Working Paper Series
The School of Business periodically publishes working papers written by students and faculty that convey the findings of ongoing research.
Faculty Research Working Paper Series
This includes faculty members’ manuscripts that:
- Have not been accepted for publication
- Have been submitted for journal publication but have not yet been accepted
- Have been presented or planned to be presented at a conference or seminar
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View Faculty Research Working Papers
FRWP #1, Spring 2013
Title: Cross Sectional Return Predictability in Taiwan Stock Exchange: An Empirical Investigation
Authors: Nusret Cakici, Kudret Topyan, Chia-Jane Wang
Department: Economics & Finance
Abstract: The purpose of this paper is to provide a comprehensive analysis of the effectiveness of certain return predictors in Taiwan stock market. Within this context, the paper provides a comprehensive analysis on the stock return predictability in Taiwan Stock Exchange (TWSE) from January 1990 to December 2011 by employing both portfolio method and cross-sectional regressions. In the risk-related predictors, we found no statistically significant predictive power of beta, total volatility, and idiosyncratic volatility. Our results indicate that two cheapness variables, book-to-market and cashflow-to-price ratios showed strong consistent economically and statistically significant predictive powers in determining the returns for the stocks traded in the TWSE. In addition, our multiple regressions found predictive power in total volatility, short-term reversal, and market capitalization in the set of small stocks but not for the set of large stocks, while our all-stock set showed predictive power only in total volatility and short-term reversal. We also found that regrouping the stocks as small and large according to the median value of the market capitalization of the stocks adds insights to the analysis. Our results show that the set of large stocks in the TWSE is the least predictable set of stocks.FRWP #2, Spring 2013
Title: Focus or Generalize: Real Estate Agent Effort Allocation and Compensation
Authors: Randy I. Anderson, Hany Guirguis, Geoffrey K. Turnbull
Department: Economics & Finance
Abstract: When agents have opportunities in both selling and non-selling related activities, the rising opportunity cost of time induces greater focus on the former, with contracted support to pursue unrelated real estate activities. This drives a positive relationship between specialization and income. Nonetheless, income may decline empirically with greater specialization when the population of most specialized agents includes those with either low opportunity costs or the least ability to earn ancillary income. Data drawn from a multi-year survey of real estate professionals indicate that income rises with greater specialization except for the most specialized. The latter result is consistent with the notion that mix of agents at the highest specialization levels enjoy different opportunity costs or ranges of income opportunities.FRWP #3, Fall 2013
Title: Characteristics of Firms Subject to Fraud Litigation
Authors: Alicja Reuben
Department: Management and Marketing
Abstract: Fraud is a fundamental issue that has been problematic for decades in the U.S. business sphere. The academic literature addresses fraud in terms of deviance, but fails to raise the question of whether corporate governance is tied to fraud in any way. In this paper, I attempt to disentangle the question, does corporate governance help firms subject to fraud litigation? Using the Governance Index and a unique set of class action law suit data, I use survival analysis to determine the correlation between fraud and corporate governance. Results indicate that bad governance is associated with cases of fraud. These findings have far reaching implications on both the establishment of governance standards as well as the study of fraudulent business activities.FRWP #4, Fall 2013
Title: The People’s Hired Guns? Experimentally Testing the Inclination of Prosecutors to Abuse the Vague Definition of Crimes
Authors: Christoph Engel and Alicja Reuben
Department: Management and Marketing
Abstract: Legal realists expect prosecutors to be selfish. If they get the defendant convicted, this helps them advance their careers. If the odds of winning on the main charge are low, prosecutors have a second option. They can exploit the ambiguity of legal doctrine and charge the defendant for vaguely defined crimes, like “conspiracy”. We model the situation as a signaling game and test it experimentally. If we have participants play the naked game, at least a minority plays the game theoretic equilibrium and use the vague rule if a signal indicates that the defendant is guilty. This becomes even slightly more frequent if a misbehaving defendant imposes harm on a third participant. By contrast if we frame the situation as a court case, almost all prosecutors take the signal at face value and knowingly run the risk of loosing in court if the signal was false. Our experimental prosecutors behave like textbook legal idealists, and follow the urge of duty.FRWP #5, Spring 2016
Title: What happens when there is an “I” in team? An investigation of status and efficiency
Authors: Gwendolyn Tedeschi and Poonam Arora
Department: Economics and Management
Abstract: Even though teams are supposed to work together for the success of the firm, a less than optimal outcome may emerge when individuals within the group are more concerned with their own status and resulting compensation, relative to other teammates. Using a game theoretic model and behavioral experiments, we show that status effects may lead to less efficient outcomes and that by conditioning workers to be team players both players and the firm may benefit.FRWP #6, Spring 2016
Title: A Failure of Fair Trade or a Market Failure? An example for Basic Microeconomics
Authors: Gwendolyn Tedeschi
Department: Economics
Abstract: : Fair Trade is a consumer driven movement that aims to improve working conditions and incomes of poor farmers and artisans. This article will help principles instructors discuss economic arguments both for and against Fair Trade in examples that can be used throughout the semester. While economists have largely denounced the Fair Trade movement as an inefficient subsidy, this stems from an incomplete view of what the movement involves and assumptions that may not be appropriate. A detailed look at all tenets of Fair Trade will help us point out the market failures and potential positive externalities present in these markets.FRWP #7, Spring 2017
Title: What Determines Financial Knowledge among University Students?
Authors: Amira Annabi, Jimena González R., Fabian Müller
Department: Economics & Finance
Abstract: The rapidly growing literature on financial literacy finds an alarming low level of financial knowledge among young adults. During their college years, students are likely to face expenditure, savings, credit card, and student loan decisions for the first time on their own. At the same time, they are investing in their human capital, which will allow them to be become better decision-makers. As students enter the workforce, their lack of financial literacy could prevent them from making adequate financial decisions, such as buying a house or preparing for retirement. Hence, our objective is to assess financial knowledge at this early stage of their adulthood. More specifically, we empirically identify the key determinants that increase financial knowledge among undergraduate college students while controlling for confounding variables that could affect it. Using data from a survey given at a private college in the Northeast, we identify a number of key determinants that influence financial knowledge including but not limited to first-generation status and having a student loan or a credit card. Based on our analysis, we recommend the implementation of school-wide personal finance classes for non-business students. We suggest offering personal finance workshops especially targeting minorities, women, first-generation students, and students who have a student loan.FRWP #8, Spring 2017
Title: On Post-Crisis Banks' Fair Value Measurement Disclosure
Authors: Amira Annabi, Alicja Reuben
Department: Economics & Finance
Abstract: We investigate the information content of the post-crisis new accounting disclosure requirements for banks. We explore the relationship between the banks’ selection of valuation techniques, their risk assessment and performance, in the context of the theory of performativity. At a high level, the theory interprets a valuation technique that gains a critical mass of users as a market device that undergoes a performative process. We use regression techniques to investigate the interplay between the selection of valuation techniques, risk assessment and performance. To do so, we rely on the banks’10-K and 20-F reports from 2012 to 2015. We use three key ingredients in our model: (1) the banks’ return on equity (ROE) as a proxy for performance; (2) the range of unobservable inputs as a proxy of the banks’ risk assessment; (3) the intensity of use of the valuation techniques, as a proxy for the extent to which a technique has undergone a performative process. We find that the banks’ performance and risk assessment are inversely related to the intensity of use. Moreover, we find that a wider range of unobservable inputs is typically associated with a less frequently used technique. These findings also suggest that the existence of a performative process for valuation techniques creates less differentiation and negatively impact the relative performance of banks.
Student Research Working Paper Series
This includes manuscripts submitted by students in partial fulfillment of the requirements for independent study or other courses of the School of Business.
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View Student Research Papers
SRWP #1, Summer 2014
Title: For the Game. For the World. For the Economy? : The Sports Economics of FIFA World Cups in Germany 2006 and Brazil 2014
Author: Doreen Horschig ’15
Department: Economics & Finance
Abstract: Brazil has been criticized by many for its application to host the 2014 FIFA World Cup and for the resulting extensive spending. Amid allegations and protests taking place during the tournament, this work attempts to assess and analyze the return on investment from the mega event for the country. The research is conducted as a comparative study of the FIFA World Cups in Germany and Brazil. Specific examples of comparable cities by size are used. The results of this paper indicate that Brazil benefited from the event through intangible assets such as image-building and self-marketing effects. Brazil and Germany provide enough after-use of the investment made in relation to the tournament with the Cup having a slightly greater impact on Brazil’s developing economy than on Germany’s developed economy. This study contributes to the literature of modern sports economics and can benefit researchers and policy makers interested in the economics of the World Cup.SRWP #2, Spring 2015
Title: The Correlation Between Sports and Entrepreneurial Success
Author: Michael MacKay ’15
Department: MBA
Abstract: The business environment is changing all over the world, and especially in the United States. Startups and entrepreneurs are completely revolutionizing the economy and the conventional traditions of business. With this explosion, many people have tried to dissect the characteristics and skills of entrepreneurs to develop a sense for what makes a specific individual successful in entrepreneurs. Starting a new business and innovating demands dedication, determination, and hard work, just like athletics do. Is there a correlation between sports and business? This study aims to take an in-depth look to see if an athlete is better suited to achieve success in entrepreneurialism over those that have not competed in organized sports.SRWP #3, Spring 2013
Title: IPO's Hit or Miss
Author: Kiara Hidalgo ‘14
Department: Economics and Finance
Read the full text→SRWP #4, Spring 2014
Title: Credit Rating for Project Finance
Author: Bruno Bunzl ‘14
Department: Economics and Finance
Read the full text→SRWP #5, Spring 2014
Title: Bitcoins - Here Today, Gone Tomorrow?
Author: Ryan Powers ‘15
Department: Economics and Finance
Read the full text→SRWP #6, Spring 2015
Title: IPOs and their Effects on Firms and Investors
Author: Stephen Salandra ‘15
Department: Economics and Finance
Read the full text→SRWP #7, Summer 2015
Title: Fair Value Measurement Disclosure Change and its Impact on Investment Banking
Author: Ann-Marie Canale ’15, MBA ‘16
Department: Economics and Finance
Read the full text→SRWP #8, Summer 2015
Title: Portfolio Construction and Optimization
Author: Rokas Kirlys ’15, MBA ‘16
Department: Economics and Finance
Read the full text→
The views expressed in these papers are those of the authors and do not necessarily reflect the views of Manhattan University. Readers are welcome to offer feedback, comments or criticism directly to the authors.