Monitoring Managers: Does it Matter?

We test under what circumstances boards discipline managers and whether such interventions improve performance. We exploit exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries coupled with detailed ‘hard’ information about the board’s performance expectations and ‘soft’ information about board and CEO actions and the board’s beliefs about CEO competence in 473 mostly private-sector companies backed by private equity funds between 1993 and 2008. We find that CEOs are fired when the company underperforms relative to the board’s expectations, suggesting that boards use performance to update their beliefs. CEOs are especially likely to be fired when evidence has mounted that they are incompetent and when board power has increased following corporate governance reforms. In contrast, CEOs are not fired when performance deteriorates due to factors deemed explicitly to be beyond their control, nor are they fired for making ‘honest mistakes.’ Following forced CEO turnover, companies see performance improvements and their investors are considerably more likely to eventually sell them at a profit.Corporate Governance, Large Shareholders, Boards of Directors, CEO Turnover, Legal Reforms, Transition Economies, Private Equity

Monitoring Managers: Does it Matter?

We document how gathering ‘hard’ and ‘soft’ information helps boards of directors to learn a CEO’s ability over time; test under what circumstances boards fire CEOs; and show that such interventions lead to improved firm performance. Our empirical design exploits detailed hard information about performance relative to pre-agreed, firm-level targets and soft information reflecting the board’s views of CEO actions, CEO decisions, and CEO competence coupled with plausibly exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries between 1993 and 2010. We find that CEOs are fired when a firm underperforms its targets and, especially, when evidence has mounted that they are incompetent, but not when poor performance reflects factors deemed explicitly to be beyond their control or for making ‘honest mistakes.’ The level of CEO turnover increases following corporate governance reforms that increase board power, as does the sensitivity of CEO turnover to soft information relative to that of hard information. Following forced CEO turnover, firms see performance improvements and their investors are considerably more likely to eventually sell them at a profit

Investor Sentiment and Pre-Issue Markets

What role do sentiment investors play in the pricing of newly listed stocks? We derive conditions under which we can distinguish between sentiment and rational pricing behavior and test for the rationality of small investors’ demand for new stock issues using data from pre-issue (or ‘grey’) markets in Europe. Under sentiment, the model predicts asymmetric relations between the prices at which small investors trade new stock issues in the grey market and i) the subsequent issue price set by the investment bank, ii) prices in the early after-market, and iii) the degree of stock price reversal in the long run. Our empirical results suggest that sentiment demand is present and influences the pricing of newly listed firms

Effects of zinc oxide filler on the curing and mechanical response of alkyd coatings

The mechanical properties of an alkyd resin filled with zinc oxide pigment were studied at different concentrations over a wide range of time scales using dynamic mechanical analysis, quartz crystal rheometry and nanoindentation. The motivation for this work stems from the interest in accessing the long-term properties of paint coatings by studying the mechanical properties of historic paints. In this foundational work, we compare three different modalities of mechanical measurements and systematically determine the effect of pigment filler loading on the measured properties. Quantitative agreement between the methods is obtained when the characteristic time scales of each of the methods is taken into account. While nanoindentation is the technique most readily applied to historic paint samples, the rheometric quartz crystal microbalance (rheo-QCM) is the best suited for obtaining mechanistic information from measurements of paint properties over time, provided that appropriate thin-film samples can be produced. In these studies we find that ZnO increases the rate of oxidation of the alkyd during the initial stages of cure by an amount that depends on the ZnO content

The Compositional Structure of the Asteroid Belt

The past decade has brought major improvements in large-scale asteroid discovery and characterization with over half a million known asteroids and over 100,000 with some measurement of physical characterization. This explosion of data has allowed us to create a new global picture of the Main Asteroid Belt. Put in context with meteorite measurements and dynamical models, a new and more complete picture of Solar System evolution has emerged. The question has changed from "What was the original compositional gradient of the Asteroid Belt?" to "What was the original compositional gradient of small bodies across the entire Solar System?" No longer is the leading theory that two belts of planetesimals are primordial, but instead those belts were formed and sculpted through evolutionary processes after Solar System formation. This article reviews the advancements on the fronts of asteroid compositional characterization, meteorite measurements, and dynamical theories in the context of the heliocentric distribution of asteroid compositions seen in the Main Belt today. This chapter also reviews the major outstanding questions relating to asteroid compositions and distributions and summarizes the progress and current state of understanding of these questions to form the big picture of the formation and evolution of asteroids in the Main Belt. Finally, we briefly review the relevance of asteroids and their compositions in their greater context within our Solar System and beyond.Comment: Accepted chapter in Asteroids IV in the Space Science Series to be published Fall 201

Child Support Compliance in Fatherhood Programs: The Role of Hope, Role Salience, and Parenting Skills

Non-resident fathers’ compliance with child support agreements is low. An estimated 50% of fathers never pay any formal support to their co-parents (Stykes, Manning, & Brown, 2013). Responsible fatherhood programs have been developed as an alternative to incarceration to provide parenting and other skills to fathers in the hopes of increasing their payment compliance. This study adds to the sparse literature on the evaluation of responsible fatherhood programs by quantitatively examining the role of hope, parenting role salience, and parenting skills in predicting changes in child support compliance attitudes. The sample was drawn from participants in community-based responsible fatherhood programs. Results indicated that as fathers reported greater improvements in parenting skills and hope for the future, they also reported greater intentions to comply with child support agreements. Implications for fatherhood educational program design and implementation are discussed