Today’s column serves two purposes – to highlight a number of our faculty members for their papers recently published or accepted by top academic journals and to offer gratitude to four professors who will retire this year.
Our latest published research includes:
Sarv Devaraj, Fred V. Duda Professor of Business (ITAO)
Impact of Working Capital on Firm Performance: Does IT Matter? (Journal of Operations Management)
The researchers examine investments in Information Technology (IT), that allow firms to optimize the working capital–firm performance relationship by helping to either automate (i.e., use technology to increase the speed and accuracy of process execution) and/or informate (i.e., use technology to create new information). Using proprietary IT data and based on a sample of 1,054 US-based manufacturing firms, the paper finds that IT investment positively moderates the performance effects of inventory, payables and receivables cycles, and that these moderating effects vary by the type of IT investment, namely IT infrastructure and IT labor.
Impact of Working Capital on Firm Performance: Does IT Matter? (Journal of Operations Management)
The researchers examine investments in Information Technology (IT), that allow firms to optimize the working capital–firm performance relationship by helping to either automate (i.e., use technology to increase the speed and accuracy of process execution) and/or informate (i.e., use technology to create new information). Using proprietary IT data and based on a sample of 1,054 US-based manufacturing firms, the paper finds that IT investment positively moderates the performance effects of inventory, payables and receivables cycles, and that these moderating effects vary by the type of IT investment, namely IT infrastructure and IT labor.
Tim Hubbard, Assistant Professor of Management & Organization
Conducting Phenomenon-Driven Research Using Virtual Reality and the Metaverse (Academy of Management Discoveries)
This paper makes the case that virtual reality (VR) — as a methodological platform — is ideal for conducting empirical research in business. It discusses the capabilities of VR technology, its potential to study poorly understood phenomena and its applications in various management subfields. The paper discusses the near-limitless research opportunities offered by VR and provide recommendations and pitfalls to consider when using VR as a research platform.
Conducting Phenomenon-Driven Research Using Virtual Reality and the Metaverse (Academy of Management Discoveries)
This paper makes the case that virtual reality (VR) — as a methodological platform — is ideal for conducting empirical research in business. It discusses the capabilities of VR technology, its potential to study poorly understood phenomena and its applications in various management subfields. The paper discusses the near-limitless research opportunities offered by VR and provide recommendations and pitfalls to consider when using VR as a research platform.
Peter Kelly, Assistant Professor of Finance
Benjamin Golez, Associate Professor of Finance
Horizon Bias and the Term Structure of Equity Returns (Review of Financial Studies)
The research defines horizon bias as the degree to which individuals are more optimistic at long horizons relative to short horizons. Consistent with the intuition from a stylized present value model, the researchers find that periods of above-average horizon bias are associated with negative term premiums, whereas periods of below-average horizon bias are associated with positive term premiums.
Benjamin Golez, Associate Professor of Finance
Horizon Bias and the Term Structure of Equity Returns (Review of Financial Studies)
The research defines horizon bias as the degree to which individuals are more optimistic at long horizons relative to short horizons. Consistent with the intuition from a stylized present value model, the researchers find that periods of above-average horizon bias are associated with negative term premiums, whereas periods of below-average horizon bias are associated with positive term premiums.
Kirsten Martin, William P. and Hazel B. White Center Professor of Technology Ethics
Are Algorithmic Decisions Legitimate? The Effect of Process and Outcomes on Perceptions of Legitimacy of AI Decisions (Journal of Business Ethics)
This study sought to answer, “Under what circumstances, if any, are algorithmic decision-making systems considered legitimate?” The research finds robust governance, such as offering an appeal process rather than mere notice, can create a legitimacy dividend for decisions with bad outcomes. However, companies cannot overcome the legitimacy penalty of using arbitrary or morally dubious factors, such as race or the day of the week, with a good outcome or an appeal process for individuals.
Are Algorithmic Decisions Legitimate? The Effect of Process and Outcomes on Perceptions of Legitimacy of AI Decisions (Journal of Business Ethics)
This study sought to answer, “Under what circumstances, if any, are algorithmic decision-making systems considered legitimate?” The research finds robust governance, such as offering an appeal process rather than mere notice, can create a legitimacy dividend for decisions with bad outcomes. However, companies cannot overcome the legitimacy penalty of using arbitrary or morally dubious factors, such as race or the day of the week, with a good outcome or an appeal process for individuals.
Joe Urbany, Professor of Marketing
Competition and the Regulation of Fictitious Pricing (Journal of Marketing Research)
The authors develop a descriptive model explaining why the practice of fictitious reference pricing persists despite FTC guidelines and explore potential regulatory solutions. They propose that disclosing the true normal price charged may be the most effective solution and present propositions about the likely effects of requiring firms to disclose recent selling prices, outlining benefits and challenges associated with this requirement.
Competition and the Regulation of Fictitious Pricing (Journal of Marketing Research)
The authors develop a descriptive model explaining why the practice of fictitious reference pricing persists despite FTC guidelines and explore potential regulatory solutions. They propose that disclosing the true normal price charged may be the most effective solution and present propositions about the likely effects of requiring firms to disclose recent selling prices, outlining benefits and challenges associated with this requirement.
Hal White, Vincent and Rose Lizzadro Professor of Accountancy
Spillover Effects of Mandatory Portfolio Disclosures on Corporate Investment (Journal of Accounting & Economics)
The researchers find that investment sensitivity to stock price declines for firms with significant ownership held by actively managed funds that have to disclose their portfolio investments more frequently. The effect is concentrated among firms that are (i) owned by funds with larger expected proprietary costs and (ii) more likely to learn from the information in price. The results suggest that portfolio disclosure requirements for money managers have spillover effects on corporate investment by curtailing corporate managers’ opportunities to learn from their firms’ stock price.
Spillover Effects of Mandatory Portfolio Disclosures on Corporate Investment (Journal of Accounting & Economics)
The researchers find that investment sensitivity to stock price declines for firms with significant ownership held by actively managed funds that have to disclose their portfolio investments more frequently. The effect is concentrated among firms that are (i) owned by funds with larger expected proprietary costs and (ii) more likely to learn from the information in price. The results suggest that portfolio disclosure requirements for money managers have spillover effects on corporate investment by curtailing corporate managers’ opportunities to learn from their firms’ stock price.
The faculty members who are transitioning to emeritus status this year collectively represent 136 years of teaching and research excellence:
Chao-Shin Liu, associate professor of Accountancy, joined Notre Dame in 1998. Chao won numerous teaching awards during his tenure and published research in the area of market reactions to public information.
Ram Ramanan has served as a professor of Accountancy since 1991. Ram taught both financial accounting and managerial accounting and received several teaching awards, including the “Outstanding Teacher” award in the MBA and Executive MBA programs.
Tom Stober, associate professor of Accountancy, joined the University in 1995. His expertise is in financial statements analysis, accounting-based valuation models, financial accounting and reporting, and capital markets. A CPA, he also previously served as the department’s assistant chair.
Jim Wittenbach, professor of Accountancy, takes the longevity prize – Jim joined Notre Dame in 1972! His many recognitions include the James Dincolo Outstanding Undergraduate Professor, the Master of Science in Accountancy Outstanding Professor Award and the Kaneb Center for Teaching Excellence. As a scholar, his research focused on the practical application of income tax laws while emphasizing the way the laws could influence personal and organizational behaviors.
Thank you to Chao, Ram, Tom and Jim for your remarkable service to Our Lady’s University. Please join me in wishing them all of the best in their retirement.
In Notre Dame,
Martijn