Two male students working together

Applied Learning - Honors College

In order to graduate with Honors, students spend at least two semesters working on an honors project in a one-on-one relationship with a faculty member who serves as a supervisor and mentor. Typically, students have spent another semester or more developing ideas with their mentors before starting the projects. It is quite an accomplishment to bring the project to completion - and to be recognized as graduating with Honors. Graduate schools and future employers know this; the ability to carry out this type of project shows that the student can conduct independent scholarly work and possesses the type of skills necessary for many jobs and for graduate level work.

Spring 2016 Graduates

Dalton Bealer

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Devin Brady

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Kevin Davis

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Brandon Hoffman

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Andrea Escrig

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Esther Rocher

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Karissa Smith

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Ashley Tomasula

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Romy van Roojj

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Edward Knish

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Sean Potter

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Alyssa Stern

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Seraina Gruenig

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Minerva Pardo

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Patricia HinarejosPatricia Hinarejos

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Economics and Finance

Dalton Bealer

GOOD VS. EVIL - A COMPARISON OF SOCIALLY RESPONSIBLE INVESTMENTS AND SINFUL INVESTMENTS

Investing strategies based on moral and ethical standpoints is an emerging field of literature. Two specific areas of interest are returns based on socially responsible investment (SRI) and sinful investment.  The results for much of the literature of SRI returns are mixed, with studies finding outperformance, underperformance, and similar performance compared to benchmarks during different periods and given different measurement techniques. In contrast, research on sinful investment shows robust returns that in many cases outperform their comparative benchmarks. This paper compares the alphas of a sin portfolio and an SRI portfolio over the time period January 2000 to December 2015 and attempts to find linkages in abnormal alphas through multiple variables. The results indicate that both the sin stock portfolio and SRI portfolio were able to outperform the market during the time period. Also, there is evidence that the spread between the sin and SRI alphas decreases in the presence of a democratic congress and under conditions of tightening monetary policy.

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Devin Brady

A COMPARISON OF NORTH CAROLINA'S FILM INCENTIVE PROGRAM TO ALTERNATIVE USES OF STATE DOLLARS

This paper examines the State of North Carolina's film production tax incentive program and compares it to three alternative uses of the incentive funds.  Input-output analysis is used to compare the economic impacts of spending incentive dollars on four different industries: film productions, Continental Tire, an Apple data center, and Quintiles Transnational's headquarters. The film industry is found to have a $10.30 impact on output in North Carolina for each dollar of incentive spent. This impact is larger than the per dollar return on the Apple data center but considerably smaller than the return on Quintiles and dwarfed by the return, per-dollar of incentive, on Continental Tire.  However, this study does not examine sub-state, regional effects of these industries.  For instance, film productions are disproportionately beneficial to the Wilmington region. Replacing one tax credit with another may have distributional impacts within the study area of North Carolina and further research is warranted.

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Kevin Davis

SOCIAL NETWORKS, FED EXPERIENCE, AND THE ACCURACY OF ECONOMIC FORECASTERS

Extant literature shows that the forecasts of individuals who work at the Federal Reserve forecasts are more accurate than private commercial forecasts due to an informational advantage of being at the Fed (Cho and Hersch, 1998; Romer and Romer, 2000).  In this paper we examine the accuracy of forecasters who have worked at the Federal Reserve and investigate whether or not their advantage dissipates over time once they have left the Fed.  To conduct our analysis, we use the Wall Street Journal survey of economic forecasters. Using a model that controls for education, experience, and length of forecast we find our results suggest that forecasters with Federal Reserve experience have more error in their forecasts. Additionally our results suggest that these forecasts contain more error the longer the forecaster is away from the Federal Reserve which is consistent with the informational advantage dissipating over time.

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Brandon Hoffman

THE EFFECT OF THE STOCK ACT ON THE ABNORMAL RETURNS OF ELECTED OFFICIALS

Trading on material non-public information is believed to be a common practice of elected officials in the United States Congress (Ziobrowski, Cheng, Boyd and Ziobrowski, 2004). In their roles as elected officials, Congressmen are privy to sensitive information which may impact firms and stock prices. In this study, we collect data on the trading activity of elected officials, and determine if Congressmen receive abnormal returns around the passage of the Stop Trading on Congressional Knowledge Act (STOCK Act) in 2012, which outlawed trading on non-public knowledge by congressional officials. Using a calendar-time portfolio approach, we document an abnormal return in the years prior to the STOCK Act; however, the abnormal return disappears in years following implementation of the STOCK Act.

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Andrea Noguera Escrig

THE UNCOVERED INTEREST RATE PARITY: EMPIRICAL EVIDENCE FOR THE EURO AREA

The uncovered interest rate parity (UIP), the hypothesis that interest rate differentials between currencies explain exchange rate movements, is as essential to international finance as it is an empirical failure. Over the years, many scholars have tested the validity of UIP for different currencies and the main conclusion has been that it does not hold, especially in the short term. On the other hand, most academics have agreed that UIP is more likely to hold in the long run. This paper examines the UIP for the Euro-dollar exchange rate, which has received little attention in prior work. The analysis reports at least limited support for UIP. It is also presented that, while the implications of the UIP can be rejected in the full sample period of 1999 to 2016, there is supportive evidence when the second half of the sample is analyzed separately. Moreover, the supportive evidence becomes stronger when UIP is examined by using longer term interest rates.

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Esther Rocher

GREECING THE SKIDS: AUSTERITY OR STIMULUS

Greece has been a centerpiece of economic discussion for the past 8 years, due to the impact of the Great Recession on its economy, and the country’s debt crisis, which have led it to sovereign default. Starting in 2010, the Greek government has had to implement austerity measures in exchange for bailout money from the European authorities, many of which have questioned if the country should remain a member of the Eurozone. This paper focuses on the evolution of different economic variables before and after the adoption of the Euro, and their impact on employment. We find that, although austerity measures prolonged the recession, Greeks were living beyond their means, with an unsustainable public system. Thus, had the Greece not been part of the Euro Area, the economy would have collapsed anyway. 

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Karissa Smith

LAW FIRMS’ PREFERENCES AND WILLINGNESS TO PAY FOR ATTRIBUTES OF LAW SCHOOL GRADUATES: AN EMPIRICAL ANAYLSIS USING A CHOICE EXPERIMENT

Potential law school students must understand the attributes law firms desire, in order to improve their chances of finding employment in a competitive job market. This research examines law firms’ preferences for attributes of recent law school graduates using the choice experiment methodology. The study uses data collected from current practicing attorneys and recruiting directors in the United States. Results suggest that firms’ strongly prefer candidates who graduate near the top of their class from top ranked schools, and firms’ are willing to pay these candidates significant premiums. The firms show a strong aversion to candidates who attend law schools not ranked in the top 100, who graduate in the bottom half of their class, and those with no work experience. The results are relevant for prospective law school applicants, and emphasize the significant economic gains from attending a top ranked school, and graduating in the top of the class.

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Ashley Tomasula

IS THERE A COST TO INVESTING SOCIALLY RESPONSIBLY?

Socially responsible investing is a way for investors to integrate their personal values into their investment decisions.  By 2014, socially screened assets under management in the United States reached $6.57 trillion, and had increased by a compound annual growth rate of 13.1% since 1995.  This study extended the work of Meir Statman in 2005 on the performance of socially responsible indices in comparison to the overall market using Jensen's alpha, a modified Sharpe ratio, and tracking error.  This study looks at the performance of the KLD 400 Index, Sentinel Sustainable Core Opportunities Fund, U.S. portion of the Dow Jones Sustainability Index, and Calvert Index from May 2000 through June 2015 in comparison to the S&P 500.  The results showed the underperformance of the DJSI during May 2004 through June 2015, and its outperformance during the 2001 recession.  All other indices showed no statistically significant difference in returns from the S&P 500.

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Romy van Roojj

THE IMPACT OF SHARE REPURCHASE ANNOUNCEMENTS IN THE U.S ON STOCK PRICES IN TERMS OF MARKET CAPITALIZATION AND TIMING RELATIVE TO THE FINANCIAL CRISIS

A very significant trend in corporate finance throughout the last two decades is the increasing popularity of share repurchases. The objective of this study is to examine the short-term effect on stock prices after a share repurchase announcement is made by companies listed in the U.S. in terms of timing relative to the financial crisis of 2008, and market capitalization. The results show that stock prices increased on average 6.66% more than the market index in the 30 days after an announcement was made. We do not find a reduction in Cumulative Abnormal Returns (CAR) after 2008, even if the financial crisis brought a lot of uncertainty into the system. Furthermore, we find that smaller companies tend to have higher CARs: as investors face more information asymmetry towards smaller firms than larger firms, the signal sent while making an announcement that their stock is undervalued is stronger, leading to higher CARs. However, we must be skeptical and further testing should be implemented to better understand the true motivation behind share repurchases.

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ISOM

Edward Knish

FOUNDATIONS AND EXPRESSIONS OF INFORMATION SYSTEMS VALUE: A PRACTICAL APPROACH TO THE EVALUATION OF INDIVIDUAL SYSTEMS

IT business value research encompasses a variety of disciplines in an attempt to prescribe financial value to an information system (IS) and its related technologies. While this research may seem to be a simple marriage of information system studies and financial practice, IT business value research extends across fields from ergonomics to macroeconomics, psychology to operations management, and even epistemology to software engineering. A comprehensive review of IT business value might take volumes to fully integrate all of these concepts and, accordingly, this paper does not seek to provide this corresponding magnitude of information. Rather, the focus remains on historical and current methods of deriving the value of information systems and exploring these various frameworks in order to establish a way for financial practitioners to calculate the intrinsic value of a proposed information system. With the birth of wide-scale internet access and its resulting technological revolution, a majority of IT professionals have come to perceive information systems as sources of enormous intrinsic value. However, the financial field still tends to approach them as cost centers rather than value creators. I attempt to provide a framework for analysts seeking to answer the longstanding question regarding information systems: what are they worth?

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Sean Potter

ANALYSIS OF SEASONALITY IN FORECASTING PHARMACEUTICAL SALES

This study will focus on improving a portion of the forecasting algorithm used by a software company to better manage an independent pharmacy's inventory. It will compare the accuracy of two forecasts developed using two sets of differing seasonal indices. Currently, the software company uses the number of scripts filled per day to develop the seasonal components. With more accurate data being provided by the pharmacy, the study will use the quantity of units sold per day to develop new seasonal components. Time Series Analysis was used to identify the seasonal indices, and linear regression was used in developing the forecasting model. It was found that the indices created from the number of scripts filled contributed to a more accurate forecast. This is due to the degree of variance in the data, which has an effect on the strength of the patterns being identified in the demand history.

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Alyssa Stern

JAMAICAN SPICE PRODUCTS: THE EFFECT OF TRACEABILITY ON US CONSUMER ATTITUDES

The recent rise of health concerns has influenced increased scrutiny of spice products. Manufacturers are expected to maintain quality; in order to provide quality certified traceability systems should be implemented. The purpose of this study is to examine the issues of traceability in the Jamaican Spice Industry and the effect on consumer buying behavior. Issues included costs associated with traceability, product defects, and miscommunication in the supply chain. Consumers’ awareness of production procedures was also observed to determine the importance of visibility. Interviews with local manufacturers were conducted for an overview of implementation concerns. Surveys were distributed to students, faculty, and staff at a regional university in southeastern United States to identify the relationship between buying perceptions of spices and traceability implementation. This research provides the status of traceability systems in this industry and determines that consumers appreciate some level of visibility.

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Marketing

Seraina Gruenig

CULTURE REFLECTED IN ADVERTISING: A COMPARISON OF TELEVISION ADVERTISEMENTS IN FRANCE, SERBIA, SWITZERLAND, AND THE UNITED STATES OF AMERICA

In this study, 542 television advertisements from four countries were analyzed based on Hofstede's cultural dimensions, degree of nudity, immediate versus delayed action, traditional female roles, diversity, consumer consumption positioning, country of origin mention, and dialect use. One of the most surprising findings is that Switzerland showed the most advertisements with collectivistic traits, even though Hofstede categorizes Serbia as a collectivist country and not Switzerland. Another finding is that global consumer consumption positioning is used most frequently in Serbia. As expected, the United States showed the most advertisements with a short-term orientation, confirming its high short-term orientation discovered by Hofstede. Interestingly, advertisements that played on the short-term orientation are statistically related to advertisements asking for immediate action from viewers through verbally asking them to call a hotline or to visit their website for more information.

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Minerva Lacal Pardo

CAUSE RELATED MARKETING: AN EXPLORATORY STUDY OF CONSUMER'S BEHAVIOR TOWARDS CHECKOUT CHARITY CAMPAIGNS

The purpose of this study is to understand how consumers react to cause-related marketing activities during their decision making process for goods and services.

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Patricia Marco Hinarejos

EXAMINATION OF THE FACTORS INHIBITING ENTREPRENEURSHIP IN SPAIN

purchases. Specifically, this study focuses on when these activities are presented upon checkout, or the so-called checkout charity effect. In this study, several scenarios were manipulated to examine the effects of product/charity fit and product type on behavioral consequences toward the likelihood of consumers making a donation to a specific non- profit organization.  Results indicate that there is a significant difference between products and services when consumers are asked to make a donation. Specifically, findings from this study indicate that the fit between the product and the cause supported by the organization is more important for practical services and frivolous products than for frivolous services and practical products. Finally, implications and future research suggestions are provided.

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