Such indicators relate to the firm's perception of “competitive intensity” in the marketplace. Survey results from 196 manufacturing companies show that technology adoption propensity and competitive intensity are associated with greater investments in offensive marketing activities as well as customer and employee engagement.     

Autoregressive Conditional Kurtosis

This article proposes a new model for autoregressive conditionalheteroscedasticity and kurtosis. Via a time-varying degreesof freedom parameter, the conditional variance and conditionalkurtosis are permitted to evolve separately. The model usesonly the standard Student’s t-density and consequentlycan be estimated simply using maximum likelihood. The methodis applied to a set of four daily financial asset return seriescomprising U.S. and U.K. stocks and bonds, and significant evidencein favor of the presence of autoregressive conditional kurtosisis observed. Various extensions to the basic model are proposed,and we show that the response of kurtosis to good and bad newsis not significantly asymmetric.     

Does volume help in predicting stock returns? An analysis of the Australian market

This paper presents an analysis of the relationship between trading volume and stock returns in the Australian market. We test this hypothesis by using data from a sample of firms listed on the Australian stock market for a period of 5 years from January 2001 to December 2005. We explore this relationship by focusing on the level of trading volume and thin trading in the market. Our results suggest that trading volume does seem to have some predictive power for high volume firms and in certain industries of the Australian market. However, for smaller firms, trading volume does not seem to have the same predictive power to explain stock returns in Australia.     

How does perceived formality shape unheard challenging voices?

Abstract

It has been argued that upward challenge is important because it allows employees to have a say in organisational decision-making. Yet upward challenge may go unheard in organisations. Formal voice mechanisms are largely considered to be advantageous for encouraging employees to share their views and concerns. However, recent papers calling into question the distinction between formal and informal voice have prompted investigation into the value of formal voice mechanisms in encouraging upward challenge. This qualitative study attempted to understand in what ways formal voice mechanisms had the potential to create unheard voices by first establishing a working definition of formal voice mechanisms. Using a sample of 19 UK police officers, participants used a card sort to categorise formal and informal voice mechanisms. They subsequently identified, through semi-structured interviews, that formal voice mechanisms could be considered risky for upward challenge. The findings can be used by scholars and practitioners as a framework to identify where challenging voices may be going unheard.     

Globalization and Taste Convergence: the Cases of Wine and Beer

This paper investigates changes in cultural consumption patterns for a low‐concentration industry: wine and beer. Using data on 38 countries from 1963–2000, there is clear convergence in the consumption of wine relative to beer between 1963 and 2000. Convergence occurs even more quickly within groups of countries that have a higher degree of integration. A key prediction of international trade is confirmed in the data: greater trade integration weakens the association between production and consumption patterns—although the relative consumption of wine can be explained well in 1963 by grape production and latitude, these variables are much less significant in 2000. Despite these “scientific” explanations, there is also a cultural angle to wine consumption. While the relative wine consumption of France and Germany is converging, several Latin American countries fail to converge. The patterns of convergence are consistent with dynamics of adjustment in overlapping generation habit formation models.     

Business Students' Perceptions of Potential Ethical Dilemmas Faced by Faculty

Because students' ethical behavior may be modified through socialization contact with faculty, the perspectives of students relating to faculty ethics is an important topic. Prior research on business schools and ethics has not included students' perceptions of ethical dilemmas that often confront faculties of business schools. Student questionnaire data provides two important insights into students' perceptions of the ethics of faculty behavior. In the aggregate, students viewed 29 potential ethical issues as more serious than did faculty. Based on students' perceptions, four factors of ethical dilemmas were isolated: Regulations, Academic Job Performance, Dating, and Personal Benefits.     

Balancing Work and Family: The Role of High-Commitment Environments

Recently, researchers have begun to recognize that the nature of jobs, the workplace environment, and more generally, the culture of the workplace can have a significant impact on the ability of workers to balance their work and family lives. This article examines the effect of high-performance work practices, job characteristics, and the work environment on workers' views about whether the company helps them balance work and family. Using data from a survey of workers across three manufacturing industries, we show that a high-commitment environment—characterized by high-performance work practices, intrinsically rewarding jobs, and understanding supervisors—positively influences employees' perceptions that the company is helping them achieve this balance. This article reinforces the view that helping workers balance work and family responsibilities is not just a matter of benefits and formal family-friendly policies. Rather, it also depends on the characteristics of jobs within the business enterprise.     

The Impact of Sampling Errors on the Choice of Portfolio Efficiency Analysis Rules with Borrowing and Lending of a Riskless Asset

This paper evaluates the impact of sampling errors on portfolio decisions using mean-variance and stochastic dominance rules where riskless borrowing and lending opportunities exist. The paper establishes criteria for comparing the alternative decision rules (for example, mean variance versus stochastic dominance) according to their effectiveness and the cost (in sampling error terms). Normal distributions are simulated using various assumed means, standard deviations, correlations, and sample sizes. These simulations enable one to evaluate the impact of sampling errors on the potential effectiveness of the empirical stochastic dominance and mean variance rules that include borrowing and lending of a riskless asset.