Political geography and stock returns: The value and risk implications of proximity to political power

We show that political geography has a pervasive effect on the cross-section of stock returns. We collect election results over a 40-year period and use a political alignment index (PAI) of each state's leading politicians with the ruling (presidential) party to proxy for local firms’ proximity to political power. Firms whose headquarters are located in high PAI states outperform those located in low PAI states, both in terms of raw returns, and on a risk-adjusted basis. Overall, although we cannot rule out indirect political connectedness advantages as an explanation of the PAI effect, our results are consistent with the notion that proximity to political power has stock return implications because it reflects firms’ exposure to policy risk.     

Watch Your Basket ‐ to Determine CEO Compensation

CEOs (chief executive officers) are paid more if they outperform other firms in their blockholders’ portfolios. For every percentage point by which their own firm's return exceeds the return of the largest blockholder's basket of investments in a year, their compensation increases by over $9,800. Once we benchmark to this portfolio, industry returns and own firm returns are of little importance. When the firm is a larger portion of the blockholder's portfolio and when the blockholder is experienced, the reward for outperforming the blockholder's portfolio is greater. Our results are robust to alternate industry classifications and definitions of blockholders.     

Stock Market Response to the Financial Regulations in the Mortgage‐Lending Market in Korea

This study investigates the economic impact of the financial regulations that aimed to control the housing market in Korea during the reign of late President Ro's Administration, which had diligently fought against the then speculative bubble in the Korean real‐estate market. We test for the validity of the general prediction that the financial regulations in the form of the loan‐to‐value (LTV) and debt‐to‐income (DTI) restrictions would have adverse impacts on the value of the firms operating in the mortgage‐lending industry. In this event study, we select two critical days as event dates and check whether the stock prices of the financial firms react negatively to the announcements of the regulations. Overall, the initial imposition of the DTI restrictions (i.e., the first event) adversely affects those banks that possess a relatively large number of mortgage loans in their asset portfolio. By contrast, banks that hold a small number of mortgage loans appear to benefit from the risk‐reducing effect of the DTI regulation. Subsequently, the reinforcement of the LTV and DTI rules (i.e., the second event) has negative impacts on the banks with large mortgage loans. The degree of this adverse effect is greater in the second event than in the first event (i.e., the DTI restrictions). The reinforced regulations also unfavorably affect the savings banks with large mortgage loans but to a lesser degree compared with their counterparts in the banks. Meanwhile, the reinforcement of the financial regulations has negligible impacts on the banks and the savings banks with smaller mortgage loans.     

Klimaschutz im Luftverkehr: Wie geht es weiter?

The paper compares the impacts of alternative geographical scopes of flights integrated in the EU-Emission Trading System (EU-ETS) with regard to environmental and economic aspects. The core of the analysis is a geographical scope according to the 50:50 approach, in which half of the emissions of international aviation between European Economic Area (EEA) and third countries will be part of the EU-ETS. In total, seven options are analysed, which differ by the geographical scope and exceptions. Besides a pure 50:50 approach without any exceptions, we also discuss an option where emissions are capped at the border of a third country. Furthermore, another option assumes that all emissions in international airspace are being excluded from the EU-ETS. For comparison, the impacts of the Full Scope and Reduced Scope approaches are analysed and two options based on airspace, where emissions of flights to/from airports outside the EEA are fully regulated by EU-ETS, as long as they are emitted in EEA airspace or EEA and international airspace, respectively.     

CSR and the workplace attitudes of irregular employees: The case of subcontracted workers in Korea

In recent years, there has been a noticeable increase in organizational trends to hire irregular workers. This inclination, in a time of great flux and uncertainty, exacerbates human resource issues faced by firms. We argue that corporate social responsibility (CSR) can be an important antecedent to improve the workplace attitudes of irregular workers and as a result reduce the negative impact on organizations of the increased use of an irregular workforce. Hence, we explore the relationship between perceived CSR (composite and disaggregated) and unfairness perception and social relations of subcontracted workers with regular workers. We further attempt to explain these relationships through the mediating effects of psychological contract violation and organizational identity, respectively. Our analysis supports a negative effect of composite and external CSR on unfairness perception and positive effect on social relations. Additionally, our results support partial mediating roles of psychological contract violation and organizational identity. Theoretical and practical implications of the results are also discussed.     

Measuring trustworthiness of information diffusion by risk discovery process in social networking services

Most of current social network services are vulnerable to malicious actions. For example, rumor (e.g., contaminated and distorted information) can be diffused along the social links. In this paper, given a social network service, we design a peer-to-peer (P2P) network, and propose a robust information diffusion model to efficiently detect the malicious peers from which a risk (i.e., rumor) has been generated on the P2P network. Thereby, by aggregating social interactions among users, a set of interaction sequences are obtained. Given a set of interaction sequences, statistical sequence mining method is exploited to discover a certain social position which provides peculiar patterns on the P2P networks. For evaluating the proposed method, we conducted two experimentations with NetLogo simulation platform for risk discovery on social network.     

Service employees’ deviant behaviors and leader–member exchange in contexts of dispositional envy and dispositional jealousy

Hotels represent a prime service industry. The current study examined the role of leader-member exchange (LMX) on hotel service employees’ deviant behaviors in contexts of dispositional envy and dispositional jealousy. Specifically, we collected two different samples of US hotel employees to examine interactions of LMX with dispositional envy and jealousy on deviant behaviors. The results supported our hypotheses, showing that (1) LMX had a negative relationship with deviant behaviors and that (2) higher levels of dispositional envy and jealousy led to more deviant behaviors. Theoretical and practical implications are discussed.     

A semantic annotation framework for scientific publications

Considering the growing volume of scientific literature, techniques that enable automatic detection of informational entities existing in scientific research articles may contribute to the extension of scientific knowledge and practical usages. Although there have been several efforts to extract informative entities from patent and biomedical research articles, there are few attempts in other scientific literatures. In this paper, we introduce an automatic semantic annotation framework for research articles based on entity recognition techniques. Our approach includes tag set modeling for semantic annotation, semi-automatic annotation tool, manual annotation for training data preparation, and supervised machine learning to develop entity type recognition module. For experiments, we choose two different domains, such as information and communication technology and chemical engineering due to their high usages. In addition, we provide three application scenarios of how our annotation framework can be used and extended further. It is to guide potential researchers who are willing to link their own contents with external data.     

Measuring Retailers' Sustainable Development

This study aimed to develop a framework and measurement items for retailers to assess sustainability while avoiding potential subjectivity by combining top‐down and bottom‐up approaches, and verifying their validity based on consumer perceptions of sustainable retailing. The framework consisted of 54 measurement items categorized into a three‐order hierarchical model. At the top level of the model, there were three third‐order dimensions respectively related to consumers, retailers, and society. At the middle level, eight second‐order sub‐dimensions associated with retailing mix were classified into the aforementioned third‐order dimensions. At the bottom level, there were 21 first‐order sub‐dimensions related to the sustainable retailing activities. The development of sustainability assessment by combining top‐down and bottom‐up approaches and including consumer perceptions will allow retailers to assess their sustainability more strategically, as it will reduce the subjectivity and increase consumers' recognition of sustainable retailing. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Job Market Signaling: What Drives the Productivity of Finance Ph.D.s?

We study the research productivity of new finance Ph.D.s as measured by the number of quality publications. A commonly accepted notion is that the highest ranked schools produce the candidates with the greatest potential for high‐quality publications. Our results, however, find publications or revisions in top‐tier journals during the doctoral program are a stronger measure of potential research productivity than the school attended. Our findings demonstrate how candidates outside of the top schools can signal their future research productivity. Even though we examine the specialized labor market, our results have broader implications for markets outside academics.