Business Microloans for U.S. Subprime Borrowers
Fracassi, Cesare; Garmaise, Mark J.;
Kogan, Shimon; Natividad, Gabriel. Journal of Financial and Quantitative Analysis. Feb2016, Vol.
51 Issue 1, p55-83.
We show that business microloans to U.S. subprime borrowers have a very large impact on subsequent firm success. Using data
on startup loan applicants from a lender that employed an automated algorithm in its application review, we implement a
regression discontinuity design assessing the causal impact of receiving a loan on firms. Startups receiving funding are
dramatically more likely to survive, enjoy higher revenues, and create more jobs. Loans are more consequential for survival
among subprime business owners with more education and less managerial experience.
Combining Value and Momentum
Fisher, Gregg; Shah, Ronnie; Titman, Sheridan. Journal
of Investment Management. 2016 Second Quarter, Vol. 14 Issue 2, p33-48.
This paper considers several popular portfolio implementation techniques that maximize exposure to value and/or momentum
stocks while taking into account transaction costs. Our analysis of long-only strategies illustrates how a strategy that
simultaneously incorporates both value and momentum outperforms a strategy that combines pure-play value and momentum
portfolios that are formed independently. There are two advantages of the simultaneous strategy. The first is the reduction in
transaction costs; the second is better utilization of unfavorable value and momentum information in a long-only portfolio. Our
analysis also addresses the optimal way to combine the faster-moving momentum signal with the slower-moving value signal.
Digital Action Repertoires and Transforming a Social Movement Organization
Lisen; Jarvenpaa, Sirkka L. MIS Quarterly. Jun2016, Vol. 40 Issue 2, p331-352.
The article addresses the question of how values influence the relationships between a social movement organization (SMO),
its supporters and its digital action repertoires in the context of the Swedish affiliate of Amnesty International, a widely
recognized and impactful SMO. It cites investigation on how the Swedish affiliate of Amnesty International responded to
opportunities to use digital action repertoires and how digital action repertoires changes the interactions and transform the
Does Rating Analyst Subjectivity Affect Corporate Debt Pricing?
Fracassi, Cesare; Petry,
Stefan; Tate, Geoffrey. Journal of Financial Economics. Jun2016, Vol. 120 Issue 3, p514-538.
We find evidence of systematic optimism and pessimism among credit analysts, comparing contemporaneous ratings of the
same firm across rating agencies. These differences in perspectives carry through to debt prices and negatively predict future
changes in credit spreads, consistent with mispricing. Moreover, the pricing effects are the largest among firms that are the
most opaque, likely exacerbating financing constraints. We find that masters of business administration (MBAs) provide higher
quality ratings. However, optimism increases and accuracy decreases with tenure covering the firm. Our analysis demonstrates
the role analysts play in shaping investor expectations and its effect on corporate debt markets.
Economic and Business Dimensions Do Patent Commons and Standards-Setting Organizations Help Navigate Patent Thickets?
Wen Wen; Forman, Chris. Communications of the ACM.
May2016, Vol. 59 Issue 5, p42-43.
They authors examine the role of the Economic Patent Commons and standards-setting organizations underlying the patent
system for information and communication technologies (ICT) in navigating patent thickets. They discuss the challenges
brought by patent thickets for ICT producers such as patent infringement, cost of identifying intellectual property rights and
royalties, and the economic impact of The Commons on open source software products and warns about the legal risks of