November 2006

In this issue

Fisher finance scholars participate in first SEC 'natural experiment'

Hall's research featured in new publication released at British parliamentary event

Logistics service providers add value to Internet retailers, study shows

  Fisher College of Business
Fisher finance scholars participate in first SEC 'natural experiment'
The SEC invited Ingrid Werner, the Martin and Andrew Murrer Professor of Finance, to participate in a Sept. 15 roundtable to discuss a Fisher team's study of the recent change in short-sale rules, which is part of SEC’s Regulation SHO.

Werner, along with colleague Karl Diether, assistant professor of finance, and doctoral student Kuan Hui Lee, analyzed the effects of the new rules.

The SEC pilot is a large scale “natural experiment” which suspended the New York Stock Exchange uptick rule on short-sale price tests and NASDAQ-bid price rule for 1,000 stocks. A control group of 2,000 listings continued to trade under the old rules. The stocks were drawn from the Russell 3,000. The Fisher team was asked to examine the effects of the suspension of the rules on the market.

While the team did not discover a dramatic change, they found the suspension of the rules had a statistically significant effect on NYSE-listed stocks. "NASDAQ stocks appeared to be unaffected because that market had less onerous restrictions on short-sales to start with," Werner said. Read More »

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Hall's research featured in new publication released at British parliamentary event
Nicholas G. Hall
Anil Arya
The results of a research project co-authored by Department of Management Sciences Professor Nicholas G. Hall will be featured in a new publication, Engaging Maths, which will be released at a British parliamentary reception in London.

The research project “Mathematical Models for Rescheduling in Manufacturing Systems” was funded from July 2002 through December 2004 by the Engineering and Physical Sciences Research Council (EPSRC) of the United Kingdom.

The February reception at the House of Commons is a forum to showcase and discuss publicly funded mathematical and statistical research that has made substantial contributions to enhancing the U.K. economy and society in general. Members of Parliament, industry executives and British media will be in attendance at the reception.

“EPSRC is the major source of public funding for scientific research in the U.K., similar to the National Science Foundation in the U.S.,” said Hall.
Read More »

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Logistics service providers add value
to Internet retailers, study shows

A. Michael Knemeyer
Anil Arya
A survey of 200 internet sellers found there is still a lack of understanding of the value of logistics service providers (LSPs) in lowering costs and improving revenue, according to an article that appeared in the summer 2006 issue of California Management Review.

A. Michael Knemeyer, an assistant professor of logistics at Fisher and co-author of the article, indicated that most e-commerce firms view the outsourcing of logistics services only from a cost perspective. Many fail to realize that a positive relationship with LSPs can not only help streamline operations and lower costs in shipping process, but they can also improve customer loyalty and help a company expand into new markets.

For example, online retailers can utilize a providerís existing relationships with local delivery carriers to gain access for their products into new markets, said Knemeyer, who co-authored the study with Elliot Rabinovich, assistant professor of supply chain management at Arizona Stateís W.P. Carey School of Business.

“There’s an opportunity to find logistics providers that will open up new business, new consumer markets and new supply relationships that you wouldn’t get access to with your own system or with that of another provider,” Knemeyer said. “Retailers need to examine a potential providers’ relationship network and how they can leverage these networks to cut costs and open up new revenue streams.” Read More »

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News Briefs

Dietrich appointed to accounting oversight board
Professor J. Richard Dietrich, chair of the Department of Accounting and Management Information Systems, was appointed to the Standing Advisory Group for the Public Company Accounting Oversight Board. Dietrich is one of two academics serving on the group mostly comprised of corporate officers, senior accounting executives and other business leaders.

The Public Company Accounting Oversight Board selected individuals with expertise in a variety of fields, including accounting, auditing, corporate finance, corporate governance and investing in public companies, according to a press release announcing the new advisory group. The board received more than 100 nominations for the position. Dietrich was one of 31 selected to serve on the group. He will serve a two-year term beginning in January 2007.

Knemeyer awarded ISM fellowship
A. Michael Knemeyer, assistant professor of logistics, has been awarded one of two senior research fellowships by the Institute for Supply Management. The $5,000 grant is awarded yearly to support emerging, high-potential scholars who teach and conduct research in supply management and to help produce useful research that can be applied to the advancement of supply management.

News Briefs

Bill Raabe, senior accounting lecturer, was quoted in the October issue of Kiplinger magazine about saving plans designed to pay for college tuition.

Raabe said because of changes to tax laws the Uniform Transfers to Minors Act has become an irrelevant way to save for college.

Ingrid Werner, associate professor of finance, was quoted in a Oct. 25 Dow Jones MarketWatch story about American banks earning around $500 million from the initial public offering of Industrial and Commercial Bank of China.

Werner told the news service that American bankers feel they need to be investing in China despite the cumbersome regulatory system.

Andrew Karolyi, Charles R. Webb Professor of Finance, was quoted in the September issue of CFO magazine on the added value foreign companies receive by listing on American stock exchanges despite the added costs of complying with the Sarbanes-Oxley Act.

Karolyi told the magazine these companies, which are usually larger and come from countries with less developed financial markets and legal systems, have as much as a 30-percent higher valuation than companies that list only in their home country.

Knowledge Link is published monthly to showcase the research produced by Fisher College of Business faculty members.

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