Welcome back from the joyous Easter holiday, where we celebrate the resurrection of Our Lord and His victory over sin and death. I hope you had a peaceful and relaxing weekend with your family and friends.

As we are in the home stretch for this academic year with commencement quickly upon us, I am glad to mention some recent faculty publications in well-regarded journals:

Timothy Loughran, C.R. Smith Professor of Finance; Bill McDonald, Thomas A. and James J. Bruder Professor of Administrative Leadership (along with Priyank Gandhi, assistant finance professor at Rutgers Business School who previously was at Mendoza) "Using Annual Report Sentiment as a Proxy for Financial Distress in U.S. Banks," (Journal of Behavioral Finance).

Current predictors of bank distress miss extreme events and lean heavily on one variable, capital adequacy. Professors Gandhi, Loughran and McDonald propose using sentiment measures derived from the text of banks’ annual reports as a proxy for bank distress. They find that negative sentiment is significantly associated with distress outcomes and suggest that regulators augment current early warning systems with a text-based measure.

Adam Wowak, Management & Organization associate professor "CEO political activism: A stakeholder alignment model," (accepted for publication at Academy of Management Review).

 

Conventional wisdom holds that CEOs should avoid wading into society’s debates. Yet more and more CEOs are ignoring this dictum, taking public stances on socially contentious issues. In this paper, Professor Wowak and his co-author introduce a theory of CEO sociopolitical activism that highlights its causes and consequences, particularly as they pertain to firm stakeholders.

F. Asís Martínez-Jerez, Accountancy associate professor “Contracting with Opportunistic Partners: Theory and Application to Technology Development and Innovation,” (Management Science).

Innovative strategic partnerships embrace ambiguity. Relying on detailed contracts creates the temptation to exploit loopholes. Instead, contracts that are ambiguous and renegotiable help ensure that both parties benefit from the strategic partnership, even when circumstances change, focusing on uncertainties and threats external to the partnership.

I congratulate the authors!

In Notre Dame,

Martijn