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  • ItemOpen Access
    Essays in Corporate Finance and Corporate Innovation
    (2023-12-08) Khan, Aman; Tian, Yisong
    In the first chapter I investigate whether firms grant stock options to rank-and-file employees (RFOs) for retention purposes. I find that it depends on their level of investment in intellectual property. Firms grant more RFOs if they have more knowledge capital, more patents awarded, more citations received by these patents, and more patents for “breakthrough” innovations. After the risk of poaching by rival firms is diminished by the adoption of the Inevitable Disclosure Doctrine, I find that firms with above median level of knowledge capital reduce their RFO grants by 32% relative to control firms; the reduction is minimal for firms with below median level of knowledge capital. In the second chapter I investigate how effective are RFO grants in retaining employees. Previous studies find that while there is an initial reduction in employee turnover, the effect is temporary and quickly reversed within three years of the grant. In this chapter, I show that the impact of RFOs is permanent. I find that there is a 36% reduction in inventor turnover in the year of grant and the impact remains over the next three years. Importantly, there is no reversal suggesting that the benefit is permanent instead of transitory. I also find that the importance of RFOs to reduce inventor turnover increases following the implementation of FAS123R when firms reduce the use of RFO. In the final chapter I study the behavior of firms with respect to their patent applications. I find that firms engage in window dressing by timing the date of their patent applications. I find that almost 40% of firms’ yearly patents are filed in the last quarter of the calendar year accompanied by a reduction in the quality of these patents. The behavior is more prevalent among firms subject to lower external and internal monitoring, supporting the incentive to window dress as the underlying channel. To establish window dressing as the key mechanism, I use the adoption of America Invents Act as a quasi-natural experiment that has increased the costs of window dressing. Following the adoption of the Act, the window dressing behavior become less prevalent.
  • ItemOpen Access
    Topics in Empirical Corporate Finance
    (2023-12-08) Naderi Khorshidi, Hossein; Bae, Kee-Hong; Kecskes, Ambrus
    In the first chapter of my dissertation, I study firm innovation as a transmission channel for monetary policy. Analyzing the impact of unanticipated changes to monetary policy on the cross-section of U.S. equity returns, I show that the sensitivity of firms’ equity prices to changes in monetary policy may depend on firms’ innovation characteristics. I find that the more the firm employs an exploratory search in its innovation strategy, the higher the sensitivity of its stock price to monetary policy. Further, I present evidence suggesting that variables capturing exploratory and exploitative innovation characteristics of firms may explain the relative sensitivity of firms’ future earnings, capital expenditures, and R&D spending to monetary shocks. In the second chapter of my dissertation, I define a novel measure to capture the timing of the future cash flow generated by the firm’s investment in innovation. I call this measure “the duration of firm innovation”. I show evidence suggesting that my measure of the duration of firm innovation is a significant channel for the transmission of monetary policy to equity prices. In the third chapter, I study the effect of work-from-home on employee performance and teamwork in the context of the sell-side analyst industry. Using a difference-in-difference setting utilizing the exogenous adoption of work-from-home following the start of the Coronavirus pandemic, I find that the performances of analysts working both individually and in teams are negatively affected following the adoption of work-from-home. Moreover, I find that following the adoption of pandemic-induced work-from-home, team size becomes negatively related to team performance, supporting the higher coordination costs hypothesis in work-from-home settings. I also find a negative impact of working from home on teams led by female analysts. These findings are in line with the findings of the prior literature which document an unequal impact of work-from-home on female employees due to the unequal burden of household responsibilities.
  • ItemOpen Access
    Impacts of Post-Truth Conditions on a Susceptible Market: The Case of Nicotine Vaping
    (2023-12-08) El-Bialy, Rowan; Fischer, Eileen; Veresiu, Ela
    The post-truth era is characterized by widespread mistrust, competing truth claims, and polarization that impact some markets to a greater degree than others. This study introduces the concept of post-truth markets as those which are highly susceptible to being impacted by post-truth conditions. Three research questions guide this study: Why are some markets susceptible to the impacts of post-truth conditions? What is the impact of post-truth conditions on susceptible markets? And, how do consumers navigate post-truth markets? Taking the nicotine vaping market as an exemplar of post-truth markets, this study uses critical discourse analysis to examine qualitative data, including archival data (legal, news media, industry, and advocacy texts), in-depth interviews with consumers and advocates, and observational data. The theoretical insights generated indicate that markets affected by historical stigma, restrictive authority interventions, and changing expert opinions are susceptible to becoming post-truth markets. Further, the data analysis suggests that post-truth conditions lead to contestation in such markets, including moral contestation which has been noted in prior literature, and epistemic contestation which this study introduces. Consumers develop various strategies based on a post-truth subjectivity to navigate post-truth markets, including alternate truth-seeking (through relational and embodied knowledge), entrepreneurship, and activism. This research introduces several new concepts to consumer research, including the concepts of post-truth markets, post-truth subjectivity, and epistemic contestation. The findings also contribute to the growing literatures on marketplace contestation, activism, stigma, and the role of emotions in consumption. Finally, the findings have implications for various stakeholders in the nicotine vaping market, as well as other post-truth markets.
  • ItemOpen Access
    Accounting, Accountability, and Open Data
    (2023-12-08) Walsh, Leigh Ellen; Saxton, Gregory
    Widely accepted as central components of good governance, accountability and transparency underpin calls for ‘open’ approaches to organization, including ‘open data’ (OD). But rhetorical use of these catchwords tends to blur important distinctions – and tensions – between them. This dissertation examines the relationships between open data and accountability in democratic governance, specifically as mobilized within public financial management (PFM) systems. The chapters build on one another to answer two overarching questions. First, how does OD combine with and/or extend existing arrangements for public financial management? And second, (how) does OD deliver on its promise to increase accountability? A combination of qualitative research methods including literature review, theory development, and empirical analysis are employed. The theoretical development draws on accountability and transparency literature to propose a framework that situates OD as both an object and instrument of accountability. This framework provides a theoretical lens through which organizational practices can be studied from an accountability perspective and guides the empirical study of OD in local government presented in this dissertation. Empirical materials including documents, interviews, and observations were gathered following a case study method and analysed to offer two distinct yet complementary views of OD in PFM. First, by adopting a data ‘producer’ perspective and theorizing OD as an informing practice, the study finds that OD has been adopted as a new type of informing practice and constitutes an aspect of conduct for which organizational actors are accountable. Two transparency orientations – usability and understandability – are identified and used to explain tensions and/or barriers that arise in OD implementation. Second, data ‘user’ perspectives are considered by theorizing OD as an instrument of accountability used in debating processes. The findings suggest that while there is a clear alignment between ‘open’ and ‘dialogic’ principles, OD is at best considered a partial tool that, used dialogically and in combination with other information sources, may encourage dialogic forms of engagement and accountability. Drawing attention to the absence of accounting in the burgeoning field of ‘open’ practice and research, this dissertation encourages Further research at the intersection of accounting, accountability, and open data.
  • ItemOpen Access
    Essays in Asset Pricing
    (2023-12-08) Celik, Batur; Dong, Ming
    This dissertation includes three essays in asset pricing. The first two essays explain the role of investor trust on mutual fund investor behavior and private fund capital raising, respectively. The third essay proposes a valuation model for bitcoin options. In the first essay, I investigate the impact of investment adviser disciplinary actions on mutual fund performance and investor redemption behavior. After a regulatory disciplinary action initiation, funds experience a transitory performance loss in the next month. In contrast, I observe persistent fund outflows starting two months after the regulatory action disclosure and persisting for over one year. My evidence suggests that investors reduce investments in affected funds mainly because they lose trust in fund integrity rather than because they observe fund performance deterioration. In the second essay, I examine the role of investor trust in the capital raising process of private funds by analyzing the impact of third-party service providers and investment adviser disciplinary actions in the US. Using private fund’s initial filings, I document that fund managers that use third party marketers raise less capital and have reduced shares of sophisticated investors even though these marketers can bring more investors. This finding indicates that investors do not trust third party marketers and prefer fund managers to be directly involved in the capital raising process. On the other hand, service providers such as auditors and bookkeepers that help regulate private funds’ financials and increase investor trust are associated with more capital raised and investor ownership. Furthermore, I observe persistent decline in total assets managed, number of investors and sophisticated investor ownership following a criminal action, suggesting that investors place a significant value on trust and more likely to respond specific disciplinary actions by withdrawing their assets. In the final essay, I propose an equilibrium valuation model for bitcoin options traded on the Chicago Mercantile Exchange. Numerical analysis shows that, among other things, all risks lead to a positive premium in option prices relative to the benchmark Black-Scholes model, and the diffusive and/or jump risks of money supply accounts for a large portion of the bitcoin return volatility.
  • ItemOpen Access
    Three Essays on the Economic Impact of FinTech Lending
    (2023-03) Jia, Xiaoran; Kanagaretnam, Kiridaran
    This dissertation consists of three independent papers with a related theme focusing on the economic and capital market impacts of FinTech lending. In specific, this dissertation explores the influence of FinTech penetration on traditional banks’ risk-taking, the influence of non-traditional information on lending discrimination in P2P lending, and whether digital inclusion is a potential determinant of P2P penetration. In Chapter 1, based on a sample of U.S. community banks and FinTech loans data from LendingClub and Prosper, I find a positive association between banks' future change in risk-taking and their current exposure to FinTech penetration. Path analysis reveals that FinTech penetration influences bank risk-taking through the erosion of bank charter value. Cross-sectional analysis suggests that banks with the lowest ex-ante charter values increase risk-taking the most. Additionally, I document that the risk-increasing effect of FinTech penetration is less pronounced for banks with more conservative loan loss provisioning and less reliance on hard information. My findings suggest that regulators may need to pay more attention to smaller banks with lower or deteriorating charter values. Chapter 2 hypothesizes that racial discrimination can exist in P2P lending even when race-related information is not directly observable, and that the degree of racial discrimination decreases in the precision of credit quality signals generated from both traditional and non-traditional information. I document that loan listings in counties with a greater proportion of minority populations are associated with higher lending rates and higher loan denial rates. Cross-sectional tests indicate that racial discrimination is less pronounced when the availability of both traditional and non-traditional information is greater. Chapter 3 investigates the influence of digital inclusion on financial inclusion. I document that digital inclusion is positively associated with P2P lending penetration, with such relation more pronounced in county-years with more vulnerable/excluded populations. The results are robust to the use of instrumental variable (2SLS) approach, alternative measurements, weighted least squares regression, additional controls, and single-year analysis. In addition, I document that higher-risk borrowing is less likely to be denied in county-years with higher digital inclusion.
  • ItemOpen Access
    Beyond Backlash: Reducing Resistance and Generating Support in Response to Diversity Initiatives Through Opening Identity Tactics
    (2023-08-04) Bryan, Camellia Sison; Lyons, Brent
    Although researchers are recognizing that dominant social identity threat towards diversity initiatives can result in backlash, researchers have paid limited attention to how dominant social identity threat can be in service of support for diversity. This dissertation considers how identity exploration after dominant social identity threat can facilitate responses that move members of dominant social identity groups towards diversity support rather than diversity resistance. First, I I bridge theory on identity threat and uncertainty regulation to birth a comprehensive model of how identity threat can lead employees belonging to dominant social identity groups to engage in closing and opening identity tactics. Closing identity tactics re-affirm one’s hierarchy-maintaining knowledge about membership to dominant social identity groups, while opening identity tactics transform one’s understanding of membership to dominant social identity groups, so that the focus becomes one that is less about maintaining hierarchy and more about challenging inequalities. Then, I document in Study 1 that participants show greater engagement in opening identity tactics after reading about an organization’s diversity initiatives when they complete an opening identity tactics intervention, which in turn, came to explain why participants were more likely to report valuing of diversity and organizational identification toward the organization. Finally, I further document in Study 2 that White employees of organizations with existing diversity initiatives showed a stronger relationship between their engagement in opening identity tactics and valuing of diversity after completing a six-week opening identity tactics intervention (versus a control condition). Overall, my dissertation challenges a widely held assumption that dominant social identity threat is only a roadblock to the advancement of diversity and inclusion in organizations. Rather, I show how dominant social identity threat can also trigger positive identity changes that translate into support for diversity. In doing so, my research has implications for understanding the benefits and costs of diversity initiatives and dominant social identity threat.
  • ItemOpen Access
    Essays on Innovation
    (2023-08-04) Mahalati Rayeni, Alireza; Larkin, Yelena
    Innovation is the engine of economic growth for developed countries. In my dissertation, I study three different factors that affect firms’ innovation outcome. The first chapter of my dissertation shows that when courts systematically favor plaintiffs over defendants, their biased attitudes stifle innovation and reduce the financial value of innovative firms under their jurisdiction. The second chapter of my dissertation looks at another aspect of innovation output, namely the inventors. I show that inventors who work in cities with higher level of labor market concentration produce more patents while compensating that with lower quality of innovation. The third chapter of my paper shows that in firms where the extensive monitoring is absent; innovation output could also be the outcome of firms’ attempt to time the market.
  • ItemOpen Access
    Citizen Use and Comprehension of Government Accounting Information: Applications of Design Science Research Methodology
    (2023-08-04) Kurpierz, John Richard; Everett, Jeffery S.
    This dissertation seeks to explore how accounting can alleviate, but also aggravate, the tensions of informed democratic participation. The behavior of accountants and the format of disclosures in governmental accounting have a powerful effect upon how citizens perceive and make decisions about their community. Because accounting research has only recently begun considering citizens as a central actor, there has been limited synthesis of this knowledge between researchers and practitioners. This dissertation seeks to bridge the gap between governmental accounting practitioners and researchers, and employs the theoretical lens of design science to do so. Design science, originally developed by accounting researchers, is used in other disciplines to bridge similar gaps. This dissertation provides three contributions to the existing literature. First, this dissertation contributes an epistemological innovation by using a design science perspective to examine this research topic and show how design science remains a valuable tool for accounting research. Second, this dissertation finds evidence supporting Baber & Gore’s (2008) supposition of governmental GAAP compliance in a novel context. Third, this dissertation uses design science methodology to become the first research that shows how practitioners developed and implemented Citizen-Centric Reporting (CCR) and how this has negatively impacted CCR effectiveness. These contributions begin in Chapter II with a genealogical literature review to show how the earliest uses of design science involved synthesizing the governmental accounting knowledge of both researchers and practitioners. In Chapter III, a design science paradigm synthesizes practitioner behavior around disclosures with correlational evidence from Washington State that school districts may be forced to choose between GAAP compliance and better performance on citizen-salient metrics, in keeping with Baber and Gore’s (2008) resource-constraint prediction. Finally, in Chapter IV, the design science DAGS Framework is used to analyze the CCR and its creators’ design goals. The CCR was deployed based on practitioner experience rather than an explicit design model, and there has been limited study of the CCR’s intent or effectiveness. Chapter IV involves interviewing the surviving creators of the CCR to determine the implicit design decisions, and judging whether the CCR fulfills its intended purpose under the constraints of those design decisions.
  • ItemOpen Access
    The Influence of Affect Regulation on Professional Skepticism
    (2023-03-28) Osecki, Errol David; Thorne, Linda
    Variances in professional skepticism are a primary cause of audit deficiencies, and thus understanding how these variations happen is of keen interest to practitioners, standard-setter, and regulators so that they can better manage professional skepticism. To this end, academics have created successively more explanatory professional skepticism models. One factor known to cause variations in professional skepticism is affect, yet how it causes these variations is still not understood as the most current models cannot explain why negative affect has been found to both increase and decrease professional skepticism. The purpose of this dissertation is to build a more explanatory model of professional skepticism with respect to affect by asking and answering the question, how does affect produce variations in professional skepticism? To answer the question, I first conduct a review of professional skepticism literature and relevant affect literature to identify affect regulation as a notable theory currently excluded from professional skepticism models. Affect regulation predicts people anticipate affect as it is being generated and change their behaviour to either up- or down-regulate the affect in service of some goal. This is notable as it can explain the contradictory results with respect to negative affect and professional skepticism observed in the literature. I further investigate this with an interview study, the results of which further support the inclusion of affect regulation into a new model of professional skepticism. Then, these insights are combined to create a new model of professional skepticism. Finally, I calibrate the model with an online experiment, the results of which fail to find significant results. Taken together, the new model of professional skepticism developed herein better explains how variations in professional skepticism occur and is of use to those looking to better manage affect to optimize professional skepticism.
  • ItemOpen Access
    I'll Believe It When I See It: Widespread Use of Organizational Diversity Statements Undermines Perceived Sincerity and Organizational Attraction
    (2022-12-14) Varty,Christianne; Hideg, Ivona
    As diversity has become highly valued, organizational diversity statements as a means to attract prospective applicants have become widespread and normative. Consequently, it is critical to understand in this context whether they are effective at enhancing applicant attraction. Drawing on and integrating a signalling perspective of organizational initiatives (Bowen & Ostroff, 2004; Leslie, 2019) with the literature on authenticity (Lehman et al., 2019), I theorize that awareness of the prevalence of organizational diversity statements undermines a prospective applicant’s attraction to the organization because of lower perceived sincerity of the organization’s commitments. In Study 1 using qualitative methods and a sample of organizational diversity statements (i.e., Fortune 100), I establish that statements are indeed highly prevalent and sophisticated. I follow up on this finding with an experiment in Study 2 testing the negative effects of awareness of this prevalence on applicant attraction via decreased perceived sincerity. Next, I identify and test potential factors to mitigate this negative effect on applicant attraction to the organization by intervening on the proposed mediator of perceived sincerity. In Study 3, I appeal to values and particularly diversity as a social responsibility (vs. the business case for diversity) which I expect to be perceived as more sincere and which should thus increase applicant attraction even for those made aware of the prevalence of statements. Finally, in Study 4, I examine whether providing evidence of an organization’s accountability for making progress (i.e., workforce demographic data) can boost perceived sincerity by helping applicants see the organization as living up to its claims. Theoretical and practical implications of this work will be discussed.
  • ItemOpen Access
    Governance and Responsibilities in the Context of Digital Platforms: Three Essays on the Interplay between Platform Governance and the Political Role of the Corporation
    (2022-12-14) Fadlallah, Hussein; Phillips, Robert; Matten, Dirk
    This dissertation sheds light on the critical research topic of platform governance defined broadly as the manner in which platform owners incentivize and influence the participation of autonomous users within their respective digital platforms. Platform governance – especially as it pertains to the exercise of voice – presents important challenges to traditional conceptions of the roles and responsibilities of private corporations. The dissertation comprises of three essays (chapters 2, 3, and 4) that collectively study (i) the political underpinnings of platform governance, (ii) the political roles and responsibilities that platform owners undertake within their respective platforms, and (iii) the intellectual structure that denotes extant research into the political role of the corporation. The first essay (chapter 2) reviews extant research into the political role of the corporation as a precursor for the study of platform governance. Using Web of Science to source a dataset of political articles published in management outlets and bibliometric techniques, I highlight the gaps and opportunities that denote extant research and propose a subsequent research agenda. The second essay (chapter 3) examines the limitations of underpowered conceptions of platform governance and proposes an alternative conception informed by political research within management. The study develops the arguments through invoking multiple literature strands coupled with three mini case studies that are leveraged for illustrative purposes. The third essay (chapter 4) examines the political mediator role of platforms owners through which they govern the engagement between platform communities and their respective political sphere. Using an inductive qualitative study of Twitter, I unpack the political practices and activities that denote platform governance. The practices are further contextualized by several factors that influence their adoption by platform owners. Collectively, the essays contribute to platform governance research through bringing fresh insights into extant understanding of the expansive roles and responsibilities of corporations in the digital age.
  • ItemOpen Access
    Digitization of Financial Services and Firm Performance
    (2022-12-14) Cao, Ting; Rungtusanatham, M. Johnny
    This dissertation focuses on the digitization of financial services in financial institutions (FIs) and investigates whether and how digitization efforts can help firms improve their performance. We conduct two studies each answering key questions from a different angle. Study 1 starts with the increasing digital investments of FIs and investigates whether FIs can gain positive returns from their investment in emerging digital technologies. Given the lack of proper tools to measure how well FIs have utilized their digital investments, we propose a new approach using data envelopment analysis to capture returns on investment in digital technologies. Additionally, we adopt a two-stage analysis to further investigate the factors that could potentially improve the returns. Our findings show that FIs have had decreasing returns on investments in digital technologies over time. Particularly, it is the inefficient resource management, rather than the invested technologies themselves, that prevent FIs from realizing the benefits of digital investment. We suggest that it is essential for FIs to continuously assess and monitor the implementation of their digital investments and learn how to optimally deploy technological resources internally. Our study also shows that FIs can gain better performance by actively enhancing their innovation capability and collaborating with FinTech firms. Study 2 turns to the digitization of existing services that FIs provide to individual customers and examines whether elevating digitization capability would improve performance. We first define a new construct to capture the ability of FIs to actively utilize emerging digital technologies to digitize service offerings. We then propose a new theoretical model in which the drivers and outcomes of building digitization capability are linked together. To empirically test the model, we collect both primary data from a well-designed, web-based survey and secondary data from FI annual reports. We first show that elevating digitization capability is indeed beneficial for FIs to gain better performance. We also show that focusing on digital-savvy customers and aligning the front-office back-office process are two important drivers for FIs in the development of their digitization capability, and these efforts also indirectly help improve performance.
  • ItemOpen Access
    Influencing a Field: The Role of Influencers in the Cosmetics Industry
    (2022-12-14) Taltekin Guzel, Gulay; Fischer, Eileen Mary
    The study explores the influx of influencers in the markets and how they change the practices of consumers by employing practice theoretics as enabling lens. It focuses on cosmetics industry by employing a multi-method qualitative approach including archival research, observational netnography and interview with consumers as well as professionals in the industry including influencers; brand owners and managers; marketing, talent and influencer agency professionals; makeup artists and lastly; a cosmetics magazine editor. Our preliminary findings consist of two level of change introduced by the influx of influencers to the market. The first one is practice entity changes including complexification of practice entities and valorization of new goals/meanings. Entity level changes are available to grasp or ignore by consumers and they are observed at the market level. On the other hand, consumer performance changes are the responses of consumers to practice entity changes. They are diversification, perfecting and rejecting strategies to plug and unplug changes into cosmetics practices. Therefore, the research aims to explain now only the institutional change brought by the influx of the influencers in the markets but also how consumption practices are shaped by consumers by responding to those changes in their daily routines. The study offers theoretical and practical implications as well as future research directions.
  • ItemOpen Access
    When Your Outrage Is Not Mine: Consumer Responses to Expressions of Online Outrage towards Brands
    (2022-12-14) Kermani, Mohammad Saeid; Darke, Peter R.
    In the digital age, it is common for consumers to encounter expressions of moral condemnation towards brands and their marketing activities. These expressions of moral disapproval tend to have emotional overtones of outrage. Public expressions of outrage can serve to alert bystanders towards the presence of a norm violations and encourage others to also condemn the triggering event. Thus, outrage can serve as a tool for social influence. However, moral values can be held with deep conviction and consumers oftentimes encounter outrage that conflicts with personal values. In the present work, I explore situational factors in which outrage towards a brand can fail to influence observing-consumers to appraise the target brand negatively. Across eight studies (N = 2277), we address two questions: 1) How do consumers respond to outrage expressed towards a brand’s social value marketing campaign? 2) Is outrage effective in persuading observing-consumers to respond negatively towards potentially offensive advertisements? In examining the first research question, participants were presented social marketing campaigns with accompanying expressions of disapproval towards these campaigns that varied in terms of outrage. Across five studies, our findings suggest that outrage towards social value marketing campaigns can increase brand support among consumers who share the brand’s values. We find that this is because outrage (versus disapproval alone) is more threatening to those values. In examining the second research question, participants were presented potentially offensive advertisements with accompanying expressions of disapproval towards these advertisements that varied in terms of outrage. Across three studies, we provide evidence that the propensity of outrage in persuading observing-consumers to respond negatively towards potentially offensive advertisements is contingent on the severity of the ad’s norm violation. Furthermore, we demonstrate that expressions of disapproval without outrage can be more effective in persuading observers to evaluate brand’s negatively when the ad’s norm violation is perceived to be mild (versus more severe). This is because outrage in these instances can be perceived to be inappropriate reactions. Taken together, these findings suggest that outrage towards brands does not necessarily lead to negative brand consequences.
  • ItemOpen Access
    Three Essays in Empirical Asset Pricing
    (2022-12-14) Zhou, Xinyao; Kamstra, Mark J.
    This dissertation consists of three essays in empirical asset pricing concerning how investor attention and social interactions impact information diffusion in financial markets. In the first essay, I investigate how different investor attention facilitates information diffusion through the customer-supplier network. I find that retail attention improves information incorporation into asset prices and plays a stabilizing role in financial markets. In contrast, institutional attention exhibits a diminished role if I control for retail attention. In addition, I show that the attention of a potential group of informed retail investors, local retail investors, plays a price-stabilizing role beyond that of uninformed (non-local) retail investors. My results provide a refinement on the view of the role played by retail investors. While the literature argues that retail investors destabilize prices, my findings suggest that at least a group of informed retail investors can stabilize financial markets. In the second essay, I examine how social connectedness affects fund manager stock holdings during the COVID19 pandemic. I exploit the recent outbreak of COVID-19 as an exogenous shock to people's beliefs on the future economic condition to examine how fund managers from different regions make different decisions on stock holdings. By applying a unique dataset from Facebook that measures social interaction among different regions, I am able to identify managers from COVID-19 hotspot counties and those highly socially connected to the hotspot counties. I am also able to identify fund managers that are skilled using standard methodologies exploiting fund alpha and other performance metrics. The results show that managers located in or socially connected to hotspot counties sold more stock holdings during the outbreak of COVID-19 in the first quarter of 2020. However, such reductions appear panic-driven given subsequent behavior and outcomes and in particular given the contrasting behavior and outcomes for skilled versus unskilled fund managers. The evidence suggests that social interaction can intensify salience bias even for institutional investors if they are unskilled, but skilled managers appear relatively impervious to the deleterious effect of social networking. Finally, in the third essay, I explore the role of institutional and retail attention in the context of the media news releases and find nuanced evidence of the costs and benefits to market price adjustments flowing from investor attention to news. I show that retail attention does indeed destabilize financial markets by inducing price overreactions to positive news, but only if it is from uninformed retail investors. I find that when retail attention destabilizes the market, it is when retail investors appear to struggle digesting complex business information and then only if the news is of a positive sentiment; negative sentiment news and retail investor attention are not associated with market instability, possibly a result of the well-known reluctance of retail investors to short sell. I also find that institutional attention plays a stabilizing role in any context I explore, complex or simple news, positive or negative news sentiment, with or without retail investor attention.
  • ItemOpen Access
    Three Essays on the Influence of Climate Change on Corporate Behaviors
    (2022-12-14) Zhang, Lei; Kanagaretnam, Kiridaran
    This dissertation follows the “three papers” dissertation model. It consists of three independent papers but with a related theme focusing on the capital market effects of climate change. The macroeconomic effects of climate change have been well documented in the literature, however, less is known about how climate change influences economic activities at the micro level. The dissertation fills this gap in and contributes to the literature by exploring the influence of climate disasters on firms’ information environment, and the influence of climate change social norms on firms’ cash holding behaviors and conditional conservatism.
  • ItemOpen Access
    Hospital Survivability and Government Policies: The 2010 Affordable Care Act
    (2022-08-08) Onder, Ortac; Rungtusanatham, M. Johnny; Kristal, M. Murat
    This dissertation investigates the impact of the U.S. Affordable Care Act (ACA) of 2010 on hospital survivability. To this end, I study two policy changes in the ACA. The first is the Hospital Readmission Reduction Program (HRRP), which ties the Centers for Medicare & Medicaid Services (CMS) payments to hospital readmission rates. A hospital’s readmission rate thus becomes an important financial and healthcare delivery indicator. Hence, in the first project of this dissertation, I test the financial viability of hospitals based on readmission rates. Then, using Simar and Wilson’s two-stage data envelopment analysis (DEA), I test the impact of two dimensions of quality—experiential quality and clinical quality—on hospitals’ financial viability. Results indicate that hospitals that offer higher quality care are more efficient at achieving financial viability. Additionally, the results demonstrate that excelling in both dimensions has had additional benefits for hospitals. The second policy change explored is the ACA’s Medicaid coverage expansion. I examine its impact on hospital closures. This policy expands Medicaid coverage to all adults with incomes lower than 138% of the U.S. federal poverty level. However, based on constitutional arguments against the ACA, the U.S. Supreme Court in 2012 ruled that states could opt out of the mandate. The heterogeneous adoption by states enables researchers to conduct a natural experiment by providing a control group. Therefore, I adopt a difference-in-differences analysis framework with fixed effects using a Poisson regression to test whether the ACA-mandated Medicaid coverage expansion impacted hospital closures. Results show that the mandate reduced the number of hospital closures in states that complied with the mandate by 54% as compared to states that did not. Then, I explore hospital-level operational drivers that contributed to the hospital closure crisis. Results demonstrate that the mandate increased patient revenue and perceived quality of care, while no evidence showed that the mandate affected the number of patient discharges, number of employees, and hospital operating expenses. Furthermore, my results suggest that Medicaid expansion increased hospital revenue not by increasing the number of patients, but rather by decreasing hospitals’ amount of uncompensated care.
  • ItemOpen Access
    Translating Lightning in A Bottle: Idealists, Pragmatists, and the Reorientation of Translators at the Intersection of Blockchain and Climate
    (2022-03-03) Phung, Kam Jyhming; Valente, Mike S.
    The travel of ideas is a ubiquitous part of social and organizational life. People and organizations are constantly exposed to ideas and often incorporate them into their lives in some way, including adopting them to create new ventures or solutions to grand societal challenges. Grounded in the translation perspective (i.e., Scandinavian institutionalism), this dissertation explores the notion of within organization translator heterogeneity and the microfoundations of the incipient process of new venture ideation predicated on the translation of an idea to a new setting or what I call "ideational translation." To explore such underpinnings of the emergence of a new organizational entity and the travel of ideas, I draw on insights from a 24-month ethnography of life behind the creation of Blockset, one of the world's first blockchain-based carbon offset platforms. Through a detailed ethnographic account, I tell the story of the set of blockchain experts and climate experts contributing to Blockset's formative creation and explore their diverse lived experiences as translators facilitating the travel of the idea of a blockchain platform to the field of climate. Notably, in doing so, I pay attention to the tensions that ensued, how people navigated them, and to what avail. Yet, what lies at the heart of this dissertation is my finding that a key microfoundational aspect of ideational translation is within organization translator heterogeneity delineated by "translation orientations" – a term I use to capture a person's general beliefs with regards to the appropriate way to implement an idea. Overall, based on my findings, I present an orientation-based model of ideational translation that is centered around a translation orientation spectrum anchored on idealism and pragmatism – which stress translators' preferences for conforming to the norms of an idea's origin and destination, respectively – and specifies why translators embrace specific orientations, their impacts on the dynamics and outcomes of translation, and reorientation pathways that translators can follow.
  • ItemOpen Access
    Voluntary Disclosure and Corporate Innovation: Evidence from Management Earnings Forecasts
    (2021-11-15) San, Ziyao; Kanagaretnam, Kiridaran
    This research consists of two parts. In the first part, I examine whether a firm whose chief executive officer (CEO) is more future-oriented (as measured by commitment to voluntary disclosure practices, i.e., issuing more frequent and more disaggregated earnings forecasts) is likely to be more successful in corporate innovation investment. Using a global sample of 26,364 firms from 27 countries and a single-country sample of 8,980 firms (domiciled in the US), I find that firms with more future-oriented CEO are granted more patents and receive more citations per patent. The results of additional cross-sectional analyses indicate that the relationship between commitments to voluntary disclosure and corporate innovation varies with various CEO-, firm-, and country-level factors. In the second part of this research, I investigate the role of CEOs personality traits in corporate innovation and in the association between commitment to voluntary disclosure and corporate innovation. I find that firms with more extraverted CEOs tend to be more successful in their innovation investment in the future and that the signaling role of commitment to voluntary disclosure in corporate innovation success is more pronounced in firms with more extraverted CEOs. My findings also indicate that voluntary disclosure by more extraverted CEOs attracts more investor attention. Collectively, the results of this research support the conjecture that future-oriented CEOs are likely to commit to voluntary disclosure practices to signal their ability to manage uncertainties associated with innovation investment and thereby achieve innovation success. Additionally, such signaling tends to be driven by more extraverted CEOs. This research should be important for the investors and other stakeholders, as it shows how the likelihood of firms future innovation success can be inferred from CEOs observable earnings forecasting behavior. The findings may also be of interest to firms, as they highlight the importance of considering candidates level of extraversion when hiring a CEO. Finally, the findings of this research should be helpful to policymakers who develop initiatives to enhance firms voluntary financial disclosure, because this research highlights how the effectiveness of management earnings forecasts in signaling corporate innovation success varies with country-level institutional characteristics.