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I investigate whether organizations can use the “power of the employee” to reduce managers' opportunistic behavior toward others. I predict that revealing this behavior to employees makes managers less inclined to act opportunistically. Employees' knowledge has a stronger impact on reducing managers' opportunistic behavior when managers have discretion over employee rewards versus when they do not. I further predict that the effect of employee-based control depends on whether managers are other-interested versus self-interested. Revealing manager actions alone is sufficient to reduce other-interested managers' opportunism, even when they lack discretion over employee rewards. Revealing manager actions alone has no discernible influence on self-interested managers' opportunism, but pairing this action with granting them discretion over employee compensation does reduce their opportunism. Results of two experiments support my predictions, and these results have important implications. By relying on the power of the employee, organizations can induce (even selfish) managers to act less opportunistically. JEL Classifications: C91; D83; M40.

An audit committee (AC) report is the primary channel through which investors learn about the responsibilities and activities of an AC. AC members may use personal language (“we”) or impersonal language (“the audit committee”) in an AC report. Psychology research suggests that personal (vs. impersonal) language signals that the language user has greater warmth and sense of communion (i.e., being part of a larger group). Applying this theory, we predict that an AC's use of personal (vs. impersonal) language leads investors to perceive a warmer and more communal AC, and that an AC's perceived warmth/communion (cued by personal language) positively impacts investor judgments. We further posit that the positive effect of personal language is stronger when AC compensation is largely short term than long term. This is because investors need more assurance of AC oversight effectiveness when AC compensation is short term, which makes investors rely more on heuristic cues such as AC language to make judgments. Consistent with this prediction, we find that when AC compensation is largely short term, nonprofessional investors (proxied by Master of Business Administration students) react more positively to an AC's use of personal language than impersonal language. The effect of AC language is insignificant when AC compensation is largely long term, as the long-term compensation structure already provides assurance about the AC's oversight effectiveness, and thus, investors rely less on heuristic cues. Furthermore, we find that the perceived warmth of AC members explains the effect of AC language. Finally, our interviews with nonprofessional investors corroborate some of our main findings and validate their practice implications. Ministry of Education (MOE) Published version The authors also thank the Singapore Ministry of Education Academic Research Fund Tier 2 MOE2019-T2-2-137 and the UOB Endowed Chair Fund for financial support.

We introduce a new distributionally robust optimization model to address a two-period, multi-item joint pricing and production problem, which can be implemented in a data-driven setting using historical demand and side information pertinent to the prediction of demands. Starting from an additive demand model we introduce a new partitioned-moment-based ambiguity set to characterize its residuals. Unlike the standard moment-based ambiguity set, we can adjust the level of robustness by varying the number of information clusters from being the most robust as the standard moment-based ambiguity set with one cluster to being the least robust as the empirical distribution. The partitioned-moment-based ambiguity set also addresses the key challenges in the stochastic dynamic optimization problem to determine how the second-period demand would evolve from the first-period information in a data-driven setting, without the need to impose additional assumptions on the distribution of demands such as independence. In addition, it also inspires a practicable non-anticipative policy that is adapted to the cluster. In particular, we investigate the joint pricing and production problem by proposing a cluster-adapted markdown policy and an affine recourse approximation, which allow us to reformulate the problem as a mixed-integer linear optimization problem that we can solve to optimality using commercial solvers. Both the numerical experiments and case study demonstrate that, with only a few number of clusters, the cluster-adapted markdown policy and the partitioned-moment-based ambiguity set can improve mean profit over the empirical model---when applied to most out-of-sample tests. Ministry of Education (MOE) Nanyang Technological University Submitted/Accepted version The research was conducted while Qinshen Tang was visiting in Sloan School of Management at the Massachusetts Institute of Technology and was partly financed by NUS Business School, FY2018 Ph.D. Exchange Fellowship. This paper was supported by Nanyang Technological University [Start-Up Grant 020022-00001], and the Ministry of Education, Singapore, under its 2019 Academic Research Fund Tier 3 grant call (Grant MOE-2019-T3-1- 010).

Estimating tail risk measures is an important task in many financial and actuarial applications and often requires nested simulations, with the outer simulations representing real world scenarios, and the inner simulations typically used for risk neutral pricing or conditional risk measurement. The standard nested simulation method is highly flexible, able to incorporate complex asset models and exotic payoff structures, but it is also computationally highly burdensome, particularly in a multi-period setting, when inner simulation paths are required at each time step of each outer level scenario. In this study, we propose and analyze a two-stage simulation procedure that efficiently estimates the conditional tail expectation of cost of a dynamic hedging program for a Variable Annuity Guaranteed Minimum Withdrawal Benefit (GMWB), under a multi-period nested simulation. In each of the two stages, the method re-uses the same set of inner level simulation paths for each outer scenario at each time point, using a likelihood ratio method to re-weight the probabilities of each individual path for the different outer scenarios. Our numerical study shows that our two-stage, likelihood ratio weighted procedure can offer a very significant improvement in efficiency, of the order of 95% as measured by the RMSE, compared with a standard nested simulation with the same computational cost. We acknowledge the support of the Natural Sciences and Engineering Research Council of Canada, funding reference number 03754 (Hardy) and 03755 (Feng). This work was also supported by the Society of Actuaries through a Center of Actuarial Excellence Research Grant and through the Hickman Scholarship held by Ou Dang. Ou Dang has also received support from the Ontario Graduate Scholarship.

This paper analyzes the optimal consumption and portfolio choice problem for an ambiguity-averse investor with recursive preferences. The investor has access to both the stock and derivatives markets. The stock price process follows a stochastic volatility jump-diffusion model and the investor can have different levels of ambiguity about diffusion and jump risks, respectively. We obtain an exact analytical solution for investors with unit elasticity of intertemporal substitution of consumption and an approximate solution otherwise. We find that the optimal consumption policy is more sensitive to ambiguity aversion with respect to diffusion risks than the jump risk. The optimal exposures to diffusion and jump risks are significantly affected by the corresponding ambiguity aversions in the complete market; however, the optimal stock investment is relatively insensitive to jump misspecification in the incomplete market. We also show that taking into consideration ambiguity aversion to diffusion risks and participating in the derivatives market are essential to reduce the potential welfare loss, while the impact of jump misspecification is marginal. Submitted/Accepted version

This paper examines different car-sharing models offered by ride-hailing firms. In the traditional model, customers are served individually. In the sharing-only model, all customers are willing to share the ride with other customers. In the hybrid model, customers may choose either individual or shared service provided by the same fleet. Sharing customers incur a hassle cost. We develop a queueing game-theoretic model to (i) determine the arrival rates that maximizes social welfare and (ii) choose admission fees that maximizes firm profits. First, we discover a tipping point in the hybrid model. When hassle cost decreases to this point, (i) the optimal customer behavior immediately switches from less than 80% sharing customers to 100%, (ii) the optimal arrival rate increases dramatically, and (iii) the rate at which a decreasing hassle cost improves the maximum social welfare significantly increases. Second, when hassle cost is higher than the tipping point, the hybrid model may generate higher social welfare than the other two models. Hence, the firm can improve social welfare by assigning customers to differentiated services even when they are not heterogeneous. Finally, we propose a profit-maximizing admission fee structure in the hybrid model to maximize firm profits and demonstrate its effectiveness. Ministry of Education (MOE) Submitted/Accepted version This work was supported by Singapore Ministry ofEducation Academic Research Fund MOE2017-T1-001-138.

People are excessively confident that they can judge others' characteristics from their appearance. This research identifies a novel antecedent of this phenomenon. Ten studies (N = 2,967, 4 preregistered) find that the more people believe that appearance reveals character, the more confident they are in their appearance-based judgments, and therefore, the more they support the use of facial profiling technologies in law enforcement, education, and business. Specifically, people who believe that appearance reveals character support the use of facial profiling in general (Studies 1a and 1b), and even when they themselves are the target of profiling (Studies 1c and 1d). Experimentally inducing people to believe that appearance reveals character increases their support for facial profiling (Study 2), because it increases their confidence in the ability to make appearance-based judgments (Study 3). An intervention that undermines people's confidence in their appearance-based judgments reduces their support for facial profiling (Study 4). The relationship between the lay theory and support for facial profiling is weaker among people with a growth mindset about personality, as facial profiling presumes a relatively unchanging character (Study 5a). This relationship is also weaker among people who believe in free will, as facial profiling presumes that individuals have limited free will (Study 5b). The appearance reveals character lay theory is a stronger predictor of support for profiling than analogous beliefs in other domains, such as the belief that Facebook likes reveal personality (Study 6). These findings identify a novel lay theory that underpins people's meta-cognitions about their confidence in appearance-related judgments and their policy positions. Nanyang Technological University This research was supported by a Nanyang Assistant Professorship grant awarded by Nanyang Technological University to Krishna Savani.

Investors frequently rely on individual analysts’ stock price targets. Aggressive price targets often reflect analysts’ attempts to strategically influence investors. Therefore, investors’ welfare may be compromised if they take aggressive price targets at face value. In this study we examine conditions under which investors are more likely to infer that analysts who issue aggressive price targets are acting strategically. Investors can evaluate multiple analysts’ price targets with or without other related information (e.g., earnings estimates). Investors can also evaluate the information provided by multiple analysts jointly or separately. Two experiments find that as predicted, when investors evaluate multiple analysts’ price targets without earnings estimates, there is no difference in investors’ perceptions about whether the aggressive analyst is acting strategically across joint versus separate evaluation. However, also as predicted, when investors evaluate multiple analysts’ price targets along with their earnings estimates, investors perceive the aggressive analyst as acting more strategically under joint evaluation than under separate evaluation. Our findings suggest that when investors evaluate multiple analysts’ price targets with other related information such as earnings estimates, adopting joint evaluation can reduce the likelihood that investors are overly influenced by aggressive analysts. Ministry of Education (MOE) Submitted/Accepted version

The spread of disinformation in recent years has caused the international community concerns, particularly around its impact on electoral and public health outcomes. When one considers how disinformation can be contained, one often looks to new laws imposing more accountability on prominent social media platforms. While this narrative may be consistent with the fact that the problem of disinformation is exacerbated on social media platforms, it obscures the fact that individual users hold more power than is acknowledged and that shaping user norms should be accorded high priority in the fight against disinformation. In this article, I examine selected legislation implemented to regulate the spread of disinformation online. I also scrutinise two selected social media platforms–Twitter and Facebook–to anchor my discussion. In doing so, I consider what these platforms have done to self and co-regulate. Thereafter, I consider the limitations on regulation posed by certain behavioural norms of users. I argue that shaping user norms lie at the heart of the regulatory approaches discussed and is pivotal to regulating disinformation effectively. Ministry of Education (MOE) Published version The research undertaken for this article is funded by a Ministry of Education Academic Research Fund Tier 1 grant [number RS07/20].

We live in an age of massive global disruption. Technological advancements threaten century-old business models, globalization is reordering supply chains, and people need to work with colleagues and customers who have vastly different backgrounds. On top of that, we have been in the midst of a global pandemic, and customers, employers, and investors are demanding more than just a Black Lives Matter social media post from organizations that purport to take social justice seriously. Organizations with high cultural intelligence (CQ) are able to navigate this volatility and complexity effectively. Over the last two decades, scholars from across the world have published hundreds of articles on CQ, the capability to relate and work effectively in complex, culturally diverse situations. Most of the work has examined CQ at the individual level. But what about organizations? Can organizations be culturally intelligent? The emerging research on CQ at the organizational level offers leaders and organizations critical insights for navigating today's diverse, digital world. Organizational CQ is a firm's capability to function effectively in a complex and unpredictable multicultural world. This article stresses the importance of the culturally intelligent organization and explains how to develop organizational CQ.

The mere marketing of firms as environmentally friendly does not mean that the firms are genuinely green. In this paper, we propose a new measure, Green Score, to capture firms’ investment in green human capital based on the concentration of green skills required in firms’ job postings. First, we find that firms that increase their Green Score have higher future profitability. Second, firms that increase their Green Score generate more green patents, and those green patents are of higher quality and receive more citations. Third, traditional ratings widely used to evaluate firms’ environmental efforts do not consider firms’ Green Score. Overall, our new action-based measure is simpler and less subjective and it offers a larger time-series variation than traditional disclosure-based environmental ratings. Nanyang Technological University Published version Darendeli and Law acknowledge financial support from Nanyang Technological University’s Start-Up Grants. Shen acknowledges financial support from National University of Singapore’s Start-Up Grant (A-0003869-00-00).

I conduct an experiment, using M.B.A. students as proxies for individual investors, to examine the impact of error source (management versus press) on the continued influence of retracted disclosures. Given the increasing role of third parties in disseminating information, it is important to examine the moderating effect of error source, a factor not previously emphasized in prior research on the continued influence effect. The experimental results show that investors are more susceptible to the continued influence effect when the error is from the press (rather than from the management), adding to the concern raised by policy makers over the quality of information provided by outside organizations. Additional analysis reveals that the differential effect found is mediated by the level of scepticism experienced by the participants. Contrary to previous research, my results provide evidence that post-exposure scepticism may moderate the continued influence effect, under the conditions of task familiarity and clarity of actual error. Implications for regulators and researchers are also discussed. Ministry of Education (MOE) Submitted/Accepted version The author acknowledges research funding received from the Singapore Ministry of Education.

This study applies signaling theory to examine the impact of environmental disclosures on equity underpricing at initial public offerings (IPO) when private firms list on stock exchanges. Firms often under-price their shares to attract investors as IPOs have high information asymmetry between firms and investors. Using a linguistic technique on environmental disclosures in prospectuses from 2009 to 2019 in the Singapore Exchange, we find that disclosures with a positive tone correlate with lower underpricing, but only if these disclosures are authentic. This finding is robust to different model specifications and measurements. We provide new evidence that linguistic features, that is, tone and authenticity, interact to influence a key IPO outcome. The results suggest that investors are not easily attracted by positive disclosure tones but are also concerned with the authenticity of such disclosures. This finding informs firms and various stakeholders navigating the nascent and growing wave of sustainability reporting in Singapore. Nanyang Technological University We wish to acknowledge the funding support for this project from Nanyang Technological University under the URECA Undergraduate Research Program.

This paper examines the impact of habit formation on the demand for life-contingent contracts in a life-cycle model. We derive an analytical solution for the optimal consumption, portfolio choice, and life insurance/annuity purchases. We illustrate the mechanism by which the consumption habit assumption can alter the bequest motive and therefore drive the demand for life-contingent products. Based on our assumed insurance/annuity markets, we show that habit formation alone leads to low demand on either life insurance or annuity but not both. However, habit formation together with social security results in low demand in both life insurance and annuity. Submitted/Accepted version

Entrepreneurship researchers have studied resilience across various contexts, including at the micro (that is, owner/business) and macro (that is, cluster/ecosystem/region) levels, by drawing from a myriad of academic disciplines. This Special Issue (SI) provides an opportunity to link resilience at the micro- and macro-level since collective small business owner resilience is foundational to macro-level resilience within clusters, ecosystems and regions. This point has become evident as businesses worldwide face similar challenges and economic adversities due to the lockdowns during the global COVID-19 pandemic. The collection of papers on small business resilience in this SI indicates the psychological, organizational, and economic responses undertaken by small businesses to overcome challenges faced, where they promoted their human, social, and financial capital while finding other responses less helpful. We hope the research and questions uncovered as a result of this SI provide continued food for thought and grounds for future research in small business resilience.

We conduct two experiments using experienced audit partners as participants to investigate whether engagement partners’ involvement in the client acquisition process as the contact partner can influence their subsequent audit judgments, and whether the engagement quality review partner’s judgments are influenced when he or she is aware that engagement partners play both roles. As predicted, we find that engagement partners who are also the contact partners during client acquisition tend to make judgments that are biased in favor of the client. However, engagement quality review partners are not sensitive to whether the engagement partner was the contact partner or not, but may be motivated to make decisions that favor the engagement partner. Our results provide a deeper understanding of how the client acquisition process influences the judgments of various partners later in the course of audit engagements. Ministry of Education (MOE) This work was supported by Singapore Ministry of Education Tier 2: [Grant Number MOE2019-T2-2-137] and United Overseas Bank Endowed Chair.

We conduct two experiments to investigate the joint effect of two justification factors of earnings management—namely, attribution for the firm's underperformance and benefits accruing to other employees from inflating reported earnings. This investigation is important because prior research examines the effects of individual justification factors, whereas real-world settings entail more complexity involving multiple justification factors. In Experiment 1, we predict and find that managers are more likely to manage earnings when the firm's underperformance is caused by an external event and misreported earnings benefit other employees besides the reporting manager. Furthermore, we show that the extent to which participants use moral justifications mediates the effect of benefits sharing on earnings management, but only when causal attribution is external, and that it mediates the effect of causal attribution on earnings management, but only when benefits are shared. In Experiment 2, we use a neutral control condition that makes no mention of inconsistent incentives to demonstrate that it is the combination of causal attribution and benefits sharing that triggers earnings management. We contribute to the accounting and psychology literature by proposing and testing a theory that explains how multiple justification factors interact to cause opportunistic behavior. Our results suggest that policy-makers and governing parties should consider developing a holistic view of possible justification factors, focusing on situational opportunities created by combinations of factors rather than individual factors alone. Ministry of Education (MOE) Published version The authors thank the Singapore Ministry of Education Academic Research Fund Tier 2 MOE2019-T2-2-137 and the UOB Endowed Chair Fund for financial support.

We investigate whether individual securities regulators exhibit personal styles in their work, a question of importance to corporate executives and capital market participants. Using the SEC's comment letters as our setting, we find that SEC staff members exhibit unique personal “styles.” We manually collect information on SEC staff members and provide evidence that staff members' personal characteristics influence the SEC's review process. Further analyses reveal that SEC staff members with a CPA qualification are associated with a lower likelihood of future accounting restatements; moreover, similarity between the SEC staff member and the firm's correspondent is associated with lower scrutiny intensity. Overall, our study offers evidence that SEC staff members exhibit individual differences and that their styles shape the SEC's enforcement actions. Our results offer implications for the working of securities regulators. Ministry of Education (MOE) Published version Zhang acknowledges thefinancial support from the National Natural Science Foundation of China(71572038, 71872046, 71872078) and Singapore Ministry of Education (RG163/17). Do acknowledges thefinancial sup-port from UQ Business School (BEL new staff start-up funds).

This study provides insight into the relationship between human and machine in the professional aviation community following the 737 MAX accidents. Content analysis was conducted on a discussion forum for professional pilots to identify the major topics emerging in discussion of the accidents. A subsequent narrative analysis reveals dominant arguments of human versus machine as zero-sum, surrender to machines, and an epidemic of mistrust. Results are discussed in the context of current issues in human-machine communication, and we discuss what other quickly automating industries can learn from aviation's experience. Published version

In this study, we introduce visual totality of a crowdfunding pitch video which considers not only visual segments with human faces but also segments without human faces. Drawing from Emotions as Social Information (EASI) theory and expression theory, we analyze more than 4 million frames in 3184 Indiegogo rewards-based crowdfunding pitch videos using the ResNet 50 deep neural network. Results indicate that the impact of peak negative affective visual expression on funding performance is stronger than that of its positive counterpart for both segments with and without human faces. Additionally, the influence of peak negative affective visual expression from human faces is stronger in the first half (vs. the second half) of the pitch video. Further, we found a substitute moderating effect between the peak negative affective visual expression from segments with and without human faces on funding performance. We conducted an additional data collection to ascertain that pain points serve as the underlying mechanism through which negative affective visual expressions related to funding outcome. We discuss the theoretical and practical implications of our study to the crowdfunding literature and the broader research on entrepreneurial resource acquisition. Submitted/Accepted version

Help-request referral (HRR) campaigns are being increasingly adopted by online service providers to attract online traffic and engage new users. In these campaigns, participants are required to collect a specific amount of help from their social network in exchange for attractive rewards. Participants often face challenges in obtaining positive feedback from their social networking groups due to the diffusion of responsibility. Based on the triangle model of responsibility, this study proposes and empirically tests a research model that examines two key determinants (i.e., request personalization and relational closeness) of recipients’ perceived responsibility that further shape their responses to HRR. Our field experiment empirically supports the research hypotheses. Overall, this study enriches the literature on online social referrals by focusing on HRR, where social referrals are broadcasted and senders reap referral benefits. The study also provides practical insights for HRR designers and social networking service providers. Ministry of Education (MOE) Published version The authors also wish to acknowledge the National Natural Science Foundation of China (72231004, 71871155, 71802147, 72172103), the Ministry of Education of Singapore (Grant MOE 2018-T1-002-097), and the Shandong Industrial Internet Innovation and Entrepreneurship Community for financial support.

Africa's healthcare system lags other regions, according to a 2022 World Health Organisation study. While the continent is home to 14.4% of the world’s population, it accounts for only 1% of global health spending. While many challenges remain, the continent has undoubtedly made progress in terms of healthcare over the past two decades. as evidenced by the fact that life expectancy at birth grew from 52.7 years in 2000, to 64.5 in 2019. Advancements have also been made in combating tuberculosis, HIV/AIDS, malaria and neglected tropical diseases, although these remain issues. The private sector is increasingly investing in healthcare facilities, including hospitals and diagnostic centres, serving not just the wealthy but also the middle class. Numerous healthtech start-ups have also emerged, offering innovative solutions such as telemedicine, patient booking systems, and more efficient and transparent medical supply chains. Susumu Tsubaki, CEO of AAIC Investment, foresees Africa's healthcare sector expanding in response to increasing insurance coverage, directionally similar to the significant growth of Japan's medical industry after the introduction of universal health insurance in 1961. Published version

In the past decades, we witness more international traveling across countries. Most countries are enjoying good growth in the tourism industry prior to the pandemic. However, this is not the story we see in a developing country, South Africa. Tourism is a major source of revenue and employment in South Africa; the COVID-19 pandemic has cast a deep impact on it. As compared to the world’s tourist arrival, South Africa lagged before and during the pandemic. South Africa has the greatest number of cities in the top ten crime cities in the world according to Crime Index Rate ( Current Crime Index, Numbeo, https://www.numbeo.com/crime/rankings_current.jsp); safety is the main deterrent for tourists. Recent data shows a reduction in crime rate over time, and the perceived safety of people in the country continues to increase. However, it does not seem to help with more tourism spending in the country and the rate of tourist arrival continues to fall behind the other countries. In this chapter, we attempt to examine why this is so and propose a solution for South Africa Tourism to move forward. South Africa is one popular tourist destination in the continent of Africa, well known for a variety of tourist attractions like its wildlife game reserves and many heritage sites. Despite its many tourism offerings, South Africa, along with other countries in Africa, is perceived as having a high crime rate and being considered as an unsafe tourist destination. This chapter examines the importance of tourism in South Africa’s economy as well as what attracts and deters tourists from visiting. The impact of COVID-19 and the post-COVID-19 scenario are also discussed, and the chapter concludes with suggestions on how South Africa can make its tourism sector more attractive.

Research Summary: This article studies fintech targeted to the base of the pyramid and its role in encouraging savings for microenterprises. We argue that the impact of fintech adoption on savings for microenterprises by the poor and by women is moderated by their access to banks—specifically, that fintech is more impactful with bank accounts, and this complementarity between fintech and banks is amplified for poor women. We develop hypotheses in the context of mobile money, a popular fintech across the developing world. Our arguments are supported by a sample of 81,345 individuals across 74 low- and middle-income countries. Overall, the paper suggests that, although fintech can be a promising tool for the poor, it is equally important to improve inclusivity in formal banking institutions. Managerial Summary: We offer an alternative to the popular narrative that fintech replaces the need for formal banks. In an analysis of 74 low- and middle-income countries, we find that fintech is more useful in encouraging marginalized individuals to save for microenterprises when it is complemented by banks. Our finding of complementarity between fintech and banks, especially for poor women, suggests the need to rethink the notion that fintech is a substitute for banks. We suggest caution in drawing definitive conclusions about the unconditional positive impact of fintech. We recommend that policymakers continue driving financial inclusion with formal banking. Strategic entrepreneurs seeking to tackle grand societal challenges can utilize digital technology to capitalize on the strengths of established institutions. Nanyang Technological University Published version The authors acknowledge financial support from the National University of Singapore Start-up Research Grant (A-0003843-00-00), Nanyang Technological University Start-up Grant (022308-00001), and the Chinese University of Hong Kong.

Africa is widely considered to be the last frontier market when it comes to doing business. However, persistent challenges of different legal systems, heightened political and currency risks, poor infrastructure and fragmented markets have hindered its growth and that has caused it to be shunned by investors. Few initiatives in the past have had varying degrees of success while most have failed. A new one - the African Exchanges Linkage Project (AELP), is the latest pan-African project aimed at unifying key regional stock markets in the spirit of the Africa Continental Free Trade Area (AfCFTA). Previously, investors from any African country desirous to invest in a different African country had to set up a new account through a host stockbroker in that country - an often cumbersome and tedious process. With AELP, which is jointly piloted by the African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB), investors can carry out cross-border trading in the continent from a single account set up in any African country. Published version

Tail risk measures such as Value at Risk (VaR) and Conditional Value at Risk (CVaR) are popularly accepted criteria for financial risk management, but are usually difficult to optimize. Especially for VaR, it generally leads to a non-convex NP-hard problem which is computationally challenging. In this paper we propose the use of model-based annealing random search (MARS) method in tail risk optimization problems. The MARS, which is a gradient-free and flexible method, can widely be applied to solving many financial and insurance problems under mild mathematical conditions. We use a weather index insurance design problem with tail risk measures including VaR, CVaR and Entropic Value at Risk (EVaR) as the objective function to demonstrate the viability and effectiveness of MARS. We conduct an empirical analysis in which we use a set of weather variables to hedge against corn production losses in Illinois. Numerical results show that the proposed optimization scheme effectively helps corn producers to manage their tail risk. Ministry of Education (MOE) Nanyang Technological University Tan acknowledges research funding from Nanyang Technological University, Singapore University Grant and President’s Chair in Actuarial Risk Management. Zhang acknowledges the research funding support from the Nanyang Technological University Startup Grant (04INS000509C300) and the Singapore Ministry of Education Academic Research Fund Tier 1 Grant (RG55/20).

The extant literature on diversity training suggests that its effect size is small and varies across studies, calling for theorization on when and why diversity training does or does not work. In this article, we propose that the national cultural context is a critical moderator and conduct a meta-analysis to examine its influence on diversity training. Our analyses show that the average effect size of diversity training outcomes is significant both inside and outside the U.S. The effect size of specific diversity training design is contingent on such cultural values as power distance, individualism, masculinity, and uncertainty avoidance. We conclude our review by providing future directions for cross-cultural research on diversity training. Ministry of Education (MOE) This research was supported by a grant from Ministry of Education Singapore to Xi Zou (Grant No:RG54/20).

We consider a revenue maximization scheduling problem where jobs can be split on parallel, uniform machines. By assuming that only major and minor setups exist between jobs and that these can be grouped into families, we reformulate the scheduling problem as a continuous knapsack problem with setup time. We then create the Revenue Rate Heuristic to solve the maximum revenue scheduling problem for both the partial and binary revenue cases. This makes use of a revenue rate – the ratio between total revenue that can be obtained from a job and the time required to achieve the revenue. The Revenue Rate Heuristic schedules the job with the highest revenue rate first and updates all the revenue rates accordingly based on existing scheduled families and remaining capacity. In cases where there are no setup times or if there is only one machine and an ordering of job revenue and production time, we are able to show that the Revenue Rate Heuristic is optimal. Numerical studies show that the Revenue Rate Heuristic performs well with an average optimality gap of 3.47% across a large set of parameters and when the setup times across families are different from each other. In a case study based on firm-level data, we also show that the average optimality gap remains small. Submitted/Accepted version This study is supported under the RIE2020 Industry Alignment Fund – Industry Collaboration Projects (IAF-ICP) Funding Initiative, as well as cash and in-kind contribution from the industry partner, HP Inc., through the HP-NTU Digital Manufacturing Corporate Lab. Grant Number: I1801E0028.

E-Commerce has long been touted as Africa’s next high-growth market. Several reasons are cited for the optimism, among them the continent’s large, relatively young, and tech-savvy population, increasing mobile internet penetration, a fast-growing middle-class and rising disposable income. The burgeoning industry has seen the birth of homegrown e-commerce platforms such as Jumia (Nigeria), Takealot (South Africa) and Kilimall (Kenya), and the market’s potential has not gone unnoticed by bigger international players like Amazon, Alibaba, Shein and even Facebook, all of whom are positioning themselves for a piece of the e-commerce pie. Africa, however, is a truly unique operating environment and presents its own challenges, from logistical constraints, underdeveloped infrastructure and limited payment gateways to security, access to capital and a customer trust deficit. The playing field, which is becoming increasingly crowded and putting pressure on margins and profitability, is ripe for both consolidation and disruption. Of the continent’s e-commerce markets, South Africa, Nigeria, and Kenya are among the most advanced and offer valuable lessons to potential entrants and upstarts about how to overcome Africa’s idiosyncrasies, and what happens when you don’t. Published version

We examine whether the extent of financial statement disaggregation affects the pricing of audit engagements in the United States. We hypothesize and find that auditors assess higher engagement risk and charge higher audit fees for clients with more disaggregated financial statements. We also find that these higher audit fees are not the result of either increased auditor effort to mitigate detection risk or heightened inherent and control risks reflected in lower financial reporting quality. Instead, we document that greater financial statement disaggregation is positively associated with litigation risk. This result suggests that higher audit fees arise out of auditors' assessments of heightened client and auditor business risks associated with litigation. While financial statement disaggregation may have beneficial effects on the quality of financial information, we document that financial statement disaggregation can impose costs on firms in terms of higher audit fees and a higher likelihood of litigation. Our study informs standard setters, firms and auditors as they debate the costs, benefits and extent of disaggregation to be presented in financial statements. Ministry of Education (MOE) Kevin Koh and Yen H. Tong acknowledge funding support fromthe Ministry of Education, Singapore (RG64/19)

In early 2020, the Government of Sri Lanka decided that all bodies of individuals who had (or were suspected to have) died of COVID-19 should be disposed of by cremation alone. Although this decision appears to be neutral and does not give rise to de jure discrimination, as a matter of fact, it has significantly impacted the religious rights of the Muslim community in Sri Lanka. This is because they firmly believe in the need to bury the dead in a dignified and decent manner—cremation being regarded as a repugnant practice amounting to a desecration of the human body. As such, the Sri Lankan Government’s decision to adopt a cremation-only policy interfered with the right of all Sri Lankan Muslims to manifest their religion or belief as guaranteed by the 1978 Constitution of Sri Lanka. Despite there being no scientific evidence to suggest that the burial of COVID-19 victims could give rise to contamination of the surroundings and thereby cause the spread of the virus, the Government of Sri Lanka continued with the policy for almost a whole year. Thereafter, due to international pressure, the Sri Lankan Government decided to allow burials but in a very restrictive manner. The objective of this article is to consider the extent to which the aforementioned decisions of the Sri Lankan Government are consistent with the fundamental rights framework of the country’s Constitution.

We examine the effect of CSR information on stakeholder decision-making, specifically on supply-chain contracting. To obtain plausibly exogenous variation in CSR information, we exploit the 2017 expansion of CSR rating coverage from Russell 1000 to Russell 2000 firms (hereafter, “treated firms”) by Thomson Reuters Asset4. Using a difference-in-differences design with the previously covered Russell 1000 supplier firms as the control group, we find a negative effect of the CSR information shock for treated suppliers with comparatively low CSR ratings. On average, these suppliers experience reductions in their number of contracts and corporate customers. In cross-sectional analyses, we document variation in our treatment effects consistent with two underlying mechanisms: (i) benchmarking of suppliers' CSR by corporate customers and (ii) CSR-related public pressure on customer-supplier contracting. Collectively, our findings provide novel evidence on the causal effect of CSR information on stakeholder decision-making. Nanyang Technological University Published version Darendeli acknowledges financial support from NTU's Start-Up Grant.

We examine the value impact of independent directors nominated by activists (Activist IDs). Firms appointing Activist IDs experience larger value increases than firms appointing other directors, particularly when Activist IDs have private firm experience and when their nominators remain as shareholders. This value increase persists over a long period and is greater than that of activism events without director appointments. The increase is also higher among firms with greater monitoring needs and entrenched boards. Moreover, the appointments of Activist IDs are greeted more positively by the market, and Activist IDs obtain more favorable shareholder votes and additional future directorships.

We model competition for liquidity provision between high-frequency traders (HFTs) and slower execution algorithms (EAs) designed to minimize investors’ transaction costs. Under continuous pricing, EAs dominate liquidity provision by using aggressive limit orders to stimulate HFTs’ market orders. Under discrete pricing, HFTs dominate liquidity provision if the bid-ask spread is binding at one tick. If the tick size (minimum price variation) is not binding, EAs choose between stimulating HFTs and providing liquidity to non-HFTs. Transaction costs increase with the tick size but can be negatively correlated with the bid-ask spread when all traders can provide liquidity. This research is supported by National Science Foundation grant 1,352,936 (jointly with the Office of Financial Research at the US Department of the Treasury) and National Science Foundation grant 1,838,183.

Substantial time has passed since countries including Australia and Singapore have ratified the Marrakesh Treaty. In this article, we examine the copyright legislation in both countries and identify gaps as well as areas for reform in each country, so as to improve the access of persons with print disabilities to copyright works. What intermediary organisations assisting such persons in both countries have been doing is considered, in order to assess the realities individuals with print disabilities face in trying to access copyright material. In addition to implementing legislation to accommodate persons with print disabilities, we argue that a variety of approaches including adopting available technologies and forging an inclusive culture will be needed so as to constitute an effective longer term strategy to improve accessibility for such persons. Accepted version

Companies often encourage consumers to compare their performance with others hoping that a comparison with a superior other will motivate consumers in their goal pursuit. However, upward social comparison is often more motivating for maximizers than satisficers. In this research, we take a closer look at the often understudied satisficers and show what types of social comparisons motivate them. Based on the accuracy–effort trade-off, we propose that satisficers care less about achieving more and focus more on the other side of the trade-off—exerting less effort. As a result, a comparison with a superior other who uses less input (vs. achieves more output) is more motivating for satisficers. Three studies support our prediction. Whereas maximizers are motivated by comparing themselves with others who achieve more, satisficers are motivated more by superior others who use less input. Collectively, these findings suggest a more nuanced perspective on satisficers and have implications for both maximizing and social comparison literature. Ministry of Education (MOE) Nanyang Technological University Submitted/Accepted version The articled was supported by NanyangTechnological University’s Start-Up Grant and the SingaporeMinistry of Education (MOE) research grant.

We study the transmission of financial news and opinions through social interactions among retail investors in the United States. We identify a series of plausibly exogenous shocks, which cause “treated investors” to trade abnormally. We then trace the “contagion” of abnormal trading activity from the treated investors to their neighbors and their neighbors’ neighbors. Coupled with methodology drawn from epidemiology, our setting allows us to estimate the rate of communication and how it varies with the characteristics of the underlying investor population.

Artificial intelligence (AI) is transforming healthcare operations. Nevertheless, particularly in the context of preventive care, little is known about how laypeople perceive and accept AI and change their behavior accordingly. Grounded in a solid theoretical framework of trust, this study bridges this gap by exploring individuals’ acceptance of AI-based preventive health interventions and following health behavior change, which is critical for preventive care providers’ operational and business performance. Through a randomized field experiment with 15,000 users of a mobile health app complemented by a survey, we first show that the use and disclosure of AI in preventive health interventions improve their effectiveness. However, individuals are less likely to accept and achieve the health behavior change suggested by AI than when they receive similar interventions from health experts. We also observe that the effectiveness of AI-based interventions can be improved by combining them with human expert opinions, increasing their algorithmic transparency, or emphasizing their genuine care and warmth. These results collectively suggest that, different from conventional technologies, AI's deficient affective trust, rather than comparable cognitive trust, play a decisive role in the acceptance of AI-based preventive health interventions. This study sheds light on the literature on the role of new-age information technologies in behavioral operations management, consumer marketing, and healthcare as well as the role of trust in technology acceptance. Valuable practical implications for more effective management of AI for preventive care operations and promotion of consumers’ health behavior are also provided. Nanyang Technological University Submitted/Accepted version This research is supported by the Nanyang Technological University, Singapore, under its Start-Up-Grant (SUG).

Space is a resource that is constantly being depleted, especially in mega-cities. Underground workspaces (UGS) are increasingly being included in urban plans and have emerged as a realistic and essential component of vertical cities. While progress had been made on the engineering aspects associated with the development of high-quality UGS, public attitudes towards UGS as work environment (i.e. concerns public has on the design of UGS) are relatively unknown. Here, we present the first large-scale study examining preferences and attitudes towards UGS, surveying close to 2,000 participants from four cities in three continents (Singapore, Shanghai, London and Montreal). Contrary to some anecdotal or qualitative beliefs, air quality (and not lack of windows) is the major concern of prospective occupants. Windows, temperature and lighting emerged as additional key architectural features for UGS. Importantly, early adopters (i.e. individuals more willing to accept UGS and thus more likely to be the first occupants) across all cities prioritised air quality. Present results suggest that (perceived) air quality is a key architectural feature for UGS that needs to be communicated to prospective occupants as this will improve their attitudes and views towards UGS. This study highlights the importance of indoor air quality for the public. Ministry of National Development (MND) National Research Foundation (NRF) Accepted version This research is supported in part by the Singapore Ministry of National Development and the National Research Foundation, Prime Minister’s Office under the Land and Liveability National Innovation Challenge (L2 NIC) Research Programme (L2 NIC Award No L2 NIC FP1-2013-2).

We propose a new neighbouring prediction model for mortality forecasting. For each mortality rate at age x in year t, mx,t, we construct an image of neighbourhood mortality data around mx,t, that is, Ꜫmx,t (x1, x2, s), which includes mortality information for ages in [x-x1, x+x2], lagging k years (1 ≤ k ≤ s). Combined with the deep learning model – convolutional neural network, this framework is able to capture the intricate nonlinear structure in the mortality data: the neighbourhood effect, which can go beyond the directions of period, age, and cohort as in classic mortality models. By performing an extensive empirical analysis on all the 41 countries and regions in the Human Mortality Database, we find that the proposed models achieve superior forecasting performance. This framework can be further enhanced to capture the patterns and interactions between multiple populations.

This study advances the limited generalizability of previous studies that have focused on developed market multinational enterprises and explores the link between institutional distance and ownership choice of emerging market multinational enterprises (EMNEs).Such studies in the EMNE context have been rare, and we provide key theoretical explanations for EMNEs’ distinct foreign direct investment motives to act as important contingencies in the link between institutional distance and EMNEs’ ownership choices. Analyses of longitudinal data of Chinese firms’ internationalization from 2001 to 2017 reveal that the higher the institutional distance, the lower the level of EMNE subsidiary ownership control with market-seeking motives; while the higher the institutional distance, the higher the level of EMNE subsidiary ownership control with knowledge-seeking motives. Published version

Many companies encourage employees to set their own performance goals and do not attach formal incentives to the achievement of these goals. In this environment, some organizations make employees' self-set performance goals public while other organizations do not. We predict that, due to strategic concerns induced by goal publicity and competition, making goals public will be more likely to lead employees to lowball their goals when they work under tournament incentives than under piece-rate incentives. Consistent with this prediction, our experimental results reveal that making self-set performance goals public decreases goal level under tournament incentives, but has no significant effect on goal level under piece-rate incentives. Results of our study suggest that the practice of making self-set goals public is potentially more compatible with organizations with a collaborative culture than those with a competitive culture. Ministry of Education (MOE) Huaxiang Yin is grateful for financial support of Tier-1 grant by the Ministry of Education in Singapore.

This paper considers the problem of cost sharing, in which a coalition of agents, each endowed with an input, shares the output cost incurred from the total inputs of the coalition. Two allocations--average cost pricing and the Shapley value--are arguably the two most widely studied solution concepts to this problem. It is well known in the literature that the two allocations can be respectively characterized by different sets of axioms and they share many properties that are deemed reasonable. We seek to bridge the two allocations from a different angle--allocation inequality. We use the partial order: Lorenz order (or majorization) to characterize allocation inequality and we derive simple conditions under which one allocation Lorenz dominates (or is majorized by) the other. Examples are given to show that the two allocations are not always comparable by Lorenz order. Our proof, built on solving minimization problems of certain Schur-convex or Schur-concave objective functions over input vectors, may be of independent interest. Nanyang Technological University Accepted version The authors gratefully acknowledge financial support from the City University of Hong Kong [Start-Up Grant 7200646], the National University of Singapore [Project R-314-000-105-133], and the Nanyang Technological University [Start-Up Grant 020022-00001].

Using detailed data for fieldwork hours and audit hours by rank from audit engagements in Korea, we examine whether audits conducted under workload imbalance, proxied by busy‐season audits, impair audit quality, and how auditors adjust staff assignments for busy‐season audits. We generally find that busy‐season audits are associated with lower audit quality, and that audit firms reduce the involvement of senior auditors during busy‐season audits. In addition, the greater the involvement of senior auditors and junior auditors, the lesser the deterioration in audit quality. Finally, although there is no increase in interim audits in response to workload imbalance during busy seasons, increasing interim audits can mitigate the negative impact of busy‐season audits on audit quality. Our results are relevant to auditors and regulators, who have expressed concerns about the adverse effects of workload imbalance on audit quality. Desequilibre de la charge de travail : reactions des auditeurs et incidence sur la qualite de l'audit Les auteurs analysent des donnees exhaustives concernant les heures de travail sur le terrain et les heures d'audit selon le rang, tirees de missions d'audit realisees en Coree, afin de determiner, d'une part, si la realisation d'audits en situation de desequilibre de la charge de travail — selon la variable substitutive des audits de la periode de pointe — est prejudiciable a la qualite de l'audit et, d'autre part, comment les auditeurs ajustent les affectations de personnel aux audits de la periode de pointe. De facon generale, les auteurs constatent que les audits de la periode de pointe sont associes a une qualite inferieure de l'audit et que les cabinets d'audit reduisent la participation des responsables de mission aux audits de la periode de pointe. En outre, plus la participation des responsables de mission et des assistants d'audit est grande, moins la deterioration de la qualite de l'audit est marquee. Enfin, meme si aucune augmentation des audits intermediaires n'est observee en reaction au desequilibre de la charge de travail au cours des periodes de pointe, la multiplication des audits intermediaires peut attenuer l'incidence negative des audits de la periode de pointe sur la qualite de l'audit. Les resultats de l’etude interesseront les auditeurs et les autorites de reglementation, qui se sont dits preoccupes par les repercussions nefastes du desequilibre de la charge de travail sur la qualite de l'audit.

The sharing economy has radically reshaped marketing thought and practice, and research has yet to examine whether and how platform-level buyer protection insurance (PPI) affects buyers and sellers in this economy. The authors exploit a natural experiment involving an unexpected system glitch during a PPI launch and estimate difference-in-differences models using over 5.4 million data points from a food sharing platform. Results suggest that PPI significantly increases buyer spending and seller revenue, affirming the benefits of this platform-level insurance in the sharing economy. The authors also uncover multifaceted buyer-side and seller-side responses that enable such benefits. PPI increases buyer spending by boosting product orders and variety-seeking behavior. Furthermore, it enhances seller revenue by increasing customer retention and acquisition. This work contributes to the literature by (1) putting a spotlight on the topic of PPI, a platform governance policy that reduces consumer risks and improves the efficacy of sharing platforms; (2) accounting for how PPI alters buyer and seller behaviors on a platform; (3) addressing what types of buyers and sellers benefit more or less from PPI; and (4) offering guidance for managers to improve platform reputation, marketplace efficiency, and consumer welfare in the context of the sharing economy.

We investigate how a shock to corporate demand for experienced directors (i.e., U.S. Congress’ grant of Permanent Normal Trade Relations status to China in 2000) affects U.S. firms’ board structure and board advisory role. We find that firms appoint more outside directors with China-related experience after the grant. Firms with such directors realize higher returns around announcements of investments involving Chinese firms and better post-deal operating performance, particularly when these directors reside in the U.S. The appointment of directors with China experience is also greeted more positively by the stock market and they gain more board seats after the grant. We are especially grateful to the referee, Michael Weisbach, for his valuable advice. We also thank Alexander Ljungqvist, Jerry Parwada, John Wei, William Schwert (editor), and seminar participants at Nanyang Technological University, National Central University, National Chiao Tung University, National Tsing Hua University, and Yuan Ze University for their useful comments. We are also grateful to participants at the 2018 Doctoral Symposium of National Taiwan University. Sheng-Syan Chen, Yan-Shing Chen, and Shu-Cing Peng gratefully acknowledge financial support from E.SUN Commercial Bank and the Ministry of Science and Technology in Taiwan (MOST 106–2917-I-002–021), respectively. All errors are our own.

Avoidance of culturally diverse peers undermines the benefits of multicultural teams. Using uncertainty reduction theory, we argue that team members’ cultural intelligence (CQ; the capability to work effectively in culturally diverse settings) and language competence (the ability to communicate in a language) exert main and synergistic effects on avoidance behaviors. We further propose that avoidance negatively predicts individuals’ task performance (behaviors that contribute to team outcomes) and voice behaviors (giving suggestions to improve the status quo). Put together, we test a moderated mediation model where the mediating role of avoidance between CQ and outcomes of task performance and voice behaviors is moderated by language competence. Our results, based on data collected from multicultural team members at three time points, showed no main effects of CQ and language competence on avoidance. Instead, we found synergistic effects such that CQ was negatively related to avoidance only when language competence was high. Avoidance was negatively related to peer-rated task performance and voice behaviors. Conditional process analyses supported our moderated mediation hypothesis, suggesting that avoidance explains why people with higher CQ and higher language competence have higher task performance and voice behaviors.

Leadership is a process where leaders enact certain behaviors to influence followers. Yet, each follower may view the leader’s enactment differently, owing to differences in disposition and context. Here we examine leadership as a property attributed by followers to their leader, influenced by both the leader and followers’ personal attributes and the situation in which leaders and followers interact. Guiding this study, we asked: how do followers’ affect (negative and positive traits), motivation (regulatory focus), and cognitions (identity) and their congruence with their leader’s corresponding attributes influence their ratings of transformational leadership? Participants operated in extreme situations where their lives were often at risk because of exposure to combat. Results based on a sample of 1587 US Army soldiers operating in 262 units show that when there is a higher congruence between leaders’ and followers’ positive affect, promotion focus, relational identity, and collective identity, follower ratings of transformational leadership are higher, whereas a higher level of incongruence between followers’ and leaders’ positive and negative affect predicted lower ratings of transformational leadership. These findings differed based on the soldiers’ time spent in deployment and the level of combat exposure they experienced. The authors disclosed receipt of the following financial support for the research, authorship, and/ or publication of this article. The authors received financial and logistical support for this research from the US Army Center for the Army Profession and Ethic. The third author's research contribution was supported by the grant “Advancing Leadership Research” (W911NF-18-2-0049) US Army Research Institute for the Behavioral and Social Sciences (ARI).

This article presents five select cases of small and medium-sized enterprises (SMEs) from China, India, Bahrain, and the US, grouped into three archetypes namely the Pandemic Warrior, the Survivor and the Digital Native,based on the fundamental nature of their business so as to highlight the unique challenges faced by each of them as they pass through the COVID-19crisis. The strategies adopted by these firms to cope with the challenges faced are also presented. The lessons distilled from the cases are used to derive a conceptual framework that would guide SMEs toward a pandemic readiness audit, a process that would enable them to systematically evaluate their preparedness to face a pandemic. Additionally, we present a list of suggested audit questions that would help SMEs to assess the vulnerabilities of their key business components. The rationale is that such an audit would equip SMEs to face yet another pandemic crisis as well as help them in preparing for the emerging post-COVID new normal. Accepted version

This paper reassesses two conflicting hypotheses on the valuation impacts of private placements of equity (PPEs), the monitoring/certification hypothesis and the managerial entrenchment hypothesis, by focusing on the shareholder approval, active buyer, and premium pricing features of PPEs. We find that PPEs with these features have significant positive announcement returns and insignificant mean long-run returns, while the corresponding announcement and long-run returns for PPEs without such features are significantly negative. Firms with value-enhancing PPE features are better governed and use proceeds more efficiently. Thus, the heterogeneous nature of PPEs helps reconcile the puzzling return patterns and conflicting hypotheses regarding PPEs. Published version Park acknowledges financial support from the Asian Institute of Corporate Governance (AICG) and Korea University Business School Research Grant.