LIQUIDITY AND ASSET PRICING UNDER THE THREE‐MOMENT CAPM PARADIGM

We examine whether the use of the three‐moment capital asset pricing model can account for liquidity risk. We also make a comparative analysis of a four‐factor model based on Fama–French and Pástor–Stambaugh factors versus a model based solely on stock characteristics. Our findings suggest that neither of the models captures the liquidity premium nor do stock characteristics serve as proxies for liquidity. We also find that sensitivities of stock return to fluctuations in market liquidity do not subsume the effect of characteristic liquidity. Furthermore, our empirical findings are robust to differences in market microstructure or trading protocols between NYSE/AMEX and NASDAQ.     

Job Characteristics and Labor Market Discrimination in Promotions

We extend promotion signaling theory to generate new testable implications concerning racial differences in promotions. In our model, promotions signal worker ability. When tasks differ substantially across job levels, the opportunity cost of not promoting qualified non‐whites/non‐Asians is large, so employers are less likely to inefficiently withhold their promotions. Thus, given prepromotion performance, the extent to which non‐whites/non‐Asians have lower promotion probabilities decreases when tasks vary more across levels. Racial differences in wage increases at promotion diminish when tasks vary more across levels. Evidence from a single firm's personnel records supports the model's predictions concerning promotion probabilities.     

Platform Sharing in a Differentiated Duopoly

Platform sharing across manufacturers has become common practice in the automobile industry. Although platform sharing reduces the degree of product differentiation, manufacturers can reduce their procurement costs by taking advantage of the commonality of components. We investigate this trade-off through analyzing a model that incorporates manufacturer–supplier relationships into a differentiated duopoly model, and find an interesting inverse relationship between the advantage of platform sharing and manufacturers' costs to communicate with their potential suppliers. We also explore welfare consequences of the Internet trading exchanges by considering an extension that allows the manufacturers to jointly establish a business-to-business electronic marketplace.     

Using Electronic Response Systems in Economics Classes

College instructors and students participated in a pilot project at the University of Akron to enhance student learning through the use of a common teaching pedagogy, peer instruction. The teaching pedagogy was supported by the use of technology, an electronic personal response system, which recorded student responses. The authors report their experiences in using this technology-enhanced teaching pedagogy and provide another example of an active and collaborative learning tool that instructors can use to move beyond “chalk and talk.” Preliminary survey results from students participating in this pilot project are also reported.     

Depositor Discipline in the Banking Sector in India: An Empirical Investigation

Journal of Quantitative Economics - The paper traces the determinants of depositor discipline in Indian banking. Using annual data on commercial banks covering the period 1996 to 2003, the findings...     

Holidays and economic growth: Evidence from a panel of Indian states

The number of holidays differs significantly across Indian states. Moreover, some of the governing political parties have been accused of using holidays as a tool either to mollify disgruntled workers or to woo voters before the state elections. In this context, this paper explores the relationship between the number of holidays and economic growth across 24 Indian states, spanning the period 2008–2016, by employing a panel model analysis. The paper presents evidence suggesting that holidays seem to affect growth negatively in the rich states but are inconsequential for the growth performance of the poor states.