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Adverse market events can affect credit supply not only by hurting financial fundamentals but also by changing the risk-taking behaviors of individual decision-makers. We provide micro-level evidence of this individual decision-making channel in the U.S. mortgage market. We find that mortgage application rejection rates are more sensitive to foreclosure intensity when loan officers are more exposed to foreclosure news, despite the same housing market and bank fundamentals. Loans originated from the affected branches have lower ex post default rates, consistent with higher lending standards being applied. In the aggregate, this effect results in tighter credit supply during housing market downturns.
It is well documented that since at least the 1970s investment-cash flow (I-CF) sensitivity has been decreasing over time to disappear almost completely by the late 2000s. Based on a neoclassical investment model with costly external financing, we show that this pattern can be explained by the gradual increase of capital adjustment costs, attributable to the accumulation of knowledge capital. The result is robust to a variety of approaches, including Euler equation estimation and the simulated method of moments. More generally, our findings demonstrate that I-CF sensitivity should only be interpreted as a joint measure of financial and real frictions.
We introduce a new approach to estimating long-term aggregate discount rates using the cross section of earnings and book values to explain current stock prices and extract expected market returns. The proposed discount rate measure is countercyclical. Shocks to it account for nearly half of historical market return variation; in contrast, shocks to other discount rate measures account for no more than 2%. It dominates other measures in explaining time-series variation in returns on duration-sorted portfolios and delivers out-of-sample predictability that exceeds that afforded by other expected return measures and predictive variables. It also performs well in international equity markets.
Recent Delaware Chancery Court decisions that boards are self-interested in setting director compensation have focused scrutiny on the pay-setting process used by corporations. We examine the effect of peer benchmarking on director compensation decisions. Director pay relates positively to peer director pay, and firms paying their directors highly are selected as peers. Moreover, firm performance and board advising performance are positively related to the talent component and are generally unrelated to the self-serving component of the peer pay effect. The evidence indicates that firms use peer benchmarking to justify high compensation mainly to attract talented directors to enhance board quality.
This article investigates the impact of exchange-traded fund (ETF) ownership on seasoned equity offerings (SEOs). We find that increases to firms’ ETF ownership is positively related to their propensity to conduct an SEO. ETF ownership is also associated with less negative SEO announcement returns, smaller discounts, and better long-run stock returns. Our evidence is consistent with equity issuance following investor demand for stocks driven by greater participation in ETFs, suggesting a possible alternative source of market timing opportunity.
We contribute to the argument for a “new” business history employing a quantitative approach. We illustrate opportunities for new perspectives from this approach using a novel microlevel longitudinal database comprising 131 variables for 1,419 cooperative creameries in Denmark for the period 1898–1945, which we also document and make available to the scholarly community. We present a number of applications of the data, including investigating regional productivity differences, expenditure on fire insurance, and survivorship and reporting biases.
Is there a trade-off between the short-run and long-run real effects of monetary policy “leaning against the wind”? We provide novel evidence on this question from the United States in 1920–1921. Our identification strategy exploits county-level variation in access to the Federal Reserve’s discount window, and hand-collected data on banking and agriculture in Illinois. In the short term, tightened conditions at the discount window decreased bank lending and lowered crop prices and farm revenues. In the long term, however, they lowered debt-to-output levels and led to greater farmland utilization, suggesting an avoidance of debt overhang problems.
The value of great leaders seems to be an unquestioned assumption. The goal of this Element is to explore the counterintuitive idea that great leaders can pose a hazard to themselves and their followers. Great leadership, which accomplishes morally commendable and difficult objectives by leaders and followers, requires competence, morality, and charisma. A hazard is a condition or event that leads to human loss, such as injury, death, or economic misfortune. A leader can become a hazard through social psychological processes, which operate through the metaphor of Seven Deadly Sins, to create negative consequences. Great leaders can undermine their own success and accomplishments, as well as their followers. They can become a threat to the organization in which they are employed. Finally, great leaders can become a danger to the larger society. The damage great leaders can create can be reduced by applying the corresponding virtue.
Edited by
Cait Lamberton, Wharton School, University of Pennsylvania,Derek D. Rucker, Kellogg School, Northwestern University, Illinois,Stephen A. Spiller, Anderson School, University of California, Los Angeles
This chapter provides a roadmap for the study of word-of-mouth (WOM) in marketing and consumer behavior. First, it presents a basic model of WOM and foreshadows the mixed method approach that is used frequently to study WOM. Second, it summarizes recent literature in WOM, focusing on the past five years and highlighting representative papers that use mixed methods. Third, it discusses key trends in the literature and identifies pathways for future research.
This chapter turns its attention to the underlying infrastructure that constitutes the material foundation of the global TV system. Technology is the application of science and knowledge to accomplish a task inside a domain, while infrastructure consists of the material elements that actualise it: it is the buildings, cables, servers, switches, and routers needed to transport data packets from point A to point B; it is the firms, machinery, engineers, and technicians who design, build, update, and repair these material components. This chapter examines the cloud infrastructure that sustains streaming, focusing on two key components: undersea cable networks and data centres. The final section describes the contours of the video ecosystem that technology and infrastructure have created, and within which television operates today.
Edited by
Cait Lamberton, Wharton School, University of Pennsylvania,Derek D. Rucker, Kellogg School, Northwestern University, Illinois,Stephen A. Spiller, Anderson School, University of California, Los Angeles
Edited by
Cait Lamberton, Wharton School, University of Pennsylvania,Derek D. Rucker, Kellogg School, Northwestern University, Illinois,Stephen A. Spiller, Anderson School, University of California, Los Angeles
People often engage in shared consumption experiences with other people, including romantic partners, friends, family, coworkers, neighbors, and acquaintances. Although the field of consumer psychology has traditionally focused on the perspective of an individual consumer, researchers are increasingly recognizing the importance and relevance of studying shared consumption (also known as joint consumption, dyadic consumption, or group consumption). In this chapter, we first discuss common methodological paradigms for studying shared consumption, given that studying shared consumption poses unique methodological challenges relative to studying solitary consumption. We then discuss prior research on shared consumption, organizing our review around the potential benefits and potential costs involved in shared consumption as compared to solitary consumption. Finally, we delineate four main areas for future research on shared consumption that we view as particularly promising.
Two shifts are transforming television: digitisation and globalisation. Internet-based video delivery, the uptake of cloud computing in the industry, mobile video consumption, and the rise of streaming platforms, are all phenomena connected to the process of digitisation. Internet protocol (IP)–based video transport is powering the transition from broadcasting to streaming, thereby changing the way content is distributed and accessed. The use of cloud computing is growing fast because it delivers an unprecedented amount of computing power and capacity to media firms at a fraction of the infrastructure costs (Chapters 3, 4, and 8). Video is increasingly accessed via mobile devices, and streaming is among the most popular activities for mobile users (Chapter 6). The digital shift is evolving business models. Platforms dominate television’s streaming age the way networks prevailed in the broadcasting era (Chapters 3 and 4). Media conglomerates are edging towards a direct-to-consumer (DCT) business model, revolutionising the way content rights are distributed and monetised (Chapters 3 and 9).
This chapter examines the policy issues that influence the shape and contours of the TV GVC. As with any trading system, the global TV industry is based on a set of social and political values that are predominantly those of open societies and market economies. These values are not universal and the nature and amount of participation of a country into the TV GVC depends on its elites’ degree of adherence to such values. Thus, the first section devotes special attention to China, which has largely shut its doors to the global TV industry. The second section examines the policy alternatives that exist for those countries that wish to embark on the path of GVC participation and economic upgrading. The chapter argues that such a policy has three key prongs: it must take into account the globalised nature of the TV industry and support firms that are best positioned to perform in the global marketplace, harness the benefits of trade, and incentivise creativity through regulation.
Edited by
Cait Lamberton, Wharton School, University of Pennsylvania,Derek D. Rucker, Kellogg School, Northwestern University, Illinois,Stephen A. Spiller, Anderson School, University of California, Los Angeles
This chapter reviews the emerging literature on consumer interactions with artificial intelligence (AI) in marketing. Over the past decade, the rapid proliferation of AI technology has dramatically altered how businesses deliver products and services to consumers, giving rise to a groundswell of research. Consumer research has revealed important differences in attitudes and behaviors resulting from AI interactions as compared to human to human interactions. First, the chapter reviews domains where AI interactions are preferred as compared to domains where consumers are more averse to AI interactions. Next, the chapter identifies key process mechanisms that have been identified linking AI with key consumer outcomes. The chapter concludes with the enumeration of predictions about future directions for AI research in consumer behavior and marketing.
This chapter applies the GVC framework in order to progress our understanding of the global TV system. Among the drivers that are changing the TV industry, three stand out: digitisation, consolidation, and vertical disintegration (also known as de-verticalisation). While the first two trends have long been identified as driving forces, the same cannot be said about the third. The phenomenon of segmentation is less known and associated with the formation of GVCs. The chapter expands on its prevalence in television and explain its role in globalising the industry. The final section provides an introductory outline of the TV GVC and its segments.
Edited by
Cait Lamberton, Wharton School, University of Pennsylvania,Derek D. Rucker, Kellogg School, Northwestern University, Illinois,Stephen A. Spiller, Anderson School, University of California, Los Angeles
The present chapter proposes an organizing framework for understanding the effects of political ideology on consumer behavior. We first summarize how political ideology is conceptualized and operationalized in the literature. We then describe three levels at which political ideology shapes consumption decisions. At the individual level, the political ideology of consumers has wide-ranging effects on their acquisition, consumption, and divestment decisions. At the company level, the political ideology of companies with which consumers interact influences corporate political actions (such as lobbying) and activism (such as taking a stand on sociopolitical issues and events), with tangible implications for consumer behavior and company outcomes. At the system level, the political ideology of systems, reflected in the media, cultural, policy, and social environments that consumers and scholars navigate, has far-ranging implications for consumer decision-making, well-being, and even the body of knowledge generated on the topic of political ideology.
This chapter covers the value-adding segments of television GVC’s media delivery phase. Media delivery begins when the final production master has been approved and the programme is ready to be distributed to audiences via various channels and platforms. The segments are: publication, transmission, and reception. The chapter argues that broadcasters had been in charge of the full transmission process of tasks deemed core to their business. Today, media delivery is externalised to the market and devolved to a network of suppliers that collaborate along the value chain. While some suppliers work solely for the media and entertainment sector, some are no ordinary firm, but tech giants that have developed deep global capabilities and can leverage an unprecedented infrastructure to deliver content to and from (almost) any location in the world. They gain further leverage by being cross-sectoral, serving clients across multiple industries. The chapter identifies these global (or transnational first-tier suppliers) and analyses their key features.
Edited by
Cait Lamberton, Wharton School, University of Pennsylvania,Derek D. Rucker, Kellogg School, Northwestern University, Illinois,Stephen A. Spiller, Anderson School, University of California, Los Angeles