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Article
Publication date: 13 January 2025

Blake Rayfield and Omer Unsal

This study aims to explore the impact of employee litigation on the innovation output of firms, specifically within the pharmaceutical sector, by examining the relationship…

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Abstract

Purpose

This study aims to explore the impact of employee litigation on the innovation output of firms, specifically within the pharmaceutical sector, by examining the relationship between employee lawsuits and Food and Drug Administration (FDA) product approvals.

Design/methodology/approach

Utilizing a hand-collected dataset comprising 2,293 employee disputes, this research conducts an empirical analysis to test how litigation involving employees influences the rate of FDA approvals for new pharmaceutical products.

Findings

The analysis reveals that employee disputes are negatively associated with the number of FDA-approved products, indicating that firms facing frequent employee allegations tend to exhibit lower innovation outcomes. Further, the study identifies case characteristics, such as the involvement of labor unions and the duration of cases, as significant determinants that delay the FDA approval process, thereby adversely affecting innovation performance.

Research limitations/implications

While the study provides novel insights into the relationship between employee litigation and innovation in the pharmaceutical industry, the findings are contingent upon the accuracy of the dataset and may not be universally applicable across all sectors.

Practical implications

The results underscore the critical importance of maintaining a positive workplace environment and treating employees fairly to foster innovation performance. Firms are encouraged to adopt strategies that mitigate the risk of litigation to enhance their innovation capabilities.

Originality/value

This research contributes to the literature by offering empirical evidence on the detrimental effects of employee litigation on firms’ ability to innovate, particularly in the highly regulated pharmaceutical industry. It highlights the significance of workplace relations in influencing a firm’s innovation outcomes.

Details

International Journal of Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 11 September 2018

Blake Rayfield and Omer Unsal

The purpose of this paper is to use a unique, hand-collected data set of Food and Drug Administration (FDA)-approved products to understand the effect of lobbying on the product…

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Abstract

Purpose

The purpose of this paper is to use a unique, hand-collected data set of Food and Drug Administration (FDA)-approved products to understand the effect of lobbying on the product market. The authors gather total 86,462 FDA labels including drug patents, drugs, pre-market approvals and medical devices and test the relationship between lobbying and future firms’ product submissions.

Design/methodology/approach

Using a sample of 86,462 FDA labels including drug patents, drugs, pre-market approvals and medical devices, the authors test the effect of lobbying on a firm’s future product submissions using survival analysis, logit, difference-in-differences and propensity score matching techniques.

Findings

The authors find lobbying firms experience an increase in the number of medical products approved. However, increased number of FDA labeling comes at the cost of product failure. The authors document that lobbying increases product recalls when responsible firms are associated with higher market withdrawals.

Originality/value

This study contributes to both the management literature on corporate lobbying and product recalls. Additionally, the study reveals the connection between pharmaceutical lobbying and firm value.

Details

Management Decision, vol. 57 no. 3
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 22 March 2022

Blake Rayfield and Omer Unsal

The aim of this study is to discuss the idea that the legal cost of environmental violations, along with reputational concerns, may persuade firms to generate more green patents.

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Abstract

Purpose

The aim of this study is to discuss the idea that the legal cost of environmental violations, along with reputational concerns, may persuade firms to generate more green patents.

Design/methodology/approach

This study examines the relationship between firms generating green patents and environmental violations. The authors show the green innovation trend over the past two decades and explore the potential motivations behind it. In addition, the authors investigate the impact of regulatory actions, such as governmental finds, on green innovation.

Findings

The authors find that firms that commit environmental violations switch to producing green patents in the long-run. The authors also document that market reaction following environmental offenses is negative for firms with a high ratio of green patents in their portfolio.

Originality/value

This study explores innovation. The authors investigate the literature and trends of green innovation over the past 20 years. The authors also find that green innovation is growing at a relatively slow rate. Overall, this study highlights the importance of green innovation and firms’ response to corporate wrongdoing.

Details

Managerial Finance, vol. 48 no. 8
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 18 May 2018

Hasib Ahmed, M. Kabir Hassan and Blake Rayfield

The purpose of this paper is to analyze whether investors perceive the issuance of sukuk differently than they do in case of conventional bonds, by using event study with superior…

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Abstract

Purpose

The purpose of this paper is to analyze whether investors perceive the issuance of sukuk differently than they do in case of conventional bonds, by using event study with superior data. Then, it analyzes whether financial characteristics of issuers can explain the abnormal return and likelihood of sukuk issuance. Finally, the paper proposes a testable model explaining the investor reaction.

Design/methodology/approach

This paper uses market model event study to assess investor reaction to the issuance of sukuk. Then, linear and logistic regressions are used to test whether financial characteristics of issuers can explain the abnormal return and likelihood of sukuk issuance. To investigate the differences between sukuk issuers and bond issuers, this paper tests the difference in means of issuer characteristics. Finally, the sample is subdivided into good and bad firm prospects according to dividend/earnings ratio and book-to-market ratio. The subdivisions are used to test the proposed model explaining the investor reaction.

Findings

The study finds that a large variety of firms issues sukuk. The event study reports significant negative abnormal returns around the announcement date of sukuk issuance. The study also reveals that the earning prospect of issuer firms affect the investor reaction. Firms with lower earning prospect receive a negative reaction from the investors. Also, smaller, or financially unhealthy firms are more likely to issue sukuk. Smaller and riskier firms issue sukuk, because participation in the market is less constrained. In other words, the risk-sharing nature of sukuk might imply that the firm is not confident about the future prospect. However, if the firm has good earnings prospects, investors react to the issuance of sukuk negatively.

Research limitations/implications

Reliability and availability of data is a hurdle to test the investor reaction model. As more data become available, the models implications can be further tested.

Originality/value

This paper uses the most complete set of data to study sukuk, making it the most selection bias-free and complete study. Moreover, the proposed investor reaction model will enrich the theory.

Details

Managerial Finance, vol. 44 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 21 August 2019

Blake Rayfield and Omer Unsal

The authors study the relationship between CEO overconfidence and litigation risk by examining employee-level lawsuit data. The purpose of this paper is to better understand the…

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Abstract

Purpose

The authors study the relationship between CEO overconfidence and litigation risk by examining employee-level lawsuit data. The purpose of this paper is to better understand the executive characteristics that potentially affect the likelihood of employee litigations.

Design/methodology/approach

The authors employ a unique data set of employee lawsuits from the National Labor Relations Board – “Disposition of Unfair Labor Practice Charges” – which includes complaints, litigations and decisions. The data spans the years 2000–2014. The authors employ the option-based CEO overconfidence metric of Malmendier et al. (2011) as the primary explanatory variable.

Findings

The authors find that overconfident CEOs are less likely to be subjected to labor-related litigations. The authors document that firms with overconfident CEOs have fewer lawsuits opened by both labor unions and individuals. The authors then investigate the effect of employee litigations on firm performance to understand why overconfident CEOs are less prominent among lawsuits. The authors show that litigations lower corporate investment and value of capital expenditures for responsible firms, which may limit overconfident CEOs’ ability to invest. Therefore, the results may reveal the fact that overconfident CEOs may prefer to align with the interest of their employees to avoid reduced investment opportunities.

Originality/value

The paper makes three main contributions. First, it provides the first large-sample evidence on CEO overconfidence and labor relations. The authors employ data on firm-level labor litigation that contains both the case reason and case outcome. Second, this paper adds to the growing literature of CEO overconfidence and governance practices in the workplace. Finally, the study highlights the importance of employee treatment and explores the impact of labor lawsuits on firm value.

Details

Review of Behavioral Finance, vol. 11 no. 4
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 8 May 2018

M. Kabir Hassan, Jennifer Brodmann, Blake Rayfield and Makeen Huda

The purpose of this paper is to investigate proprietary data from customers of a Southern Louisiana credit union. It analyzes the factors that contribute to an accelerated failure…

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Abstract

Purpose

The purpose of this paper is to investigate proprietary data from customers of a Southern Louisiana credit union. It analyzes the factors that contribute to an accelerated failure time (AFT) using information from customers’ credit applications as well as information provided in their credit report.

Design/methodology/approach

This paper investigates the factors that affect credit risk using survival analysis by employing two primary models – the AFT model and the Cox proportional hazard (PH) model. While several studies employ the Cox PH model, few use the AFT model. However, this paper concludes that the AFT model has superior predictive qualities.

Findings

This paper finds that the factors specific to borrowers and local factors play an important role in the duration of a loan.

Practical implications

This paper offers an easily interpretable model for determining the duration of a potential borrower. The marketing department of credit unions can then use this information to predict when a customer will default, thus allowing the credit union to intervene in a timely manner to prevent defaults. Further, the credit union can use this information to seek out customers who are less likely to default.

Originality/value

This study is different from the previous research due to its focus on credit unions, which have distinct characteristics. Compared to similar lending institutions, the charter of the credit union does not allow management to sell off loans to other investors.

Details

International Journal of Bank Marketing, vol. 36 no. 3
Type: Research Article
ISSN: 0265-2323

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Book part
Publication date: 21 October 2019

Omer Unsal and Blake Rayfield

In 1971, the patent for the Automated Teller Machine was awarded to David Wetzel. While possibly not the first application of financial technology, since 1971 time, the innovation…

Abstract

In 1971, the patent for the Automated Teller Machine was awarded to David Wetzel. While possibly not the first application of financial technology, since 1971 time, the innovation in the financial industry has grown beyond expectations. However, most studies in innovation ignore the financial sector altogether. In this study, the authors investigate financial technology firms and innovation. After identifying firms that are considered financial technology, the authors collect innovation outcomes such as patents and data breaches associated with those firms. The authors show that patent activity has enjoyed modest growth year over year; however, firms still have challenges to overcome such as market risk and data security. This study serves as a perspective on financial technology.

Details

Disruptive Innovation in Business and Finance in the Digital World
Type: Book
ISBN: 978-1-78973-381-5

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Book part
Publication date: 17 January 2023

Blake Rayfield, Hasib Ahmed, Nicolas Duvernois and Lois Rayfield

The relationship between borrowers and lenders can reveal a lot of information regarding loan pricing, information costs, and competition. In this study, the authors investigate…

Abstract

The relationship between borrowers and lenders can reveal a lot of information regarding loan pricing, information costs, and competition. In this study, the authors investigate the impact of FinTech lenders on Paycheck Protection Program (PPP) loan disbursement. Specifically, the authors investigate financial technology companies’ ability to provide loans at greater distances, expanding the available resources for businesses struggling during the Covid-19 pandemic. The authors find that not only were FinTechs able to lend at greater distances, but also they provided loans to firms that were younger and had less bank competition in their headquarters’ zip codes. The results remain consistent and are generalizable to the complete population of PPP loans.

Details

Fintech, Pandemic, and the Financial System: Challenges and Opportunities
Type: Book
ISBN: 978-1-80262-947-7

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Book part
Publication date: 6 March 2025

Vlora Berisha Dranqolli and Blake Rayfield

Purpose: This chapter examines the impact of regulatory frameworks on FinTech enterprises in Central and Eastern European (CEE) countries, focusing on identifying legislative…

Abstract

Purpose: This chapter examines the impact of regulatory frameworks on FinTech enterprises in Central and Eastern European (CEE) countries, focusing on identifying legislative barriers and facilitating factors for the advancement of financial technology.

Need for the Study: Despite the increase in FinTech, more knowledge is needed about how varying regulatory environments across CEE nations impact the sector’s growth and innovation. This study aims to fill this void by delving into these regions’ supportive and obstructive legislative factors.

Methodology: This research utilizes a comparative approach to analyze legislation related to FinTech, digital platforms, and data security. Data sources include central banks, financial regulators, and institutions across the Western Balkans, as well as the World Bank’s Global Fintech-Enabling Regulations Database and BBVA Research’s DiGiX index.

Findings: The analysis reveals that countries like Slovenia, Poland, and the Czech Republic have high digital readiness levels. Poland, Estonia, and Lithuania are leading in FinTech startup activities, with Serbia and Bulgaria notable for their regulatory sandboxes. Estonia, Lithuania, and Slovakia possess effective regulatory frameworks conducive to FinTech growth. In contrast, Albania, Kosovo, Serbia, Bosnia and Herzegovina lag in developing their FinTech infrastructure. Progress varies across North Macedonia and Montenegro.

Practical Significance: The study underscores the pivotal role of regulatory frameworks in ensuring financial stability and safeguarding consumer interests. It emphasizes the necessity for tailored legislative reforms in countries with underdeveloped FinTech ecosystems, thereby fostering a more robust environment for FinTech, and ultimately, enhancing economic growth and technological innovation in the region.

Details

Financial Landscape Transformation: Technological Disruptions
Type: Book
ISBN: 978-1-83753-751-8

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Book part
Publication date: 17 January 2023

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Abstract

Details

Fintech, Pandemic, and the Financial System: Challenges and Opportunities
Type: Book
ISBN: 978-1-80262-947-7

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