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- 2024
- Working Paper
Public Sector SME Grading System in Emerging Markets: A Focus on Nigeria
By: Saveshen Pillay, Anywhere Sikochi, Charles Odii, Zaakirah Ismail, Regina Bamaiyi and Denise Mubaiwa
In this paper, we explore the impact of creating a public sector nano, micro, small and medium
enterprise (nMSME) grading system in Nigeria. Using insights from work with the Nigerian
government, the first country in Africa to attempt to establish a public sector SME... View Details
- August 2024
- Article
Not a One-Trick Pony: Price Impact of Rating Agency Information
By: Michael Machokoto and Anywhere Sikochi
Prior literature on the informational role of credit rating agencies has largely focused on announcements by the rating agencies regarding rating actions. We take a tangent in this paper and examine the relevance of rating agencies' other information disclosures beyond... View Details
- 2024
- Report
The Economic Benefits of a Public Sector Nano, Micro, Small and Medium Enterprise (nMSME) Grading Agency: Evidence from Nigeria
By: Saveshen Pillay, Zaakirah Ismail, Anywhere Sikochi and Charles Odii
This is a summary of our working paper exploring the possibility of creating a public sector small and medium enterprise (SME) grading system in Emerging Markets. Using research and insights from ongoing work with the Nigerian government, the first country in Africa to... View Details
- September 2023
- Article
Stock Price Reactions to ESG News: The Role of ESG Ratings and Disagreement
By: George Serafeim and Aaron Yoon
We investigate whether ESG ratings predict future ESG news and the associated market reactions. We find that the consensus rating predicts future news, but its predictive ability diminishes for firms with large disagreement between raters. Relation between news and... View Details
Keywords: ESG; ESG (Environmental, Social, Governance) Performance; ESG Disclosure; ESG Ratings; ESG Reporting; ESG Disclosure Metrics; Sustainability; Investments; Disagreement; Rating Disagreement; Ratings; Environmental Sustainability; Social Issues; Corporate Social Responsibility and Impact; Performance; News; Investment; Financial Markets; Stocks; Price
- August 2023
- Article
Do Rating Agencies Behave Defensively for Higher Risk Issuers?
By: Samuel B. Bonsall IV, Kevin Koharki, Pepa Kraft, Karl A. Muller III and Anywhere Sikochi
We examine whether rating agencies act defensively toward issuers with a higher likelihood of default. We find that agencies' qualitative soft rating adjustments are more accurate as issuers' default risk grows, as evidenced by the adjustments leading to lower Type I... View Details
- 2023
- Article
Probabilistically Robust Recourse: Navigating the Trade-offs between Costs and Robustness in Algorithmic Recourse
By: Martin Pawelczyk, Teresa Datta, Johannes van-den-Heuvel, Gjergji Kasneci and Himabindu Lakkaraju
As machine learning models are increasingly being employed to make consequential decisions in real-world settings, it becomes critical to ensure that individuals who are adversely impacted (e.g., loan denied) by the predictions of these models are provided with a means... View Details
- January 2022
- Article
Why Is Corporate Virtue in the Eye of the Beholder? The Case of ESG Ratings
By: Dane Christensen, George Serafeim and Anywhere Sikochi
Despite the rising use of environmental, social, and governance (ESG) ratings, there is substantial disagreement across rating agencies regarding what rating to give to individual firms. As what drives this disagreement is unclear, we examine whether a firm’s ESG... View Details
- December 2021
- Article
Partisan Professionals: Evidence from Credit Rating Analysts
By: Elisabeth Kempf and Margarita Tsoutsoura
Partisan perception affects the actions of professionals in the financial sector. Using a novel dataset linking credit rating analysts to party affiliations from voter records, we show that analysts who are not affiliated with the U.S. president’s party downward-adjust... View Details
- 2021
- Working Paper
Time Dependency, Data Flow, and Competitive Advantage
Data is fundamental to machine learning-based products and services and is considered strategic due to its externalities for businesses, governments, non-profits, and more generally for society. It is renowned that the value of organizations (businesses, government... View Details
- January 2021 (Revised May 2021)
- Case
Delta Air Lines: Navigating the COVID-19 Storm
By: Ted Berk and Ryan Flamerich
This case examines Delta Air Lines’ response as demand for its services plummeted in the face of the COVID-19 pandemic, with a focus on the company’s funding needs and capital structure. Following a series of initial actions, the company’s cash “burn” had reduced from... View Details
- Article
Conversational Receptiveness: Expressing Engagement with Opposing Views
By: M. Yeomans, J. Minson, H. Collins, H. Chen and F. Gino
We examine “conversational receptiveness”—the use of language to communicate one’s willingness to thoughtfully engage with opposing views. We develop an interpretable machine-learning algorithm to identify the linguistic profile of receptiveness (Studies 1A-B). We then... View Details
- 2021
- Working Paper
International Evidence on the Effects of a Local Presence by U.S. Credit Rating Agencies
By: Liran Eliner, Michael Machokoto and Anywhere Sikochi
Major U.S. credit rating agencies are criticized for failing to understand developments in other economies and thereby impeding capital access by assigning lower ratings. Consistent with this, we find that Moody's and S&P credit ratings are more favorable after the... View Details
- January 2, 2020
- Article
Changes in Quality of Care After Hospital Mergers and Acquisitions
By: Nancy Dean Beaulieu, Leemore S. Dafny, B. E. Landon, Jesse Dalton, Ifedayo Kuye and J. Michael McWilliams
Background: The hospital industry has consolidated substantially during the past two decades and at an accelerated pace since 2010. Multiple studies have shown that hospital mergers have led to higher prices for commercially insured patients, but research about effects... View Details
- January 2020
- Article
The Job Rating Game: Revolving Doors and Analyst Incentives
By: Elisabeth Kempf
Investment banks frequently hire analysts from rating agencies. While many argue that this "revolving door" creates captured analysts, it can also create incentives to improve accuracy. To study this issue, I construct an original dataset, linking analysts to their... View Details
- 2019
- White Paper
Impact-Weighted Financial Accounts: The Missing Piece for an Impact Economy
By: George Serafeim, T. Robert Zochowski and Jennifer Downing
Reimagining capitalism is an imperative. We need to create a more inclusive and sustainable form of capitalism that works for every person and the planet. Massive environmental damage, growing income and wealth disparity, stress, and depression within developed... View Details
- April 2019
- Article
Shooting the Messenger
By: Leslie John, Hayley Blunden and Heidi Liu
Eleven experiments provide evidence that people have a tendency to “shoot the messenger,” deeming innocent bearers of bad news unlikeable. In a preregistered lab experiment, participants rated messengers who delivered bad news from a random drawing as relatively... View Details
- 2018
- Working Paper
Corporate Refinancing, Covenants, and the Agency Cost of Debt
By: Daniel Green
How valuable are restrictive debt covenants in reducing the agency costs of debt? I exploit the revealed preference decision to refinance fixed-coupon bonds, which weighs observable interest rate savings against the unobservable costs of a change in restrictive... View Details
Keywords: Covenants; Refinancing; Corporate Bonds; Agency Costs; Debt Policy; Borrowing and Debt; Bonds; Interest Rates
- September 2018
- Case
Verisk: Trailblazing in the Big Data Jungle
By: Andrew Wasynczuk, Francesca Gino and Karim Sameh
This case revolves around Verisk Analytics' initiatives to drive innovation throughout the firm's many business verticals. Verisk, originally named ISO, started life as an insurance rating agency in the early 1970s, acting as an intermediary between insurance companies... View Details
Keywords: Verisk; Argus; Wood Mackenzie; Insurance; Energy; Analytics; Data; Big Data; Acquisitions; Acquisition Strategy; Innovation; Organic Growth; Innovation Strategy; Innovation Leadership; Technological Innovation; Acquisition; Growth and Development Strategy; Analytics and Data Science; Insurance Industry; Energy Industry; Consulting Industry; United States; United Kingdom; New York (state, US); England
- October 2016
- Case
Turkasset: Bringing Customer-Centricity to Debt Collection
By: Dennis Campbell and Gamze Yucaoglu
In December 2014, in preparation for the year-end board presentation, Hilmi Guvenal (PMD 1993), shareholder and CEO of Turkasset, and Ilker Yoney, COO, sat down to discuss Turkasset’s five- and ten-year strategic plans. Since taking leadership of the company in 2009,... View Details
Keywords: Customer Satisfaction; Customer Experience; Customer Service; Customer-centric; Emerging Market; Customer Focus; Employee Empowerment; Employee Engagement; Employee Training; Staffing; Operations Management; Quality Management; Service Management; Service Quality; Continuous Improvement; Turkasset; Collections Agency; NPL; Call Center; Financial Services; Borrowing and Debt; Customer Focus and Relationships; Organizational Culture; Operations; Management; Service Operations; Quality; Competitive Advantage; Cost vs Benefits; Financial Services Industry; Turkey
- July 2015
- Article
The Impact of Corporate Social Responsibility on Investment Recommendations: Analysts' Perceptions and Shifting Institutional Logics
By: Ioannis Ioannou and George Serafeim
We explore the impact of corporate social responsibility (CSR) ratings on sell-side analysts' assessments of firms' future financial performance. We suggest that when analysts perceive CSR as an agency cost, due to the prevalence of an agency logic, they produce... View Details