Market Response to Investor Sentiment

This paper reconsiders the effect of investor sentiment on stock prices. Our main contribution is that, in addition to the intermediate term return predictability, we also analyze the immediate price reaction to the publication of survey‐based investor sentiment indicators. We find that the sign of the immediate market response is the same as that of the predictability at intermediate time horizons. This is consistent with underreaction to cash flow news or with investor sentiment being related to mispricing. It is inconsistent with the alternative explanations of a rational response to cash flow news or sentiment indicators providing information about future expected returns.     

Do firms lease to hedge? CEO risk-taking and operating lease intensity

Operating leases are used extensively for financing, but their ability to separate ownership and use also creates hedging opportunities. We investigate whether firms recognize such opportunities by examining the relation between chief executive officer (CEO) risk-taking incentives and the use of operating leases. Consistent with firms using operating leases to hedge, we find higher CEO risk-taking incentives lower operating lease intensity. To address endogeneity, we use the adoption of Statement of Financial Accounting Standards 123R as an exogenous shock to option compensation, dynamic panel generalized method of moments, simultaneous equations, and change regressions. Our results are robust to placebo and alternative tests.     

Labor unemployment risk and firm risk

This paper examines the effect of labor unemployment risk on firm risk. Using unemployment insurance benefits as a proxy for unemployment risk, we find an economically significant positive relation between unemployment risk and firm risk. This positive relation is more pronounced for firms that are more labor-intensive, have a higher layoff propensity and are more financially constrained. While existing literature that employs corporate policy measures such as debt and cash holdings suggests an opposite relationship, our paper presents evidence that the effects stemming from earnings management, earnings quality and reporting quality appear to dominate.     

The Impact of Land-Use Change on Ecosystem Services,Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

Land-use change has a significant impact on the world’s ecosystems. Changes in the extent and composition of forests, grasslands, wetlands and other ecosystems have large impacts on the provision of ecosystem services, biodiversity conservation and returns to landowners. While the change in private returns to landowners due to land-use change can often be measured, changes in the supply and value of ecosystem services and the provision of biodiversity conservation have been harder to quantify. In this paper we use a spatially explicit integrated modeling tool (InVEST) to quantify the changes in ecosystem services, habitat for biodiversity, and returns to landowners from land-use change in Minnesota from 1992 to 2001. We evaluate the impact of actual land-use change and a suite of alternative land-use change scenarios. We find a lack of concordance in the ranking of baseline and alternative land-use scenarios in terms of generation of private returns to landowners and net social benefits (private returns plus ecosystem service value). Returns to landowners are highest in a scenario with large-scale agricultural expansion. This scenario, however, generated the lowest net social benefits across all scenarios considered because of large losses in stored carbon and negative impacts on water quality. Further, this scenario resulted in the largest decline in habitat quality for general terrestrial biodiversity and forest songbirds. Our results illustrate the importance of taking ecosystem services into account in land-use and land-management decision-making and linking such decisions to incentives that accurately reflect social returns.     

Theorizing the Politicizing City

This introductory symposium article develops a framework for an urban political reading and a theorization of urban uprisings. We argue that there is a need to foreground the notion of the urban political as central to the theoretical and practical demands of urban research today. First, we revisit critical urban theory in light of recent urban insurrections and point out a lack of sustained theoretical engagement with the political. Second, based on this critique, we argue for what we call a ‘re‐centring of the urban political' to rethink urban theory in ways that consider the city as a site of political encounter, interruption and experimentation, even when, or perhaps especially when, these ways fall outside institutional forms or lack the organizational form or legitimacy of social movements. Thus, we attempt to place politics at the heart of radical urban political theory and practice today in order to make sense of urban subjects, events and claims that elude established government practices and institutionalized structures.     

Measuring industrial upgrading: applying factor analysis in a global value chain framework

ABSTRACT

A key question for promoting international competition is how to improve the position of countries and industries in global value chains (GVCs). The first step is to properly measure industrial upgrading in GVCs. This is not a trivial issue because upgrading has not been defined unambiguously. Several authors have used different (and sometimes related) measures, all of which indicate certain aspects of upgrading. Rather than trying to find the single, ultimate measure of upgrading, we propose a different approach. We examine the multidimensionality of industrial upgrading, using eight indicators in factor analysis. Four of the eight indicators adopt the GVC perspective and include, for example, the growth of the share in value-added exports. We provide three quantitative dimensions of industrial upgrading: process upgrading, product upgrading, and skill upgrading. With these dimensions, we compare and analyze the upgrading of different countries and industries using the World Input–Output Database.     

Supply chain capabilities for facilitating the internationalisation of retailers – a multiple case study of three Swedish retail companies

ABSTRACT

Market-oriented aspects of retail internationalisation have received a lot of research attention since the 1990s. However, beyond these aspects lies also supply-chain oriented capabilities that are necessary for retailers to successfully internationalise into foreign sales markets. By using a perspective based on resource-based theories, this paper explores supply-chain oriented capabilities that facilitate retail internationalisation. The research is based on a multiple case study of three Swedish retailers. Through the perspective of research based theories, specifically capabilities, the empirical data is studied in a single-case as well as a cross-case analysis. Findings reveal three supply chain-oriented capability categories (leadership capability, integration capability and learning capability) of importance for retail internationalisation. Resources necessary for the capabilities are to be found internally at the retailer, but also externally at other firms. This research adds to the market-oriented knowledge on retail internationalisation by adding a supply-chain oriented perspective. Further, it provides an understanding of the early phases of retail internationalisation.