This paper examines methods of inference concerning quantile treatment effects (QTEs) in randomized experiments with matched-pairs designs (MPDs). The standard multiplier bootstrap inference fails to capture the negative dependence of observations within each pair, and thus, is conservative. The analytical inference involves estimating multiple functional quantities that requires several tuning parameters. In this paper, we propose two bootstrap methods that can consistently approximate the limit distribution of the original QTE estimator and lessen the burden of tuning parameter choice. In particular, the inverse propensity score weighted multiplier bootstrap can be implemented without knowledge of pair identities.

ABSTRACT We provide large‐sample evidence on whether U.S. publicly traded corporations use voluntary disclosures about their commitments to employee diversity opportunistically. We document significant discrepancies between companies' external stances on diversity, equity, and inclusion (DEI) and their hiring practices. Firms that discuss DEI excessively relative to their actual employee gender and racial diversity (“diversity washers”) obtain superior scores from environmental, social, and governance (ESG) rating organizations and attract more investment from institutional investors with an ESG focus. These outcomes occur even though diversity‐washing firms are more likely to incur discrimination violations and have negative human‐capital‐related news events. Our study provides evidence consistent with growing allegations of misleading statements from firms about their DEI initiatives and highlights the potential consequences of selective ESG disclosures.

Abstract We use New York City (NYC) taxi data to identify trips between mutual fund offices and local firm headquarters. NYC funds overweight the stocks of local firms they visit via taxi, and firm visits are associated with superior investment performance. Firm visits are elevated prior to earnings announcements, and mutual fund trades that are associated with firm taxi visits predict earnings surprises. The results are generally stronger when fund and firm executives share educational connections. Additional tests support the conclusion that funds’ local bias and investment performance are driven by portfolio managers’ efforts and ability to actively gather material information.

To remain relevant, IB research must address the increasing pressure being applied to multinational enterprises (MNEs) to address equality, diversity, and inclusion (EDI). In this first systematic review of EDI in international business (IB), we evaluate the extent to which IB research on EDI addresses current and future demands for global equality and social justice. Our text analysis of 1618 articles indicates that EDI research within IB focuses on similar diversity categories (e.g., gender) and rationales for addressing EDI (e.g., performance) as mainstream EDI research from outside IB, but that IB research does not leverage the global aspects of the MNE, and is slower to shift its goal from firm or team performance to the inclusion of underrepresented groups. Our subsequent narrative review of 101 articles within IB indicates that IB excels at theorizing mechanisms related to heterogeneity, but avoids moral arguments for EDI, and that findings are often blind to power or status differences, postcolonial legacies, and other inequalities. We call for more moral-based and power-laden analysis that could mitigate international resistance to EDI, while maintaining an interest in EDI’s relationship to organizational performance. At the intersection of IB and EDI research, we see the opportunity to lead societal change.

Airfares evolve dynamically, giving rise to a so-called price path. This price path is controlled via two levers: (i) a fare ladder, which defines a set of airfares before the selling season, and (ii) revenue management algorithms, which control how fares evolve along the ladder during the season. We hypothesize that the current policies to control both levers—which do not account for quality differences between competing airlines—give rise to an inefficient price path and, accordingly, a loss of potential revenue. We substantiate this hypothesis via a field experiment. By partnering with an airline, we introduced quality considerations in the design of fare ladders, across 5,000 itineraries, to show that current ladder-design policies indeed lead to a suboptimal price path. We also show that this inefficiency can be mitigated by incorporating quality differences between competing airlines. This creates a smoother (and more profitable) price path. This paper was accepted by Vishal Gaur, operations management.

AbstractMultinational corporations have benefited tremendously from free trade in the past few decades. However, the dynamism of international relations, paired with the global recession, has rekindled the debate over frictionless trade. In this study, we examine how trade friction, created by tariff trade barriers, affects the operational performance of domestic firms which source from the affected countries. We also investigate how various supply chain characteristics and strategies can moderate the impact of such trade friction. Motivated by the 2018 U.S.–China trade war, we conducted a difference‐in‐difference analysis to examine the impact of trade tariffs on performance indicators of U.S. firms with direct supplier connections in China. Specifically, we found that U.S. firms with direct supply partners (i.e., first‐tier suppliers) in China had a worse performance than the U.S. firms without direct supply partners in China in terms of inventory (i.e., days of supply) and profitability (return‐on‐assets). We further found that the negative impacts were more severe for firms with a higher degree of outsourcing, and horizontal and spatial supply base complexity. We discuss the implications for international operations management, supply chain networks, supply risk management, and provide suggestions to supply chain practitioners and trade policymakers.

Abstract Research contends that internal capital should be allocated in proportion to divisional performance, but scholars are often puzzled to find that managers do not adhere to this winner‐picking approach. We argue this is because scholarship has not incorporated corporate‐level factors that influence how corporate managers structure holistic capital allocation strategies. In this study, we build on the behavioral theory of the firm to focus on analyst performance projections for multidivisional corporations and how they inform corporate managers' allocation strategies. Specifically, we theorize corporate managers deviate from the winner‐picking allocation approach owing to search‐related behaviors stemming from projected performance below or above expectations. We further theorize about conditions that offer corporate managers opportunities to deviate from winner‐picking, focusing particularly on multidivisional relatedness and asset durability.

ABSTRACT Cross-border alliances expose firms to heightened risks, posing different governance and control challenges than domestic alliances. We examine the impact of differences in alliance partner countries' institutional environments. Analysis of survey data supports our contention that cross-border alliances involve a greater reliance on formal controls, particularly when firms collaborate with partners in countries with a weaker institutional environment. These relations exist regardless of governance structure (i.e., equity or non-equity alliance) that prior research considers a critical choice for addressing cross-border alliance risks. Additional analyses show that four subdimensions of institutional characteristics (voice and accountability, regulatory quality, rule of law, and control of corruption) and one subdimension of formal controls (behavior controls) are the main drivers in the association between institutional distance and reliance on formal controls. These findings demonstrate the distinct impact of institutional environment as a country-level determinant of alliance control choices. Data Availability: Due to confidentiality agreements with respondents, the data cannot be released publicly. JEL Classifications: D23; D82; L22; M4.

We examine how societal secrecy affects the underpricing of initial public offerings (IPOs). Using a large sample of 18,304 IPOs across 38 countries, we find robust evidence that IPO underpricing is positively related to societal secrecy. Additional analyses reveal that investor protection, market openness, and third-party certification moderate the effect of societal secrecy on IPO underpricing. We find that societal secrecy influences IPO underpricing through the information asymmetry, demand for control, and information cascade channels. Collectively, we show that societal secrecy exerts a strong influence on IPO underpricing globally.