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We provide evidence of an inherent trade-off between access regulation and investment incentives in telecommunications by using a comprehensive data set covering 70+ fixed-line operators in 20 countries over 10 years. Our econometric model accommodates: different investment incentives for incumbents and entrants; a strategic interaction of entrants' and incumbents' investments; and endogenous regulation. We find access regulation to negatively affect both total industry and individual carrier investment. Thus promoting market entry by means of regulated access undermines incentives to invest in facilities-based competition. Moreover, we find evidence of a regulatory commitment problem: higher incumbents' investments encourage provision of regulated access.

With permission of the University of Chicago Press

This research builds on the complementary corporate social responsibility (CSR) literatures in strategy and marketing to provide insight into the efficacy of CSR as a challenger's competitive weapon against a market leader. Through an investigation of a real world CSR initiative, we show that the challenger can reap superior business returns among consumers who had participated in its CSR initiative, relative to those who were merely aware of the initiative. Specifically, participant consumers demonstrate the desired attitudinal and behavioral changes in favor of the challenger, regardless of their affective trust in the leader, whereas aware consumers' reactions become less favorable as their affective trust in the leader increases. Furthermore, participation, unlike mere awareness, transforms the nature of the consumer-challenger relationship from a transactional one to a communal, trust-based one.

© 2011 INFORMS

The paper integrates and builds on extant thinking in corporate marketing and CSR to provide an identity-based conceptualization of CSR. Based on this, it positions CSR as an optimal managerial tool for promoting alignment between multiple corporate identities (e.g., internal, external), which ultimately leads to key benefits for the company.

With permission of Emerald

In this paper we focus on modeling and predicting the loss distribution for credit risky assets such as bonds and loans. We model the probability of default and the recovery rate given default based on shared covariates. We develop a new class of default models that explicitly account for sector specific and regime dependent unobservable heterogeneity in firm characteristics. Based on the analysis of a large default and recovery data set over the horizon 1980-2008, we document that the specification of the default model has a major impact on the predicted loss distribution, while the specification of the recovery model is less important. In particular, we find evidence that industry factors and regime dynamics affect the performance of default models, implying that the appropriate choice of default models for loss prediction will depend on the credit cycle and on portfolio characteristics. Finally, we show that default probabilities and recovery rates predicted out-of-sample are negatively correlated, and that the magnitude of the correlation varies with seniority class, industry, and credit cycle.

© 2011 INFORMS

Project forms of organizing are theorized to rely upon horizontal as opposed to vertical lines of authority, but few have examined how this shift affects progression-how people advance in an organization. We argue that progression without hierarchy unfolds when people assume lateral authority over project tasks without managing people. With a longitudinal study of a mature, collectively managed open source software project, we predict the individual behaviors that enable progression to lateral authority roles at two different stages. Although technical contributions are initially important, coordination work is more critical at a subsequent stage. We then explore how lateral authority roles affect subsequent behavior-after gaining authority, individuals spend significantly more time coordinating project work. Our research shows how people progress to the center as opposed to up a hierarchy, and how progression differs by stage and specifies the theoretical relationship between lateral authority roles and the coordination of project work.

© 2011 INFORMS

We study the prices individual banks pay for liquidity (captured by borrowing rates in repos with the central bank and benchmarked by the overnight index swap) as a function of market conditions and bank characteristics. These prices depend in particular on the distribution of liquidity across banks, which is calculated over time using individual bank level data on reserve requirements and actual holdings. Banks pay more for liquidity when positions are more imbalanced across banks, consistent with the existence of short squeezing. We also document that small banks pay more for liquidity and are more vulnerable to squeezes. Healthier banks pay less, but contrary to what one might expect, banks in formal liquidity networks do not. State guarantees reduce the price of liquidity, but do not protect against squeezes.

With permission of Elsevier