Latest Research Publications

This paper examines how female directors (FDs) affect firm value in the absence of mandatory gender quotas. Using a newly collected data set on director deaths around the globe, we find that stock prices decrease approximately 2% more when an FD passes away, compared with a male director. What explains this negative capital market reaction? We find evidence that finding successors for deceased FDs is challenging for firms: Succession delays are longer, and although firms try to replace FDs with women, two-thirds of their successors are male. Furthermore, their successors tend to be younger, less experienced, and more often externally hired. Stock prices decline less if more potential female successors exist in a country, the firm is larger, or FDs other than the deceased woman were on the board. Because observable characteristics such as age, tenure, education, and network centrality cannot explain the negative stock market reaction, unobserved differences across genders that lead to a lower fit of male successors to the existing board are the most likely explanation for the firm value loss after the death of an FD.

Drawing from research on the transparency-privacy dilemma in management, we theorize that firm-level pay transparency elicits a multistep process involving managers and employees that shifts the dispersion in remuneration from more to less observable forms, thus making pay transparency a “moving target.” We posit a serial indirect effect of pay transparency on firm-level rates of i-deal grants (a less observable form of remuneration) via variable pay compression and heightened rates of employee i-deal requests, with this indirect effect amplified in firms characterized by collectivist shared values. First examining the role of managerial agency and collectivist shared values in the pay transparency–compression relationship in a simulation-based experiment, we test the overall model in a multisource field study using a sample of 111 medical device distribution firms. Our findings demonstrate that: (a) firm-level pay transparency is predictive of greater pay compression, (b) firm-level rates of i-deal grants are largely explained by this pay compression via its effects on employee i-deal requests, and (c) this sequential effect is amplified in firms with more collectivist shared values. Accordingly, we explicate how transparency triggers unintentional hiding, and suggest that accompanying more transparent pay may be an increased reliance upon rewards that, by their very nature, are less transparent.

Following the Fukushima nuclear accident, Japan gradually shut down all its nuclear power plants, causing a countrywide power shortage. In response the government launched large-scale energy-saving campaigns to reduce electricity consumption. Exploiting the electricity-saving targets across regions and over time, we show that the campaigns significantly increased mortality, particularly during extremely hot days. The impact is primarily driven by people using less air conditioning, as encouraged by the government. Nonpecuniary incentives can explain most of the reduction in electricity consumption. Our findings suggest there exists a trade-off between climate change mitigation and climate change adaptation.

We develop a theory of blockchain governance. In our model, the proof-of-work system, the most common set of rules for validating transactions in blockchains, creates an industrial ecosystem with specialized suppliers of goods and services. We analyze the interactions between blockchain governance and the market structure of the industries in the blockchain ecosystem. We show that the proof-of-work system may lead to a situation in which some large firms in the blockchain industrial ecosystem—blockchain conglomerates—capture the governance of the blockchain.

Stock returns during the week are negatively associated with the reported incidence of domestic violence during the weekend. This relationship is primarily driven by negative returns. The incidence of domestic violence increases with the magnitude of losses, and the effect increases with local stock market participation. Our findings suggest that negative wealth shocks caused by stock market crashes can affect stress levels within intimate relationships, escalate arguments, and trigger domestic violence. Stock market losses may reduce household utility beyond the shock to financial wealth, supporting gain-loss models where disutility from losses outweighs the utility from gains of a similar magnitude.

We develop a tractable model of systemic bank runs. The market-based banking system features a two-layer structure: banks with heterogeneous fundamentals face potential runs by their creditors while they trade short-term funding in the asset (interbank) market in response to creditor withdrawals. The possibility of a run on a particular bank depends on its assets' interim liquidation value, and this value depends endogenously in turn on the status of other banks in the asset market. The within-bank coordination problem among creditors and the cross-bank price externality feed into each other. A small shock can be amplified into a systemic crisis.

Manufacturers and retailers often advance sell seasonal products or services (e.g., holiday decorations, summer or winter entertainment). The authors examine advance selling in marketing channels to offer several insights. First, it is well established that a decentralized channel suffers from the issue of double marginalization; that is, the manufacturer and retailer both add positive margins when setting their prices, which results in inefficiently high retail prices. The authors find that, under a dynamic wholesale-price contract, advance selling can alleviate this double-marginalization problem and benefit the manufacturer, the retailer, and consumers. Second, the benefit of advance selling diminishes with the product's holding cost, the retailer's stockpiling ability, and the manufacturer's commitment to spot wholesale price. Third, with wholesale-price commitment, advance selling benefits the manufacturer and consumers but hurts the retailer; the manufacturer is better off making a price commitment only when its product's holding cost is sufficiently low and worse off otherwise. Last, the retailer's stockpiling ability decreases its own profit under a dynamic contract but increases it under a commitment contract.

Although social media has helped online newspapers by allowing users to organically share articles, some have argued that it has cannibalized and hurt newspapers through reduced readership and diminished agenda-setting power. Motivated by these two opposing effects, it is critical to understand what affects the duality between sharing news articles on social media and reading the articles on news websites. Using rich clickstream data on online news readership obtained from an English-language newspaper in an Asian country and social media data collected from Twitter, we focus on article sentiment as a key news content attribute and find a differential effect of sentiment on readership and sharing behaviors across the news site and third-party social media platform. Our results show that people are likely to read news articles with negative sentiment on the news site, but they tend to share articles with positive sentiment on Twitter. Specifically, a one-unit increase in content sentiment is associated with a 10.86% or 273-unit decrease in news site page views but a 17.0% or 2.10-unit increase in Twitter sharing volume. Upon decomposition of news article sentiment, we also find a contrasting positive author sentiment effect and a negative news topic valence effect on news readership. To uncover the underlying mechanism of the findings, we test the key intuitions from prior self-presentation literature. We find that an increase in a Twitter user’s followers (i.e., audience size) leads to an increase in the Twitter user’s propensity to share positive-sentiment news articles. Our findings on the role of sentiment on content consumption and sharing affirm the coopetitive but complementary relationship between news websites and social media platforms. Our results also guide publishers to better craft their news content and manage social media presence to improve audience engagement and readership outcomes while preserving the agenda-setting ability of news media.

Can massive online retailers such as Amazon and Alibaba issue digital tokens that potentially compete with bank debit accounts? There is a long history of trading stamps and loyalty points, but new technologies are poised to sharply raise the significance of redeemable assets as a store of value. Here, we develop a simple stylized model of redeemable tokens that can be used to study sales and pricing strategies for issuing tokens, including ICOs. Our central finding is that platforms can potentially earn higher revenues by making tokens non-tradable unless they can generate a sufficiently high outside-platform convenience yield.