Leadership & Organizational Behavior

Null-hypothesis significance tests (NHSTs) have received much criticism, especially during the last two decades. Yet, many behavioral and social scientists are unaware that NHSTs have drawn increasing criticism, so this essay summarizes key criticisms. The essay also recommends alternative ways of assessing research findings. Although these recommendations are not complex, they do involve ways of thinking that many behavioral and social scientists find novel.

This paper describes the motives that gave rise to the creation of the Federal Reserve System, summarizes the history of Fed monetary policy from its origins in 1914 through the Treasury-Fed Accord of 1951, and reviews several of the principal controversies that surround that history. The persistence of conceptual errors in Fed monetary policy — particularly adherence to the "real bills doctrine" — is a central puzzle in monetary history, particularly in light of the enormous costs of Fed failures during the Great Depression.

This paper shows that Chief Executive Officers (CEOs) meaningfully affect firm performance. Using variation in CEO exposure resulting from the numer of days a CEO is hospitalized, we provide estimates of the effect of CEOs on firm policies, holding firm and CEO matches constant. We have four main findings. First, CEOs have an economically and statistically significant effect on profitability, revenue, and investment outcomes. Firms whose CEOs are hospitalized underperform when their chief executives are sick but otherwise exhibit similar performance relative to other firms.

Financial openness is often associated with higher rates of economic growth. We show that the impact of openness on factor productivity growth is more important than the effect on capital growth. This explains why the growth effects of liberalization appear to be largely permanent, not temporary. We attribute these permanent liberalization effects to the role financial openness plays in stock market and banking sector development, and to changes in the quality of institutions. We find some indirect evidence of higher investment efficiency post-liberalization.

This paper reviews the pattern of bank failures during the financial crisis and asks whether there was a link with corporate governance. It revisits the theory of bank governance and suggests a multiconstituency approach that emphasizes the role of weak creditors. The empirical evidence suggests that, on average, banks with stronger risk officers, less independent boards, and executives with less variable remuneration incurred fewer losses. There is no evidence that institutional shareholders opposed aggressive risk-taking.

We analyze contagious sovereign debt crises in financially integrated economies. Under financial integration banks optimally diversify their holdings of sovereign debt in an effort to minimize the costs with respect to an individual country"s sovereign debt default. While diversification generates risk diversification benefits ex ante, it also generates contagion ex post. We show that financial integration without fiscal integration results in an inefficient equilibrium supply of government debt.

Research on the relationship between teachers' characteristics and teacher effectiveness has been underway for over a century, yet little progress has been made in linking teacher quality with factors observable at the time of hire. However, most research has examined a relatively small set of characteristics that are collected by school administrators in order to satisfy legal requirements and set salaries.

We develop a methodology to collect and analyze data on CEOs' time use. The idea — sketched out in a simple theoretical set-up — is that CEO time is a scarce resource and its allocation can help us identify the firm's priorities as well as the presence of governance issues. We follow 94 CEOs of top-600 Italian firms over a pre-specified week and record the time devoted each day to different work activities. We focus on the distinction between time spent with insiders (employees of the firm) and outsiders (people not employed by the firm).