Wednesday, August 03, 2011

We've moved

For now, I'm trying to keep my blog at Typepad (

Monday, August 01, 2011

Corporate Misconduct and Reputation

I have had the luck of being assigned to Jonathan Karpoff as a Research Assistant for the summer. Not only he is really great to work with, but he also studies a subject that will hopefully be the theme of my dissertation: corporate misconduct and reputation.

I have been working on this for about a month, and read 56 papers about corporate misconduct and reputation. The vast majority are about financial misrepresentation, but some are about more "movie-like" types of misconduct. Fifty-six papers is a hefty number for a month, and by now I surely know a little bit about corporate misconduct, maybe "just enough to be dangerous": there's a lot that I don't know, but sometimes I feel confident enough to give suggestions to people that clearly know a great deal more than I do.

Case in point, a paper by Langus, Motta and Aguzzoni called "The Effect of EU Antitrust Investigations and Fines on Firm's Valuations". It is a great paper and I have almost presumed to send the authors an email suggesting that they look into some similar literature and also suggesting that they address a couple additional points.

The paper describes "dawn raids" performed by the EU antitrust authority to try to find evidence that companies are participating in cartels or illegal monopolies and concludes that the companies' stock prices are punished much more than the fines, mostly because the (economically profitable) activity is now likely to end. It doesn't mention similar literature about financial misconduct that comes to the same conclusion, or the economic theory of reputation of Klein-Laffler and Shapiro.

My presumption would probably cost me my chances of living in Barcelona or Milan when I finish the Ph.D., and I can't risk something like that.