Abstract This study examines the relationship between creativity and economic policy uncertainty. It does so by examining the relationship between projects launched across US states via the Kickstarter platform during the period 2010–2019 and state-level measures of economic policy uncertainty. Panel regressions (state and year-month fixed) indicate that the number of Kickstarter projects launched exhibits a negative relationship with the national economic policy uncertainty faced by individual states but no relationship with the states’ own economic policy uncertainty. Other findings indicate that the proportion of projects that get fully funded are negatively affected by national economic policy uncertainty faced by the states, whereas the average amount pledged per project and the average number of backers per project are negatively affected by an increase in states’ own economic policy uncertainty. These findings suggest that creativity itself declines plus constraints on creativity increase with an increase in economic policy uncertainty.

This study examines the impact of Michigan and Indiana Right-to-Work (RTW) laws passed in 2012 on the financials (assets, revenue, operating expenses, and profitability) of their hospitals. Difference-in-difference regressions indicate that, on average, RTW enactments by the two states is associated with significant increase in assets (buildings and fixed equipment), net income, operating margin, and ROA of their hospitals compared to those in states with RTW laws or without RTW laws as the control group.

This study examines the relationship between Right-to-Work (RTW) laws and creativity. Using data from the Kickstarter crowdfunding platform for the period 2010-2019, we find that the number of projects launched, the probability of success, the average amount of capital pledged, and the average number of backers are all significantly higher in states without RTW laws than in states with RTW laws. This finding holds for both Art- and Product- focused projects. Thus, our findings are consistent with the view that states without RTW laws provide a better outlet for creativity than states with RTW laws.

This study examines financial constraints of Michigan and Indiana firms before and after the two states enacted Right-to-Work laws in 2012 relative to those in states with and without RTW laws as separate control groups. Findings based on difference-in-difference regressions indicate that, on average, financial constraints of Michigan and Indiana firms were significantly higher than those in both the control groups before the RTW laws were enacted, but the constraints declined significantly after the laws were enacted not only relative to the pre-enactment levels but also relative to those of companies in both the control groups.

Using corporate value statements of the top Fortune 300 firms for the year 2012, we examine relationships among the stated values of these companies, their industries, and their Corporate Social Responsibility (CSR) performance measures. We classify stated values into 21 broad categories. We find that corporate values exhibit strong industry affiliations. Correspondence analysis and regression models indicate that 19 out of 21 values are related to at least one performance measure and while some values are associated with improved performance (e.g., ethics), others (e.g., safety) have a negative impact. Further, while some values have the anticipated impact on performance (e.g., the shareholder value is positively associated with financial performance), some show no relationship (e.g., the environment value is not associated with environmental performance). Finally, our findings also suggest possible CSR washing in some cases. Overall, the study finds corporate values do affect their performance.

We examine the Environmental, Social, and Governance (ESG) performance of Michigan and Indiana companies before and after they passed the Right-to-Work (RTW) laws in 2012 by referencing it against that of companies in states with and without RTW laws. Our findings indicate that after the laws were passed the Environmental and Social performance of companies in these two states declined on the compliance dimension and so did some of their Social performance on the proactive dimension. Outside of some of the common trends in the ESG performance of companies in states with and without RTW laws, the Social performance of companies in states without RTW laws declined on the proactive dimension as well after the laws were passed. Performance pertaining to Governance was unaffected for companies after the enactments.

This study provides a review of important legal cases and empirical studies on Right-to-Work RTW laws. Twenty-seven US states have passed RTW laws since 1946, but the proposed Protecting the Right to Organize (PRO) Act 2021 intends to override some of their important provisions. Evidence on RTW laws will therefore be widely in demand as the PRO Act starts getting increased legislative attention. Our study provides a brief background on RTW laws, reviews important legal cases, groups congruous empirical findings into broad themes, identifies topics on which there is still turbidity in findings, and points out areas that are likely to receive increased research attention going forward.

Overnight returns are significantly positive while day returns are significantly negative in the COMEX gold front futures contract, the gold spot market (London Fix), gold mining company stocks, and gold related closed end mutual funds and exchange traded funds. The findings are consistent with gold price being (too) high at the opening of the various markets. The asymmetry is shown to be present in both up and down markets for gold. The results are economically important even with transaction costs.

This study examines share price reaction to the enrollment by companies in the Children's Food and Beverage Advertising Initiative. We find that, on average, in the month of enrollment, shareholders of companies that join the CFBAI experience abnormal return of -3% and so do the shareholders of the immediate competitors that do not join the initiative. However, over the subsequent five years, while the shareholders of companies enrolled in the initiative experience an average abnormal return of +16.6%, that of non-enrolled competitors experience a further abnormal return of -34%. The abnormal returns for the two groups (at the time of enrollment and over the subsequent five years) are uncorrelated and so benefitting at the expense of competitors does not appear to be the motive for enrolling in the CFBAI. The study also provides comparison of number of employees and other important financial ratios before and after enrollment in the CFBAI for the two groups.

This study examines the abnormal returns to the shareholders of companies that have enrolled in the Children’s Food and Beverage Advertising Initiative (CFBAI) as well as those of their competitors that did not join the initiative. We find that, on average, the former group of companies is much larger than the latter. Shareholders of both groups experience significant abnormal return of -3% in the month of enrollment. However, the former group experiences an abnormal return of 16% over the next five years, while those of the latter experience an abnormal return of -34%. These abnormal returns net out to be an average abnormal gain of $14.5 billion for companies enrolled in the initiative and an average abnormal loss of $1.7 billion for non-enrolled competitors. The findings suggest that being in a position to be socially responsible is of benefit to shareholders while being ill situated can hurt them.

Overnight returns on the COMEX gold front month contract are significantly positive, whereas day returns are significantly negative (1985 through 2012). Similarly, overnight returns on the SPDR Gold Shares exchange traded fund are significantly greater than day returns. The asymmetry has weakened substantially over the years, but it is still present.

Introduction Gold is in demand as an investment, as jewelry and as an industrial commodity. The demand for gold as an industrial commodity is relatively stable over time. However, the demand for gold as jewelry and as an investment changes substantially across time. For example, in 1998 the demand for jewelry gold was 80% of the total demand for gold, and the demand as an investment was only 7% of the total demand for gold. But, at the end of 2009, the former was 45% and the latter was 40%. (1) As an investment, gold is similar to growth stocks in that it does not pay any cash dividend, but as jewelry it provides consumption dividend. We expect, therefore, that when the demand for gold as investment is high, the return on gold is similar to the return on other growth investments. On the other hand, when demand for gold as jewelry is high, the return on gold is less similar to growth investments. Consequently, as the relative portion of the jewelry demand for gold changes, its correlation with the value-growth factor in stock returns should change as well. Rising stock prices can cause the demand for gold as jewelry and as an investment to increase simultaneously (that is, increases in investor wealth may cause the demand for both components to increase). However, even if the changes in the demand for gold as investment and as jewelry are in the same direction, the incremental change for the two components could be different. Accordingly, if an investor adds gold to a stock portfolio as an investment asset, its effect on the portfolio's returns along the value-growth axis could be separate from its effect along the market axis. It is also likely that combining gold with stock portfolios could have different effects on the Sharpe ratio depending on the tilt of the portfolio along the value-growth axis. Another property of gold is its tendency to move against the value of the dollar (Pukthuanthong and Roll 2011). Big firms are likely to have larger multinational exposure than small firms and are thus more likely to be affected by changes in the value of the dollar. Consequently, gold may be sensitive to some of the same forces that influence the small-big differential in stock returns. Adding gold to stock portfolios could therefore cause style drift along the small-big axis. Also, the impact on the Sharpe ratio could be different when combining gold with small stocks versus combining gold with large stocks. In this paper, we regress the excess return on gold (relative to the return on a 30-day T-bill) against the augmented Fama-French factors as in Carhart (1997). This approach helps assess gold's sensitivity to the market factor (Rm-Rf), the small-big factor (SMB), the value-growth factor (HML) and the momentum factor (UMD). When used together, these factors capture much of the common variation in stock returns compared to using only the market factor. Our approach provides an assessment of gold's sensitivity to these pervasive influences on stock returns. (2) Our findings indicate that gold is a hedge against value stocks during periods of falling inflation, expansive monetary policy, recessions and a falling dollar. However, gold is a hedge against growth stocks during equity bull markets, periods of rising inflation and periods of restrictive monetary policy. Gold's loading on the market factor also changes sign across business/economic regimes, but these sign changes are unrelated to the sign changes in its loading on HML. Gold's loadings on SMB and UMD are either zero or positive depending on the business/economic regime. Thus, the empirical evidence indicates that combining gold with stock portfolios can change the portfolios' sensitivities to the augmented Fama-French factors. Further, our findings indicate that adding gold to stock portfolios improves their Sharpe ratios irrespective of their style (market, value, growth, small, big, momentum winners and losers) during most business economic regimes, but it reduces their Sharpe ratios during periods of rising dollar value and recessions. …

This study examines the weekend effect in gold returns during bull and bear markets over the period 1975 through 2011. It shows that gold returns from close on Friday to close on Monday are significantly lower than returns during the rest of the week. This result is due largely to gold returns during bear markets. During gold bull markets, gold weekend returns are not significantly different from weekday returns. The study shows that the effect has substantial economic implications for gold investors. The effect is shown to be related to a significantly negative skewness in the weekend returns.

The purpose of our research is to investigate the factors that impact performance in a financial management simulation component of a second financial management class. We measured the impact of previous course performance, gender, age and other concurrent course components on the dependent variable. Using two different statistical techniques, we found that a students current scores on exams, case write-ups and written summary reports were the strongest predictors of performance in the online simulation. The predictive ability of this variable was complemented by the positive impact of a students age. All else equal, the higher the age, the better the performance as measured by the simulated firms stock price. These results are encouraging and we will continue this experiential process during future semesters to add additional students to our sample size to further investigate the relationship between performance in the simulation and student characteristics.

Introduction As documented by a voluminous research effort, equity securities show significant variation across weekdays. In particular, average Monday returns have been negative and significantly lower than other weekday returns. Recent empirical evidence, however, documents that Monday returns have become positive and larger than other weekday returns for large-firm securities only. Chen and Singal (2003) offer a hypothesis based on order flow that explains the historically low returns for Monday and a partial explanation of the shift in Monday returns for large-firm securities. Many earlier researchers have also hypothesized that weekday variation in order flow causes negative Monday returns. These arguments include the following notions: 1) individuals use weekends as decision making time and then execute sells on Monday; 2) investors are inherently pessimistic on Mondays, making them more likely to sell and less likely to buy; and 3) institutions withdraw liquidity on Mondays, allowing sell orders to have a greater negative impact than on other weekdays. (4) Chen and Singal's novel argument attributes the weekend effect to order flow patterns caused by the trading of speculative short sellers that result in high Friday returns and low Monday returns. (5) They argue that because short selling is an inherently risky strategy, short sellers are reluctant to hold their positions over non-trading periods. Hence, speculative short sellers tend to close their positions on Friday and re-establish their positions on Mondays, (6) causing prices to rise on Fridays and fall on Mondays. This pattern, they argue, changed as less risky put options became available and bearish traders switching to this alternative no longer felt compelled to close their position over the weekend. Thus, the weekend effect disappeared for large-firm securities. For small-firm securities without available put options, however, the traditional weekend pattern continued. Chen and Singal's argument is creative and appealing, but we identify three key factors that suggest a critical evaluation of their conclusions. First, we find it untenable that the trading pattern of bearish investors suggested by Chen and Singal, if pervasive enough to cause the weekend effect, would have gone unreported by the financial press. Likewise, if bearish investors had migrated en masse to put options from short-selling, this switch too would have been noted by the financial press. After extensive investigation we find no report of either behavior in the financial press. Nor do Chen and Singal provide any such example. Further, the financial press, as discussed below, continues to report bearish trading activity in terms of short-selling behavior. Second, as argued below, weekend return patterns (as reported in literature extant at the time of the Chen and Singal study) would make the trading behavior assumed by Chen and Singal irrational. (7) Third, Chen and Singal argue that put buying is less risky than short selling. Although this view is widely held, we suggest that careful consideration leads to its rejection. In the next section we report evidence of trading behavior of bearish investors as reported by the financial press and from a survey of bearish investors. We find no support for the hypothesis that short sellers routinely close their position over the weekend arguing against short-selling activity as the cause of the weekend effect. Further, we find no support for the hypothesis that bearish investors substituted put options for short selling on a wholesale basis following the introduction of put options as required by the Chen and Singal hypothesis. In Section 3 we discuss how existing empirical evidence conflicts with the Chen and Singal hypothesis and we develop the argument that put speculation is more risky than short selling, suggesting a lack of rationale for any impact on the weekend effect for individual stocks resulting from put option listing. …

Strategic alliances play a prominent role in firm competitiveness. While the number of strategic alliances formed increases year after year, the research evidence on alliance success is conflicting. This study compares marketing and technology alliances during the technology era, 1996–2003. The sample size for the two groups is 91 and 109, respectively. On the basis of the Fama-French three-factor model, we find that the stock market considers the announcement of marketing and technology alliances to be a zero NPV project (whether alliance partners are considered individually or not). Also, we find that between alliance partners the larger firms exhibit better bargaining in technology alliances than in marketing alliances.