Applied Economics and Management

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    Influence of advertising attributes on audio ad effectiveness
    Xu, Lingyi; Wang, Lu; Yu Yingying (2018-05)
    This research focuses on the key attributes of audio advertising. Content analysis are conducted for the 121 audio ads objects with labels of attributes. Regression models and cluster analysis are then conducted based on the data collected from surveys. As a result, we find the relationship between attributes and willingness to buy, willingness to recommend a product and enjoyment level of an audio ad.
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    Static and dynamic impacts of venture capital shareholding on stock price crash risk
    Yang, Bin; Zhou, Yuefan; Fang, Chuangtao; Guo, Xinmei; Yang, Xuan; Chen, Mengni; He, Dawn (2018-05)
    With the rapid development of venture capital industry in China, venture capital firms are playing an increasingly active role in funding startups. As more and more companies with venture capital shareholders go public, venture capital firms become an important group of institutional investors that can bring significant influence on companies’ stock price. In the past decade, extremely high exit returns from IPO of venture capital firms raised the public and Chinese scholars’ attention. However, few researches inspected the venture capital’s post-IPO influence. In this paper, we examine whether venture capital shareholding will lead to companies’ higher stock crash risk, and whether different venture capital shareholders’ different behavior of holding and selling after lockup period will have different impacts on companies’ crash risk. The research used descriptive statistics and regression analysis to analyze the quarterly data of Chinese A-share companies from 2005-2016. We found that: (1) Companies with venture capital shareholders in a specific quarter will have greater incentive of earnings management (exaggerating revenue and profit) and greater stock price crash risk in the next quarter then companies without venture capital shareholders. (2) Venture capital shareholders continuing to hold non-restricted shares after lockup period is considered as a positive signal, thus reduce the crash risk. Venture capital shareholders selling shares is considered as a negative signal, thus increase the crash risk.
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    Does products labeling have stigma effect on GMO products
    Zhang, Xiaolin (2018-05)
    Production labeling is commonly used to convey specific information to customers. With distinctive labels, customers may make different choices due to different labels. Sometimes, consumers may be attracted by attractive introduction on the label, and they increase their willing to pay on this products, while sometimes consumers may decrease their willing to pay on some conventional products because there are some special description on the label. Producers could have a loss because consumers are supposed to lower their willing to pay on some products with conventional labels as well as new labels. In this paper, whether Genetically modified organism(GMO) or non-Genetically modified organism(non GMO) shown on the label of conventional agricultural products stigmatizes consumers’ willing to pay. Strawberries and apples are chosen as two groups of conventional products.
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    Firm performance examination of lodging REITs and specialty REITs companies
    Zhang, Qingguo (2017-05)
    This study investigated the performance of lodging and specialty real estate investment trusts (REITs) over a 11-year period from January 2007 to December 2017. The results of the study indicated that, overall, specialty REITs companies outperformed the market portfolio, which was not the case for lodging REITs' performance compared to the market portfolio. In terms of comparison with specialty REITs, lodging REITs performed significantly differently based on firm size, profitability, and leverage ratio.
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    Analysis of barley contracts in North America via AB InBev
    Slocum, Lawrence (2018-05)
    The purpose of this project was to analyze three types of barley forwards contracts as they are used in North America by the company AB InBev. The scope of the project includes the profiling of farmers to determine what attributes they use in selecting a contract for the upcoming crop year. The goal is to determine the financial impact of these contracts on AB InBev cost cutting strategies.
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    Effects of food recalls on retailers' stock price
    Lang, Shan (2018-05)
    With the frequent food recall events, the public has grown increasingly aware of food safety problems in the United States and elsewhere. My project focused on whether food recall events have a significant effect on retailers’ stock price. To answer this question, I used the event study method, collected 9 retailers’ stock price data from Yahoo Finance and chose 8 major food recall events before 2006 and 2011. Previous studies have shown that the impact of product recall announcements on retailers’ financial value. My results indicate that food recall events do affect retailers’ stock price. For instance, the stock price of Kroger was affected significantly by Nestlé Toll House cookie dough event and the stock price of Whole Foods Market was affected significantly by Peanut Corporation of America peanut product recall. The degree of the effect was sensitive to the length of event window.
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    Investment in lodging REIT through the lens of asset qualities
    Wu, Junhua (2018-05)
    Purpose – This research aims to explore the underlying factors that affect investors’ investment decision on hotel REITs. Through this experiment, we will have a better understanding on what matters to hotel REITs investors when making investment decision. Research method – Due to the lack of primary data, we designed a survey to collect first hand responses from investors. We received a total of 74 responses from investors, including but not limited to students, industry professionals and fund managers, etc. Among all, there are 27 responses recorded through online survey and 47 responses are recorded through paper survey. Findings – Investors have two objectives when investing in lodging REITs – seeking for high return or reducing risk profile via diversification. This research reveals that the each investor has idiosyncratic investment preference. When investing in a lodging REIT, investor will not solely look at the performance at the REITs’ firm level but also examine the characteristics at property level. For investors who seek high return, they are keen on hotel average daily rate (ADR) and occupancy rate. For investors who seek for risk diversification, they take consideration of other factors such as location, brand and operating cost, etc. Although these factors are part of REITs’ firm investment criteria, they do not appear to have significant impact on investors’ decision.
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    Consumers' demand for local food products: An investigation into the power of label information
    Chang, Biying; Li, Mengjia; Yang, Liuyuanyuan (2018-05)
    The local food movement continues to grow as consumers around the world become increasingly conscientious about where their foods come from. While it has been observed that consumers are willing to pay higher prices for local food products, the reasons driving the premium are not fully understood. The purpose of this research project is to investigate how different locally-related marketing messages and different product-origin information influence consumers’ valuation of locally-produced food products. To do this, we employ an incentive compatible experiment designed to measure participants’ willingness-to-pay (WTP) for five locally produced foods under different information treatments. Results indicate that both product-origin information and local-related marketing information have significant effect on consumers’ willingness-to-pay, with participants willing to pay significantly more for food that they are told originates from their region. These results can inform how local brands develop their value proposition, target valuable customer segments, create effective marketing communications with appealing labels that call-for-action, and come up with profitable pricing strategies.
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    Passive activity: Millennials and financial advisory
    Amladi, Sonia (2018-05)
    The purpose of this research is to study usage and knowledge of passive financial advisory. Using a unique survey on passive investing that gathered information on how people use and understand passive financial advisory, the study analyzes the relationship between passive financial advisory usage and generation. Results indicate that Millennials use passive financial advisory at a higher rate than Generation X, but there is no significant difference between Millennials and Baby Boomers. Millennials show a significantly higher likelihood of having heard of passive fund management compared to other generations. Further, there is no significant difference in openness to passive financial advisory by generation among those who do not use it.
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    A study of the impacts of customization on consumer behavior, preferences, and willingness to pay
    Lortie, Alexandra; Goodness, Jarrett; Rao, Yudong; Li, Anqi (2018-05)
    With the growing importance of eCommerce and its influence on consumer preferences, companies have created value for consumers by offering online customization of their products. Traditional economic theory poses that consumers gain utility from the functional benefits of goods and services. This paper investigates the concept of non-functional utility, in the frame of product customization. The authors test if the act of customizing a product creates additional value for the consumer when the customization does not add functional utility to the product. This was measured in two different ways, through a trivial and non-functional customization of a mug, and non-functional customization of a premium automotive vehicle online, to simulate real-world consumer choice behavior. Utility was quantified by the effects on willingness to pay, after nonfunctional changes were made. The purpose of this study is to uncover new ways companies can serve their customers and create the most value in their products and increase firm profits.