Short Selling: The Impact of SEC Rule 201 of 2010

Despite its sizeable compliance costs, we are unable to document any clear benefits of SEC Rule 201 in ensuring fair valuations and price stability, promoting higher liquidity and execution quality, or preventing a sudden flash crash or prolonged market crises. Our daily and intraday analysis of data both before and after Rule 201 finds that short sellers are naturally more active before the occurrence of negative returns, not after significant price declines. Our simulation results show that Rule 201 further curtails short selling during normal periods, but is not binding on short sellers during the volatile period of the 2008 financial crisis.     

How Does Ambiguity Influence IPO Underpricing? The Role of the Signalling Environment

We explore the relationship between ambiguity, or low information clarity, in the IPO prospectus of newly public firms and their underpricing. Consistent with signalling theory, we find that IPO underpricing is low when the prospectus contains less ambiguous information that creates a more reliable signal conveying the quality of the IPO firm. However, the positive association between ambiguity and IPO underpricing is less pronounced when IPO firms display low strategic conformity with other firms in the industry, operate in industries with high valuation heterogeneity, or are medium‐sized. Using a sample of 398 IPOs between 1998 and 2007, our results support these predictions. This study shows the importance of the signalling environment influencing boundedly rational signal recipients interpreting ambiguous signals.     

Microfinance Traps and Relational Exchange Norms: A Field Study of Women Entrepreneurs in Tanzania

In interdependent social groups, microfinance traps occur when conflicts arise between borrowers’ affective ties related to family needs and instrumental ties related to obligations toward their loan group. Thus, the social capital that facilitates microfinancing can lead to conflicting obligations toward business needs and economic obligations toward family. Building on an inductive field study among female entrepreneurs in Tanzania, we conceptualize microfinance traps. By using relational contract theory to interpret the qualitative data, we argue that microfinance traps can be reduced by balancing role integrity, preserving norms and reciprocity, and harmonizing the social matrix toward the family and loan group.     

Grit and self-employment: a multi-country study

Blending the literatures on grit and self-employment, we propose the role of grit in separating the self-employed from the employed. Based on a sample of 13,210 respondents from nine countries, our results indicate that not only is grit related to self-employment, but also grit is more strongly related to self-employment for risk-takers, females, and younger individuals. The findings are robust, controlling for several individual characteristics and alternate specifications, and have implications for the broader literature on self-employment.     

Still Searching (Systematically)<Superscript>1</Superscript> for Entrepreneurial Discoveries

We examine how entrepreneurs can search deliberately for discoveries. We use consideration sets to impose constraints on how and where they search. A consideration set is a promising set of information channels, which entrepreneurs can select and search based on prior knowledge. To decide how to search the channels in a consideration set, we apply existing mathematical formalism to illustrate a maximal search sequence. Because there is some probability that a search sequence could continue indefinitely, we determine stopping rules. We argue that entrepreneurial search is more feasible within a consideration set than it is in the rest of the world.     

Commonality in liquidity and multilateral trading facilities

We use the introduction of two multilateral trading facilities (MTFs) to examine the impact of market fragmentation on commonality in liquidity. We find that the introduction of MTFs following the Markets in Financial Instruments Directive increases the comovement of stocks’ liquidity with MTF liquidity, while the comovement with the home market liquidity generally decreases. We also find that the higher the MTF trading volume or the number of MTFs trading a stock, the stronger the effect. Further, we find that the commonality in liquidity remains unchanged for a matched control sample of stocks that do not trade on MTFs.     

Trends in occupational mobility in France: 1982–2009

Are labor markets more turbulent now than thirty years ago? Most job and worker flows imply that the answer is “no”, with one exception: occupational mobility, which increased substantially in the United States. This paper remedies the lack of comparable evidence by focusing on France for the years 1982 to 2009. After correcting for various statistical biases and discrepancies that affect the measurement of occupational mobility, it documents this reallocation process overall and in different subgroups. The data reveal that, over the period considered, the fraction of workers switching occupation exhibits no trend in the aggregate because changing demographics mask increases in mobility within several age and education groups. After taking these composition effects into account, occupational mobility increased sharply in France as well.     

Engineering controls to minimize worker exposure to ethylene oxide at sterilization facilities

Gas sterilizers, using either pure ethylene oxide (EtO) or an admixture with an inert diluent, are typically utilized for treating products which cannot withstand heat sterilization. Due to the highly toxic nature of ethylene oxide and its classification as a suspect carcinogen, special precautions must be taken to ensure safe exposure levels to human receptors. This paper discusses the various engineering controls that can be implemented at EtO sterilization facilities to minimize ethylene oxide ambient concentrations and worker exposure levels.     

Improving China’s food and environmental security with conservation agriculture†

China has achieved impressive increases in agricultural output in recent decades. Yet, past approaches centred on a growing use of fertilizers, pesticides, fuel and water are not likely to achieve the required 30–50% additional increases in food production by mid-century. We show that efficiencies of production are falling and the costs of environmental harm are increasing. Agricultural innovations that improve natural capital are urgently needed. Conservation agriculture (CA) is now practised on >8?Mha in China and is offering promising prospects of both enhanced yields and environmental services. Our meta-analysis of 60 papers with 395 observations in China shows notable benefits from CA. Mean yield increase was 4.5% or 263?kg?ha^?1 for wheat, 8.3% or 424?kg?ha^?1 for maize, and 1.65% or 250?kg?ha^?1 for rice. In 34 datasets from 22 published papers (experimental duration: 2–17 years), 26 datasets (76.5%) show that CA increased yield and soil organic carbon (mean SOC increase of >3?g.kg^?1 in 0–10?cm soil depth) when compared with traditional tillage. Key priorities for the spread of more sustainable forms of agriculture in China are national policy and financial support, better coordination across agencies, and better extension for farmers.     

The Impact of Frequent Shopper Programs in Grocery Retailing

Frequent shopper programs are becoming ubiquitous in retailing. Retailers seem unsure however about whether these programs are leading to higher loyalty, or to higher profits. In this paper we analyze data from a U.S. supermarket chain that has used a number of frequent shopper rewards to improve sales and profitability. We find that while these programs are profitable, this is only because substantial incremental sales to casual shoppers (cherry pickers) offset subsidies to already loyal customers. In this way our findings are inconsistent with existing theories about how frequent shopper programs are supposed to work. We construct our own Hotelling-like model that explicitly models cherry picking behavior and show that its predictions match the data quite closely. We further test the predictions of our model by characterizing the impact of such programs on trip frequency and basket size. We then use the model to examine more complex scenarios. For example, our analysis suggests that frequent shopper programs may be unprofitable if they eliminate all cherry picking. This may explain why some retailers seem dissatisfied with their programs. We end by proposing a solution that retains the benefits of the frequent shopper programs and yet continues to let supermarkets benefit from price discrimination.