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Issue Six: Spring 2015

The Undergraduate Business & Economics Research Journal Spring 2015, Volume 6

Downside and Upside Risk of Corporate Social Responsibility

by Nicole Hamilton (University of Massachusetts Boston) . . . . . . . .12

This paper examines the effect of corporate social responsibility (CSR) on alternative measures of firm risk (downside and upside) as a means to quantify the value of CSR.    Systematic risk is usually measured by beta, or the sensitivity of the asset’s returns to market returns.  Downside and upside beta measures are ways to distinguish fluctuations below and above mean returns.  Using the KLD database, which includes strength and concerns of firms in seven major qualitative areas using approximately 80 indicators, this paper investigates the relationship between CSR and firm upside and downside systematic risk.   A significant relationship between downside beta and positive CSR performance implies that CSR management is a way to manage risks during downturns of the market. On the other hand, a positive relationship between CSR performance and upside beta means that CSR amplifies gains during “good times”.  CSR practices in the areas of Governance, Diversity, Humanity, and Product had a significant effect on risk measures.   Given my findings that different CSR policies relate differently to upside and downside risk, practical implementation of CSR policies must be based on the assessment of specific CSR policy’s likely cost and benefits to shareholders and other stakeholders of a firm. (Winner of the Best Paper Award)

Sporting Events and Local Economies: The Effects of the National Association of Intercollegiate Athletics (NAIA) National Championship Football Game on Hotel Tax Revenue in Rome, Georgia

by Kelly Hastings (Berry College) ................................. 34

City administrators and public officials often praise mega-sporting events for providing major boosts in local economies. These beliefs lead local government officials to lobby aggressively in an attempt to bring such mega-sporting events to their cities.  The actual economic impacts of these events are often overstated.  This paper seeks to explain the economic impact of the NAIA National Championship football game in Rome, Georgia by analyzing city hotel tax revenue data from January 2005 to October 2012.  The paper also examines the effects of local recreational tennis tournaments on city hotel tax revenue.  The results indicate that the championship football game did not have significant positive effect on hotel tax revenue in Rome, Georgia.  These results support the belief of many economists that the actual impacts of mega-sporting events on local economies are much less than commonly believed by public officials.    


Financial Deregulation and its Effect on Economic Growth: A Meta-Analysis

by Joseph Korkames (Hendrix College) ...............................48

This study systematically analyzes the empirical literature on financial deregulation and its effect on economic growth by conducting a comprehensive meta-regression analysis based on 374 estimates from 53 studies. Financial deregulation or liberalization consists of the removal of interest rate controls, capital account restrictions, and/or any other laws or regulations that restrict the actions of financial institutions. The initial hypothesis that financial deregulation has a positive effect on economic growth is verified at the .05 significance level. This paper also finds that the long-run effect is larger and more positive than the short-run effect. This indicates the possibility of short-run financial destabilization caused by financial deregulation. A positive prediction interval for the value of the effect of deregulation on growth is provided from a weighted least squares (WLS) multivariate meta-regression model. Prior to conducting the meta-analysis, this paper reviews the pragmatic (empirical/statistical) and theoretical literature and also incorporates a discussion of the theoretical development and empirical tests of the McKinnon-Shaw hypotheses. Additionally, a discussion of the policy implications of the results, methods of meta-regression analysis, and methods for conducting tests for publication bias in a research literature are provided.


Partial Effects on Crime Reporting 2007-2011: Analysis Based on the National Crime Victimization Survey

by Kegan O’Connor (Brigham Young University – Idaho)...... 70

In the United States a vast majority of crimes go unreported, and various aspects could be the cause of this problem in crime fighting. From 2007 to 2011 the United States experienced a period of economic strain called the Great Recession, which may have resulted in an increase in reported criminal activity. This study attempts to uncover any trends or changes in these partial effects, which could be the result of economic recession. An econometric multivariable regression model was used to analyze the partial effects across all of the years in question. This study uncovered some significant changes in income levels and their effects on crime reporting as well as some significant trends among varying education attainment levels. These results provide opportunity for expansions with additional research on how changes in income mobility affect crime reporting during economic recession, as well as the ways in which behavior in crime reporting changes among education levels during downturns in economic activity. These potential studies combined with this study may be used to better assess implicit costs inherent during recessions and how authorities can better mitigate crime during trying national economic conditions in the future.


Experiential Learning to Improve Disability Services on a College Campus Using Quality Techniques: A Case Study

by Alison Scaringi (SUNY Fredonia), Brandon Napieralski (SUNY Fredonia), & Amanda Swan (Jamestown Community College)..................... 90

Institutions of Higher Learning (IHL) are well advised to take proactive measures to ensure accessibility of critical academic services to ensure compliance with the Americans with Disability Act. Applied Operations Management (OM) students attempted a mechanism to improve the services offered to the disabled population of a medium-sized public college. Experiential learning not only benefits the students but also the institutions. The merits of Six Sigma methodology to enhance performance with its Define-Measure-Analyze-Improve-Control (DMAIC) model are discussed. A paired t-test was used to find the differences between the accommodated and the general population of students. The utilization of the DMAIC framework identified a need for more robust data collection from within the accommodated population and provided recommendations for that collection process to facilitate full and equal participation of the disabled population.  This study is of interest to both administrators of IHLs as well as operations management instructors who wish to engage in experiential learning.