We examine the asset pricing implications of a neoclassical model of repeated investment and disinvestment. Prior research has emphasized a negative relation between productivity and equity risk that results from operating leverage when capital adjustment is costly. In general, however, expansion and contraction options affect risk in the opposite direction: they lower equity risk as profitabil...

This study aims at assessing if benefits, based on the economic performance of farms operating in an agro-food supply chain, are generated by a vertical coordination. A panel data (2008–2011) of durum wheat producers was used, namely the Italian Farm Accountancy Data Network (FADN). Outcomes of coordinated and non-coordinated farms with equal farm and farmer characteristics were calculated thro...

This paper develops a theory that predicts why firms organize their knowledge workers as employees vs. independent contractors and predicts the performance implications of this choice. It then employs a newly constructed data set to empirically examine this organizing choice, which our theory predicts will be driven by contracting difficulties arising from expropriation concerns, measurement co...

We examine the stock market reaction to inter-corporate (984 contractors and 575 contractees) and corporate-government (1963 contractors) contract announcements reported by Dow Jones between January 1, 1990 and December 31, 2000. Around contract announcement dates, we find statistically significant positive average abnormal return for contractors, but insignificant average abnormal returns for ...

This paper documents the effect of investments in Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM) systems on a firm’s long-term stock price performance and profitability measures such as return on assets and return on sales. The results are based on a sample of 186 announcements of ERP implementations; 140 SCM implementations; and 80...

This paper utilizes unique survey data on labor union coverage at the firm level to examine union effects on the profitability of 705 U.S. companies during the 1970s. Market value and earnings are estimated to be about 10%-15% lower in an average unionized company than in a nonunion company, following extensive control for firm and industry characteristics. Deleterious union effects on firm pro...

We study how a stock index can affect corporate behavior by serving as a source of prestige. After decades of low corporate profitability in Japan, the JPX-Nikkei400 index was introduced in 2014. The index selected 400 large and liquid firms deemed to be best-performing in terms of profitability annually; membership was considered highly prestigious. We document that index-inclusion incentives ...

Public transport system must be profitable to the private operators without government subsidy or intolerable rise in bus fare to ensure efficient mobility in a third world city. However, a populist but not so affluent government is unwilling either to subsidize or raise the bus fare, thereby forcing private players to withdraw or compromise with the level of service and the commuters are badly...

this study examines the empirical validity of claims that value stocks (stocks with high ratios of book value to price) have higher average returns than growth stocks (stocks with low book-to-market ratios). the analyses are performed using data pertaining to 70 firms for the period 1381-1389 and used the panel data methodology. this paper contains significant and consistent results. the result...