The effect of the business cycle on the performance of socially responsible equity mutual funds

The current study applies a two-state switching regression model to examine the behavior of a hypothetical portfolio of ten socially responsible (SRI) equity mutual funds during the expansion and contraction phases of US business cycles between April 1991 and June 2009, based on the Carhart four-factor model, using monthly data. The model identified a business cycle effect on the performance of SRI equity mutual funds. Fund returns were less volatile during expansion/peaks than during contraction/troughs, as indicated by the standard deviation of returns. During contraction/troughs, fund excess returns were explained by the differential in returns between small and large companies, the difference between the returns on stocks trading at high and low Book-to-Market Value, the market excess return over the risk-free rate, and fund objective. During contraction/troughs, smaller companies offered higher returns than larger companies (ci = 0.26, p = 0.01), undervalued stocks out-performed high growth stocks (h i = 0.39, p <0.0001), and funds with growth objectives out-performed funds with other objectives (oi = 0.01, p = 0.02). The hypothetical SRI portfolio was less risky than the market (bi = 0.74, p <0.0001). During expansion/peaks, fund excess returns were explained by the market excess return over the risk-free rate, and fund objective. Funds with other objectives, such as balanced funds and income funds out-performed funds with growth objectives (oi = −0.01, p = 0.03). The hypothetical SRI portfolio exhibited similar risk as the market (bi = 0.93, p <0.0001). The SRI investor adds a third criterion to the risk and return trade-off of traditional portfolio theory. This constraint is social performance. The research suggests that managers of SRI equity mutual funds may diminish value by using social and ethical criteria to select stocks, but add value by superior stock selection. The result is that the performance of SRI mutual funds is very similar to that of the market. There was no difference in the value added among secular SRI, religious SRI, and vice screens.

Regional diversification and performance: Conceptualization and competing strategic objectives

This dissertation comprised of three essays provides justification for the need to pursue research on multinationality and performance with a more fine-grained approach. Essay one is a conceptual response to an article written by Jean-Francois Hennart in 2011 which questions the need and approach toward future research in this domain. I argue that internalization theory does not render multinationality and performance research meaningless and identify key areas where methodological enhancements can be made to strengthen our research findings with regard to Hennart's call for more content validity. Essay two responds to the need for more-fine grained research on the consequences of multinationality by introducing non-traditional measures of performance such as social and environmental performance and adopting a more theoretically relevant construct of regionalization to capture international diversification levels of the firm. Using data from the world's largest 600 firms (based on sales) derived from Bloomberg and the Directory of Corporate Affiliates; I employ general estimating equation analysis to account for the auto-correlated nature of the panel data alongside multivariate regression techniques. Results indicate that regionalization has a positive relationship with economic performance while it has a negative relationship with environmental and social performance outcomes, often referred to as the "Triple Bottom-Line" performance. Essay three builds upon the work in the previous essays by linking the aforementioned performance variables and sample to corporate reputation which has been shown to be a beneficial strategic asset. Using Structural Equation Modeling I explore economic, environmental and social signals as mediators on relationship between regionalization and firm reputation. Results indicate that these variables partially mediate a positive relationship between regionalization and firm reputation. While regionalization positively affects the reputation building signal of economic performance, it aids in reputation building by reducing environmental and social disclosure effects which interestingly impact reputation negatively. In conclusion, the dissertation submits opportunities for future research and contributes to research by demonstrating that regionalization affects performance, but the effect varies in accordance with the performance criterion and context. In some cases, regional diversification may produce competing or conflicting outcomes among the potential strategic objectives of the firm.

Regional Diversification and Performance: Conceptualization and Competing Strategic Objectives

This dissertation comprised of three essays provides justification for the need to pursue research on multinationality and performance with a more fine-grained approach. Essay one is a conceptual response to an article written by Jean-Francois Hennart in 2011 which questions the need and approach toward future research in this domain. I argue that internalization theory does not render multinationality and performance research meaningless and identify key areas where methodological enhancements can be made to strengthen our research findings with regard to Hennart’s call for more content validity. Essay two responds to the need for more-fine grained research on the consequences of multinationality by introducing non-traditional measures of performance such as social and environmental performance and adopting a more theoretically relevant construct of regionalization to capture international diversification levels of the firm. Using data from the world’s largest 600 firms (based on sales) derived from Bloomberg and the Directory of Corporate Affiliates; I employ general estimating equation analysis to account for the auto-correlated nature of the panel data alongside multivariate regression techniques. Results indicate that regionalization has a positive relationship with economic performance while it has a negative relationship with environmental and social performance outcomes, often referred to as the “Triple Bottom-Line” performance. Essay three builds upon the work in the previous essays by linking the aforementioned performance variables and sample to corporate reputation which has been shown to be a beneficial strategic asset. Using Structural Equation Modeling I explore economic, environmental and social signals as mediators on relationship between regionalization and firm reputation. Results indicate that these variables partially mediate a positive relationship between regionalization and firm reputation. While regionalization positively affects the reputation building signal of economic performance, it aids in reputation building by reducing environmental and social disclosure effects which interestingly impact reputation negatively. In conclusion, the dissertation submits opportunities for future research and contributes to research by demonstrating that regionalization affects performance, but the effect varies in accordance with the performance criterion and context. In some cases, regional diversification may produce competing or conflicting outcomes among the potential strategic objectives of the firm.

Essays on corporate reputation: Antecedents and consequences

This dissertation studied the determinants and consequences of corporate reputation. It explored how firm-, industry-, and country-level factors influence the general public’s assessment of a firm’s reputation and how this reputation assessment impacted the firm’s strategic actions and organizational outcomes. The three empirical essays are grounded on separate theoretical paradigms in strategy, organizational theory, and corporate governance. The first essay used signaling theory to investigate firm-, industry-, and country-level determinants of individual-level corporate reputation assessments. Using a hierarchical linear model, it tested the theory based on individual evaluations of the largest companies across countries. Results indicated that variables at multiple analysis levels simultaneously impact individual level reputation assessments. Interactions were also found between industry- and country-level factors. Results confirmed the multi-level nature of signaling influences on reputation assessments. Building on a stakeholder-power approach to corporate governance, the second essay studied how differences in the power and preferences of three stakeholder groups—shareholders, creditors, and workers—across countries influence the general public’s reputation assessments of corporations. Examining the largest companies across countries, the study found that while the influence of stock market return is stronger in societies where shareholders have more power, social performance has a more significant role in shaping reputation evaluations in societies with stronger labor rights. Unexpectedly, when creditors have greater power, the influence of financial stability on reputation assessment becomes weaker. Exploring the consequences of reputation, the third essay investigated the specific effects of intangible assets on strategic actions and organizational outcomes. Particularly, it individually studied the impacts of acquirer acquisition experience, corporate reputation, and approach toward social responsibilities as well as their combined effect on market reactions to acquisition announcements. Using an event study of acquisition announcements, it confirmed the significant impacts of both action-specific (acquisition experience) and general (reputation and social performance) intangible assets on market expectations of acquisition outcomes. Moreover, the analysis demonstrated that reputation magnifies the impact of acquisition experience on market response to acquisition announcements. In conclusion, this dissertation tried to advance and extend the application of management and organizational theories by explaining the mechanisms underlying antecedents and consequences of corporate reputation.

CEO Humility: Development of an Unobtrusive Measure and Strategic Implications

Over the past 30 years, the Upper Echelons perspective of strategic management has sought to explain a given organization’s strategies and effectiveness as a reflection of the differences in personality, background, and other characteristics of the senior executives that guides each organization. An important stream of research within this field has linked a firm’s strategy to the grandiose way that executives are often thought to view themselves – namely through examining the narcissism, core self-evaluations (CSE), and hubris of Chief Executive Officers (CEOs). In this dissertation, I focus on understanding the strategic impact of CEO humility – a trait that has often been erroneously thought of to represent a poor view of oneself. Consistent with ancient writings and recent research, humility is defined herein as a multi-faceted trait that is the common core of four dimensions: self-awareness, developmental orientation/teachability, appreciation of others' strengths and contributions, and low self-focus. In the first essay, I explore the conceptual relevance and various potential implications of executive humility. Drawing on existing empirical research about the humility construct and general behavioral implications of humility, I argue that executive humility is a critical avenue toward a more rich and nuanced understanding of the delicate interplay and implications of executive self-concept. In essay two, I develop and validate an unobtrusive measure of CEO humility. Ten indicators of humility are suggested and then validated using a self-reported survey administered to a sample of 30 U.S. and Canadian CEOs. Two behaviors were found to be significantly positively related to self-reported humility: CEOs who volunteered some of their time for non-profit organizations and CEO’s who reported that part of their own firm’s success was due to the help of the board of directors. In essay three, I examine the relationship between the level of CEO humility and four firm-level outcomes. Employing a sample of 163 CEOs appointed to S&P 500 firms between 2005-2008, I show that firms led by humble CEOs (measured by the unobtrusive indicators) tend to outperform others in regards to corporate social performance, while at the same time showing that their financial performance is generally no better or worse.

The effect of vision congruence on employee empowerment, commitment, satisfaction, and performance

Five models delineating the person-situation fit controversy were developed and tested. Hypotheses were tested to determine the linkages between vision congruence, empowerment, locus of control, job satisfaction, organizational commitment, and employee performance. Vision was defined as a mental image of a possible and desirable future state of the organization.^ Data were collected from 213 employees in a major flower import company. Participants were from various organizational levels and ethnic backgrounds. The data collection procedure consisted of three parts. First, a profile analysis instrument was used which was developed employing a Q-sort based technique, to measure the vision congruence between the CEO and each employee. Second, employees completed a survey instrument which included scales measuring empowerment, locus of control, job satisfaction, organizational commitment, and social desirability. Third, supervisor performance ratings were gathered from employee files. Data analysis consisted of using Kendall's tau to measure the correlation between CEO's and each employee's vision. Path analyses were conducted using the EQS structural equation program to test five theoretical models for goodness-of-fit. Regression analysis was employed to test whether locus of control acted as a moderator variable.^ The results showed that vision congruence is significantly related to job satisfaction and employee commitment, and perceived empowerment acts as an intervening variable affecting employee outcomes. The study also found that people with an internal locus of control were more likely to feel empowered than were those with external beliefs. Implications of these findings for both researchers and practitioners are discussed and suggestions for future research directions are provided. ^

The relative influence of social support, rehabilitation program participation, and inmate preincarceration characteristics on incarcerated substance abusers' perceptions of adjustment to community reintegration

This dissertation identifies, examines, and assesses the relative influence of identified empirically and conceptually relevant variables on incarcerated substance abusers' expectations of postrelease adjustment. A purposive sampling procedure was used to recruit 101 male and female substance-abusing offenders participating in prison- and jail-based drug treatment programs in south Florida. A 92-item survey questionnaire was used to collect basic demographic data; measure inmate preincarceration characteristics, social support, and rehabilitation program participation; and record archival data. Regression equations were developed utilizing ten different measures of the participants' expectations of their postrelease adjustment. Two equations yielded statistically significant F ratios; maintaining a stable living and maintaining abstinence. Twenty-two percent of the variance in respondents' expectations of maintaining a stable living was explained by preincarceration characteristics, social support, and rehabilitation program participation (F = 1.89; df = 13,87; p $<$.05). The only significant predictor variable was perception of social support (b = $-$.05; t = $-$3.6; p $<$.001). Twenty-three percent of the variance in respondents' expectations of maintaining abstinence from substances was explained by preincarceration characteristics, social support, and rehabilitation program participation (F = 2; df = 13,87; p $<$.05). Once again, the only significant predictor variable was perception of social support. The results of the analyses indicate that social support was the only important variable for understanding these respondents' efficacy expectations of postrelease abstinence and stable living. The results of this investigation demonstrate the complexity of the social support variable for prisoners, and identify social support as a potential rehabilitative resource for substance-abusing inmates. The results of this investigation underscore the importance of continued, detailed empirical study in order to understand and clarify how social support, efficacy expectations, and actual postrelease performance interrelate for this population of offenders.

Power and influence in joint venture relationships and their impact on performance

The purpose of this research was to apply the concepts of power and influence tactics to the joint venture context by examining how they relate to venture performance. In addition, culture and the expectations of future cooperation were examined for their association with influence tactic use and joint venture performance. Data were collected from 58 parent firms of U.S.-based domestic and international joint ventures about their relationships with their partners.^ Under the theories of social exchange and power dependence, a parent's level of power is based on its partner's dependence on the relationship. The statistical results indicated that: (1) the greater the total of power of both parents in an equal power relationship, the greater the joint venture's performance; and (2) the greater the inequality between each parent's level of power, the lower the joint venture's performance. It was also found that the way in which a parent firm tried to influence its partner was related to joint venture performance. Specifically, the use of references to a partner's legitimate authority was negatively related to performance, while the use of rational arguments and compromises was positively related.^ Contrary to expectations, the cultural backgrounds of the parents were not shown to have a relationship to influence tactic use or joint venture's performance. On the other hand, greater expectation of future cooperation had a positive association with performance, and a significant relationship with influence tactic use. The greater the expectation, the less partners used more confrontational tactics such as pressure or legitimate authority. ^

The effects of the outdoor experiential ropes course on perceived team performance

The purpose of this quasi-experimental study was to explore the perceived effects of the Ropes Course on the performance of intact work teams. The dependent variable, team performance, was measured by the Team Performance Assessment, a 20 question inventory. The Ropes Course, the independent variable, was an outdoor experiential training program presently marketed as a highly effective team building training program. Issues the team addressed in the highly emotional and physical environment were purported to transfer back to the work environment and act as a catalyst for change The Ropes Course in this study consisted of a day long series of outdoor mental, emotional and physical exercises addressing the issues of goal-setting, role expectations, accountability, trust, respect, communication, problem-solving and decision-making. The 68 subjects, 37 in the treatment group and 31 in the control were employees of a large international financial institution. They were not chosen by random selection. The work teams' managers recognized a need to improve team morale, performance and functioning due to corporate reengineering and downsizing resulting in team members' job losses. Control teams were partially matched to the treatment teams on the basis of professional composition and similar job descriptions. The pretest of the Team Performance Assessment was given the morning of the Ropes Course treatment and the posttest was given three to five weeks later. The control teams received the pretests and posttests at about the same time intervals at their work location but received no Ropes Course treatment. The treatment teams' scores and the control teams' scores were statistically compared using the Multivariate Analysis of Variance (MANOVA) and the Multivariate Analysis of Covariance (MANCOVA) at the .05 level of significance. The statistical analysis revealed a significant difference between the control and experimental teams after the team building Ropes Course training as measured by the Team Performance Assessment (Gilbert, 1996). ^

Black middle school students' perceptions of success and their influence on academic performance

The purpose of the study was to investigate the perceptions of success held by Black middle school students in a Miami-Dade County (FL) public school and how these perceptions influence academic performance. The study sought to determine if differences exist among African-American, Haitian-American, and Haitian immigrant subgroups of the Black student population. ^ The study combined qualitative and quantitative methodology in data collection and analysis. The qualitative data consisted of three focus group interviews. Using a semi-structured protocol, questions focused on the student's perceptions of the characteristics of successful people, definitions of success, behaviors associated with achieving success, and peer, family and school support. The quantitative data comprised the responses of 352 Black middle school students to the Inventory of Student Motivation (ISM) developed to measure mastery, performance and social goal orientations. Response similarities and differences were examined using a series of two-way ANOVAs on the success scales by gender and culture. A three-way repeated measures ANOVA was conducted on mastery, performance and social general goal scales by culture and gender. ^ The results of the ISM revealed no statistically significant differences among African-American, Haitian-American, and Haitian students in their mastery, performance or social goal orientations. All three cultural groups scored significantly high on the mastery goal scale. There was a significant effect for gender on the mastery general scale with the females being more concerned with mastery than the males. Qualitative focus group interview results included varying definitions of success. African-American and Haitian-American students defined success in materialistic terms. Haitian students defined success in scholastic achievement terms. All students indicated hard work, persistence and goal setting through completion as important to achieving success. Negative influences included peer pressure, teacher and societal expectations, and classroom environment. Parental reaction to low academic performance varied by culture. ^

Adolescent readers' self-perceptions of affective factors related to performance on standardized tests

The purpose of this study was to investigate which affective factors of adolescent high school readers were related to high-level readers, middle-level readers and low-level readers. The research problem was to determine the relationship between adolescent high school students' self-perceived reading self-efficacy factors and the students' reading performance on a standardized reading assessment considering demographic factors of age, gender and socio-economic status as covariates. The research design was ex post facto making inferences without direct intervention. The sample was obtained from one large, diverse, urban high school, consisting of 9th and 10th grade adolescent students (N = 176). Students voluntarily completed a self-report, reading self-efficacy survey. School records were used to obtain standardized reading level scores, age, gender, and socio-economic status data. An exploratory factor analysis of the self-efficacy survey responses resulted in the identification of 7 underlying factors. The striving (low-level) readers had significantly lower self-perceptions on 5 of the 7 affective factors than the middle-level readers, and strong (high-level) readers, p < .05. The 5 affective factors on which the striving readers had significantly lower self-perceptions were: (a) Observational Comparison, (b) Progress, (c) Lack of Progress, (d) Lack of Anxiety, and (e) Positive Social Feedback. The 2 affective factors which were not significantly different for reader level were Anxiety and Negative Social Feedback. Girls had significantly less anxiety than boys for both of the factors in the Anxiety category. Statistical results showed that none of the demographic covariates tested; age, gender, or socio-economic status, moderated the relationship between affective reader self-efficacy factors and reader level. This study concluded that there were distinguishable differences for striving, middle, and strong readers' self-efficacy factors. Determining affective factors related to reading can be used to create better instructional environments and instruction for adolescent students.

Evaluating the impacts of Bolsa Escola programs on student performance in Brazil

Since the 1980s, governments and organizations have promoted cash transfers in education as a tool for motivating elementary aged children to attend school. Oftentimes, the monthly payments supplemented the income a child would be making in the labor market. In Brazil, where these Bolsa or grant programs were pioneered, there has been much success in removing children from harsh labor conditions and increasing enrollment rates among the poorest families. However, the capacity of Bolsa Escola programs to meet other objectives, such as impacting educational outcomes and reducing incidences of poverty, continues to be examined. As these programs continue to be adopted globally, funding millions of children and families, evidence that demonstrates such success becomes ever more imperative. This study, therefore, examined evidence to determine whether Bolsa Escola programs have a significant impact on the academic performance of beneficiaries in Brazil. ^ Through the course of three data collection phases, multiple data sources were used to demonstrate the academic performance of fourth and eighth grade Brazilian students who were eligible to participate in either an NGO or the federal cash transfer program. MANOVAs were conducted separately for fourth and eighth grade data to determine if significant differences existed between measures of academic performance of Bolsa and non-Bolsa students. In every case and for both grade levels, significant effects were found for participation. ^ The limited qualitative data collected did not support drawing conclusions. Thematic analysis of the limited interview data pointed to possible dependency on Bolsa monthly stipends, and reallocation of responsibilities in the home in cases where children shifted from being breadwinners to students. ^

The impact of institutional complexity and top management characteristics on executive compensation and firm performance

While most studies take a dyadic view when examining the environmental difference between the home country of a multinational enterprise (MNE) and a particular foreign country, they ignore that an MNE is managing a network of subsidiaries embedded in diverse environments. Additionally, neither the impacts of global environments on top executives nor the effects of top executives’ capabilities to handle institutional complexity are fully explored. Thus, using a three-essay format, this dissertation tried to fill these gaps by addressing the effects of institutional complexity and top management characteristics on top executive compensation and firm performance. ^ Essay 1 investigated the impact of an MNE’s institutional complexity, or the diversity of national institutions facing an MNE’s network of subsidiaries, on the top management team (TMT) compensation. This essay proposed that greater political and cultural complexity leads to not only greater TMT total compensation but also to a greater portion of TMT compensation linked with long-term performance. The arguments are supported in this essay by using an unbalanced panel dataset including 296 U.S. firms with 1,340 observations. ^ Essay 2 explored TMT social capital and its moderating role on value creation and appropriation by the chief executive officer (CEO). Using a sample with 548 U.S. firms and 2,010 observations, it found that greater TMT social capital does facilitate the effects of CEO intellectual capital and social capital on firm growth. Finally, essay 3 examined the performance implications for the fit between managerial information-processing capabilities and institutional complexity. It proposed that institutional complexity is associated with the needs of information-processing. On the other hand, smaller TMT turnover and larger TMT size reflect larger managerial information-processing capabilities. Consequently, superior performance is achieved by the match among institutional complexity, TMT turnover, and TMT size. All hypotheses in essay 3 are supported in a sample of 301 U.S. firms and 1,404 observations. ^ To conclude, this dissertation advances and extends our knowledge on the roles of institutional environments and top executives on firm performance and top executive compensation.^

Secondary stakeholders as agents of influence: Three essays on political risk, reputation, and multinational performance

Organizational researchers have recently taken an interest in the ways in which social movements, non-governmental organizations (NGOs), and other secondary stakeholders attempt to influence corporate behavior. Scholars, however, have yet to carefully probe the link between secondary stakeholder legal action and target firm stock market performance. This is puzzling given the sharp rise in NGO-initiated civil lawsuits against corporations in recent years for alleged overseas human rights abuses and environmental misconduct. Furthermore, few studies have considered how such lawsuits impact a target firm’s intangible assets, namely its image and reputation. Structured in the form of three essays, this dissertation examined the antecedents and consequences of secondary stakeholder legal activism in both conceptual and empirical settings. ^ Essay One argued that conventional approaches to understanding political risk fail to account for the reputational risks to multinational enterprises (MNEs) posed by transnational networks of human rights NGOs employing litigation-based strategies. It offered a new framework for understanding this emerging challenge to multinational corporate activity. Essay Two empirically tested the relationship between the filing of human rights-related civil lawsuits and corporate stock market performance using an event study methodology and regression analysis. The statistical analysis performed showed that target firms experience a significant decline in share price upon filing and that both industry and nature of the lawsuit are significantly and negatively related to shareholder wealth. Essay Three drew upon social movement and social identity theories to develop and test a set of hypotheses on how secondary stakeholder groups select their targets for human rights-related civil lawsuits. The results of a logistic regression model offered support for the proposition that MNE targets are chosen based on both interest and identity factors. The results of these essays suggest that legal action initiated by secondary stakeholder groups is a new and salient threat to multinational business and that firms doing business in countries with weak political institutions should factor this into corporate planning and take steps to mitigate their exposure to such risks.^

School segregation and educational performance in a multicultural society: The case of Miami -Dade County, Florida

One of the most important goals of American educational institutions over the past 47 years has been the desegregation of pubic schools. This goal reflected the Supreme Court's decision in Brown v. Board of Education that segregated schools are inherently unequal and deny segregated minority students equal educational opportunities as mandated by the United States Constitution. This study examined the extent, nature, and causes of segregation in the Miami-Dade County Public Schools and the effects of segregation on the educational performance of minority students. ^ Research questions were analyzed using demographic data from the United States Census Bureau, the Metro-Dade County Planning Department, the United States Commission on Civil Rights, the United States Department of Education, and the Miami Dade County Public Schools. The extent of residential and school segregation in MiamiDade County was measured using the Dissimilarity Index. Historical and sociological literature were analyzed to explain the causes of school segregation, the socioeconomic characteristics of segregated minority students, and the relationship between school segregation and equal educational opportunities. A causal-comparative research method was chosen because it is the most appropriate method to compare the educational performance of minority students in segregated schools with the educational performance of minority students in desegregated schools. ^ The results of this study demonstrates that there is a high degree of residential and school segregation in Miami-Dade County, Florida. Furthermore, the Miami-Dade County Public Schools are characterized by a high degree of socioeconomic segregation. This is significant considering that the socioeconomic status of a student's peers is, after the student's family background, the most influential factor in determining academic performance. Clearly, schools and other social institutions must continue efforts to throughly desegregate the school district and improve minority student academic performance. A racially and economically desegregated school system would constitute an important component in Miami-Dade County's efforts to provide equal educational opportunities to all students. ^