Séminaires de Recherche

Capital Inflows and Equity Issuance Activity

Finance

Intervenant : Mauricio Larrain
Columbia Business School

11 mai 2017 - T004 - De 14h00 à 15h15


We use issuance-level data to study the relation between equity capital inflows and the issuance of equity by emerging market firms. We start by showing that equity inflows are associated with higher values of country-level equity issuance proceeds. Equity inflows and the cost of equity capital are shown to be negatively correlated, suggesting that the increase of equity proceeds is largely driven by increased foreign equity capital supply. Next, we find that capital inflows substantially increase the likelihood of raising equity and the value of equity proceeds of a subset of firms that issue large amounts of equity during our sample period. When we control for potential endogeneity of equity demand, using mutual fund flows as a supply-side instrument, our results are confirmed. Finally, we find that the impact of equity inflows on issuance is also associated with significant increases in investment and employment.

Stratégie et Politique d’Entreprise

Intervenant : Karin Hoisl
University of Mannheim

11 mai 2017 - T015 - De 13h30 à 15h00


Séminaire ESSEC/HEC - Direct Measures of Auditors’ Quantitative Materiality Judgments: Properties, Determinants and Consequences for Audit Characteristics and Financial Reporting Reliability

Comptabilité et Contrôle de Gestion

Intervenant : Katherine Schipper
Duke University

4 mai 2017 - CNIT Paris La Défense - Amphi 236 - De 11h00 à 13h00


For a large sample of audits carried out during 2005-2015 by eight large accounting
firms and inspected by the PCAOB, we provide evidence on the properties of auditors’
quantitative materiality judgments and the consequences of those judgments for both audit
characteristics (audit fees, audit hours, and detected misstatements) and financial reporting
outcomes (unreliable financial reports, proxied by restatements). We find that auditors’
quantitative materiality judgments do not appear to result only from applying conventional rulesof-
thumb, specifically, 5% of pre-tax income, but instead are associated with qualitative factors
suggested by authoritative guidance and with size-related financial statement outcomes (income,
revenues and assets); weights placed by auditors on these outcomes vary with client
characteristics such as profitability. We construct a materiality slack measure that makes
individual audit-firm-specific materiality judgments comparable with regard to whether they are
looser or tighter within boundaries specified by non-authoritative guidance in audit-firm policies.
We find that materiality slack (that is, relatively looser materiality) is associated with fewer audit
hours, lower audit fees, and a lower amount of detected misstatements. After controlling for
other factors including decisions to waive audit adjustments, we find evidence that looser
materiality judgments are associated with greater incidences of restatements.

Stratégie et Politique d’Entreprise

Intervenant : Thomas Mellewigt
Freie Universität Berlin

4 mai 2017


WHEN BROKERAGE BETWEEN FRIENDSHIP CLIQUES ENDANGERS TRUST: A PERSONALITY–NETWORK FIT PERSPECTIVE

Management et Ressources Humaines

Intervenant : Martin Kilduff
Professor , University College London, UK

4 mai 2017 - Bernard Ramanantsoa room, building V - De 14h00 à 15h30


Workplace friendship obligations of openness and favoritism are likely to conflict with organizational norms of discretion and neutrality. This dilemma is especially apparent for Simmelian brokers, who divide time and attention across multiple otherwise disconnected friendship cliques. In two samples, we found support for the core idea that the fit between the requirements of the network role and the personality of the individual facilitates trust. Simmelian brokers are trusted by their friends if they exhibit a role-appropriate diplomatic personality style involving flexibility of self-presentation (high self-monitoring) and inhibition of verbal loquaciousness (low blirtatiousness). Of course, not everyone engages in Simmelian brokerage. Some individuals experience a strongly cohesive situation: a single friendship clique within which they are embedded. For these non-brokers, we hypothesized and found that the most appropriate trait combination likely to maintain the trust of a group of tightly-bound colleagues involved a forthright, be-true-to-yourself, loquacious personality style (i.e., low self-monitoring, high blirtatiousness). In introducing a personality-network fit perspective concerning whether Simmelian brokers are trusted by their colleagues, we help reconcile discrepancies in prior literature concerning whether or not these brokers are paralyzed into indecision by cross pressures. Brokers who flexibly and guardedly manage individuality facilitate interconnection across cliques.

Bio

Martin Kilduff (PhD Cornell, 1988) is Professor of Organizational Behavior at the UCL School of Management and former editor of Academy of Management Review (2006-08). His research focuses on the micro-foundations and consequences of individuals' social networks, with particular emphasis on the role of personality, cognition, and emotion in these processes. His recent work investigates: the career benefits and drawbacks of working under a high-reputation boss (AMJ, 2016); the relative effects of personality and network position on career outcomes (Organization Science, 2015); and the extent to which men and women leaders are evaluated by the social network contexts in which they work (Organization Science, 2015).

Buying Products from Whom You Know: Personal Connections and Information Asymmetry in Supply Chain Relationships

Comptabilité et Contrôle de Gestion

Intervenant : Ron Shalev
NYU Stern School of Business

28 avril 2017 - HEC Paris - salle T015 - De 14h00 à 16h00


This study investigates whether the ability of executives to mitigate information asymmetry via interpersonal connections can affect the formation and the contractual terms of customer-supplier relations. We find that both educational and past work-based personal connections increase the likelihood of a potential supplier (hereinafter: vendor) becoming an actual supplier (hereinafter: supplier). The magnitude of the effect varies across management ranks and positions. Personal connections grow in importance when information asymmetry between the vendor and customer increases and thus affect both the choice of suppliers and contractual terms. Finally, transacting with a personally connected supplier can mitigate supply chain interruptions and improve customer performance.

“Cross-border bank flows and systemic risk”

Finance

Intervenant : Andrew Karolyi
Johnson - Cornell University

27 avril 2017 - T004 - De 14h00 à 15h15

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Using data on cross-border bank flows from 26 source countries to 128 target countries, we find that bank inflows are associated with improved financial stability and lower systemic risk in the bank systems in the target country. The flows are greater between source (target) countries with more (less) stringent de jure regulations that govern the bank systems. And the link between increased flows and eductions in marginal expected shortfall (MES) are concentrated among larger banks, those with poorer asset quality, and those that rely more on non-traditional banking activities and on more volatile sources of funds. Additional evidence suggests that bank flows help to reduce MES by improving target-country bank asset quality, efficiency, and reliance on non-traditional revenue sources. Overall, we interpret our findings as in support of a benign view of regulatory arbitrage in international bank flows.

Stratégie et Politique d’Entreprise

Intervenant : Stefano Brusoni
ETH Zürich

27 avril 2017 - T015 - De 13h30 à 15h00


Determinants and Consequences of Presentation Format: The Case of ETR Reconciliations

Comptabilité et Contrôle de Gestion

Intervenant : Sundaresh Ramnath
University of Miami

21 avril 2017 - HEC Paris - salle T004 - De 14h00 à 16h00


SEC Regulation S-X requires companies to reconcile deviations between their actual tax expense and their expected tax expense under federal statutory tax rates (effective tax rate (ETR) reconciliation). This regulation permits companies to choose between a dollar or percentage format for the ETR reconciliation. In our sample, roughly half the firms choose one of the two formats. We investigate the causes and consequences of this disclosure decision. We find, consistent with a political cost argument that firms with low (high) ETRs, through their choice of presentation format, tend to highlight the dollar (percentage) amount of the tax expense. We also find that users such as analysts seem to find the percentage format easier to use and tend to make smaller errors in their ETR forecasts when firms present their ETR reconciliation in the percentage format. Moreover, analysts’ ETR forecast dispersion is higher when companies present reconciliation in the dollar format, consistent with analysts’ comfort (or lack thereof) when information is presented in an easily usable (less straightforward) format.

Online Streaming and its Effects on Society

Marketing

Intervenant : Hannes DATTA
Professeur Assistant - Département de Marketing , Tilburg School of Economics and Business

21 avril 2017 - Salle T015 - De 10h30 à 12h00


Online Streaming and its Effects on Society

By Hannes DATTA
Joint work with George Knox and Bart Bronnenberg (both Tilburg University)

Digital streaming is set to take over as the dominant business model in industries like music (e.g., Spotify), movies (e.g., Netflix), books (e.g., Kindle Unlimited), and games (e.g., Steam). Instead of purchasing individual content, streaming allows users to rent access to a vast library of digital content that is free at the margin. Using a panel data set of individual consumers’ listening histories across many platforms, we study how the shift from purchasing to streaming affects society.

Prior work has established that the adoption of online streaming leads to a sizeable effects at the individual level. For example, consumers discover more new content, and tend to favor less popular artists over superstars. However, it is not clear how online streaming affects consumption behavior at the societal level (i.e., across consumers). On the one hand, consumer tastes may become fragmented when choosing among less popular and newer artists. On the other hand, consumer tastes may become more homogenous if recommendation systems and curated playlists on streaming services push users to the same new content.

From a public policy perspective, too much fragmentation is bad news because it can diminish social capital, as fewer people share the same experience. However, too little fragmentation may signal a lack of diversity, favoring superstars and damaging independent labels. We examine several possible drivers of fragmentation, and use our data to test competing explanations.


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