Further evidence for links between facial width-to-height ratio and fighting success: Commentary on Zilioli et al. (2014)

Recent research has reported an association between facial width-to-height ratio (fWHR) and both fighting performance and judgments of formidability in a sample of mixed martial arts (MMA) combatants. The results provide evidence of fWHR being associated with sporting performance and aggression in men. However, it has been argued that the effect of fWHR might be a by-product of associations between body size and behavioral measures. Here we tested whether fWHR is associated with perceived aggressiveness, fighting ability and success in physical confrontation, while controlling for body size, also in a sample of MMA fighters. We found that perceived fighting ability was predicted by weight but not by fWHR. In contrast, both fWHR and body weight independently predicted perceived aggressiveness. Furthermore, we found positive associations between fWHR and fighting performance which appear to be independent of body size. Our findings provide further support for the proposal that fWHR is associated with fighting ability and perceived aggression, and that these effects are independent of body size. Therefore, fWHR might be considered as a viable and reliable marker for inference of success in male intra-sexual competition

Analyst Optimism and Incentives under Market Uncertainty

We examine how analysts’ changing incentives driven by changes in market uncertainty affect their forecast optimism. Analysts issue more optimistically biased earnings forecasts and buy recommendations under high market uncertainty (VIX). The lower reputational costs and larger benefits of optimistic output explain the increased optimistic output: Analysts are less likely to be penalized for inaccuracy and can stimulate more trading activity from optimistically biased output when market uncertainty is high. We find that the likelihood of analysts’ turnover decreases, while the trading volume associated with optimistic output increases, with VIX. No evidence suggests that analysts’ self‐selection affects our findings on optimism and market uncertainty.Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/137733/1/fire12138.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/137733/2/fire12138_am.pd

Perceptions and Price: Evidence from CEO Presentations at IPO Roadshows

This paper examines the relation between cognitive perceptions of management and firm valuation. We develop a composite measure of investor perception using 30‐second content‐filtered video clips of initial public offering (IPO) roadshow presentations. We show that this measure, designed to capture viewers’ overall perceptions of a CEO, is positively associated with pricing at all stages of the IPO (proposed price, offer price, and end of first day of trading). The result is robust to controls for traditional determinants of firm value. We also show that firms with highly perceived management are more likely to be matched to high‐quality underwriters. In further exploratory analyses, we find the impact is greater for firms with more uncertain language in their written S‐1. Taken together, our results provide evidence that investors’ instinctive perceptions of management are incorporated into their assessments of firm value.Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/136541/1/joar12164_am.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/136541/2/joar12164.pd

Risk reporting: A review of the literature and implications for future research

YesThis paper provides a wide-ranging and up-to-date (1997-2016) review of the archival empirical risk-reporting literature. The reviewed papers are classified into two principal themes: the incentives for and/or informativeness of risk reporting. Our review demonstrates areas of significant divergence in the literature specifically: mandatory versus voluntary risk reporting, manual versus automated content analysis, within-country versus cross-country variations in risk reporting, and risk reporting in financial versus non-financial firms. Our paper identifies a number of issues which require further research. In particular we draw attention to two: first, a lack of clarity and consistency around the conceptualization of risk; and second, the potential costs and benefits of standard-setters’ involvemen

The Effects of MiFID II on Sell-Side Analysts, Buy-Side Analysts, and Firms

This paper provides early but broad empirical evidence on a major new investor protection regulation in Europe, MiFID II, which requires investment firms to unbundle investment research from other costs they charge to clients. We predict that the price separation resulting from unbundling and a hard-dollar system leads to a shrinking of the market for sell-side investment research, manifested in lower quantity of sell-side coverage that is of higher quality than before the regulation. We test our predictions in difference-in-differences matched-sample research designs with firm fixed effects. We find a decrease in the number of sell-side analysts covering European firms after MiFID II implementation, particularly for firms that are less important to the sell-side. However, research quality improves; specifically, individual analyst forecasts are more accurate and stock recommendations garner greater market reactions. In addition, sell-side analysts seem to cater more to the buy-side after MiFID II by providing industry recommendations along with stock recommendations. Importantly, we predict and find evidence that buy-side investment firms turn to more in-house research after MiFID II implementation. Equally interesting, buy-side analysts increase their participation and engagement in earnings conference calls compared to the control group. Finally, we find some evidence that stock-market liquidity decreases post-MiFID II. Our findings have implications beyond Europe, as investors are currently pressuring the U.S. Securities and Exchange Commission to adopt a similar regulation

Do voters get it right? A test of the ascription-actuality trait theory of leadership with political elites

Are the traits preferred by voters also associated with success in political office? Drawing on the ascription-actuality trait theory of leadership the present study examines whether traits ascribed to politicians predict leadership outcomes differently to the actual traits they possess. We collected self-ratings of politicians’ personality (N=138) using the NEO-PI-R (actual traits) and observer ratings of politicians’ facial appearance (ascribed traits) to examine their relationship with (a) leadership emergence, measured using share of vote in election, and (b) in-role leadership effectiveness, rated anonymously by political and local authority colleagues. Facial appearance predicted leadership emergence but not effectiveness. Personality had a more nuanced relationship with leadership outcomes. Conscientiousness predicted effectiveness but not emergence, and Agreeableness revealed a trait paradox, positively predicting emergence and negatively predicting effectiveness. These findings suggest a need to understand the contested nature of political leadership and qualities required for different aspects of political roles

Analyst information precision and small earnings surprises

This study proposes and tests an alternative to the extant earnings management explanation for zero and small positive earnings surprises (i.e., analyst forecast errors). We argue that analysts’ ability to strategically induce slight pessimism in earnings forecasts varies with the precision of their information. Accordingly, we predict that the probability that a firm reports a small positive instead of a small negative earnings surprise is negatively related to earnings forecast uncertainty, and we present evidence consistent with this prediction. Our findings have important implications for the earnings management interpretation of the asymmetry around zero in the frequency distribution of earnings surprises. We demonstrate how empirically controlling for earnings forecast uncertainty can materially change inferences in studies that employ the incidence of zero and small positive earnings surprises to categorize firms as suspected of managing earnings