Leadership at the upper echelons : three essays

"IT'S THE ECONOMY STUPID", BUT CHARISMA MATTERS TOO: A DUAL PROCESS MODEL OF PRESIDENTIAL ELECTION OUTCOMES. ABSTRACT Because charisma is assumed to be an important determinant of effective leadership, the extent to which a presidential nominee is more charismatic than his opponent should be an important determinant of voter choices. We computed a composite measure of the rhetorical richness of acceptances speeches given by U.S. presidential candidates at their national party convention. We added this marker of charisma to Ray C. Fair's presidential vote-share equation (1978; 2009). We theorized that voters decide using psychological attribution (i.e., due to macroeconomics and incumbency) as well as inferential processes (i.e., due to leader charismatic behavior) when voting. Controlling for the macro-level variables and incumbency in the Fair model, our results indicated that difference between nominees' charisma is a significant determinant of electoral success, particularly in close elections. This extended model significantly improves the precision of the Fair model and correctly predicts 23 out of the last 24 U.S. presidential elections. Paper 2: IT CEO LEADERSHIP, CORPORATE SOCIAL AND FINANCIAL PERFORMANCE. ABSTRACT We investigated whether CEO leadership predicted corporate financial performance (CFP) and corporate social performance (CSP). Using longitudinal data on 258 CEOs from 117 firms across 19 countries and 10 industry sectors, we found that determinants of CEO leadership (i.e., implicit motives) significantly predicted both CFP and CSP. As expected, the most consistent positive predictor was Responsibility Disposition when interacting with n (need for) Power. n Achievement and n Affiliation were generally negatively related or unrelated to outcomes. CSP was positively related to accounting measures of CFP. Our findings suggest that executive leader characteristics have important consequences for corporate level outcomes. Paper 3. PUNISHING THE POWERFUL: ATTRIBUTIONS OF BLAME AND LEADERSHIP ABSTRACT We propose that individuals are more lenient in attributing blame to leaders than to nonleaders. We advance a motivational explanation building on the perspective of punishment and on system justification theory. We conducted two scenario experiments which supported our proposition. In study 1, wrongdoer leader status was negatively related to blame and the perceived seriousness of the wrongdoing. In study 2, controlling for the Big-Five personality factor and individual differences in moral evaluation (i.e., moral foundations), wrongdoer leader status was negatively related with desired severity of punishment, and fair punishments were perceived as more just for non-leaders than for leaders.

Five essays on bankruptcy

Chapter 2 Bankruptcy Initiation In The New Era of Chapter 11 2.1 Abstract The bankruptcy act of 1978 placed corporate managers (as debtor in possession) in control of the bankruptcy process. Between 2000 and 2001 managers apparently lost this control to secured creditors. This study examines financial ratios of firms filing for bankruptcy between 1993 and 2004 and tests the hypothesis that the change from manager to creditor control created or exacerbated the managerial (and dominant creditor) incentive to delay bankruptcy filing. We find a clear deterioration in the financial conditions of firms filing after 2001. This is consistent with managers (or creditors who control them) delaying filing for bankruptcy. We also observe patterns of operating losses and liquidations that suggest adverse economic consequences from such delay. Chapter 3 Bankruptcy Resolution: Priority of Claims with the Secured Creditor in Control 3.1 Abstract We present new evidence on the violation of priority of claims in bankruptcy using a sample of 222 firms that tiled for Chapter 11 bankruptcy over the 1993-2004 period. Our study reveals a dramatic reduction in the violations of priority of claims compared to research on prior periods. These results are consistent with changes in both court practices and laws transferring power to the secured creditors over our sample period. We also find an increase in the time from the date of a bankruptcy filing to reaching plan confirmation where priority is not violated. Chapter 4 Bankruptcy Resolution: Speed, APR Violations and Delaware 4.1 Abstract We analyze speed of bankruptcy resolution on a sample of 294 US firms filing for bankruptcy in the 1993-2004 period. We find strong association between type of Chapter II filing and speed of bankruptcy resolution. We also find that violations to the absolute priority rule reduce the time from bankruptcy filing to plan confirmation. This is consistent with the hypothesis that creditors are willing to grant concessions in exchange for faster bankruptcy resolution. Furthermore, after controlling for the type of filing and violations to the absolute priority rule, we do not find any difference in the duration of the bankruptcy process for firms filing in Delaware, New York, or other bankruptcy districts. Chapter 5 Financial Distress and Corporate Control 5.1 Abstract We examine the replacement rates of directors and executives in 63 firms filing for bank ruptcy during the 1995-2002 period. We find that over 76% of directors and executives are replaced in the four year period from the year prior to the bankruptcy filing through three years after. These rates are higher than those found in prior research and is consistent with changes in bankruptcy procedures and practice (i.e. the increased secured creditors control over the process due to both DIP financing and changes in the Uniform Commercial Code) having a significant impact on the corporate governance of firms in financial distress. Chapter 6 Financial Statement Restatements: Decision to File for Bankruptcy 6.1 Abstract On a sample of 201 firms that restated their financial statements we analyze the process of regaining investor trust in a two year period after the restatement. We find that 20% of firms that restate their financial statements tile for bankruptcy or restructure out of court. Our results also indicate that the decisions to change auditor or management is correlated with a higher probability of failure. Increased media attention appears to partly explain the decision of firms to restructure their debt or tile for bankruptcy.

Essays in equilibrium asset pricing

Introduction This dissertation consists of three essays in equilibrium asset pricing. The first chapter studies the asset pricing implications of a general equilibrium model in which real investment is reversible at a cost. Firms face higher costs in contracting than in expanding their capital stock and decide to invest when their productive capital is scarce relative to the overall capital of the economy. Positive shocks to the capital of the firm increase the size of the firm and reduce the value of growth options. As a result, the firm is burdened with more unproductive capital and its value lowers with respect to the accumulated capital. The optimal consumption policy alters the optimal allocation of resources and affects firm's value, generating mean-reverting dynamics for the M/B ratios. The model (1) captures convergence of price-to-book ratios -negative for growth stocks and positive for value stocks - (firm migration), (2) generates deviations from the classic CAPM in line with the cross-sectional variation in expected stock returns and (3) generates a non-monotone relationship between Tobin's q and conditional volatility consistent with the empirical evidence. The second chapter proposes a standard portfolio-choice problem with transaction costs and mean reversion in expected returns. In the presence of transactions costs, no matter how small, arbitrage activity does not necessarily render equal all riskless rates of return. When two such rates follow stochastic processes, it is not optimal immediately to arbitrage out any discrepancy that arises between them. The reason is that immediate arbitrage would induce a definite expenditure of transactions costs whereas, without arbitrage intervention, there exists some, perhaps sufficient, probability that these two interest rates will come back together without any costs having been incurred. Hence, one can surmise that at equilibrium the financial market will permit the coexistence of two riskless rates that are not equal to each other. For analogous reasons, randomly fluctuating expected rates of return on risky assets will be allowed to differ even after correction for risk, leading to important violations of the Capital Asset Pricing Model. The combination of randomness in expected rates of return and proportional transactions costs is a serious blow to existing frictionless pricing models. Finally, in the last chapter I propose a two-countries two-goods general equilibrium economy with uncertainty about the fundamentals' growth rates to study the joint behavior of equity volatilities and correlation at the business cycle frequency. I assume that dividend growth rates jump from one state to other, while countries' switches are possibly correlated. The model is solved in closed-form and the analytical expressions for stock prices are reported. When calibrated to the empirical data of United States and United Kingdom, the results show that, given the existing degree of synchronization across these business cycles, the model captures quite well the historical patterns of stock return volatilities. Moreover, I can explain the time behavior of the correlation, but exclusively under the assumption of a global business cycle.

Three essays on major trends in a slow clockspeed industry : the case of industrial automation

The motivation for this research initiated from the abrupt rise and fall of minicomputers which were initially used both for industrial automation and business applications due to their significantly lower cost than their predecessors, the mainframes. Later industrial automation developed its own vertically integrated hardware and software to address the application needs of uninterrupted operations, real-time control and resilience to harsh environmental conditions. This has led to the creation of an independent industry, namely industrial automation used in PLC, DCS, SCADA and robot control systems. This industry employs today over 200'000 people in a profitable slow clockspeed context in contrast to the two mainstream computing industries of information technology (IT) focused on business applications and telecommunications focused on communications networks and hand-held devices. Already in 1990s it was foreseen that IT and communication would merge into one Information and communication industry (ICT). The fundamental question of the thesis is: Could industrial automation leverage a common technology platform with the newly formed ICT industry? Computer systems dominated by complex instruction set computers (CISC) were challenged during 1990s with higher performance reduced instruction set computers (RISC). RISC started to evolve parallel to the constant advancement of Moore's law. These developments created the high performance and low energy consumption System-on-Chip architecture (SoC). Unlike to the CISC processors RISC processor architecture is a separate industry from the RISC chip manufacturing industry. It also has several hardware independent software platforms consisting of integrated operating system, development environment, user interface and application market which enables customers to have more choices due to hardware independent real time capable software applications. An architecture disruption merged and the smartphone and tablet market were formed with new rules and new key players in the ICT industry. Today there are more RISC computer systems running Linux (or other Unix variants) than any other computer system. The astonishing rise of SoC based technologies and related software platforms in smartphones created in unit terms the largest installed base ever seen in the history of computers and is now being further extended by tablets. An underlying additional element of this transition is the increasing role of open source technologies both in software and hardware. This has driven the microprocessor based personal computer industry with few dominating closed operating system platforms into a steep decline. A significant factor in this process has been the separation of processor architecture and processor chip production and operating systems and application development platforms merger into integrated software platforms with proprietary application markets. Furthermore the pay-by-click marketing has changed the way applications development is compensated: Three essays on major trends in a slow clockspeed industry: The case of industrial automation 2014 freeware, ad based or licensed - all at a lower price and used by a wider customer base than ever before. Moreover, the concept of software maintenance contract is very remote in the app world. However, as a slow clockspeed industry, industrial automation has remained intact during the disruptions based on SoC and related software platforms in the ICT industries. Industrial automation incumbents continue to supply systems based on vertically integrated systems consisting of proprietary software and proprietary mainly microprocessor based hardware. They enjoy admirable profitability levels on a very narrow customer base due to strong technology-enabled customer lock-in and customers' high risk leverage as their production is dependent on fault-free operation of the industrial automation systems. When will this balance of power be disrupted? The thesis suggests how industrial automation could join the mainstream ICT industry and create an information, communication and automation (ICAT) industry. Lately the Internet of Things (loT) and weightless networks, a new standard leveraging frequency channels earlier occupied by TV broadcasting, have gradually started to change the rigid world of Machine to Machine (M2M) interaction. It is foreseeable that enough momentum will be created that the industrial automation market will in due course face an architecture disruption empowered by these new trends. This thesis examines the current state of industrial automation subject to the competition between the incumbents firstly through a research on cost competitiveness efforts in captive outsourcing of engineering, research and development and secondly researching process re- engineering in the case of complex system global software support. Thirdly we investigate the industry actors', namely customers, incumbents and newcomers, views on the future direction of industrial automation and conclude with our assessments of the possible routes industrial automation could advance taking into account the looming rise of the Internet of Things (loT) and weightless networks. Industrial automation is an industry dominated by a handful of global players each of them focusing on maintaining their own proprietary solutions. The rise of de facto standards like IBM PC, Unix and Linux and SoC leveraged by IBM, Compaq, Dell, HP, ARM, Apple, Google, Samsung and others have created new markets of personal computers, smartphone and tablets and will eventually also impact industrial automation through game changing commoditization and related control point and business model changes. This trend will inevitably continue, but the transition to a commoditized industrial automation will not happen in the near future.

Four essays on economic geography, trade and development

RESUME Cette thèse se situe à la frontière de la recherche en économie du développement et du commerce international et vise à intégrer les apports de l'économie géographique. Le premier chapitre s'intéresse aux effets de création et de détournement de commerce au sein des accords régionaux entre pays en développement et combine une approche gravitaire et une estimation non paramétrique des effets de commerce. Cette analyse confirme un effet de commerce non monotone pour six accords régionaux couvrant l'Afrique, l'Amérique Latine et l'Asie (AFTA, CAN, CACM, CEDEAO, MERCO SUR et SADC) sur la période 1960-1996. Les accords signés dans les années 90 (AFTA, CAN, MERCOSUR et SADC) semblent avoir induis une amélioration du bien-être de leurs membres mais avec un impact variable sur le reste du monde, tandis que les accords plus anciens (CEDEAO et CACM) semblent montrer que les effets de commerce et de bien-être se réduisent pour finir par s'annuler à mesure que le nombre d'années de participation des Etats membres augmente. Le deuxième chapitre pose la question de l'impact de la géographie sur les échanges Sud-Sud. Ce chapitre innove par rapport aux méthodes classiques d'estimation en dérivant une équation de commerce à partir de l'hypothèse d'Armington et en intégrant une fonction de coût de transport qui prend en compte la spécificité des pays de l'UEMOA. Les estimations donnent des effets convaincants quant au rôle de l'enclavement et des infrastructures: deux pays enclavés de l'UEMOA commercent 92% moins que deux autres pays quelconques, tandis que traverser un pays de transit au sein de l'espace UEMOA augmente de 6% les coûts de transport, et que bitumer toutes les routes inter-Etat de l'Union induirait trois fois plus de commerce intra-UEMOA. Le chapitre 3 s'intéresse à la persistance des différences de développement au sein des accords régionaux entre pays en développement. Il montre que la géographie différenciée des pays du Sud membres d'un accord induit un impact asymétrique de celui-ci sur ses membres. Il s'agit d'un modèle stylisé de trois pays dont deux ayant conclu un accord régional. Les résultats obtenus par simulation montrent qu'une meilleure dotation en infrastructure d'un membre de l'accord régional lui permet d'attirer une plus grande part industrielle à mesure que les coûts de transport au sein de l'accord régional sont baissés, ce qui conduit à un développement inégal entre les membres. Si les niveaux d'infrastructure domestique de transport sont harmonisés au sein des pays membres de l'accord d'intégration, leurs parts industrielles peuvent converger au détriment des pays restés hors de l'union. Le chapitre 4 s'intéresse à des questions d'économie urbaine en étudiant comment l'interaction entre rendements croissants et coûts de transport détermine la localisation des activités et des travailleurs au sein d'un pays ou d'une région. Le modèle développé reproduit un fait stylisé observé à l'intérieur des centres métropolitains des USA: sur une période longue (1850-1990), on observe une spécialisation croissante des centres urbains et de leurs périphéries associée à une évolution croissante puis décroissante de la population des centres urbains par rapport à leurs périphéries. Ce résultat peut se transférer dans un contexte en développement avec une zone centrale et une zone périphérique: à mesure que l'accessibilité des régions s'améliore, ces régions se spécialiseront et la région principale, d'abord plus importante (en termes de nombre de travailleurs) va finir par se réduire à une taille identique à celle de la région périphérique.

Dyslexia in a French-Spanish bilingual girl: behavioural and neural modulations following a visual attention span intervention.

We report the case study of a French-Spanish bilingual dyslexic girl, MP, who exhibited a severe visual attention (VA) span deficit but preserved phonological skills. Behavioural investigation showed a severe reduction of reading speed for both single items (words and pseudo-words) and texts in the two languages. However, performance was more affected in French than in Spanish. MP was administered an intensive VA span intervention programme. Pre-post intervention comparison revealed a positive effect of intervention on her VA span abilities. The intervention further transferred to reading. It primarily resulted in faster identification of the regular and irregular words in French. The effect of intervention was rather modest in Spanish that only showed a tendency for faster word reading. Text reading improved in the two languages with a stronger effect in French but pseudo-word reading did not improve in either French or Spanish. The overall results suggest that VA span intervention may primarily enhance the fast global reading procedure, with stronger effects in French than in Spanish. MP underwent two fMRI sessions to explore her brain activations before and after VA span training. Prior to the intervention, fMRI assessment showed that the striate and extrastriate visual cortices alone were activated but none of the regions typically involved in VA span. Post-training fMRI revealed increased activation of the superior and inferior parietal cortices. Comparison of pre- and post-training activations revealed significant activation increase of the superior parietal lobes (BA 7) bilaterally. Thus, we show that a specific VA span intervention not only modulates reading performance but further results in increased brain activity within the superior parietal lobes known to housing VA span abilities. Furthermore, positive effects of VA span intervention on reading suggest that the ability to process multiple visual elements simultaneously is one cause of successful reading acquisition.