Robert H. Smith School of Business
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Item THE DEI SIGNALING THRESHOLD: WHEN AND WHY MORE MESSAGING IS NOT ALWAYS BETTER(2024) Holmes, Tara; Derfler-Rozin, Rellie; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)When it comes to messaging diversity, equity, and inclusion (DEI) efforts to employees, organizations take great care in considering the content of the signals they create. However, despite carefully designed communications, they continue to struggle to garner employee support and participation for these initiatives. Counter to the prevailing assumption that more DEI signaling is better (Roberson, 2006; Plaut et al., 2011; Nishii, 2013; Richard et al., 2013; Leslie, 2019; Hunt et al., 2020; Shuman et al., 2023), I argue that positive effects of organizational DEI signaling do not persist with increased exposure to DEI-related stimuli. Leveraging exposure effect research, I instead propose that employee attitudes shift from positive to negative as exposure to signaling increases, thereby decreasing their desire to engage with DEI at work. Specifically, I hypothesize that low and moderate levels of signaling are associated with employees feeling more engagement towards DEI, but at higher DEI fatigue and cynicism are more likely to develop, negatively impacting employees’ DEI effort. I further posit that because managers play a central role in shaping employee attitudes and behaviors, a manager’s consistency with organizational DEI signaling is the key to minimizing negative employee attitudes that emerge because of overexposure. I test these hypotheses in an experiment and a field study with implications for the literatures on DEI in organizations, issue fatigue, and behavioral integrity.Item DEVELOPING MULTIMODAL LEARNING METHODS FOR VIDEO UNDERSTANDING(2024) Sun, Mingwei; Zhang, Kunpeng; Business and Management: Decision & Information Technologies; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In recent years, the field of deep learning, with a particular emphasis on multimodal representation learning, has experienced significant advancements. These advancements are largely attributable to groundbreaking progress in areas such as computer vision, voice recognition, natural language processing, and graph network learning. This progress has paved the way for a multitude of new applications. The domain of video, in particular, holds immense potential. Video is often considered the most potent form of digital content for communication and the dissemination of information. The ability to effectively and efficiently comprehend video content could prove instrumental in a variety of downstream applications. However, the task of understanding video content presents numerous challenges. These challenges stem from the inherently unstructured and complex nature of video, as well as its interactions with other forms of unstructured data, such as text and network data. These factors contribute to the difficulty of video analysis. The objective of this dissertation is to develop deep learning methodologies capable of understanding video across multiple dimensions. Furthermore, these methodologies aim to offer a degree of interpretability, which could yield valuable insights for researchers and content creators. These insights could have significant managerial implications.In the first study, I introduce an innovative network based on Long Short-Term Memory (LSTM), enhanced with a Transformer co-attention mechanism, designed for the prediction of apparent emotion in videos. Each video is segmented into clips of one-second duration, and pre-trained ResNet networks are employed to extract audio and visual features at the second level. I construct a co-attention Transformer to effectively capture the interactions between the audio and visual features that have been extracted. An LSTM network is then utilized to learn the spatiotemporal information inherent in the video. The proposed model, termed the Sec2Sec Co-attention Transformer, outperforms several state-of-the-art methods in predicting apparent emotion on a widely recognized dataset: LIRIS-ACCEDE. In addition, I conduct an extensive data analysis to explore the relationships between various dimensions of visual and audio components and their influence on video predictions. A notable feature of the proposed model is its interpretability, which enables us to study the contributions of different time points to the overall prediction. This interpretability provides valuable insights into the functioning of the model and its predictions. In the second study, I introduce a novel neural network, the Multimodal Co-attention Transformer, designed for the prediction of personality based on video data. The proposed methodology concurrently models audio, visual, and text representations, along with their intra-relationships, to achieve precise and efficient predictions. The effectiveness of the proposed approach is demonstrated through comprehensive experiments conducted on a real-world dataset, namely, First Impressions. The results indicate that the proposed model surpasses state-of-the-art methods in performance while preserving high computational efficiency. In addition to evaluating the performance of the proposed model, I also undertake a thorough interpretability analysis to examine the contribution across different levels. The insights gained from the findings offer a valuable understanding of personality predictions. Furthermore, I illustrate the practicality of video-based personality detection in predicting outcomes of MBA admissions, serving as a decision support system. This highlights the potential importance of the proposed approach for both researchers and practitioners in the field. In the third study, I present a novel generalized multimodal learning model, termed VAN, which excels in learning a unified representation of \textbf{v}isual, \textbf{a}coustic, and \textbf{n}etwork cues. Initially, I utilize state-of-the-art encoders to model each modality. To augment the efficiency of the training process, I adopt a pre-training strategy specifically designed to extract information from the music network. Subsequently, I propose a generalized Co-attention Transformer network. This network is engineered to amalgamate the three distinct types of information and to learn the intra-relationships that exist among the three modalities, a critical facet of multimodal learning. To assess the effectiveness of the proposed model, I collect a real-world dataset from TikTok, comprising over 88,000 videos. Extensive experiments demonstrate that the proposed model surpasses existing state-of-the-art models in predicting video popularity. Moreover, I have conducted a series of ablation studies to attain a deeper comprehension of the behavior of the proposed model. I also perform an interpretability analysis to study the contributions of each modality to the model performance, leveraging the unique property of the proposed co-attention structure. This research contributes to the field by proffering a more comprehensive approach to predicting video popularity on short-form video platforms.Item PROMOTING SAFETY IN FOOD SUPPLY CHAINS: NAVIGATING REGULATIONS, INSPECTOR SCHEDULES, AND INCENTIVE STRUCTURES(2024) Grover, Abhay Kumar; Dresner, Martin E; Business and Management: Logistics, Business & Public Policy; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)The dissertation examines different aspects around safety in U.S. food supply chains, using the context of regulatory policy implementation and inspections. The first essay explores the impact of supply chain accountability regulations on firm level inventory performance within the context of global sourcing. Using the case of the Food Safety Modernization Act, the study suggests that regulatory policies have the potential to negatively impact a firm’s inventory performance by increasing regulatory stress. Using the stress-coping theory, the study finds that sourcing from developed markets exacerbates the regulatory stress, while sourcing from emerging markets alleviates it, thus altering the firm’s coping response as reflected by its inventory leanness performance. The essay has implications for safety in food supply chains. The second essay investigates the impact of work-break schedules on task performance of field staff. Using the context of the U.S. Food and Drug Administration’s regulatory inspections, the study explores different work-break regimes and their impact on food inspectors’ quality assessments of food facilities. The study finds that temporal pacing of inspections increases task performance, but at a diminishing rate. Multi-tasking and non-standard schedules negatively affect performance, while intermittent breaks and start-day of inspections may have a positive effect on inspection outcomes. Strategic scheduling of inspections may increase violation detection. The third essay investigates the impact of incentive design on task performance of field staff. Using the context of the U.S. Food and Drug Administration’s regulatory inspections, the study explores how salary differences relative to multiple referent groups impact food inspectors’ quality assessment of food facilities. Grounded in equity theory, the study finds that a higher salary as compared to previous year, internal peers, and operational interface referents, leads to work withdrawals due to complacency. Conversely, a higher salary as compared to industry referents enhances inspector task performance. A strategic incentive design for inspectors may increase the detection of violations. These studies contribute to the literature at the intersection of supply chain and operations management, public policy, and public sector operations. They do so by advancing our understanding of the factors affecting safety in food supply chains.Item Marketing Implications of Sustainability(2024) Kim, Sanghwa; Kannan, P. K.; Trusov, Michael; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation considers the marketing implications of sustainability. In particular, I study the spillovers of an environmental challenge and a sustainable alternative to marketing practices. The first essay documents an increase in consumer spending with higher levels of air pollution. Moreover, the prominent effect in hedonic categories suggests mood regulation as an underlying mechanism, where the nature of its consumption helps reduce individuals’ negative affect. The second essay reveals consumers’ increased restaurant visits in the presence of e-scooters in urban areas. Moreover, the greater benefits in cities with lower urban accessibility suggest an instrumental role of such micromobility in reducing transportation costs. This mechanism particularly helps restaurants with lower popularity, which brings an advantage to businesses in the long tail, addressing their geolocational inequalities. The two essays provide implications for marketing researchers and practitioners to improve the local economy and develop a sustainable society for consumer welfare.Item Creative Star or Territorial Jerk? The Interpersonal Consequences of Claiming Ownership over Creative Ideas at Work(2024) Hong, Rebekah SungEun; Venkataramani, Vijaya; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Employee creativity—the generation of novel and useful ideas—is vital for organizational growth and survival. To encourage creativity, organizations often reward employees who develop successful ideas, motivating them to claim ownership over their specific creative ideas. However, this dissertation argues that such idea ownership-claiming behaviors are a double-edged sword. Drawing from the Dual Perspective Model of social evaluation, this study proposes that claiming ownership of creative ideas leads to positive evaluations by coworkers of the focal employee’s creative potential but can also result in coworkers perceiving such individuals as territorial, influencing their willingness to collaborate on subsequent creative work. The study further proposes that the idea claiming employee’s granting of idea ownership to other coworkers’ ideas serves as a moderating factor, amplifying the positive effect of perceived creative potential and mitigating the negative effect of perceived territoriality on coworkers’ willingness to collaborate creatively with them. Finding support from a field study and three pre-registered lab experiments, the current research sheds light on the importance of balancing idea ownership claims with acknowledging others’ contributions to navigate the collaboration dynamics in organizations.Item ESSAYS IN INNOVATION AND ENTREPRENEURSHIP(2024) Ye, Zhen; Tate, Geoffrey A.; Business and Management: Finance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation focuses on the topics of innovation and entrepreneurship. In Chapter 1, I study how banks affect their borrowing firms’ green innovation when they reduce credit to firms with high carbon emissions. Using banks’ commitments to carbon neutrality as credit shocks to the borrowing firms, I first show that high-emission firms file fewer green patents following their relationship banks’ commitments to carbon neutrality. At the same time, other borrowing firms that receive increased lending from these committed banks see an increase in green patent filings. Second, I present evidence suggesting that financial constraints and inventor mobility are important mechanisms driving these effects. Third, I find that the value of newly filed green patents by firms in high-emission industries declines post-commitment, whereas there appears to be no discernible impact on the value of green patents filed by other firms. Finally, I develop a novel measure that gauges a patent’s relevance to mitigating climate change impact using text algorithms and show that banks’ commitments lead to lower relevance of green patents filed by high-emission firms. Altogether, the paper highlights an unintended consequence of bank divestment: a decrease in the production of high-quality green patents.Chapter 2 is joint work with Sven Oskarsson and Rafael Ahlskog. This chapter investigates the effects of parental income volatility on individuals’ entrepreneurial decisions in Sweden. Our results indicate that individuals who experience higher uninsurable parental income volatility during adolescence are more likely to become entrepreneurs. Specifically, a one-standard-deviation increase in parental income volatility is associated with an increase in the probability of becoming an entrepreneur by around 45% relative to the mean. Second, we find that firms started by individuals with higher parental income instability have a lower survival rate. Finally, we present evidence in line with higher risk tolerance being an important mechanism driving our findings. We do not find support for alternative mechanisms, including human capital accumulation and financial resources.Item Essays in Corporate Finance(2024) Wu, Chengjun; Maksimovic, Vojislav; Business and Management: Finance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation contains three essays that explore topics in corporate finance and banking. Chapter 1 studies the role of board's political connections in corporate misconduct. Leveraging a policy shock in China that mandated politically connected directors to resign from corporate boards, I find that following the disruption in political connections, firms become less prone to commit misconduct while their misconduct is more likely to be detected. The elimination of political connections on board is particularly effective in deterring and detecting high-level offenses. The effects of the policy are also more pronounced for non-state-owned enterprise and firms in regions with lower level of corruption. I also find that firms affected by the shock are more inclined to initiate Directors and Officers insurance coverage and executives from such firms exhibit more negative sentiments in communications. Overall, the results suggest that political connections may shape firm compliance and facilitate a more lenient regulatory environment for the firm, thereby posing significant challenges to effective regulatory oversight. In Chapter 2, we argue that bank holding companies (BHCs) extend shadow insurance to the prime institutional money market funds (PI-MMFs) they sponsor and that PI-MMFs price this shadow insurance by charging investors significantly higher expense ratios and paying lower net yields. We provide evidence that after September 2008, expense ratios at BHC-sponsored PI-MMFs increased more than at non-BHC-sponsored PI-MMFs. Despite higher expense ratios, BHC-sponsored PI-MMFs did not experience larger redemptions than non-BHC-sponsored PI-MMFs. In addition, we show that expense ratios increased with BHCs' financial strength and the likelihood of their support; however, this expense ratio differential disappeared after the 2016 MMF reform. Chapter 3 studies how the revelation of financial misconduct affects the peer firms of the accused firm. I find that such spillover effect exists in both equity and debt markets using event study approach and staggered difference-in-differences design. In the equity market, the peer firms of the accused firm suffer significant negative cumulative abnormal returns. In the debt markets, both loans and bonds of the peer firms exhibit significantly higher spread over the benchmark risk-free rate following the misconduct revelation. Peer firms that employ the same auditor as the accused firm are more adversely affected. These peer firms not only experience even lower cumulative abnormal returns but also face tighter terms from creditors including collateral requirements and more restrictive covenants. They are also more likely to replace their auditors to distance themselves from the accused firm. The findings are consistent with the notion that financial misconduct erodes the trust in capital markets, prompting market participants to reassess the credibility of the non-accused peer firms.Item Essays on investor preferences and corporate strategies(2024) Nguyen, Huu Loc; Sampson, Rachelle; Business and Management: Logistics, Business & Public Policy; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Time horizon, an investment’s expected payback period, is a consequential investor preference and a crucial determinant of corporate strategy as it can constrain firms’ investment options. However, a gap exists between research focusing on investor temporal preferences and on corporate intertemporal strategy. Therefore, my dissertation offers a multi-level analysis to examine the dynamic relationship between investor temporal preferences and firm strategy. In the first essay, I construct a real-options signaling game model in which time horizon serves as a key determinant of firm strategic responses to shifts in investor temporal preferences. I test my predictions using the emergence of low-carbon energy innovation in the U.S. Oil and Gas industry during 1980-2018. I find that firms adjust their strategies in response to changes in investor time horizons. When faced with a lengthened investor time horizon, firms are more inclined to prioritize long-term inventive innovation, whereas a shortened investor time horizon prompts a greater focus on short-term adoptive innovation. Furthermore, I find suggestive evidence that such commitments when firms align their strategies to investor temporal preferences enhance firms' innovation performance. The second essay extends my investigation in the first chapter to explore the impacts of the inherent information asymmetry between firms and investors on investor-induced firm strategies. I find that, in high information asymmetry contexts, firms overshoot their investor-induced responses to effectively signal their alignment to shifts in investor temporal preferences. In the third (co-authored) essay, we explore the interplay between investor temporal preferences and firm strategies via top management teams. We study how the career experience of top management influences firm strategies and investor temporal preferences. We construct a novel metric to capture, standardize, and compare executives’ career paths across different functional roles, firms, and industries. Our findings indicate that executives with heightened diversity of experience across various functional roles tend to support longer-term strategies, such as income smoothing over time, aligning with the interests of long-term investors. In contrast, executives with more transitions between firms and industries often exhibit more short-term actions, namely cuts in R&D investments, rendering their firms more appealing to short-term investors.Item The Spillover Effect of Environmental Disclosures: Evidence from Customers' Net-zero Pledges(2024) Castillo, Juan; Hann, Rebecca; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This paper investigates the real impact of customers’ voluntary environmental disclosures, specifically, Net-Zero Pledges (NZPs), on the direct greenhouse gas emissions of their suppliers. NZPs represent a growing trend in corporate disclosure, where companies commit to reducing carbon emissions to a minimum level by a specified date, with any remaining emissions being offset by carbon removal actions. Using firms’ connections along the supply chain and a staggered difference-in-differences design, this study provides evidence that suppliers significantly reduce their direct emissions following customers’ NZPs. This effect is more pronounced for NZPs made by customers with greater bargaining power, while suppliers’ reactions are stronger when they have higher carbon intensity and better environmental performance. Furthermore, NZPs of higher quality elicit a stronger response, especially when they limit the use of carbon offsets, set interim targets, and establish public reporting mechanisms. The evidence suggests that this reduction in emissions is achieved by suppliers’ investments in green technologies and innovation, as well as improvements in environmental policies in the years following customers’ NZPs. While these modifications do not seem to change firms’ profitability, they are associated with increased business output and capital investments, though at the expense of additional debt. These findings suggest that customers’ voluntary environmental disclosures can trigger positive spillover effects in upstream suppliers’ real operations, even in the absence of mandatory regulations.Item CREDIT RATING AGENCIES AS GATEKEEPERS FOR NON-GAAP DISCLOSURE IN THE DEBT MARKET(2024) Yan, Lu; Kimbrough, Michael; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)To aid investors in assessing earnings persistence, managers often voluntarily provide non-GAAP disclosure, which excludes certain items they characterize as non-recurring from GAAP earnings. The quality of non-GAAP disclosures and their impact on the equity market have been well studied. By contrast, there is little evidence on the impact of these disclosures in the debt market. Credit rating agencies (CRAs) serve as gatekeepers in the debt market, playing an important role in evaluating creditworthiness by actively incorporating accounting information from corporate disclosure. Like shareholders, CRAs also seek to isolate the transitory component of GAAP earnings. For example, Moody’s (2006) and Standard & Poor’s (2008), the two largest rating agencies, state that they derive their credit ratings from adjusted accounting figures by excluding non-recurring items that do not reflect long-term credit risks. Thus, in this paper, I explore the possibility that managers’ non-GAAP disclosures are relevant to CRAs. Consistent with CRAs’ emphasis on long-horizon corporate performance, I provide evidence that CRAs exhibit stronger responses to non-GAAP earnings than GAAP earnings. Using mediation analysis, I find that bondholders rely on CRAs to incorporate earnings information, and such reliance is notably greater for non-GAAP earnings than GAAP earnings. While CRAs do not specifically emphasize the direction of exclusions (i.e., gains or losses), they are attentive to identifying high-quality non-GAAP disclosure, as evidenced by the more positive associations observed between their credit ratings and high-quality non-GAAP earnings. I further find that non-GAAP earnings outperform GAAP earnings for non-GAAP reporters in their predictive power for long-term bankruptcy and default risks, validating CRAs’ motivations to incorporate non-GAAP earnings when assigning credit ratings. Finally, managers appear to be aware of CRAs’ utilization of their non-GAAP disclosure and are thus inclined to offer high-quality but conservative non-GAAP metrics to either achieve or maintain higher ratings when approaching rating upgrades or downgrades. My findings collectively suggest that CRAs view non-GAAP metrics as more relevant tools when evaluating borrowers’ long-term performance and default risks, serving as key intermediaries between non-GAAP reporters and bondholders.