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Category Archives: Michelle Connolly

How Expensive Is This Suit? An Analysis of Corporate Litigation Settlements and Brand Value

By Jenny Y. Zhang

Two recent corporate trends include a rise in litigation and companies’ increased emphasis on branding. This paper examines whether there is a relationship between the two phenomena by analyzing corporate litigation outcomes and brand value. Specifically, I examine law suits resulting in a settlement in order to determine whether a company’s brand value impacts the settlement amount. I do not find evidence of a relationship between a company’s brand value and the settlement value. Further research is needed in order to more conclusively determine whether a company’s brand value and the resulting settlement are related.

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Advisors: Professor James Roberts, Professor Michelle Connolly, Professor Grace Kim | JEL Codes: K40, K41

Investigating the Costs of Religious Observance: Cross-Country Analysis of Islamic Banking

By Myla Swallow and Richard Vargo

This study regresses key variables that influence the profitability of Conventional and Islamic banks as measured by Return on Average Assets, to determine the impact of Islamicity on the profitability of the banks in a given country. The study compares 36564 banks in 77 countries belonging to both Islamic and non-Islamic countries. We  find that Islamic banks have higher operating costs and overall experience lower return on average assets.

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Advisors: Professor Kent Kimbrough, Professor Michelle Connolly | JEL Codes: F30; G21; Z12

The Impact of Post-IPO Private Equity Ownership on Long-Term Company Performance

By Maria Suhail and Cipriano Echavarría

This thesis contributes to existing knowledge of private equity (PE) by analyzing the
impact of PE ownership post-IPO upon the long-term performance of companies. It considers whether companies perform better when PE funds maintain their ownership stakes post-IPO and whether this performance is also impacted by the degree of ownership that is maintained after IPO. This study uses stock performance (measured by cumulative excess stock returns) as a proxy for long-run company performance. The paper constructs and analyzes a sample of 487 companies that underwent an IPO between 2004 and 2012 to determine the implications of the maintenance and level of PE ownership by analyzing the performance of these companies for six years post-IPO. Results suggest that PE ownership post-IPO positively impacts long-term stock performance of companies. Duration and degree of PE ownership post-IPO are also important determinants of long-run performance likely due to the positive signal that continued PE ownership sends to outside investors about the quality of the company, the information asymmetry that exists between public and private markets and that PE firms are experienced managers that add value to companies.

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Advisors: Professor David Robinson, Professor Michelle Connolly | JEL Codes: G11, G14, G24

The Effect of Marriage on the Wages of Americans: Gender and Generational Differences

By William Song and Theresa Tong

A substantial body of literature on the wage effects of marriage finds that married American men earn anywhere from 10% to 40% higher wages than unmarried men on average, while married American women earn up to 7% less than unmarried women, even after controlling for traits such as background, education, and number of children. Because this literature focuses heavily on men born in a single time period, we study both men and women in two different generational cohorts of Americans (Baby Boomers and Millennials) from the National Longitudinal Surveys of Youth to examine how the wage effects of marriage differ between genders and across time. Using a fixed effects approach, we find that Millennial women—but not Baby Boomer women—experience an increase in wages after marriage, and we replicate the finding from the literature that men experience an increase in wages after marriage as well. However, after controlling for wage trajectory-based selection into marriage by using a modified fixed effects approach that allows wage trajectories to vary by individual, we find that the wage effects of marriage are no longer statistically significant for any group in our data, suggesting that the wage differences between married and unmarried individuals found in previous studies are primarily a result of selection.

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Advisors: Professor Marjorie McElroy, Professor Michelle Connolly | JEL Codes: C33; D13; J12; J13; J22; J30

Asylum Determination within the European Union (EU): Whether Capacity and Social Constraints Impact the Likelihood of Refugee Status Determination

By Louden Paul Richason

This paper analyzes whether capacity and social constraints impact acceptance rates for asylum seekers in the European Union from 2000-2016. Theoretically people should receive asylum based on the criteria outlined in international law – a well founded fear of persecution – but the influx and distribution of applicants in the European Union suggests that this may not hold in practice. For a group of pre identified “legitimate” asylum cases, this paper finds that surges in applications in a country (i.e. capacity constraints) have a positive and statistically significant correlation with acceptance rates, while the percentage of migrants in a country (i.e.  social constraints) has a negative and statistically significant correlation with acceptance rates. This suggests that the burden of proof becomes easier during a surge in total applications in a country. However, as the international migrant stock in that country increases, it is more difficult for that same group of applicants to receive asylum.

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Advisors: Professor Suzanne Shanahan, Professor Michelle Connolly | JEL Codes: D73, D78, F22, H12, J11, J15, K37, O52

The Effect of Tourism on Child Health Outcomes in Roatán, Honduras

By Hemal Pragneshbhai Patel

Increased tourism, especially in developing economies, brings with it more economic opportunities and avenues for development. In Roatán, the largest of Honduras’ Caribbean Bay Islands, tourism has brought economic development that the island had never before experienced. However, the impact of this economic development brought by increasing cruise ship tourism on child health has yet to be investigated. The increase in economic development is expected to improve child health through improved absorbed nutrition, and this paper uses an OLS regression model to examine how differential exposure to tourism development during a child’s crucial early life developmental window impacts later life health outcomes, proxied by height-for-age Z-scores.

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Advisors: Professor Dennis Clements, Professor Michelle Connolly | JEL Codes: I1; I15; Z32

Do Evictions Cause Income Changes? An Instrumental Variables Approach

By Grace Mok

Evictions are an important aspect of the affordable housing crisis facing low-income American renters. However, there has been little research quantifying the causal impact of evictions, which poses challenges for academics interested in understanding inequality and policy-makers interested in reducing it. Merging two datasets both new to the literature, I address this gap in the causal literature by using an instrumental variables strategy to examine the impact of evictions on household income over time in Durham, North Carolina. Exploiting gentrification-related evictions as an instrument, I find a 2.5% decrease in household income after eviction. This is a small, but significant decrease in income given that median household income for households at time of eviction is about $15,000.

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Advisors: Professor Christopher Timmins, Professor Michelle Connolly | JEL Codes: I32, R29

Social Capital and Financial Development after Economic Shocks: Evidence from Italy after the Financial Crisis of 2007-2009

By Sujay Rao & Ethan Lampert

Like traditional forms of capital, social capital – an intangible measure of an individual’s social networks, trust in institutions, and participation in civic life – has implications for personal and financial behavior. Individuals from educated, well established backgrounds with fruitful family ties may be more amenable to opening new lines of credit or investing in stock markets due to their trust in and connectedness with society. But what happens after a major economic shock, such as the financial crisis of 2008? Using Italy as a case study and panel data from the Survey of Household Income and Wealth, we find that social capital has significant effects on an individual’s credit card usage, informal borrowing, and choice to invest in securities.

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Advisors: Professor Grace Kim, Professor Michelle Connolly, Professor Giovanni Zanalda | JEL Codes: G01, G2, O1, D1, D14

Evidence of Stalinist Terror in Modern Adult Height Data

By David Blauser Henderson

Adult height is often used to evaluate standards of living experienced in childhood, as it is highly dependent on early-life nutrition (Komlos and Baten, 1998). I employ adult height data collected by the Russian Longitudinal Monitoring Survey (RLMS) to measure well-being among the population of the USSR during two periods of Stalinist repression: The Great Terror from 1937- 1938, and dekulakization, which led directly to the Great Famine of 1932-1933. Heights are normalized by gender and birth year using data from the Survey of Health, Ageing, and Retirement in Europe. I find that both the Great Terror and Great Famine had significant negative impacts on health. In particular, I find the impact of famine on adult height was greatest for those of low socioeconomic status and those born in rural areas. The Great Terror, however, primarily impacted the health of those of high socioeconomic status, those born in urban areas, and those born in areas that were heavily targeted by repression campaigns.

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Advisors: Professor Charles Becker, Professor Michelle Connolly | JEL Codes: N5, N54, I15

ICT Behavior at the Periphery: Exploring the Social Effect of the Digital Divide through Interest in Video Streaming

By Erik W. Hanson and Justin C. LoTurco

We investigate the factors that influence changes in consumer behavior with regard to video streaming. We focus our analysis on the effect of bandwidth impairment to explore a potential consequence of the digital divide. To measure the change in relative popularity of video streaming services, we use Google Trends data as a proxy. We then investigate whether broadband speed improvements in rural vs. urban regions affect the proxy differently. We find that increasing the broadband speeds in rural regions appears to stimulate greater interest in video streaming than equivalent speed increases in urban regions.

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Advisors: Professor Michelle Connolly, Professor Grace Kim | JEL Codes: C33; J11; L96

Questions?

Undergraduate Program Assistant
Jennifer Becker
dus_asst@econ.duke.edu

Director of the Honors Program
Michelle P. Connolly
michelle.connolly@duke.edu