Economics Insights @ CBS

We investigate the effectiveness of regulatory oversight exercised by the SEC against auditors over the years 1996–2009. The evidence suggests that the SEC is significantly less likely to name a Big N auditor as a defendant, after controlling for both the severity of the violation and for the characteristics of companies more likely to be audited by Big N auditors. Further, when the SEC does charge Big N auditors, the SEC (i) is less likely to impose harsher penalties on the Big N; and (ii) is less likely to name a Big N audit firm relative to individual Big N partners.

Research has shown that possessions have the power to change consumers' self-construal and activate different aspects of the self. Building on this literature, the authors suggest that the salience of product ownership not only activates the product-related self but also simultaneously deactivates product-unrelated selves, resulting in impaired performance on tasks unrelated to the activated self. In five experiments, we first elicit feelings of ownership over a product (e.g., a calculator) to activate a product-related identity (e.g., the math self).

Studies of how quantitative easing (QE) impacts asset prices typically look for effects in one- or two-day windows around QE announcements. This methodology underestimates the impact of QE on asset classes whose responses happen outside of this short time frame. We document that QE announcements by the Fed, ECB, and the Bank of England are associated with: quick price reactions of medium- and long-term government bonds; but with reactions in equity and equity implied volatility that occur over several weeks.

We quantify the difference in the convenience yield of U.S. Treasuries and government bonds of other developed countries by measuring the deviation from covered interest parity between government bond yields. We call this wedge the "U.S. Treasury Premium." We document a secular decline in the U.S. Treasury Premium at medium to long maturities. The five-year U.S. Treasury Premium averages approximately 21 basis points prior to the Global Financial Crisis, increases up to 90 basis points during the crisis, and has disappeared after the crisis with the post-crisis mean at -8 basis points.

Effectively delegating work to others is considered critical to managerial success, as it frees up managers' time and develops subordinates' skills. We propose that female leaders are less likely than male leaders to capitalize on these benefits of delegating. Although delegation has communal (e.g., relational) and agentic (e.g., assertive) properties, we argue that female leaders, as compared to male leaders, find it more difficult to delegate tasks due to gender-role incongruence.