2021 Research Highlights

RESEARCH HIGHLIGHTS

We are advocates for the teacher-scholar model

and believe that it produces the best outcomes for our students, the university, and our professions.

We embrace the teacher-scholar model by encouraging our faculty to conduct and publish research with our students, putting only faculty and not PhD or graduate students in front of our students, and supporting faculty research so that faculty can then teach the latest concepts to our students while instilling a systematic, data-driven approach to decision making, and a passion for lifelong learning.

The Farmer School is ranked as one of the top 3

public schools for quality of teaching and within the top 5 for faculty availability and mentorships.

(Poets&Quants for Undergrads)

Each Farmer School tenured and tenure track faculty published an average of

.886 scholarly papers in 2021 77 ABDC A* or A articles

16 ABS 4 or 4* articles

Our faculty are extraordinary teachers, and they are as dedicated to their students’ success as they are to the advancement of their field. In fact, in the most recent Poets & Quants rankings of undergraduate business schools we were ranked as one of the top three public schools for quality of teaching and among the top five for faculty availability and mentorships, while also being ranked in the top three for our students landing a job with their desired company and within the top ten for student experience and early-career return on investment.

Our faculty are also extraordinary world-class researchers and the research they produce appears in some of the academy’s most prestigious journals. Of the 99 scholarly publications published last year, 77 were ABDC A* or A, 16 were ABS 4* or 4, and 11 were in the FT 50. In addition, some of our faculty publish in high quality journals that sit outside of these lists, most notably faculty in our accountancy and information systems and analytics departments.

JENNY DARROCH Dean and Mitchell P. Rales Chair in Business Leadership

Accountancy Dr. William Brink, Associate Professor

WILLIAM BRINK, Xi (Jason) Kuang, Michael Majerczyk “The effects of minimum-wage increases on wage offers, wage premiums and employee effort under incomplete contracts” Accounting, Organizations and Society

We experimentally investigate how increases in legally required minimum wages affect wage offers from firms and employee effort. Prior research has shown higher wage offers lead to higher effort. However, when the minimum wage increases, we predict that employees will focus on whether their wage premium is maintained (e.g. the excess of wages over the minimum wage), while firms will focus on the overall wage paid. We find that while firms will increase wage offers, wage premiums will decline, and thus employees will not increase their effort. The results of (1) a laboratory experiment and (2) two online experiments are consistent with our predictions, suggesting that minimumwage increases can have a negative effect on employee effort. Ultimately, employees respond to equivalent wages differently depending on the context surrounding the wage level.

Billy ranks • #4 in BYU’s research rankings in the category of experimental tax research The department ranks • #1 in experimental accounting information systems research • #3 in experimental audit • #5 experimental tax • #9 in experimental managerial, #11 in experimental financial • #6 in experimental research across all topics.

(BYU Accounting Research)

Economics Dr. Kimberly Berg, Assistant Professor

KIMBERLY BERG, Chadwick C. Curtis, Steven Lugauer, and Nelson C. Mark “Demographics and Monetary Policy Shocks”, Journal of Money, Credit and Banking

This paper studies how U.S. consumption expenditures for different age groups respond to monetary policy shocks. When we decompose the aggregate consumption response into contributions from households at different stages of the life cycle, we find that monetary policy shocks have a larger impact on the expenditures of older households. As the U.S. population continues to age, these results suggest a potential change in the effectiveness of monetary policy.

We also present several pieces of empirical evidence that suggest that life-cycle wealth effects are driving these heterogeneous consumption responses. First, older households have much higher net wealth than younger households. Since they are wealthier than younger households, a given interest rate decline generates a larger capital gain for the older households. Second, older households may be more sensitive to interest rate changes due to the composition of their portfolios. The composition of wealth for older households is tilted toward long-term assets whose value is more interest-rate sensitive than short-term assets. Third, we find that consumption of older homeowners is more responsive than that of older non-homeowners. Fourth, conditional on owning a house, consumption of older households respond more than younger households.

We then try to understand the agerelated heterogeneity in consumption responses in the context of a partialequilibrium life-cycle model of consumption, saving, and laborsupply decisions. The model is able to produce age-related consumption response heterogeneity to interest rate shocks in a manner that is largely consistent with the data.

Our faculty were also called upon by Forbes, the Wall Street

Journal, Harvard Business Review, Bloomberg, Psychology Today, Fast Company and numerous other consumer publications.

Entrepreneurship Dr. Brett Smith, Cintas Chair in Entrepreneurship & Founding Director, Center for Social Entrepreneurship & Professor

Top BRETT SMITH with McMullen, J., Cardon, M. “Toward a theological turn in entrepreneurship: How religion could enable transformative research in our field.” Journal of Business Venturing Despite its overwhelming importance to millions of people across the planet both currently and throughout history, religion has been largely neglected by entrepreneurship research. Yet, because of its prevalence (more than 80% of the world claims a religious affiliation), centrality (religion is considered of primary importance to many adherents), established base of scientific inquiry (religion has robust literatures in base disciplines of psychology, sociology, and economics), and ability to offer novel insight into emerging phenomena (religion is equipped to extend social entrepreneurship and emancipatory entrepreneurial activity), religion offers numerous opportunities for transformative research. We propose it is time to augment the dominant economic paradigm with an alternative and complementary perspective offered by religion. The integration of religion and entrepreneurship is important to extend the legitimacy and relevance of our field.

Two decades ago, economists began integrating economic and religious perspectives to generate knowledge about neglected nonmarket behavior and to understand how religion affected economic attitudes and behaviors of individuals, groups, and societies. In so doing, they hoped to “bury two myths – that of homo economicus as a cold creature with neither need nor capacity for piety, and that of homo religiosus as a benighted throwback to

10

Entrepreneurship Program for 14 years in a Row Among Public Undergraduate Programs ( P R I N C E T O N R E V I E W/ E N T R E P R E N E U R M AG A Z I N E )

pre-rational times” (Iannacone, 1998: 1492). In a similar way, we suggest that religion might provide an alternative and complementary foundation to our field’s economic legacy by allowing for transformative research that embraces multiple perspectives to “establish a rich, more comprehensive understanding of entrepreneurial phenomena” (Shepherd, 2015: 503).

In this paper, we offer a glimpse of what a “theological turn” in entrepreneurship research entail. First, we identify obstacles to religion’s inclusion and how these barriers may be overcome. Second, we explain how the theological turn enables alternative explanations of important phenomena and stimulates research questions that build on the growing integration of religion and entrepreneurship in practice, including entrepreneurs, investors, and ecosystems. Finally, we show how a theological turn could challenge researchers to reach beyond our existing knowledge horizons to develop a future of impactful, relevant, and pioneering scholarship in the field of entrepreneurship.

Finance

Dr. Haim Kassa, Associate Professor

DeLisle, R. Jared, Michael F. Ferguson, HAIMANOT KASSA, and Gulnara R. Zaynutdinova. “Hazard stocks and expected returns.” Journal of Banking & Finance Lottery stocks have payoffs similar to State lotteries, i.e. a relatively small probability of large positive payoff. The literature on lottery stocks documents that investors prefer, and are willing to pay higher prices for, lottery stocks.

Because investors pay higher prices, next period return is often lower. In this paper, we study the opposite of lottery stocks, which we call hazard stocks.

Because hazard stocks have a potential to experience large negative payoffs, albeit with small probability, investors should discount them. Surprisingly, we find that investors overprice both lottery and hazard stocks. This result is puzzling because investors with lottery preferences should not simultaneously pay a premium for both lottery stocks and hazard stocks.

We resolve this apparent contradiction by appealing to the notion of asymmetric arbitrage, i.e. arbitrageurs are generally able to eliminate underpricing more efficiently than overpricing because buying underpriced stocks is easier than shorting overpriced stocks.

This arbitrage asymmetry allows for

The finance department’s new real estate major is a cross-

divisional collaboration between three of Miami University’s divisions.

negative abnormal returns among contemporaneously overpriced stocks but does not create similar returns for contemporaneously underpriced stocks. As a result, overpricing will be observed more often than underpricing.

We provide causal evidence using SEC’s Rule 202T Regulation SHO that removed shortsale constraints on approximately onethird of the stocks in the Russell 3000 index, relaxing the prohibitive uptick rule and making it much easier to short the selected pilot stocks. Using Reg SHO data, we find that investors discount hazard stocks included in the pilot during the program.

Overall, we find what appears to be asymmetric preferences across lottery and hazard stocks. But in a closer look, we conclude that it is arbitrage asymmetry (i.e., shorting overpriced stocks is more difficult than buying underpriced stocks) that generates what appears to be asymmetric preferences across lottery and hazard stocks.

Information Systems & Analytics Dr. Fadel Megahed, Associate Professor and Dr. Allison Jones-Farmer, Van Andel Professor of Business Analytics & Professor

MEGAHED, FADEL M., L. ALLISON JONES-FARMER, Longwen Zhao, and Steven E. Rigdon. “Modeling the differences in the time-series profiles of new COVID-19 daily confirmed cases in 3,108 contiguous US counties: A retrospective analysis.” Plos One

Throughout the pandemic which began in March 2020 in the U.S., the number of COVID cases have been traditionally reported at the national level. At this level, the outbreak pattern is multiwave; however, most local entities did not observe a similar pattern to the U.S. as a whole. When considering the 3,108 counties in the contiguous U.S., our research showed that there were actually three different patterns that emerged during the first year of the pandemic. About 1380 counties in the U.S. exhibited a pattern consistent with an early outbreak of COVID in the spring of 2020 followed by a second outbreak in the late summer of 2020, and finally a large rise in cases beginning in late November of 2020. These counties are located distinctly in the Eastern and

Southeastern regions of the U.S., and tend to be more densely populated with a higher percent of residents in poverty. Around 1,134 counties did not show an early spring 2020 pattern of outbreaks, but did experience a late summer wave followed by a second surge in November-December of 2020. The counties, primarily in the Midwestern and Western U.S., have a lower population density and a lower percentage of residents in poverty. This pattern of outbreak is associated with a slightly higher government response to COVID than those with an early wave pattern. Finally, 594 counties exhibited little to no outbreak during the first year of the pandemic, with only a slight rise in cases toward the end of 2022. These counties, mostly rural, are located throughout the western U.S. with a few counties located in the Northeastern and Southeastern U.S. These counties have significantly lower population densities than counties with more COVID cases.

The local patterns in outbreaks observed at the county-level suggest that decisions regarding the timing of mitigation efforts should be informed by local conditions. Local conditions vary across the country and even within each state, and the clusters of patterns exhibit spatial distributions.

By understanding the patterns of COVID-19 progression across the country, policy and mitigation standards can benefit from regional information at a given time in order to better preserve public health.

Information Systems & Analytics faculty published 13 papers in

top tier publications.

Marketing Dr. Peter Nguyen, Assistant Professor

PETER NGUYEN, Xin (Shane) Wang, Xi Li, and June Cotte “Reviewing Experts’ Restraint from Extremes and its Impact on Service Providers” Journal of Consumer Research

For a long time, expert opinions have played an important role informing the general public on consumption choices. such as the selection of wines and electronics. Over the past two decades, consumers have increasingly relied on online reviews—such as those found on Amazon, Yelp, and Google Reviews—prior to purchase decisions. In our research, we study so-called “experts” on many of these online review platforms, such as “Elite” reviewers on Yelp. We collected and analyzed millions of online reviews and our analyses yield a number of interesting findings.

First, we find that experts and novices have very different rating approaches.

Because experts, by nature, tend to consider many attributes in their experiences (e.g., service, taste, ambiance) and evaluations across many attributes tend to be mixed (i.e., some attributes are evaluated as good, some as bad), we find that reviewing experts provide summary ratings that are restraint from extremes (2, 3, and 4 stars). This pattern runs in sharp contrast with their novice counterparts who adopt an “I hate it versus I like it” mentality of rating (1 and 5 stars).

Second, the asymmetry in rating patterns between experts and novices affects businesses. We find that although reviews by experts are generally deemed more informative by readers, the restraint-from-extreme rating approach by experts ends up moving the user rating average needle very little. This is important because in the age of online reviews, consumers don’t always have the time to read many, or even any, of the reviews. Instead, they largely rely on aggregate metrics, such as the valence (user rating average) and volume (total review count), to make inferences about products/services prior to purchase.

Third, the story becomes more interesting when we look at how the user rating average is being moved by novices. Novices are assigning 1- and 5-stars not randomly, but systematically. Accordingly, service providers that generally provide really good (mediocre) service are benefitted (harmed) by novices, as their polarizing rating approach tends to pull up (down) the business’ user rating average.

Some key takeaways. If you’re a consumer, (a) be careful when reading reviews—look at both aggregate metrics and read some reviews, especially ones that are deemed most helpful by previous readers. (b) Be cautious of 1 and 5 stars—most novices assign these ratings. For businesses, such as a local restaurant, (c) if you’re a really good service provider, be cautious with experts reviewing you– they are hesitant to give 5-stars and may limit how good you can appear. (d) If you’re a mediocre level service provider, of course, aim to be better, but also, be cautious of novices as their polarizing rating approach can harm your reputation online.

Management Dr. Monique Murfield, Associate Professor & Director of Center for Supply Chain Excellence Thomas, S.P., MURFIELD, M.L.U. and Eastman, J.K. “I Wasn’t Expecting That!

The Relational Impact of Negotiation Strategy Expectation Violations.”

Journal of Supply Chain Management There is no question that buyers and suppliers are currently managing their companies’ supply chains amidst ongoing chaos. There is a practical need for supply chain buying managers to consider their relationship history with their key suppliers and their strategic expectations to better understand and predict potential supplier negotiation behaviors and outcomes when environmental changes occur.

Some buyers may have a collaborative relationship with their key suppliers, where information is shared and it is a win-win for both firms. Other buyers may be facing a competitive situation, with suppliers’ emphasizing their own short-term gains. After repeated negotiations, buyers learn to adjust to their suppliers’ negotiation style given their history of past negotiations.

What happens then to buyers’ levels of trust when suppliers change their negotiation strategy to a different style than expected?

Through a series of experiments with experienced supply chain managers, this research examines the importance of negotiation strategy and its relational impacts. Regardless of the type of negotiation strategy that a supplier partner has used in the past, our research found that buyers appreciate and expect consistency.

When a supplier partner behaves in an unexpected way during a negotiation, it causes cognitive conflict for the buyer and plants seeds of doubt about the future of the relationship. One may think that a collaborative approach

used when a competitive approach was expected would yield positive results.

However, we found that buyers were skeptical of this change in behavior and levels of trust were lower when suppliers used a collaborative approach in this type of scenario than if they used their traditional competitive approach.

Traditionally, trust levels are higher when a collaborative negotiation style is used. This research shows that when an unexpected change happens, this isn’t the case.

While these changes in expected negotiation strategy can cause issues between buyers and suppliers, there are ways to avoid damaging the existing buyer-supplier relationship.

Buyers should be intentional from the beginning, realizing that relationship history develops over time, and actions now will form expectations for future supplier negotiations. Because people tend to resist change, we found that buyers will try to seek out other internal or external factors which may help to explain the change in negotiation strategy, and suppliers can mitigate damage by explaining their actions if they plan to deviate from behavior their buyers may expect of them.

Top 5 for research productivity in non-PhD institutions.

National Accolades The Farmer School and its programs have been recognized nationally for the quality of the experiences our students receive through our curriculum and experiential learning opportunities and for the success they achieve post-graduation.

96%

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#2 public university for student internships (Poets & Quants)

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TOP 3 public university for signature/international experience participation (Poets & Quants)

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TOP 3 public university for landing a job with their desired company (Poets & Quants)

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TOP 10 for student experience (Poets & Quants)

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TOP 10 for early-career return on investment (Poets & Quants)

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#11 for employment outcomes (Poets & Quants)

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TOP 20 public undergraduate business school (Poets & Quants)

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TOP 10 entrepreneurship program for 14 years in a row among public undergraduate programs (Princeton Review/Entrepreneur magazine)

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#1 Master’s of Economics among public schools without doctoral programs (Financial Engineer Times)

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#4 accountancy program among schools without doctoral programs (Public Accounting Review)

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TOP 5 undergraduate marketing program among public universities (GradReports)

Public Undergraduate Business School

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Awarded TOP CENTER for entrepreneurial excellence (Nasdaq)

(POETS & QUANTS)

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TOP 20 undergraduate supply chain program (Gartner)

of Students With At Least One Internship (POETS & QUANTS)

Top

20

Top

10

Early-Career Return on Investment (POETS & QUANTS)

We focus on excellence in all that we do

and the results speak for themselves It starts with exceptional students: •

8,163 high-achieving students applied for admittance to FSB for 2021.

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Applications by women increased 15.1%.

We provide an educational experience that goes beyond the classroom: •

100% of Farmer School students participate in handson learning—starting in their first year here.

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TWO-THIRDS are members of a Farmer School Business organization.

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MORE THAN 65% of Farmer School students studied abroad. (The national average is 16%), making us one of the TOP 3 public universities for signature/international experience participation.

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96% of all Farmer School students have at least one Internship.

Driven by talented faculty focused on student success: •

TOP 10 for Student Experience.

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MORE THAN 93% of all first year Farmer School students return to the school the following year. For students of color, the percentage returning is slightly higher

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MORE THAN 20 Miami faculty members are among the top 2% most cited researchers in the world.

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Faculty are regarded as SUBJECT-MATTER EXPERTS

by Forbes, Fortune, the Wall Street Journal as well as major scholarly and education-focused publications.

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Every Farmer School department is NATIONALLY RANKED.

“What I think the Farmer School does better than any place that we recruit is prepare students to be effective quickly. They are work ready, day one.”

Chris Gorman Chairman and CEO, KeyCorp.

In July 2021,

6 companies founded by Farmer School alumni raised more than

$927 million

in the private and public markets, with a combined market valuation across those six companies of almost

$10 billion.

MIAMI GRADS HAVE FOUNDED

9 unicorns

2nd

(only to MIT) FOR STUDENTS’ TECHNICAL/CODING SKILLS CODESIGNAL

Yields tremendous results: •

MORE THAN 400 employers sought to hire our graduates.

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TOP 3 Public University for landing a job with their desired company.

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TOP 10 for early-career return on investment.

4 CEOs OF FORTUNE 500 COMPANIES ARE MIAMI GRADS

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