Using the 2007–2009 financial crisis as a laboratory, we analyze the transmission of crises to country-industry equity portfolios in 55 countries. We use an asset pricing framework with global and local factors to predict crisis returns, defining unexplained increases in factor loadings as indicative of contagion. We find evidence of systematic contagion from US markets and from the global financial sector, but the effects are very small.
We examine aggregate idiosyncratic volatility in 23 developed equity markets, measured using various methodologies, and we find no evidence of upward trends when we extend the sample until 2008. Instead, idiosyncratic volatility appears to be well described by a stationary autoregressive process that occasionally switches into a higher-variance regime that has relatively short duration. We also document that idiosyncratic volatility is highly correlated across countries. Finally, we examine the determinants of the time-variation in idiosyncratic volatility.
The performance of organizations depends partly on the reputations of their industries. Such reputations are "intangible commons." Interest in protecting mutual welfare motivates members of an industry to engage in self-regulation. However, the current literature tends to have a pessimistic view of the efficacy of self-regulation in solving the problem of reputational commons. We argue that the obstacles forecasted by such pessimistic reasoning are context-bound and can be overcome if industry self-regulation includes effective sanctions and exclusion strategies.
The current research examines whether direct and vicarious identification with a low-status group affects consumers' desire for objects associated with status. Experiment 1 found that individuals who belonged to and identified with a status social category associated with relatively lower status (Blacks) exhibited an enhanced desire for high-status products compared to Blacks who did not identify with their race or individuals who belonged to a social category associated with higher status (Whites).
Significant work time in the U.S. is lost each year due to worker absence, but evidence on the productivity losses from absenteeism remains scant due to difficulties with identification. In this paper, we use uniquely detailed data on the timing, duration, and cause of absences among teachers to address many of the potential biases from the endogeneity of worker absence.
The modal scientific approach in consumer research is to deduce hypotheses from existing theory about relationships between theoretic constructs, test those relationships experimentally, and then show “process” evidence via moderation and mediation. This approach has its advantages, but other styles of research also have much to offer. We distinguish among alternative research styles in terms of their philosophical orientation (theory-driven vs. phenomenon-driven) and their intended contribution (understanding a substantive phenomenon vs. building or expanding theory).
The rise of China in world trade has brought both benefits and anxiety to other economies. For many policy questions, it is crucial to know the extent of domestic value added (DVA) in exports, but the computation is more complicated when processing trade is pervasive. We propose a method for computing domestic and foreign contents that allows for processing trade. By our estimation, the share of domestic content in exports by the PRC was about 50% before China's WTO membership, and has risen to over 60% since then. There are also interesting variations across sectors.
In four studies employing multiple manipulations of psychological closeness, we found that feeling connected to another individual who engages in selfish or dishonest behavior leads people to behave more selfishly and less ethically themselves. In addition, psychologically connecting with a scoundrel led to greater moral disengagement.
Five studies explored whether power undermines the quality of relationships by creating instrumental attributions for generous acts. We predicted that this cynical view of others' intentions would impede responses that nurture healthy relationships. In the first three studies, the powerful were more likely to believe that the favors they received were offered for the favor-giver's instrumental purposes, thereby reducing power-holders' thankfulness, desire to reciprocate, and trust.