In this study, we examine how the 2007-2009 Global Crisis affected manufacturing firms’ security ... more In this study, we examine how the 2007-2009 Global Crisis affected manufacturing firms’ security spending and losses due to property crime (i.e. theft, robbery, vandalism, and arson) in Eastern Europe and Central Asia. Although we are currently experiencing a new global crisis due to the coronavirus, we cannot examine this current period yet since the current crisis is still ongoing. This article pulls together different literatures on the aftermath of the 2007-2009 Global Crisis in middle income economies, the influence of crisis on global supply chains, and the connections between unemployment and crime, to provide an empirical investigation of the trends in security spending within manufacturing firms across time. We find that fewer firms paid for security after the crisis has passed. On the other hand, the firms that spent money on security after the crisis ended actually spent a larger proportion of their sales on security. Our results indicate that, after the crisis, although ...
In this study, we examine the impact of business conditions and stock market conditions on blockh... more In this study, we examine the impact of business conditions and stock market conditions on blockholders’ ownership in U.S. firms. We expect that in periods when the general interest in the stock market goes up, blockholders’ interest and participation in the market will also increase (i.e. there are more blockholders per firm and the percentage share of blockholder ownership in each corporation is higher). We use the Aruoba-Diebold-Scotti (i.e. ADS) Business Conditions Index and the S&P 500 Index as proxies for business conditions and stock market conditions, respectively. We find that blockholders’ investments more closely track stock market conditions than business conditions. Our nonparametric tests show that there are more blockholders per firm when stock market conditions are better.
The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no l... more The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no longer be such a profitable method for accumulating wealth for the average investor in the new millennium. This paper investigates the relationship between compound return and holding period length to see how long an Exchange Traded Fund (ETF) investment must be held before a positive return on principal is 100% likely. Because the ETF is a relatively new investment vehicle that could be considered particularly well-suited to the requirements of the buy and hold strategy, we begin our investigation here. We find that the compound returns earned over a rolling holding period are much more volatile than one might assume given historic rules of thumb for average return expectations. Using monthly return data for all listed NASDAQ ETFs between their date of inception and 2015, we find it takes ten years for the average probability of a gain on principal to be over 95 percent.
This paper documents the empirical relationship between ownership concentration and monetary poli... more This paper documents the empirical relationship between ownership concentration and monetary policy to fill out the picture for when ownership concentration is likely to change within U.S. publicly traded firms. The sample is drawn from the Dlugosz et al. (2006) data set for firms between 1996 and 2001. The authors explore the patterns between the Federal Reserve's policy position and ownership concentration rather than asserting causal direction between the two. This empirical paper tests alternative theories on blockholder activism by examining whether "voice" or "exit" is more dominant under contractionary monetary policy. Using the series of same direction changes in the Federal Funds Rate to establish time periods as a proxy for monetary policy in the U.S., nonparametric tests show that there are more blockholders per firm, the sum of their blockholdings in percentage terms is higher, and the total percentage held by the blockholder in U.S. firms is greater under contractionary policy periods. This supports an active theory of blockholder behavior in corporate governance.
The outside blockholder has become an important agent in the corporate governance literature in t... more The outside blockholder has become an important agent in the corporate governance literature in the United States. Understanding how his monitoring role changes as economic circumstances deteriorate is rarely considered. In this study, we examine whether the number of certain types of blockholders, as well as their ownership concentrations, will increase during recessions. By categorizing blockholders by type: affiliated, outside, employee (through Employee Stock Ownership Plans), non-officer director, and officer director, we are able to track how blockholder composition changed within firms when the economy moved from expansion in 1999 to recession in 2001. Using nonparametric tests, we show that the number of outside blockholders and their ownership stake go up during the recessionary period examined. This suggests a more important monitoring role for the outside blockholder when the economy worsens. Though we do not find a statistically significant change overall in the average ...
The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no l... more The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no longer be such a profitable method for accumulating wealth for the average investor in the new millennium. This paper investigates the relationship between compound return and holding period length to see how long an Exchange Traded Fund (ETF) investment must be held before a positive return on principal is 100% likely. Because the ETF is a relatively new investment vehicle that could be considered particularly well-suited to the requirements of the buy and hold strategy, we begin our investigation here. We find that the compound returns earned over a rolling holding period are much more volatile than one might assume given historic rules of thumb for average return expectations. Using monthly return data for all listed NASDAQ ETFs between their date of inception and 2015, we find it takes ten years for the average probability of a gain on principal to be over 95 percent.
In this study, we examine how the 2007-2009 Global Crisis affected manufacturing firms’ security ... more In this study, we examine how the 2007-2009 Global Crisis affected manufacturing firms’ security spending and losses due to property crime (i.e. theft, robbery, vandalism, and arson) in Eastern Europe and Central Asia. Although we are currently experiencing a new global crisis due to the coronavirus, we cannot examine this current period yet since the current crisis is still ongoing. This article pulls together different literatures on the aftermath of the 2007-2009 Global Crisis in middle income economies, the influence of crisis on global supply chains, and the connections between unemployment and crime, to provide an empirical investigation of the trends in security spending within manufacturing firms across time. We find that fewer firms paid for security after the crisis has passed. On the other hand, the firms that spent money on security after the crisis ended actually spent a larger proportion of their sales on security. Our results indicate that, after the crisis, although ...
In this study, we examine the impact of business conditions and stock market conditions on blockh... more In this study, we examine the impact of business conditions and stock market conditions on blockholders’ ownership in U.S. firms. We expect that in periods when the general interest in the stock market goes up, blockholders’ interest and participation in the market will also increase (i.e. there are more blockholders per firm and the percentage share of blockholder ownership in each corporation is higher). We use the Aruoba-Diebold-Scotti (i.e. ADS) Business Conditions Index and the S&P 500 Index as proxies for business conditions and stock market conditions, respectively. We find that blockholders’ investments more closely track stock market conditions than business conditions. Our nonparametric tests show that there are more blockholders per firm when stock market conditions are better.
The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no l... more The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no longer be such a profitable method for accumulating wealth for the average investor in the new millennium. This paper investigates the relationship between compound return and holding period length to see how long an Exchange Traded Fund (ETF) investment must be held before a positive return on principal is 100% likely. Because the ETF is a relatively new investment vehicle that could be considered particularly well-suited to the requirements of the buy and hold strategy, we begin our investigation here. We find that the compound returns earned over a rolling holding period are much more volatile than one might assume given historic rules of thumb for average return expectations. Using monthly return data for all listed NASDAQ ETFs between their date of inception and 2015, we find it takes ten years for the average probability of a gain on principal to be over 95 percent.
This paper documents the empirical relationship between ownership concentration and monetary poli... more This paper documents the empirical relationship between ownership concentration and monetary policy to fill out the picture for when ownership concentration is likely to change within U.S. publicly traded firms. The sample is drawn from the Dlugosz et al. (2006) data set for firms between 1996 and 2001. The authors explore the patterns between the Federal Reserve's policy position and ownership concentration rather than asserting causal direction between the two. This empirical paper tests alternative theories on blockholder activism by examining whether "voice" or "exit" is more dominant under contractionary monetary policy. Using the series of same direction changes in the Federal Funds Rate to establish time periods as a proxy for monetary policy in the U.S., nonparametric tests show that there are more blockholders per firm, the sum of their blockholdings in percentage terms is higher, and the total percentage held by the blockholder in U.S. firms is greater under contractionary policy periods. This supports an active theory of blockholder behavior in corporate governance.
The outside blockholder has become an important agent in the corporate governance literature in t... more The outside blockholder has become an important agent in the corporate governance literature in the United States. Understanding how his monitoring role changes as economic circumstances deteriorate is rarely considered. In this study, we examine whether the number of certain types of blockholders, as well as their ownership concentrations, will increase during recessions. By categorizing blockholders by type: affiliated, outside, employee (through Employee Stock Ownership Plans), non-officer director, and officer director, we are able to track how blockholder composition changed within firms when the economy moved from expansion in 1999 to recession in 2001. Using nonparametric tests, we show that the number of outside blockholders and their ownership stake go up during the recessionary period examined. This suggests a more important monitoring role for the outside blockholder when the economy worsens. Though we do not find a statistically significant change overall in the average ...
The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no l... more The buy and hold stock market strategy, which gained tremendous popularity in the 1970s, may no longer be such a profitable method for accumulating wealth for the average investor in the new millennium. This paper investigates the relationship between compound return and holding period length to see how long an Exchange Traded Fund (ETF) investment must be held before a positive return on principal is 100% likely. Because the ETF is a relatively new investment vehicle that could be considered particularly well-suited to the requirements of the buy and hold strategy, we begin our investigation here. We find that the compound returns earned over a rolling holding period are much more volatile than one might assume given historic rules of thumb for average return expectations. Using monthly return data for all listed NASDAQ ETFs between their date of inception and 2015, we find it takes ten years for the average probability of a gain on principal to be over 95 percent.
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Papers by Nancy Sowers