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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

For Love of the Game: A Study of Tournament Theory and Intrinsic Motivation in Dota 2

By YAO Shengjie

This paper studies the effect of intrinsic motivation on the extrinsic incentives specified by tournament structure in tournament theory in the context of e-sports. It incorporates tournament theory and motivation crowding theory in the same framework, something that past literature have hinted towards but never formally done so. It also uses an e-sports dataset, a type of dataset that few academics in the past have dealt with, but one that offers many interesting potentials. Results weakly show that crowding-in occurs in e-sports, but the effects of tournament structure on performance are inconclusive in the context of this paper. Implications of this paper lie mainly in the possibility for future academics to utilise e-sports data for research.

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Advisors: Professor Grace Kim | JEL Codes: J31, J33, J41, M51, M52, Z20

Pricing and Pack Size Brand, Quantity, and Cost Considerations in Pricing Multipacks of Toothpaste

By Stephanie Wiehe

The US market for toothpaste, like many other goods, is shifting towards selling
in bulk. Multipacks of toothpaste require quantity discounts to incentivize consumers, making buying in bulk a great deal for the savings-minded toothpaste-shopper. It is more difficult to understand, however, producers’ willingness to sell multipacks of toothpaste, when margins are necessarily slimmer than single tubes due to quantity discounts. This paper explores the consumer’s decision in purchasing toothpaste as an interaction between savings on price and inventory considerations, like shopping and carrying costs. My model combines aspects of prior works on second degree price discrimination and quantity discounts with alterations to fit the intricacies of the market for toothpaste. The model’s predictions support the possibility of pack size as a tool for second degree price discrimination as shopping and carrying costs  constitute two markets with different price elasticities of demand for single and multipacks of toothpaste. This work adds to the existing literature on storable goods and non-linear pricing and brings a new economics-based approach to a question faced by toothpaste producers.

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Advisors: Professor Allan Collard-Wexler, | JEL Codes: L11; L42; D4

Female Labor Force Participation in Turkic Countries: A Study of Azerbaijan and Turkey

By Natasha Jo Torrens

Encouraging female labor force participation (FLFP) should be a goal of any country attempting to increase their productive capacity. Understanding the determinants and motivations of labor force participation requires isolating the factors that influence a woman’s decision to enter or leave formal employment. In this thesis, I utilize data from the Demographics and Health Surveys to explain the role of social conservatism in promoting or limiting participation in the labor force. I focus on ever-married women in Azerbaijan and Turkey to provide a lens through which to explain the unexpectedly low FLFP of Turkey. Though most prior research attempts to explain Turkey’s low FLFP rate by comparisons to other OECD countries, my study looks at Turkey through the context of other Turkic cultures to explore cultural factors driving labor force participation for ever-married women. This study finds a negative correlation between conservatism and the likelihood of participating in the labor force for ever married women in Azerbaijan, and a larger, positive relationship in Turkey.

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Advisors: Professor Charles Becker, Professor Didem Havlioğlu, Professor Kent Kimrbough | JEL Codes: C50, J16, N95

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

Immigrant Workers in a Changing Labor Environment: A study on how technology is reshaping immigrant earnings

By Grace Peterson

This research determines how automation affects immigrant wages in the US and how closely this impact follows the skills-biased technical change (SBTC) hypothesis. The present study addresses this question using American Community Survey (ACS) data from 2012 to 2016 and a job automation probability index to explain technological change. This research leverages OLS regressions to evaluate real wage drivers, grouping data by year, immigration status, and education level. According to the SBTC hypothesis, high skill immigrant wages should be less negatively affected by technological change than low skill immigrant wages. Univariate analysis suggests that the SBTC hypothesis is even stronger for US = immigrants than native-borns, as high skill immigrants have a lower average probability than low skill immigrants of having their jobs automated, and the difference in effect on high versus low skilled workers is larger for immigrant than native-borns. However, multivariate analysis asserts that technological change affects low skill immigrants’ wages less than high skilled individuals’ wages, which counters the SBTC hypothesis.

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Advisors: Professor Grace Kim | JEL Codes: J15, J24, J31, J61, E24

The Effect of Early Life Economic Conditions on Child Health in Post-Soviet Russia

By Hemal Pragneshbhai Patel

The effect of the economic collapse on health has been extensively documented in Russia since the dissolution of the Soviet Union. The proportion of stunted children in Russia increased substantially in this period, but no study has investigated the mechanisms by which this economic collapse impacted child health outcomes. This paper uses an OLS regression followed by a Binder-Oaxaca decomposition to determine the specific economic factors that significantly contributed to this decrease in child heights.

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Advisors: Professor Charles Becker | JEL Codes: I1; I14; J13

Questions?

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Jennifer Becker
dus_asst@econ.duke.edu

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