HEC Paris

About: HEC Paris is a education organization based out in Jouy-en-Josas, France. It is known for research contribution in the topics: Investment (macroeconomics) & Market liquidity. The organization has 584 authors who have published 2756 publications receiving 104467 citations. The organization is also known as: Ecole des Hautes Etudes Commerciales & HEC School of Management Paris.

Skewness Seeking: Risk Loving, Optimism or Overweighting of Small Probabilities?

Abstract: In a controlled laboratory experiment we use one sample of college students and one of mature executives to investigate how positive skew influences risky choices. In reduced-form regressions we find that both students and executives make riskier choices when lotteries display positive skew. We estimate decision models to explore three explanations for skew seeking choices: risk-loving (convex utility), optimism (concave probability weighting) and likelihood insensitivity (inverse s-shape probability weighting). We find no role for love for risk as neither students nor executives have convex utility. Both optimism and likelihood insensitivity play a part in skew seeking choices. Likelihood insensitivity is larger for students than for executives. Executives have more concave utility and are more optimistic than students, but this is found to be largely due to them being older.

Using Real Activities to Avoid Goodwill Impairment Losses: Evidence and Effect on Future Performance

Abstract: We examine whether managers postpone the recognition of goodwill impairment by manipulating cash flows and the consequences of such a strategy on future performance. According to SFAS 142, an impairment loss must be recognized if the reporting unit’s total fair value to which goodwill has been allocated is less than its book value. A growing body of empirical evidence shows that managers delay the recognition of goodwill impairment in accounting books. However, past literature is silent on how managers convince various gatekeepers (e.g., auditors, financial analysts) that recognizing an impairment loss is unnecessary although it seems economically justified. SFAS142 requires managers to forecast future cash flows to justify the decision to recognize or not an impairment loss. Therefore we predict that managers manipulate upward current cash flows to support their choice to avoid reporting an impairment loss. We also test whether or not this real earnings management is detrimental to future performance. Based on a sample of US firms over the 2003-2011 period, we document that firms suspect of postponing goodwill impairment losses exhibit significantly positive discretionary cash flows compared to various control groups. We also find that this real activities manipulation is detrimental to future performance.

Measuring the efficacy of leaders to assess information and make decisions in a crisis: The C-LEAD scale

Abstract: Effective leadership is needed in times of public health and safety crisis, yet the empirical research on what it means to be an effective crisis leader is scarce. We present a new measure, the Crisis Leader Efficacy in Assessing and Deciding (C-LEAD) scale, to further research on this important topic. C-LEAD captures the self-efficacy of an individual to perform two critical crisis leader behaviors, assessing information and making decisions, in the face of the ambiguity, high stakes, and urgency present in crises. In addition to the psychometric properties of the C-LEAD scale, we demonstrate evidence of its factor structure and discriminant validity from two related constructs--general leader efficacy and procedural crisis preparation. In particular, we found that C-LEAD more accurately predicts decision-making difficulty in a crisis context than general leadership efficacy. Theoretical and practical implications are discussed.

(Re)Locating boundaries: a systematic review of online ethnography

Abstract: Purpose – The purpose of this paper is to systematically review online ethnography and its boundary challenges. The paper especially focusses on how researchers draw space boundaries, set time boundaries and engage their online field. Design/methodology/approach – The authors perform a systematic review of extant literature and identify 59 papers in 40 different journals as online ethnographies from various management disciplines. The authors perform both qualitative and quantitative analyses on papers in the sample. Findings – The paper identifies how online ethnographers both define boundaries and engage their online field. The paper shows that some of the advantages of online ethnography actually prompt researchers to favor-specific research designs over others. Research limitations/implications – The authors only focussed on articles adopting online ethnography in organization and management studies that are listed in Social Sciences Citation Index database. Online ethnographies in other research fiel...