Did Board Configuration Matter? The Case of US Subprime Lenders

Research Question/Issue: The origins of the global financial crisis have been attributed to the combination of a housing price bubble and innovative financial instruments, as well as the lack of restraint by corporate executives and boards to engage in excessive risk-taking. The rise in subprime lending between 1997 and 2005 played a crucial role in inflating the housing price bubble. We take a unique dataset of US financial institutions heavily engaged in subprime lending and ask the following research question: Did board configuration play a role in determining whether a financial institution specialized in subprime lending? Research Findings/Insights: We use a matched-pair sample of firms in the financial industry from 1997-2005 with half of the sample specializing in subprime lending and conduct panel data logistic regression analysis. We find that the board configurations of those financial institutions that engaged in subprime lending were significantly different from those that did not. Specifically, subprime lenders had boards that were busier, had less tenure, and were less diverse with respect to gender. Theoretical/Academic Implications: This study uses the group decision making perspective in the context of subprime lending to examine board of director configuration and its influence on decision making processes around the issue of risky subprime lending. Findings show that how boards were configured did influence the decision to specialize in subprime lending. We find robust support for predictions based on the group decision making perspective. Practitioner/Policy Implications: The deterioration of mortgage lending requirements that gave rise to the defaults of so many subprime loans, in retrospect, appears to be something that should have been entirely preventable. By demonstrating that subprime specialists had significant differences in board configuration that impacted group decision making, this study offers guidance to policymakers considering additional regulation and for corporate officers examining corporate governance issues

Exploring the Questionable Academic Practice of Conference Paper Double Dipping

We develop a conceptual framework and provide empirical evidence that helps to explain why management scholars submit the same paper to more than one scholarly conference, a practice referred to as double dipping. Drawing from general strain theory,we find that certain features of the social and national institutional context in which these scholars are embedded provides motivation for and facilitates rationalization of engagement in the double-dipping practice. Specifically, our results show that the incidence of conference paper double dipping is greater for junior scholars and for those currently affiliated with research-intensive universities. We also find that authors who received their highest educational degree in countries with higher levels of corruption are more likely to engage in double dipping. The study provides a better theoretical understanding of contextual factors that may lead individuals to engage in questionable academic practices.We hope our findings will raise this issue to fuller scrutiny within the Academy, and motivate some potential remedies to reduce the frequency of this questionable behavior. © Academy of Management Learning & Education,2017