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GWSB Research Winter/Spring 2014

The George Washington University School of Business

A street near Taksim Square in central Istanbul is quiet right before a police crackdown on public demonstrators. GWSB executive MBA students were near the end of a residency on emerging markets in Istanbul during the unrest. (Photo by Maria Lourdes Tiglao)



WEMBA Candidates Learn in Some Parts of the World, ‘Business as Usual’ is Anything But


ometimes the best research is done “in the field,” as a team of GWSB World Executive

MBA (WEMBA) candidates learned when they encountered street demonstrations, political unrest, government reaction and response in Turkey. Unfortunately, these are often facts of life when doing business in a volatile political climate. For 38-year-old Maria Lourdes Tiglao—a U.S. Air Force veteran who’s done two tours in Afghanistan— assessing a fast-changing foreign landscape is nothing new. Even so, the student in the WEMBA program came away with valuable, hard-won lessons when she found herself in the midst of public protests and a police crackdown during her recent emerging-market residency in Istanbul last spring. “This experience will definitely help to shape my perspective as I look at other economies,” said Tiglao.


“Specifically, weighing economic factors isn’t enough when you want to work in a developing market.” Other WEMBA candidates on the Istanbul trip agree. “An experience like this shows how some emerging and developing countries are limited in their growth capabilities as a result of unrest,” said Rena Jabbour. “This lack of predictability could make many investors and business-oriented individuals very cautious. Despite the massive growth opportunity, it is critical to place importance on the societal and political state of the market.” “It’s unstable terrain,” said Tiglao, a pulmonary lab manager in northern Virginia who hopes to put her business skills to work for Team Rubicon, a nonprofit that uses veteran volunteers for domestic and international disaster relief work. She learned in Turkey that, “Bringing historical, cultural, social and political

contexts into consideration in whatever endeavor I undertake can steer me toward better decisions.” The outbreak of rioting complicated travel plans for WEMBA students who completed their residency and were preparing to leave Turkey, but some of the team remained to complete their work. Bryan Andriano, GWSB’s director of international education and programs, who was also on the trip, made arrangements to ensure that students heading for the airport were picked up early in the morning on a quiet street to avoid roadblocks, and those staying on in Istanbul were moved to a hotel in a quieter part of the city. “At the end of the day, these kinds of situations represent significant challenges for a university, but also, opportunities for students to fully understand the social and political events that are taking place in their countries of study,” said Andriano. Brian Fricke, a WEMBA candidate, added, “Any cultural immersion into an emerging market that allows you to feel out of your comfort zone will help you grow as an individual and as a leader.” Many students said the School’s track record on international study, especially in emerging markets, meant that those on the trip were as prepared as possible to handle unexpected situations. “There is always a need and responsibility to have an understanding of where one travels from the social, cultural and political, as well as economic, point of view,” said Errol B. Williamson, Jr., a WEMBA candidate. “Having said that, the GW School of Business goes above and beyond the call of duty to be responsible regarding these issues.”

Home-Buying Decisions Driven by MORE THAN THE BOTTOM LINE ther factors, beyond basic dollars-and-cents considerations, can play a

small, but important role in influencing individual economic decisions. In their research paper, “Social Influence in the Housing Market,” published in the Journal of Financial and Quantitative Analysis, Christo Pirinsky, assistant professor of finance, and co-author Carrie Pan, assistant professor of finance at Santa Clara University, examine a little-known, but essential factor driving economic decisions. According to Pirinsky, the behaviors of others within an affinity group – which includes everything from ethnic identity to age cohort to graduates of the same high school – can exert a measurable influence on individuals’ economic decisions. Pirinsky said that his study found that “social influence” can be measured at between 2 and 5 percent of all factors weighing on home-buying decisions. “The social influence effect is when people are influenced by others on a subconscious level, sometimes making decisions that might not otherwise be in their best interests,” Pirinsky said. “It’s an important aspect of consumer behavior.” In their paper, Pirinsky and Pan state: “Understanding social influence is particularly important because when people follow the behavior of others they are prone to mistakes. Given that housing assets comprise a large fraction of household portfolios, even small consumer errors in this market could have strong welfare implications. Household homeownership decisions affect not only individuals’ welfare but also the macro-economy, given the systemic link of the housing market to the financial sector and other industries in the economy.”

“Understanding social influence is particularly important because when people follow the behavior of others they are prone to mistakes.” Pirinsky and Pan focused on Christo Pirinsky, Assistant Professor of Finance ancestry and geography as the two primary social influences. “We find that the homeownership decisions within ethnic groups are locally correlated, after controlling for the homeownership of rates within the group and the region. For example, when a Lebanese person in D.C. decides whether to buy a home, his or her decision is very sensitive to the homeownership decisions of other Lebanese people in D.C. [but] not as sensitive to the homeownership decisions of Lebanese people in Baltimore.” Pirinsky added that this type of social influence is strongest among recent immigrants; it dissipates somewhat in succeeding generations, but remains an important factor. “People need to be aware of social influence, because it can lead them to make bad economic decisions, exceeding their budgets and buying something that they can’t afford,” Pirinsky said. “It’s important for people to be more educated about home-buying decisions.”

Vital Research (and lots of it)


ccording to the website of GWSB’s Department of Strategic Management & Public Policy (SMPP), “Strategic management and public policy issues have never been more important, both for university stakeholders and the rest of society.” The discipline demands that scholars continuously expand the boundaries of their knowledge and explore new applications for their expertise. “Research is the lifeblood of this institution,” Professor Jennifer Griffin, department chairwoman, said, adding that the department is doing its part to keep that lifeblood flowing. The SMPP faculty exemplifies GWSB’s focus on – and high level of achievement in – the realm of scholarly research. SMPP faculty were actively engaged in the recent annual Academy of Management and Society for Business Ethics conferences, earning significant recognition. “We have an incredible presence at these conferences,” Griffin said. At the Academy of Management conference, SMPP researchers presented research papers on variety of subjects: • Assistant Professor Eun-Hee Kim presented “Beyond the Dichotomy of

in a Vital Field

Symbolic versus Substantive Actions: Evidence from Corporate Environmental Management” (co-authored by Tom Lyon) in the conference’s Business Policy Strategy division. • Assistant Professor Kirsten Martin presented “Repairing Trust in Organizations: the Area of Privacy in Facebook.” • Assistant Professor Sanjay Patnaik earned an Honorable Mention for Best Dissertation from the conference’s International Management division for his paper, “Cap(ture)-andTrade – Arbitraging by Multinational Firms in the European Union Emissions Trading Scheme (EUETS).” • Assistant Professor Jorge Walter (with co-authors M. Kreutzer and L.B. Cardinal) presented “Organizational control as an antidote to politics in the pursuit of strategic initiative performance.” Walter also participated as a panelist for the Early Career Development Consortium, hosted by the conference’s Entrepreneurship division. • Griffin, along with co-authors GWSB doctoral candidate Andrew P. Bryant and Cynthia Clark, presented “It’s In

the Asking: Issue Materiality as a Predictor of Managerial Action,” in the conference’s Social Issues in Management division. • Doctoral candidate Smita Trivedi co-led a session entitled “Business Ethics: Field, Subfield or Flavor of the Day” in the conference’s International Management division. The department was also well represented at the annual Society for Business Ethics conference, where Trivedi presented her paper, “Creating Livelihoods: Indian Women Entrepreneurs in the Context of Poverty” and Martin presented “Ethics on the Internet: Who is tracking us online and should they stop?” SMPP faculty again showcased their outstanding research efforts at the Strategic Management Society Conference this fall in Atlanta. • Kim, and doctoral candidate Yoona Youm, were nominated for the Best Conference Paper Prize for Practice Implications for their paper, “New Dimension to Firm-Stakeholder Relationships through Social Media:

Jennifer Griffin

Examination of Electric Power Companies’ Twitter Accounts.” • Walter, along with co-authors T. Khoury and E. Pleggenkuhle-Miles, was also recognized for his paper, “Experience, negotiation leverage, and their effects on exclusively in technology licensing agreements,” which was nominated for the Best Conference Paper Prize at the Strategic Management Society Conference, in Atlanta, Ga. • Griffin (and co-authors Bryant and Clark) won the Best Conference Paper Award at the Strategic Management Society Conference on Stakeholder Theory for her paper, “Issue Materiality and Stakeholder Theory.” “I am very excited about the important research work being done by the SMPP faculty,” Griffin said.

MESSAGE from the Dean


Christopher B. Leinberger, Charles Bendit Distinguished Scholar and research professor of Urban Real Estate, recently released The WalkUP Wake Up Call: Atlanta, a research report on walkable communities in metropolitan Atlanta, and the followup to last year’s The WalkUP Wake Up Call: D.C. According to the report, the Atlanta area, long the very epitome of “suburban sprawl,” has turned a corner, with walkable communities accounting for more than 60 percent of the growth in incomegenerating real estate over the past four years. “Atlanta has reached peak sprawl,” Leinberger said. “This is the end of that trend. The pendulum is now swinging in the other direction.” The report is available at: http://business.gwu. edu/walkup/atlanta2013/ Next stop for Leinberger? Boston.

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Dean D. Christopher Kayes

he George Washington University School of Business takes great pride in its

commitment to cutting-edge research. GWSB is home to a dozen research centers focused on such critical topics as corporate governance, environmental sustainability, entrepreneurship, real estate, financial literacy, international business, the market dynamics of Europe and Latin America, and economic growth. GWSB is also committed to recruiting and retaining the top research faculty from around the world, and supporting their vital work. The research conducted by these leading experts in their fields paves the way for better business for a better world, and has a positive impact in both the classroom and the boardroom. The School is widely recognized for its scholarly research. GW recently earned a top-25 ranking

from the Princeton Review for the quality of its entrepreneurship programs—a direct reflection on GWSB’s ground-breaking work in studying the science of creating new, needed and profitable business ventures. Our faculty continue to explore, analyze and share their findings on a broad range of issues covering every imaginable aspect of the business world. In this issue of GWSB Research, you’ll read about: Professor Annamaria Lusardi’s work measuring and promoting financial literacy in the U.S. and across the globe; Professor Christo Prinisky’s fascinating exploration of non-economic factors influencing home-buying decisions; and a group of World Executive MBA candidates whose research consisted of experiencing firsthand how doing business in emerging-market countries can often be affected by political volatility. The impressive list of papers and presentations (see: “Recent Research,” beginning on page 3) demonstrates the volume and scope of scholarly work done by the GWSB faculty in just the past few months. As I said, we are extremely proud of these efforts. Sincerely,

D. Christopher Kayes Dean GW School of Business

Recent Research RAVI ACHROL Professor of Marketing

SALAH S. HASSAN Professor of Marketing

Presentation (as Wachovia Distinguished Scholar) on “The Theory of Marketing Networks,” Florida State University School of Business

“Nation branding effects on retrospective global evaluation of past travel experiences” with Milena S. Nikolova (GWSB, PhD, 2009), assistant professor, American University in Bulgaria, Journal of Business Research, Volume 66, Issue 6, 2013, pp. 752-758

ELIAS CARAYANNIS Professor of Information Systems and Technology Management • Editor-in-chief, The Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship • Co-editor (with George M. Korres, associate professor in the Department of Geography at the University of the Aegean, Greece), The Innovation Union in Europe: A Socio-economic Perspective on EU Integration DOUG GUTHRIE Professor of International Business Addressed the University of Chicago East Asia Workshop: Politics, Economy and Society on “U.S.-China Business Relations in an Era of New Leadership” WILLIAM HALAL Professor Emeritus of Information Systems and Technology Management “Forecasting the Technology Revolution: Results and Lessons from the TechCast Project,” in Technology Forecasting & Social Change, Volume 80 (2013), pp. 1635–1643 WILLIAM C. HANDORF Professor of Finance “Commercial Real Estate Loans, the Banking Industry and Covered Bonds,” in the spring 2013 issue of Real Estate Review

A sampling of recent scholarly articles and research papers authored by GWSB faculty • Co-authored (with N. Allen and N. Self) “Integrating Learning, Leadership, and Crisis in Management Education: Lessons From Army Officers in Iraq and Afghanistan,” Journal of Management Education, 37, pp. 180-202 KRISTIN LAMOUREUX Associate Research Professor Director, International Institute of Tourism Studies

• Keynote address, “UNWTO Knowledge Network Vision and Strategic Directions,” at the Travel and Tourism Research Association’s European conference held in Dublin, Ireland

Presentation, 15th annual American Indian Alaska Native Tourism Association conference, Tulsa, Okla.

MARK HYMAN Teaching Assistant Professor of Management

ANNAMARIA LUSARDI Denit Trust Distinguished Scholar in Economics and Accountancy Director, GWSB’s Global Center for Financial Literacy Editor, articles collection, July 2013 issue of Numeracy (in collaboration with Dorothy Wallace and Audrey Brown from Dartmouth College)

Panelist, Association of Health Care Journalists presentation, “Will Research Drive More Changes in School Sports?” D. CHRISTOPHER KAYES Dean, Associate Professor of Management • Presented paper co-written with J. Yoon, “The Air France Flight 447 disaster: The breakdown of learning in ad hoc teams,” International Conference on Organizational Learning, Knowledge, and Capabilities

Presentation on privacy expectations in the mobile data “ecosystem,” 2013 Research Conference on Communication, Information, and Internet GEORGE T. SOLOMON Associate Professor of Management

DONALD HAWKINS Eisenhower Professor of Tourism

• Presentation on “Travel for Social Good,” World Bank tourism for development seminar, Washington, D.C.

KIRSTEN MARTIN Assistant Professor of Strategic Management and Public Policy

Best paper award (with co-author Jeewhan Yoon, GWSB PhD candidate) in Asia-Pacific Small Business Management for “Entrepreneurial orientation gone risky: A lesson from Asian culture and its impact on firm performance,” International Council for Small Business conference sponsored by the Korean Association Small Business Society JORGE WALTER Assistant Professor of Strategic Management and Public Policy Presentation of his paper, “Weak Ties and Innovation,” Industrial Research Institute’s Diamond Jubilee meeting

Congratulations! ERIK K. WINSLOW, professor emeritus of management, was inducted as a Wilford L. White Fellow of the International Council for Small Business (ICSB). Selection as a Wilford L. White Fellow is the highest recognition that the ICSB gives to individuals who have made an outstanding contribution to the development, furtherance and benefit of small and medium-sized businesses.

A BASIC, NECESSARY SKILL FOR THE 21ST CENTURY What does the average American really know about

the basics of personal finance? How does his knowledge – or lack therefore – about money compare to that of others around world? Professor Annamaria Lusardi, Denit Trust Distinguished Scholar in Economics and Accountancy, is on a mission to measure financial literacy and to educate people on the basic financial knowledge and skills that they need to survive in the modern world. Whether conducting research, teaching, delivering lectures, giving interviews, blogging or testifying before Congress, Lusardi is a tireless advocate for financial literacy. Lusardi founded the Global Financial Literacy Excellence Center (GFLEC), which has positioned itself to be the world’s leading center for financial literacy research and policy. She has played a key role in measuring levels of financial knowledge in the U.S. (the National Financial Capability Study) and internationally (the Programme for International Student Assessment). It is clear to Lusardi that financial knowledge is more important now than ever before in human history. “Financial literacy is a basic, necessary skill for the 21st century,” she said. “The world has changed. There are so many opportunities, so much available credit, and a proliferation of alternative financial

services. At every stage of life, we need to be equipped to make informed financial decisions. “There is a low-level of financial literacy – people are not equipped with the knowledge they need,” she said, adding that it’s never too early to begin learning the ABC’s of finance. “Early education is very important – perhaps the most important financial decisions you make are at age 20.”

While early financial education is indeed vital, Lusardi has most recently been conducting research on the financial factors affecting older individuals. Lusardi’s research (with longtime writing partner Olivia Mitchell, professor of insurance and risk management at the Wharton School of Business) on debt and debt management among adults on the verge retirement has found that Americans today are more likely to arrive at retirement with debt than in the past. Not only has the number of people holding debt increased, but the value of that debt has grown sharply. The bottom line is that a growing number of people who should be close to their peak wealth accumulation are, in fact, “financially fragile” – especially susceptible to financial shocks (more than 35 percent report that they could not come with $2,000 within 30 days to cover emergency expenses, for example). It is impossible to overstate the importance of having a solid understanding of the basics of finance and why the current low level of financial literacy presents such a challenge to society. As Lusardi and Mitchell write at the conclusion of their report, “the costs of raising financial literacy are likely to be substantial, but so too are the costs of being liquidity-constrained, over-indebted, and poor.” | 3



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GWSB Research is published by The George Washington University School of Business Dean: D. Christopher Kayes Vice Dean of Faculty and Research: Jennifer Spencer Vice Dean of Programs and Education: Philip W. Wirtz Editor: Christine Patton Senior Writer: Dan Michaelis Design: Lloyd Greenberg Design, LLC For comments or suggestions contact us at:



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About GWSB The George Washington University School of Business provides undergraduates, graduates and executives with a world-class business education. It is recognized globally as a leading academic institution, especially for international business programs. Located in Washington, D.C., just steps from the World Bank, the International Monetary Fund, the State Department, the White House and the Securities and Exchange Commission, the School’s innovative programs emphasize ethics, sustainability and international business.

To learn more, visit:

Center for Real Estate and Urban Analysis European Union Research Center Global and Entrepreneurial Finance Research Institute Global Financial Literacy Excellence Center The Growth Dialogue The Institute of Brazilian Issues Institute for Corporate Responsibility Institute for Integrating Statistics in Decision Sciences International Institute of Tourism Studies

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GWSB in Washington, D.C. is the perfect setting for leading research. We don't do research for research's sake. Like everything we do, our...

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