IE University

About: IE University is a education organization based out in Segovia, Castilla y León, Spain. It is known for research contribution in the topics: Corporate governance & Context (language use). The organization has 527 authors who have published 1709 publications receiving 64682 citations.

Portfolio delegation under short-selling constraints*

Abstract: In this paper we study delegated portfolio management when the manager’s ability to short-sell is restricted. Contrary to previous results, we show that under moral hazard, linear performance-adjusted contracts do provide portfolio managers with incentives to gather information. We find that the risk-averse manager’s effort is an increasing function of her share in the portfolio’s return. This result affects the risk-averse investor’s choice of contracts. Unlike previous results, the purely risk-sharing contract is now shown to be suboptimal. Using numerical methods we show that under the optimal linear contract, the manager’s share in the portfolio return is higher than what it is under a purely risk sharing contract. Additionally, this deviation is shown to be: (i) increasing in the manager’s risk aversion and (ii) larger for tighter short-selling restrictions. As the constraint is relaxed the deviation converges to zero.

The Dominance of Diversified Versus Specialized Firms Across Industries

Abstract: Some industries are populated primarily by diversified firms, while other industries are dominated by specialized firms, which are present only in such a given industry. In this study, we analyze what factors determine the dominance of diversified versus specialized firms, and its effect on firm performance. In line with transaction cost economics, we show that market concentration and the degree of variability in the diversification pattern of firms in the industry are negatively associated with the importance of the activity accounted by specialized firms across the 720 industries in our study. The performance of diversified firms is greater than that of specialized firms, where diversifiers dominate the industry and vice versa. We also discuss the implication of these results for the literature on firm diversification.

A Two-Wave Study of Self-Monitoring Personality, Social Network Churn, and In-Degree Centrality in Close Friendship and General Socializing Networks:

Abstract: We examine the role of self-monitoring personality in shaping network change in two important types of social relationships. In a two-wave social network study, we find that individuals with higher levels of self-monitoring derive persistent personality-linked in-degree centrality benefits in the general socializing network but have fading benefits over time in the close friendship network. Simultaneous examination of the formation and dissolution of relationships over time (network churn) reveals that this pattern of network change is shaped by differential reactions of relationship partners to individuals based upon level of self-monitoring in the two network types. Overall, by incorporating the dynamic reactions of relationship partners, the findings contribute to the understanding of the complex relationship between personality and social network development.

Rewards for Patents and Inventor Behaviors in Industrial Research and Development

Abstract: This study investigates the effects of rewards in a research and development (R&D) setting in which employees’ inventive efforts lead to patented inventions. Pay for performance (PFP) for inventions is associated with two challenges: Low-quality inventions may be rewarded (false positives), and high-quality inventions may be overlooked (false negatives). Building on previous findings regarding the motivational and informational effects of rewards, we use social identity theory to predict that different types of inventors react differently to such false positive and false negative information. Specifically, we hypothesize that PFP that produces false positives has detrimental effects on corporate inventors with a taste for science, who are motivated by scientific prestige, reputation, and intellectual curiosity. The empirical results from survey data related to 3,995 inventor–patent pairs show that, for this particular group of inventors, false positives are associated with reduced effort in research activ...