Is CEO Pay Related to Performance in the U.S. Hospitality Industry?

Due to the unique nature of the hospitality industry that entails higher competition, ease of entry and exit of firms, and geographic diversification, we hypothesize that CEO compensation in the hospitality industry will be higher and will also have higher pay-for performance sensitivity than in other industries. Using a comprehensive sample of firms in the hospitality and tourism (HT) industries, we find that CEO compensation depends upon firm size, Tobin's Q, and CEO tenure. In addition, we find that compensation of HT firm CEOs is very sensitive to performance, using both measures- stock returns and return on assets. Interestingly we also find that HT firm CEOs earn as much as non-HT firm CEOs although HT firms are much smaller and underperform non-HT firms. Implications for theory and practice are discussed.

  • Prof. Manisha Singal, Pamplin College of Business, Virginia Tech University
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  • 2016-12-27

Stock Picking - Insights from academic research

Despite the importance of the banking sector to the economy, prior valuation studies in accountinghave tended to generally discard bank stocks. We examine returns to a fundamental analysis based trading strategy for the U.S. bank stocks, using a bank fundamentals index (BSCORE) based on thirteen bank specific valuation signals. A long-short strategy based on BSCORE yields positive hedge returns for all but one year during the 1994-2013 period. Results are robust to partitions based on size, analyst following and exchange listing status, and persist after adjusting for known risk factors. Interestingly, we observe especially strong hedge returns during the 2007-2009 financial crisis. We further document a positive relation between BSCORE and future analystforecast surprises, earnings announcement period returns, and future performance-based delistings. Finally, the results are significantly enhanced if we combine the BSCORE strategy witha relative valuation strategy based on an intrinsic value approach. The results show that fundamental analysis can provide useful insights for analyzing banks, beyond the usual focus on metrics such as return on equity (ROE).

  • Prof. Partha S. Mohanram, Rotman School of Management, University of Toronto
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  • 2016-12-22

Logistics, the human factor

As every manager knows, people are important to achieve operational excellence. The decisions and behavior of leaders impact the behaviors of employees which are instrumental in obtaining high performance. Still, in operations management research, we largely rely on models that help to optimize managerial decision making and in which people do not really play a role. Behavioral operations management is still at its infancy. It tries to include manager or employee behavior as an explanatory variable in performance. In my presentation I will give examples of some recent research projects, focusing on performance in warehouses. Depending on time, I will look into (1) behavioral factors that can bring down the number of work-related accidents in warehouses, (2) the direct and interaction effects of incentives and worker characteristics on performance in a warehouse, and (3) the impact, and managerial use, of worker skills on order pick performance.

  • Dr. Rene (M.) B.M. de Koster, Rotterdam School of Management, Erasmus University
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  • 2016-12-16

Does Health Influence Risk Preference?

This paper investigates whether self-assessed health (SAH) status - a measure of health stock - influences the risk preference of an individual. Using the National Longitudinal Study of Adolescent Health (Add Health), we estimate that better health during adolescence is associated with more willingness to take risks when people are around age 30. Moreover, the experience of a reduction in their health stock between adolescence and young adulthood is even more strongly associated with willingness to take risk later in their lives - a finding that provides a novel pathway through which individual's loss aversion gets operationalized. These findings are robust to regression specifications- linear probability, fixed effects, and generalized ordered logistic regression models - as well as to the inclusion of exogenous personal characteristics - variables that are shown to be related to both health and various measures of risk in the existing literature. Our findings remained robust even after including two heritable measures of personality - neuroticism and conscientiousness - that could have bearing on both health and risk preference. These findings are quite pertinent in building a better understanding of the processes that govern deepening of the market mechanism and the processes leading to policy formation. If similar findings hold for older populations, then it potentially establishes a link between health and the future of financial markets and the pace of change in policy regimes.

  • Dr. Sanjeev Kumar, Yale School of Public Health, Yale University, USA
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  • 2016-12-16

A Framework Model on MNE's Impact on Global Development Challenges in Emerging Markets

MNEmerge is a three-year (2014-2016) collaborative research project funded by the EU's Seventh Framework Programme for research, technological development and demonstration under Grant Agreement No. 612889. The project aims to provide a comprehensive framework for understanding the impact of multinational enterprises on United Nations Millennium Development Goals in developing countries by using case studies, quantitative data as well as policy analysis. The project's research team studies how MNEs manage their activities in FDI, business functioning, technology and innovation strategies, corporate philanthropy or socially responsible investments and how these issues can contribute to the attainment of poverty alleviation, food security, health security, environmental security and electrification in developing countries. MNEmerge also provides recommendations regarding modes of MNE collaboration with societal stakeholders, as well as tools for decision making that can facilitate the implementation of these recommendations. Thus, the project aims at supporting business sustainability while simultaneously ensuring sustainable development of a society.

  • Prof. Suraksha Gupta, Kent Business School, University of Kent, United Kingdom
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  • 2016-12-15

Assessing recent Social Security Programs in India

There has been a major expansion of social security programmes in India during the last fifteen years or so, along with wider recognition of economic and social rights. This paper discusses five programmes of interest: school meals, child care services, employment guarantee, food subsidies and social security pensions. The record of these programmes varies a great deal between Indian states, but there is growing evidence that they make an important contribution to human well-being, and also that the achievements of the leading states are gradually spreading to other states as well. Much scope remains for extending these efforts: despite the recent expansion, India's social security system is still very limited in international perspective. The paper also discusses some general issues of social policy in India, such as the arguments for universalization versus targeting, the role and limitations of legal entitlements, and the influence of democratic politics on social security programmes.

  • Dr. Reetika Khera, Dept. of Humanities & Social Sciences, IIT Delhi
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  • 2016-12-12

New Technology Innovations, Rise of Start-Ups and Design of Competitive Business Models

Business models are a current hot topic, and their design has become a key to achieving high performance of the companies big or small. New Technologies: Mobile Internet, IOT, Social media, Cloud, Algorithmic Governance, Driverless cars, etc are changing the industry structure and forcing re-examination of the business development strategies. Indeed, wealth and employment creation are moving from asset builders to service providers to start-ups. The recent game changing disruptive innovations leading to the rise of unicorn start-ups is threatening the incumbents including Fortune 500 companies.

  • Prof. N. Viswanadham, Computer Science and Automation, Indian Institute of Science, Bangalore
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  • 2016-12-09

Large Population Aggregative Potential Games

We consider population games in which payoff depends upon the aggregate strategy level and which admit a potential function. Examples of such aggregative potential games include the tragedy of the commons and the Cournot competition model. These games are technically simple as they can be analyzed using a one-dimensional variant of the potential function. We use such games to model the presence of externalities, both positive and negative. We characterize Nash equilibria in such games as socially inefficient. Evolutionary dynamics in such games converge to socially inefficient Nash equilibria.

  • Prof. Ratul Lahkar, IIM Udaipur
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  • 2016-12-08