Knowledge Link: Research news from Fisher College of Business
February 2008
  In this issue

Creation and Discovery: Alvarez challenges scholars to study, debate alternative theory to entrepreneurship

Finance professor's research paper honored by leading journal

Haugtvedt helps launch first-ever consumer psychology handbook

Wruck presents at AEI conference in Washington

Gift from Nationwide enhances Fisher’s research activities

Max M. Fisher College of Business > The Ohio State University Fisher College of Business
Creation and Discovery: Alvarez challenges scholars to study, debate alternative theory
to entrepreneurship

Business researchers need to focus more on entrepreneurs who “create” new businesses rather than those who “discover” them, according to two management professors.

Discovery-type entrepreneurs find and exploit business opportunities that already exist, and they get the most attention by researchers, according to Sharon Alvarez, an associate professor, and Jay B. Barney, the Chase Chair for Excellence in Corporate Strategy at the Fisher College of Business. These discovery-type entrepreneurs might be viewed as “mountain climbers,” they said.

But researchers have virtually ignored the business creators, who develop markets that didn’t exist before. These entrepreneurs can be seen as “mountain builders.”

The Fisher professors offer a strong case for studying the mountain builders in the business world in an article released in the November 2007, “Strategic Entrepreneurship Journal,” a new research publication that accompanies the “Strategic Management Journal.”

The article, “Discovery and Creation: Alternative Theories of Entrepreneurial Action,” explores the distinction between the two theories and their implications for business development. The co-authors contend that discovery theory has been the approach to research on entrepreneurial action.

“It is the easier of the two to study and teach in business schools,” Alvarez said. Read More»

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Finance professor's research paper
honored by leading journal

A study on the shorting market and stock prices, co-authored by a Fisher College of Business professor received a 2007 Smith Breeden Prize as a “Distinguished Paper” in “The Journal of Finance,” on January 5.

Karl B. Diether, an assistant professor in finance, co-authored the study, “Supply and Demand Shifts in the Shorting Market,” with Lauren Cohen and Christopher J. Molloy, both on the faculty at Harvard Business School. The article was published in the October 2007 edition of “The Journal of Finance.”

The researchers’ paper examined the link between the shorting market and stock prices. The paper found that shorting demand is an important predictor of future stock returns. Diether and his colleagues were able to analyze signals in the short selling market through studying stock loan fees and the number of shares in the transactions.

“One of the things the paper had going for it is that we had a fairly unique data set. No one else had this data,” said Diether, who teaches Security Markets and Investments. “No one has ever looked at the joint role of stock loan fees and quantities.” Read More »

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Haugtvedt helps launch first-ever
consumer psychology handbook

A new consumer psychology handbook, co-edited by a Fisher College of Business professor, is the first to provide a comprehensive overview of the discipline.

Curtis P. Haugtvedt
Curtis P. Haugtvedt
“The Handbook of Consumer Psychology” contains theoretical reviews and research studies in consumer psychology, marketing, advertising and consumer behavior by some of the field’s top scholars. Curtis P. Haugtvedt, associate professor of marketing and co-editor of the handbook, said it provides a history of the field, contains integrative literature reviews and sets the path for future research.

The handbook was created to provide researchers and students in various disciplines - such as advertising, communications, marketing, psychology and human ecology - reference point on consumer psychology, Haugtvedt said. A former president of the Society for Consumer Psychology, Haugtvedt edited the handbook along with Paul M. Herr, University of Colorado professor of marketing, and Frank R. Kardes, a University of Cincinnati professor of marketing.

The work examines the scientific understanding of cognitive, affective and behavioral responses to products and services as well as the marketing of products and services. A section on consumer well-being explores various ethical and social issues including compulsive shopping and tobacco advertising aimed toward children. Read More »

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Wruck presents at AEI conference
in Washington

A two-day conference in Washington, D.C. examining private equity featured a presentation by Fisher College of Business' Karen H. Wruck, associate dean for MBA programs and Dean’s Distinguished Professor, discussing its impact on corporate control.

Hosted by the American Enterprise Institute for Public Policy Research on Nov. 27-28, the event brought together leading financial economists and practitioners for a detailed evaluation of the private equity sector, which included presentations and panel discussions on significant historical events and various perspectives on future trends.

In Wruck’s presentation, she discussed how the so-called “Golden Age” of private equity has led to two major achievements. The first she identified is the reinvention of the market for corporate control. According to recent data, private equity was involved in up to 30 percent of the merger and acquisition market in 2006. As a result, providers of capital now compete for the right to govern corporations.

“This private equity cycle is different than what we experienced in the ‘80s,” Wruck told the audience. She said private equity’s reinvention “will be a permanent feature of the way the market for corporate control works here in the United States.”
Read More »

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Gift from Nationwide enhances
Fisher’s research activities

Andrew Karolyi, the Charles R. Webb Designated Professor of Finance, will continue his research program investigating terrorism-related investing strategies as the the first Nationwide faculty fellow.

Fisher College’s Department of Finance and Nationwide Insurance have developed new programs that will strengthen the link between academic researchers and business practitioners. As a part of a $1.08 million gift that supports both curricular and research work, Nationwide established fellowship programs for both faculty and doctoral student researchers.

The first Nationwide faculty fellow, Andrew Karolyi, the Charles R. Webb Designated Professor of Finance, will continue his research program investigating terrorism-related investing strategies and, specifically, the impact of terrorist attacks on corporations’ stock prices as a part of the year-long fellowship.

“It’s a natural matching of interests,” Karolyi said. “This is something that I’ve studied for quite some time and insurance companies face practical problems with regards to assessing such risk and its potential consequences in providing terrorism risk insurance.”

Karolyi’s study found that terrorist attacks targeting specific companies cost those firms an average of $401 million in stock value per incident. Karolyi and his former doctoral student, Rodolfo Martell, now a research analyst at Barclay’s Global Investors in San Francisco, studied 75 terrorist incidents around the world between 1995 and 2002 and found that the target companies saw their stock prices drop an average of 0.83 percent on the day of the terrorist incident. Read More»

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News Briefs

Search committee for Fisher’s next dean formed
Ohio State University Executive Vice President and Provost Joseph A. Alutto has appointed a 17-member search committee to conduct the search for Fisher’s next dean.

The group of faculty members, administrators, business leaders and one student will be charged with finding a successor to Alutto, who served as the dean of Fisher from 1991 to 2007 before becoming Ohio State ’s chief academic officer.

The search committee will be chaired by Dr. Wiley W. Souba Jr., dean of the College of Medicine, interim senior vice president and executive dean for health sciences and interim CEO of The Ohio State University Medical Center.

Joining Souba on the search committee are: Anil Arya, John J. Gerlach Chair in Accounting, Jay B. Barney, Chase Chair for Excellence in Corporate Strategy, Annette L. Beatty, Deloitte and Touche Chair in Accounting, W. C. Benton, Edwin D. Dodd Professor in Management, Keely L. Croxton, associate professor of marketing and logistics, Benjamin P. Hummel, MBA student, W.G. (Jerry) Jurgensen, CEO of Nationwide Insurance and Dean’s Advisory Council member, Roy J. Lewicki, Irving Abramowitz Memorial Professor, Anil Makhija, chair of the Department of Finance and David A. Rismiller Professor in Finance, James D. Miller, associate to the dean and executive director of the Office of External Relations, Hazel A. Morrow-Jones, associate professor at the Knowlton School of Architecture, Martin C. Murrer, managing director of Sagent Advisors Inc. and Dean’s Advisory Council member, Gene Smith, Ohio State athletics director, René M. Stulz, Everett D. Reese Chair of Banking and Monetary Economics, H. Rao Unnava, associate dean of undergraduate programs and W. Arthur Cullman Professor in Marketing, and Karen Hopper Wruck, associate dean for MBA programs and Dean’s Distinguished Professor.

Executive Education’s Lean Manager Certificate program cited by Black Enterprise magazine as top innovative program
Fisher’s Executive Education’s Lean Training Manager Certification program was ranked by Black Enterprise magazine as a top Executive Education program. According to the February 2008 edition of the magazine, the Lean Manager Certification offering is, “ideal for mid-to top-level executives.”

Fisher’s course was listed in the Top Ten Executive Education programs along with offerings at University of Chicago Graduate School of Business, Columbia University Graduate School of Business, Harvard University, Northwestern’s Kellogg School of Management and Stanford University Graduate School of Business.

Fisher’s Lean Manager Certification for Administration and Service Industries is a highly interactive and fully accredited program that teaches a carefully sequenced curriculum of lean concepts and techniques. It is specifically designed for use in an administrative and service industry environment.

Fisher Global Impact

Annual Report
available online
Fisher’s Annual Report “Fisher global impact” is now available online. The 40-page publication which details the international reach of the college through the efforts of students, faculty, staff, alumni and friends is available for download through the Online Publications Web page.

Fisher In the News

W.C. Benton, Edwin D. Dodd Professor in Management, was quoted in a Jan. 30 Associated Press article on the impact alleged fraud by executives at National Century Financial Enterprises had on financing health care.

Benton told the news service that the alleged embezzlement of $1.9 billion could present major financial problems for small practices, which don’t have extra cash available.

Rüdi Fahlenbrach, assistant professor of finance, was quoted in the Jan. 8 and Jan. 12 editions of The Wall Street Journal on the return of Howard Schultz as the CEO of Starbucks.

Fahlenbrach, who conducted research on boomerang CEOs, told the paper the CEOs return because they think the company needs their help.

Oded Shenkar, Ford Motor Co. Chair in Global Business Management, was quoted in a Jan. 7 Christian Science Monitor article on Americans’ perceptions of the 2008 Summer Olympics held in China following tainted shipments of pet food and toys from the country last year.

Shenkar told the paper because of the problems Americans have realized that the Olympic games will not create a "shiny new China."

Andrew Karolyi, Charles R. Webb Designated Professor of Finance, was quoted in a Dec. 5 USA Today article on proposed regulation changes aimed at reducing the number of foreign corporations delisted on American stock exchanges.

Karolyi told the paper it might not be the best time to call for significant deregulation because the rise in delisting could be attributed to a recent SEC ruling that makes the process easier.

Fisher Working Paper Series

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

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