Happy fall!
We have a number of exciting events coming up, including the Fireside Chat With Dean Cremers featuring guest speaker Dr. Willis Lonzer at 3 p.m. on Thursday (October 6) in the Jordan Auditorium. Dr. Lonzer is the general president of Alpha Phi Alpha Fraternity, the first intercollegiate Greek-lettered fraternity for African American men. The Alpha Phi Alpha Fraternity is an important and ongoing partner with Mendoza in developing young leaders, which includes hosting programs such as the Inclusive Leadership Immersion in 2021 and the Solidarity Summit taking place in the College today and tomorrow. Please consider attending the Fireside Chat on Thursday.
I’m glad to highlight a selection of Mendoza research papers recently published in top academic journals:
Brad Badertscher, Deloitte Professor of Accountancy
Assurance Level Choice, CPA Fees, and Financial Reporting Benefits: Inferences from U.S. Private Firms (Journal of Accounting & Economics)
Many U.S. private firms choose either a financial statement compilation or review rather than the higher assurance provided by an audit, yet little is known about these choices. Brad and co-authors find that assurance choices are associated with bank debt, trade credit and internal information reliability. They explore economic aspects of assurance choice and find that CPA fees more than double for each increment in assurance, yet the financial reporting benefits are similar for audits and reviews.
Assurance Level Choice, CPA Fees, and Financial Reporting Benefits: Inferences from U.S. Private Firms (Journal of Accounting & Economics)
Many U.S. private firms choose either a financial statement compilation or review rather than the higher assurance provided by an audit, yet little is known about these choices. Brad and co-authors find that assurance choices are associated with bank debt, trade credit and internal information reliability. They explore economic aspects of assurance choice and find that CPA fees more than double for each increment in assurance, yet the financial reporting benefits are similar for audits and reviews.
Ken Kelley, Edward F. Sorin Society Professor of IT, Analytics, and Operations
Sample Size Planning for Replication Studies: The Devil is in the Design Psychological Methods (Psychological Methods)
Research in the social sciences has been under fire over the last several years for supposed “failures to replicate.” However, formally designing studies for the purposes of replication has not been considered much. Rather, research for replication studies have been planned as is there were primary studies, which the researchers argue is problematic for several reasons. The article details four ways to design replication studies and does so for estimating magnitude or showing the existence of an effect. The paper suggests that a well-designed replication study will help with the supposed replication crisis and help to build a more cumulative literature.
Yoon Son, Assistant Professor of IT, Analytics, and Operations
Effectiveness of Integrated Offline-and-Online Promotions in Omnichannel Targeting: A Randomized Field Experiment (Journal of Information Management Systems)
Leveraging omnichannels has become a new norm of strategic marketing in the retail industry, with many vendors foregrounding the value of customers who wish to maximize their shopping experiences across all channels. Using a randomized field experiment design, the researchers provide empirical evidence of an offline direct experience effect and reveal short-term channel substitution behaviors among online-only customers. They further examine omnichannel conversion behaviors after exposure to online promotion and develop different coupon discount schemes based on responses to the previously offered offline initiative. Finally, the research detects significant patterns of post-treatment omnichannel migration and confirms the effectiveness of integrated omnichannel promotions in fostering a shift to omnichannel shopping.
Jun Yang, Assistant Professor of Finance
Bank Stress Testing: Public Interest or Regulatory Capture? (Review of Finance)
The research tests whether measures of influence on regulators affect stress test outcomes. The large trading banks – those most plausibly ‘Too Big to Fail’ – face the toughest tests. Supervisory stress tests have a greater effect on large trading banks’ portfolios; the large banks respond by making more conservative (initial) capital plans; and, despite their more conservative capital plans, the large banks still fail their tests more frequently than other banks. In contrast, while Jun and co-authors find little evidence that political or regulatory connections affect the quantitative element of the stress tests, these connected banks do face less scrutiny under its qualitative dimension.
Bank Stress Testing: Public Interest or Regulatory Capture? (Review of Finance)
The research tests whether measures of influence on regulators affect stress test outcomes. The large trading banks – those most plausibly ‘Too Big to Fail’ – face the toughest tests. Supervisory stress tests have a greater effect on large trading banks’ portfolios; the large banks respond by making more conservative (initial) capital plans; and, despite their more conservative capital plans, the large banks still fail their tests more frequently than other banks. In contrast, while Jun and co-authors find little evidence that political or regulatory connections affect the quantitative element of the stress tests, these connected banks do face less scrutiny under its qualitative dimension.
Thank you to Brad, Ken, Yoon and Jun for their contributions to Mendoza’s research efforts.
Yours in Notre Dame,
Marti