Conservation,Discrimination, and Salvation: Investors’ Social Concerns in the Stock Market

Stocks appear to have investor clienteles based on their business practices and products. The variety in expressive benefits each individual receives from owning controversial stocks causes them to modify their portfolio to accommodate their beliefs. We examine the ownership of firms with social concerns and sin stocks (tobacco, alcohol and gambling). Women tilt their portfolios towards stocks with progressive labor policies for women and minorities. Younger investors avoid companies with poor environmental records but seek companies with progressive labor policies. Democratic voters favor stocks with progressive policies regarding women/minorities and gays/lesbians and are less likely to own sin stocks. Christian objections to homosexuality lead their members to invest less in stocks with progressive labor policies for gays and lesbians. The Christian denominations vary, though, in regard to sin stocks. Catholics are more likely while Mormons are less likely to own a sin stock relative to other investors. Socially responsible investors are clearly not all alike. Social characteristics that are important to one investor may not be important to another socially conscious investor.     

The Effect of Bank Debt Downgrades on Stock Prices of Other Banks

We find that debt downgrades of money center banks elicit negative stock price responses in nondowngraded money center banks. Stock prices of larger regional banks also react to these downgrades. Although downgrades of regional banks evoke negative stock price responses for regional banks in the same geographic region, the importance of geographic region as a factor determining the extent of intra‐industry reactions has diminished since 1989. Our results indicate that the merger and expansion activities triggered by interstate banking have blurred differences between regional and money center banks as interstate banking activity has moved towards nationwide banking     

RAISING CAPITAL WITH PRIVATE PLACEMENTS OF DEBT

In this study the role of private placements of debt in the capital acquisition decision of public utilities is investigated. Whereas public offerings are sales of securities through financial intermediaries to the public-at-large, private placements are direct sales of securities by an issuing corporation to a limited number of institutional investors. In contrast to the negative stock price reactions typically found for public security sales, private placements are associated with significant positive abnormal returns in the shares of the issuing public utilities. Also, larger private placements appear to elicit a more favorable market response. Results are consistent with reduced information asymmetries and increased monitoring of the issuing firm resulting from the private placement.     

The role of interpersonal affect in performance appraisal: evidence from two samples – the US and India

The interpersonal affect, a li ke–dislike relationship between a supervisor and his/her subordinate, has traditionally been conceptualized as a source of bias in performance appraisals. However, some researchers have argued that the interpersonal affect may not be a bias, especially where it develops as a result of past performance. In this field study, using data from 190 supervisors in the US, and 113 supervisors in India, we delineate the relationship between interpersonal affect and performance ratings. In both samples, interpersonal affect and performance level were found to have significant effects on performance ratings. Results from the US sample indicated that raters are able to separate their liking for a subordinate from actual performance when a ssigning performance ratings, suggesting that the interpersonal affect does not operate as a bias in the appraisal process. Results from the Indian sample, however, suggest that supervisors inflate ratings of low performers, suggesting that local cultural norms may be operating as a moderator.     

Cultural distance and expatriate failure rates: the moderating role of expatriate management practices

Abstract

This study examines moderators of the relationship between cultural distance and the two critical indicators of expatriate failure – maladjustment and premature return rates. Results based on a sample of 126 Taiwanese multinational corporations indicate that expatriate selection and performance management practices moderate the cultural distance–expatriate maladjustment relationship, and expatriate performance management practices moderate the cultural distance–premature return relationship. Additionally, these relationships were stronger when the use of practices was low. We discuss theoretical and practical implications, and offer suggestions for future research.     

Bond rating agencies and their role in bank market discipline

This study examines whether changes in the ratings of bank debt have any information content. Bank holding companies are monitored both by bank regulators and by debt rating agencies, leading to the view that duplication of effort may render superfluous the monitoring service of rating agencies. However, our results show that downgrades of bank debt are associated with statistically significant wealth losses, irrespective of whether the rating change is across rating classes or within a rating class. Moreover, the results hold even when observations with potentially confounding events are removed from the sample. These results suggest that rating agencies provide valuable information to the capital market regarding the risk exposure of bank holding companies.     

The Relationship Between HR Capabilities and Quality of Patient Care: The Mediating Role of Proactive Work Behaviors

Based on theoretical frameworks of resource‐based theory, dynamic capabilities, and behavioral perspective on human resource management, we developed a multidimensional construct of human resource (HR) capabilities and tested its relationship with quality of patient care using a national sample of U.S. hospitals. The data on HR capabilities were collected from senior managers (421 individuals nested in 279 hospitals) representing both the administrative and clinical sides of the hospitals. The data on quality of patient care were gathered from two unique sources—patients of 207 hospitals who reported the data via the hospital Consumer Assessment of Healthcare Providers and Systems Survey, and 421 senior managers of 279 hospitals. Our analyses using structural equation modeling suggests that the positive relationship of HR capabilities with quality of patient care is mediated by proactive behaviors of health care workers. Implications of the study findings for research and practice are discussed. © 2016 Wiley Periodicals, Inc.     

Institutional Investor Ownership and Corporate Pension Transparency

We examine the association between institutional ownership and defined benefit (DB) pension decisions. We find that institutional ownership is negatively associated with pension underfunding, opportunistic increases in the expected rate of return assumption in the presence of underfunding, and significant ownership of the firm's own stock in the DB plan portfolio. Furthermore, these relations are stronger when institutional ownership is concentrated, when institutions are nontransient investors, or when institutions are relatively large. These results suggest that institutional investors are monitoring firm pension decisions, particularly those institutions with stronger monitoring incentives or resources.