Larger Endowments Research Articles

What Effect Does Being a Historically Black College/University Have on Endowments?

Abstract This article estimates several causal counterfactual parameters of the effect of being an Historically Black College/University (HBCU) on college/university endowment, and on the probability of a college/university failing as a function of its financial health, which is proportional to endowment. Our various counterfactual causal parameter decomposition estimates suggest that the racial distinctiveness of HBCUs causes, and can account for cumulative HBCU/non-HBCU endowment disparities between $11.5 billion and $58.9 billion for the HBCUs in our estimating sample. This is consistent with, at least in part, racial discrimination against HBCUs in philanthropic endowment contributions/gifts. With respect to failure, as HBCU status contributes to higher failure probabilities that are a function of college/university financial health, reducing the HBCU/non-HBCU endowment disparity would also enhance the ability of HBCUs to continuously exist. We suggest two public policy interventions to close the endowment disparity. First, increase the tax subsidy for contributions/gifts to HBCUs relative to non-HBCUs, as a way to incentivize more gifts to HBCUs from wealthy foundations and individuals. Secondly, to the extent that the wealth of HBCU alumni—who give back to their alma mater at higher rates than their non-HBCU peers—has been constrained due to the legacy of Slavery and discrimination, a distribution of reparations to the descendants of Black American Slaves would close Black-White wealth disparities that could translate into larger endowment contributions/gifts from HBCU alumni.

Employment benefits across U.S. allopathic medical schools: National norms and relationships with institutional wealth.

This study summarizes employment benefits from across 155 U.S. allopathic medical schools, investigates differences in employment benefits according to institutional characteristics, and explores possible connections between employment benefits and institutional wealth. Employment benefits data were extracted from institutions' websites across four categories: time-off, time-away, retirement contributions, and Employee Assistance Programs (EAPs)/family benefits. This dataset was mixed with other publicly available datasets sourced through the Association of American Medical Colleges (AAMC), the American Council on Education (ACE), and the American Association of University Professors (AAUP) to conduct additional analyses. Nationally, medical schools offered an average of 31 vacation/sick days and 12 paid holidays. Schools typically offered 4 out of 8 time-away benefits. Employers' retirement contributions ranged from 3.0% to 15.5%, with a mean contribution of 8.5%. A total of 43.2% (67 of 155) of medical schools offered a pension. Collectively, private medical schools offered fewer time-away benefits and more EAP/family benefits compared to public schools. Universities with larger endowments per student were associated with a higher number of EAP/family benefits offerings (r = 0.543, p < 0.001). Institutional wealth did not influence other benefits offerings. The quantity/quality of most employment benefits offered at allopathic medical schools were wide-ranging, tended not to vary by region or school control, and were not a function of institutional wealth.

Market Participation of Small-Scale Rice Farmers in Eastern Bolivia

Abstract Using a double-hurdle approach, we assess factors associated with the extent of participation in the rice market with data for small-scale farmers drawn from a nationally representative dataset. The results suggest that larger endowments and assets, animal farming and commercialization, and alternative off-farm income make farmers less likely to participate. Conversely, having access to credit, larger farm sizes, and being part of a farmers’ association all increase the likelihood of participation. Farms with better technological resources are also those with higher sales volumes. Further understanding market participation dynamics should prove useful for deriving evidence-based policy recommendations to strengthen this Bolivian sector.

Report of the President of the Society for the Advancement of Scandinavian Study

Report of the President of the Society for the Advancement of Scandinavian Study

Perceived and Ideal Inequality in University Endowments in the United States

Whether and which university to attend are among the most financially consequential choices most people make. Universities with relatively larger endowments can offer better education experiences, which can drive inequality in students’ subsequent outcomes. We first explore three interrelated questions: the current educational inequality across U.S. universities, people’s perceptions of this inequality, and their desired inequality. Educational inequality is large: the top 20% of universities have 80% of the total university endowment wealth while the bottom 20% have around 1%. Studies 1 to 3 demonstrated that people underestimate university endowment inequality and desire more equality. These perceptions and ideals were mostly unaffected by contextual factors (e.g., salience of endowment consequences, distribution range) and were not well explained by participants’ demographics. Finally, Study 4 revealed that learning about current endowment inequality decreased tolerance of the distribution of university wealth. We discuss the implications of awareness of educational inequality for behaviors and educational policies.

Regional security cooperation against hegemonic threats: Theory and evidence from France and West Germany (1945–65)

Abstract Why do some regional powers collectively threatened by a potential hegemon eagerly cooperate to ensure their security, while others appear reluctant to do so? I argue that robust security cooperation at the regional level is less likely when an unbalanced distribution of power exists between the prospective security partners. In such situations, regional security cooperation tends to be stunted by foot-dragging and obstructionism on the part of materially inferior states wary of facilitating the strategic expansion of neighbours with larger endowments of power resources, anticipating that much of the coalition's gains in military capabilities are likely to be achieved through an expansion of the materially superior neighbour's force levels and strategic flexibility. Evidence drawn from primary material and the latest historiography of France's postwar foreign policy towards West Germany provides considerable support for this argument. My findings offer important correctives to standard accounts of the origins of Western European security cooperation and suggest the need to rethink the difficulties the United States has encountered in promoting cooperation among local allies in key global regions.

Is Bigger, Better? Exploring U.S. News Graduate Education Program Rankings and Internet Characteristics

University ranking systems influence a wide range of educational stakeholders, including students, faculty members, and campus administrators. Of these ranking systems, the U.S. News & World Report ranking of colleges and universities has been the subject of much research. However, little research has examined specific U.S. News disciplinary rankings (such as graduate education) and whether Internet characteristics—such as the popularity of an institutional website—contributes to such a ranking. This study examines relationships between Internet characteristics, institutional characteristics, and the ranking of 69 of the top graduate education programs per U.S. News & World Report 2018 rankings. This examination sought to understand which U.S. News criteria best predicts ranking and whether Internet and institutional characteristics are better predictors of ranking. Regarding U.S. News ranking criteria, results suggest peer assessment best predicts graduate education program ranking. Regarding Internet and institutional characteristics, results suggest institutions with larger endowments (p = 0.01) and smaller websites (p = 0.05) enjoy better rankings. Considering all U.S. News criteria alongside Internet and institutional characteristics, doctoral admission rates (t = 3.30, p = 0.00) and funded research per faculty member (t = − 4.89, p = 0.00) best predict ranking, but the size (t = 2.61, p = 0.01) and popularity (t = − 2.88, p = 0.00) of an institution’s website also strongly predicts ranking. Implications for theory and future research are addressed.

Investment Returns and Distribution Policies of Non-Profit Endowment Funds

We present the first estimates of investment returns and distribution rates for U.S. non-profit endowments, based on a comprehensive sample of 35,755 organizations for 2009-2018, a period that saw a sharp drop followed by a lengthy appreciation in public equity values. Non-profit endowments badly underperform market benchmarks during our sample period. Holding a zero investment portfolio (long endowment and short 60-40 mix of U.S. equity and Treasury bond indexes) generates a mean -4.20% annual return. Regression estimates in four-factor models including U.S. stocks and bonds, global stocks, and hedge funds, find statistically significant alphas of -0.39% per year. Smaller endowments have less negative alphas than larger endowments, but all size classes significantly underperform. Distribution ratios are conservative, well below the funds’ long-run returns. Donors increase contributions when endowment returns are strong, with an elasticity of about 0.20 between net-of-market investment returns and new donations.

Change, Challenge and Opportunity: Departments of Medicine and Their Leaders

Change, Challenge and Opportunity: Departments of Medicine and Their Leaders

An experimental analysis of information acquisition in prediction markets

An experimental analysis of information acquisition in prediction markets

An Experimental Analysis of Information Acquisition in Prediction Markets

We study which factors in terms of trading environment and trader characteristics determine individual information acquisition in experimental asset markets. Traders with larger endowments, existing inconclusive information, lower risk aversion, and less experience in financial markets tend to acquire more information. Overall, we find that traders overacquire information, so that informed traders on average obtain negative profits net of information costs. Information acquisition and the associated losses do not diminish over time. This overacquisition phenomenon is inconsistent with predictions of rational expectations equilibrium, and we argue it resembles the overdissipation results from the contest literature. We find that more acquired information in the market leads to smaller differences between fundamental asset values and prices. Thus, the overacquisition phenomenon is a novel explanation for the high forecasting accuracy of prediction markets.

Value relevance and corporate responsibility reporting in the South African context : an alternate view post king-III

This study tests for the value relevance of corporate responsibility reporting (CRR) based on a sample of companies listed on the Johannesburg Stock Exchange (JSE). It also provides evidence of the statistical significance of the potential contribution of CRR to share price values in the South African context at a particular point. On the basis of a sample of 82 companies on the JSE, hierarchical regression analysis was used to test the contribution of levels of corporate social responsibility disclosures to company share prices, over and above the contribution of the size of a firm’s equity and net income. In contrast with other findings which predict a positive relationship between company share price and levels of corporate social responsibility disclosures, the latter are found to have no significant association with company share price over and above the associations of the size of a firm’s equity and net income. Bivariate associations, however, indicate a significant association between share price and levels of corporate social responsibility disclosures. On the basis of these findings, it is argued that disclosures increase for firms with larger endowments of equity, yet corporate social responsibility disclosures do not necessarily add value to company share price.

Smaller university endowments: team characteristics, portfolio composition and performance

Purpose – The paper aims to help explain how certain smaller university endowments are able to provide investment results that are more typical of much larger endowments. Investment teams' characteristics and risk-reward perceptions are examined in relation to portfolio composition and performance. Design/methodology/approach – This exploratory study uses a grounded-theory approach consisting of 20 in-depth interviews of financial officers at US colleges and universities with assets between $100 million and $200 million. Ten were conducted from the top performance quartile and ten from the bottom quartile. Interviews were transcribed and coded; afterward, emerging themes and constructs were identified. Objective investment performance over a ten-year period was employed from a well-known industry survey. Findings – Top-performing endowments were described as having endowment teams with greater investment expertise, efficacy, decision-making independence and learning commitment than teams from the low-performing endowments. Teams from top-performing endowments assessed alternative investments more favorably and made greater portfolio allocations to them as compared to teams from low-performing endowments. Research limitations/implications – Because of the chosen research approach, the research results may not be generalizable. Practical implications – The paper includes implications for colleges and universities in the management of their endowments, and particularly in the selection of committee and other team members. Originality/value – The paper is original in exploring certain team characteristics and practices of institutional investment decision-makers and their relationship to portfolio composition and performance.

Investment Beliefs of Endowments

American university and college endowments now hold close to one-third of their portfolios in private equity and hedge funds. We estimate the implied beliefs of endowments about alternative assets' returns relative to equities and bonds. At the end of 2012, the typical endowment believes that its private equity investments will outperform a portfolio of conventional assets by 3.9% per year and that hedge funds will outperform by 0.7% per year. Out-performance beliefs, particularly for private equity, have increased since 2006. There are significant cross-sectional differences in beliefs and trends: private universities are, on average, less risk averse and have more optimistic beliefs and universities with larger endowments, higher spending rates, and those that rely more on the endowment to meet operational budgets tend to believe that alternatives deliver higher alphas. Taking into account the implied equity exposures in alternative asset positions, the effective equity holding of endowments is approximately 60%.

The Role of Institutional Factors in Fostering the Development of Industrial Districts in Italy

This paper aims at analysing the role of institutional factors in fostering the agglomeration of SMEs in Italian industrial districts. The main findings are: the availability of strong family institutions and a social environment reducing individual opportunism have played a significant role in nurturing local development through industrial agglomeration. There is no clear evidence, apart from the case when a more restrictive definition of industrial district is adopted, of a positive influence of a larger endowment in relational capital. Local government intervention, as measured by the proxy utilised in the study, does not appear to have played an important role in fostering industrial districts development. Apart from providing some empirical support to the thesis of the relevance of social institutions in promoting industrial agglomeration in Italy, the spatial econometric analysis revealed positive and significant spillover effects across neighbouring areas, an evidence consistent with the existence of a contagion process.

Endowment Effects for Products with Negative vs. Positive Attributes

In two experiments we study the endowment effect in the exchange of an endowment for an alternative product. The products differed either in their unique-positive or unique-negative features. Furthermore, we compared endowment effects for both hedonic and utilitarian goods. The results of the first experiment show a larger endowment effect in the unique-negative than in the unique-positive features condition, especially for utilitarian products. The results suggest that people tend to focus on the exchange product under these conditions. The second experiment shows that induced focusing on the exchange product positively influences the endowment effect, especially in the unique-negative condition for utilitarian products. We conclude that focusing has differential effects on choices regarding positive vs negative features and regarding the type of good.

Commerce des bioénergies et émissions de gaz à effet de serre

Résumé Afin de déterminer les effets de la production et de l’échange de bioénergie sur les émissions de gaz à effet de serre, on développe un modèle de commerce en équilibre général qui fait intervenir un grand nombre de pays répartis dans deux régions, le Nord et le Sud. Chaque pays est doté d’un secteur industriel et d’un secteur agricole, chaque secteur étant potentiellement polluant, et on suppose que les pays du Nord disposent d’une dotation en travail effectif supérieure à celle des pays du Sud. Bien qu’en autarcie les pays aient des niveaux d’émissions identiques, on montre qu’à l’équilibre de commerce diversifié, les émissions agricoles sont plus importantes dans les pays du Sud, tandis que les émissions industrielles sont plus importantes dans le Nord, ce qui reflète une restructuration sectorielle des économies. Au niveau mondial, le commerce de bioénergie permet de réduire le total des émissions, ce qui est favorable au bien-être de tous les consommateurs. Contrairement à l’interprétation courante du “havre de pollution”, la taxe environnementale plus faible du Sud réussit certes à attirer les industries relativement plus polluantes, mais ne parvient pas à contrecarrer la localisation massive des industries dans le Nord, région devenue la plus polluante et dont le surcroît de richesse s’est accentué. JEL Classification : F18 ; H23 ; Q17

Working on the short grass: A qualitative analysis of fundraiser roles and experiences at public historically Black colleges and universities

The former president of Morehouse College, Dr Benjamin E. Mays, once said, ‘Higher education for Blacks has always been in a precarious position. These institutions were founded on short grass financially, and they live today on short grass.’ Today, many public and private historically Black colleges and universities (HBCUs) have found success in fundraising endeavors, with the schools taking advantage of the opportunities extended to them. Although these colleges are not on the same long, financial grass as are other institutions with larger endowments, larger advancement staff and larger alumni pools, the advancement offices and top fundraisers at public HBCUs are striding toward greater fiduciary goals and heights. This paper examines the experiences of 27 institutional advancement officers at public HBCUs. The practitioners interviewed believed that they were in the dominant coalition that guided the university's decisions. However, practitioners were constrained or limited in their roles by the lack of financial or personnel support for their function. The fundraisers enacted the expert prescriber, problem-solving facilitator and technician roles described by Kelly (1998).

The Stolper Samuelson Theorem, the Rybczynski Theorem, and the Pattern of Trade in Neoclassical and Vintage Capital Trade and Growth Models

THE STATIC TWO FACTOR TWO COMMODITY, or Heckscher-Ohlin-Samuelson model of international trade has become the principle vehicle for theorists working in the modern theory. At the heart of this model lies the analysis of the case in which neither country is completely specialized. In this case the main results can be summarized in two theorems: the Stolper-Samuelson theorem which relates changes in commodity prices to changes in factor rentals, and which has been used mainly in the analysis of the effects of tariffs and the Rybczynski theorem which relates changes in factor endowments to changes in outputs and serves as a basis of the proof of the Heckscher-Ohlin Theorem which states that the country with the relatively larger endowment of capital will export the capital intensive good.2 Recently there have been a considerable number of papers which utilize the framework of the two sector neoclassical growth model to analyze trade problems. In addition, Bardhan [2] has extended the explorations to include a two sector vintage capital trade and growth model. However, chiefly because of a somewhat different focus, the validity of the Stolper-Samuelson and Rybczynski theorems, and the determination of the pattern of trade for these models, have not been subiect systematic to analysis.3