Journal of Applied Business and Economics
The Journal of Applied Business and Economics (JABE) is dedicated to the advancement and dissemination of business and economic knowledge by publishing, through a blind, refereed process, ongoing results of research in accordance with international scientific or scholarly standards. Articles are written by business leaders, policy analysts and active researchers for an audience of specialists, practitioners and students. Articles of regional interest are welcome, especially those dealing with lessons that may be applied in other regions around the world. This would include, but not limited to areas of marketing, management, finance, accounting, management information systems, human resource management, organizational theory and behavior, operations management, economics and econometrics, or any of these disciplines in an international context. Focus of the articles should be on applications and implications of business, management and economics. Theoretical articles are welcome as long as their focus is in keeping with JABE’s applied nature.
State of Persistence: Unemployment Hysteresis in Ten U.S. States: Bootstrap Nonlinear Unit Root Tests in Regional Labor Markets
This study examines the extent to which the hypothesis of hysteresis holds across different U.S. states by analyzing unemployment data. Implementing advanced nonlinear unit root tests, in combination with bootstrap techniques, the analysis investigates whether temporary shocks—such as recessions or the COVID-19 pandemic—can result in permanent changes in unemployment and other labor market outcomes. Our results reveal mixed outcomes consistent with recent literature on the hysteresis hypothesis in the U.S. The LNV and Sollis tests generally support the natural rate hypothesis. In contrast, the KSS and Kruse tests provide evidence of permanent effects in several states.
Copyright (c) 2025 Journal of Applied Business and Economics
The Long-Term Effect of the First Course in Accounting on Graduation Rates
We study the impact of business major student performance in the Introductory Financial Accounting (IFA) class on their graduation rates. The results show that the student GPA in the first semester, the cumulative final exam score in the IFA class and the term in which the class is taken significantly impact graduation rates. Though past studies have indicated that first term GPA is a good predictor of graduation rates, we find that performance in the IFA class has additional predictive value of graduation rates. Our results remain robust after controlling race, gender, major and embedded tutors.
Cluster Analysis and Population Density Theories: An Exploratory Study of Indigenous Female Entrepreneurship
The last twenty years have seen significant contributions in the literature on women entrepreneurship. This has been augmented with studies that are engaged in comparative analyses across gender, borders, and industries. While these studies provide insights into the status of women entrepreneurs, what is often missing and what has not emerged are niche studies that look at women entrepreneurs from a particular group, a particular ethnicity, a particular genre - going deep in any of these directions, with rigorous statistical analyses while focusing on and deriving conclusions from said in-depth focus. In essence, studies asking questions that call for comprehensive, multiple layer analyses with statistically backed answers that produce substantial conclusions in terms of their contribution to the forum of women entrepreneurs in general and specific niche groups of women entrepreneurs in particular. With this in mind, we turn our attention to the world of Native American entrepreneurs and specifically Native American female-owned enterprises and examine these questions as we consider the context on female entrepreneurship from the setting of the Indigenous community.
In modern times, the issue of media trust and its impact on people’s media use has taken on increased importance. The degree to which people trust the news media and how much it relates to their use of different types of media is not apparent, particularly among members of Gen Z. This research examines news media trust and its influence on media use on Gen Z. Specifically, this research examines media and information consumption among Gen Z for gathering political news and their level of trust among various digital channels. This was accomplished via an online survey of Gen Z college-aged students (N=99) enrolled at a private university in the northeastern United States. The longitudinal study was administered during two academic semesters, one during fall 2023 and the other in fall 2024 during the presidential election. The empirical findings supported the hypothesis that there is a significant difference between the level of media trust and political ideology. However, there was no significant difference in the average media trust value between Republicans and Democrats The study also found that as a person’s media trust increased so did their weekly usage of various social media networks. Specifically, the findings also indicated that Facebook, Twitter, Pinterest, Snapchat, and TikTok usage frequency had a positive correlation with media trust
United States vs. Dane Watson: A Teaching Case
This teaching case can be used in various classes: accounting, tax, business law, or ethics. It can be used at either the undergraduate level or the graduate level, perhaps with different learning objectives. It is derived from a real criminal court case where the defendants paid workers using gold and silver coins with a fair value above their face value. For tax purposes, the defendants were using the face value of the coins as the amount of compensation even though the coins were immediately traded for cash. Also, the workers were required to sign independent contractor agreements, so no income, Social Security, or Medicare taxes were withheld.
Leveraging Data-Driven Decisions: A Predictive Model to Enhance Student Success in Higher Education
Higher education institutions often face challenges in achieving key success metrics, such as on-time graduation rates, particularly when supporting students with diverse backgrounds, needs, and barriers. This study examines a detailed dataset containing student demographics and academic records from College of Business at a large public university spanning ten years. Our results highlight significant achievement gaps based on factors such as gender, age, race, family income, and parents’ education levels. These gaps persist even among students with similar academic histories. We develop prediction models that enable institutions to identify high-risk students early, facilitating timely intervention and providing a framework for comparing institutional efforts to improve student success. This study highlights how data-driven approaches can enhance institutional management by enabling proactive identification of challenges, optimizing resource allocation, and supporting strategies that improve student outcomes.
Teaching Economics With Case-Based Learning and Problem-Based Learning
We explore the impact of two active learning methods – case-based learning (CBL) and problem-based learning (PBL) – and summarize our experiences using these methods in an applied managerial economics course. Our empirical analysis evaluates cognitive, affective, and behavioral dimensions of learning. In the cognitive category, analysis of student exam performance on topics covered by either CBL or PBL demonstrates improvements compared to topics covered only in traditional lectures. In the affective category, which focuses on student satisfaction, and the behavioral category, which concerns student skills, survey evidence demonstrates a positive impact of active learning.
Simple Rules for Determining How States Can Save for a Rainy Day
Various articles have been written concerning the level of savings states should accumulate to weather an economic downturn, and since states have differing business cycle characteristics a one-size-fits-all approach does not seem to make much sense. Once the level of accumulated savings is determined, the next question concerns the savings rate that will enable the state to achieve its desired accumulated savings. This article builds on the work of Wagner and Elder (2007) and presents a simplified approach to determine the appropriate savings rate based on each state’s risk preferences.
Artificial Intelligence Applications and the Impact on Banking Operations
Artificial Intelligence (AI) has emerged as a powerful force in the banking and financial sectors, reshaping traditional processes and unlocking new opportunities for efficiency and inclusion. However, its adoption is not without challenges, particularly concerning ethical risks, regulatory compliance, and operational limitations. The purpose of this paper is to explore AI in banking applications and its impact on banking operations. First, a literature review examines the multifaceted role of AI in banking, exploring its applications, the ethical risks it poses, and the strategies required to ensure equitable and responsible deployment. Second, we study 39 banks and their AI applications. Third, based on our research, we develop and distribute opinion surveys to students. The survey results show that students believe most jobs eliminated due to AI will be in the lower levels of financial organizations, particularly bank tellers. While AI offers substantial benefits, its success relies on robust governance frameworks, transparent systems, and ongoing efforts to mitigate bias.
Bridging Climate Awareness and Green Actions: The Role of Employee Psychological States in Fostering Pro-Environmental Behaviors
The study examines how climate change awareness impacts pro-environmental work behavior in organizations through three proactive psychological states. The study results suggest that climate change awareness increases pro-environmental work behaviors through three psychological states (environmental self-efficacy, environmental accountability, and environmental passion). In addition, green pay and rewards enhance employees’ psychological states toward pro-environmental work behavior. This paper revealed how climate change awareness influences pro-environmental work behavior by affecting employees’ proactive psychosocial states. In addition, the multilevel study explains how individual and organizational variables interact to influence personal initiatives toward environmentally friendly work behaviors.
Undergraduate Accounting Students’ Perspectives on the Proposed CPA Competency-Based Experience Pathway: Insights From a Diverse Urban University
This study examines undergraduate accounting students’ perspectives on the proposed CPA Competency-Based Experience Pathway. Survey data collected from 76 accounting majors at a southern public university with a predominantly Hispanic population’s assessed awareness, understanding, and attitudes toward the alternative pathway. Key findings reveal limited awareness but strong interest in practical experience and cost-saving benefits, alongside concerns about employer acceptance and competency evaluation clarity. Most students indicated the pathway would positively influence their CPA pursuit, valuing interstate consistency. Results suggest the pathway could broaden CPA licensure access but highlight needs for enhanced communication, employer engagement, and standardized evaluation. This research informs educators and policymakers about students’ perspectives to support pathway implementation for diverse, non-traditional candidates.
Fueling IPOs and M&As: The Power of Entrepreneurial Social Capital
While investigating more than 2,750 serial entrepreneurs from around the world, including almost 1,500 from the US, with the help of the Crunchbase dataset, we found that the social capital of entrepreneurs positively influences the number of exits through both mergers and acquisitions (M&As) and initial public offerings (IPOs). The link between entrepreneurs’ connectedness and their respective startups’ exits is more pronounced in the US than internationally, showing that a 1% increase in social capital among American entrepreneurs is associated with a 6.82% increase in the number of M&A exits and a 2.98% increase in the number of IPO exits.
The Impact of Data Breach on Short-Term Profit Margins
This paper addresses the impact of data breaches on the short-term profit margin of breached firms. Data from 2013 to 2018 is used to test the model. The data represents 441 breaches, impacting 166 companies in twelve industries, with 77 percent of the breaches in the retail, technology, healthcare, and financial sectors. The analysis is first conducted with the broad collection of businesses, then repeated for retailers only. Breaches were found to have no adverse effect on profit margins for the broad group of firms. The retailers were negatively affected, but this was not statistically significant.
Intellectual Capital and Stock Performance of US High-Tech Acquiring Firms
This paper examines the impact of intellectual capital on the stock performance of US high-tech acquiring firms between 2010 and 2016. Intellectual capital is characterized as the knowledge that assists companies in creating value and enhancing profitability. The study finds that impacts of intellectual capital on stock performance around the announcement date and in the short run depend on the intellectual capital measure and the industry type. When the overall sample is considered, the VAIC measure indicates that intellectual capital is positively related to stock performance for the 3-year window around the announcement date, while the Tobin’s Q measure suggests a negative impact.
An Emotional Business: The Role of Emotional Intelligence in Entrepreneurial Success
Entrepreneurship represents an increasingly dynamic and productive force in the economy. Why are some entrepreneurial ventures more successful than others? This study examined the role of emotional intelligence (EI) in predicting entrepreneurial success, with a specific focus on the mediating effect of managerial competence. Utilizing data collected from 307 entrepreneurs across industries in the United States, the researchers applied regression analyses to test the hypothesized correlations. Research findings indicated that EI significantly predicted entrepreneurial success in the dimensions of financial firm, relative, and personal success. The results also suggest that higher managerial competence contributes to greater entrepreneurial success by enhancing the ability to perform essential managerial tasks effectively. This study contributes to the field of entrepreneurship by identifying constructs critical to entrepreneurial success at multiple levels. It also provides practical implications for entrepreneurship education and entrepreneurial development.
Exponential Growth Bias in an Inflationary World
This paper examines the exponential growth bias (EGB), both compound savings questions and in a domain relevant to household finance: inflation-based questions. Here, we test a broad-based sample of 354 adults living in the US initially on estimates for future compound savings and future prices after inflation over time. Here, we find significant EGB in both domains with and without calculators, with significantly higher bias sizes in the inflation questions. After the initial results, each participant completed a short 5 to 10-minute tutorial designed to teach them about EGB. We split the overall participants into two random learning groups: One group was shown how to use interactive charts while the other group learned the formal formula. While we do not find any significant differences of improvements between the two learning groups, we find significantly large decreases in bias sizes in both savings and inflation questions after the tutorial, with and without a calculator, particularly for those who did not know how to make the correct calculation before the tutorial.
The Heterogeneous Effects of the Music Modernization Act and Co-Occurring Federal Regulation on the Release of New Music in the United States
I examined the impact of the Music Modernization Act (MMA) and a co-occurring regulation on the release activity by composers and musical performers. The analysis uses a negative binomial count model with artist fixed effects to identify incremental release activity. Demographic and music copyright covariates were included to identify heterogeneity. While not impacting release activity overall, I identified increased release activity among composers (increasing with composer credits) as well as younger and female performers. These findings are observed in two instances: (1) during the post-period after the MMA was enacted and (2) during the negotiation period while the MMA was written and debated. Additionally, while there has been a significant increase in the release of singles, this phenomenon appears to be driven by the growth of music streaming. This work identifies the extent to which this new law and federal regulation have encouraged recording artists to increase their release activity.
Benchmarking Correctional Facilities in the United States: An Undesirable Output Data Envelopment Analysis Model
This study evaluated the operational efficiency of 741 U.S. correctional facilities using Data Envelopment Analysis (DEA) with five inputs and two outputs, including undesirable outputs like disciplinary reports. An undesirable-output DEA model identified 128 efficient and 616 inefficient facilities. Efficient benchmarks averaged 825 capacity, 36.3 years in age, 31 professional staff, 189 security staff, 898 inmates, 1,043 disciplinary reports, and $27.6 million in annual costs. Hypothesis testing revealed that GED, ESL, vocational training, and health services were associated with higher efficiency. The DEA model offers a valuable tool for policymakers to benchmark and improve correctional facility operations nationwide.
Home Country Responsibility: Foreign Direct Investors in Less and Least Developed Countries
Inward foreign direct investment (FDI) plays a crucial role in the economic development of less and least developed countries. While these firms have the potential to positively influence economic development in host countries, they may also become dominant. This can lead to various challenges, such as market distortions, competitive challenges for domestic firms, increased dependency of the domestic industry and fiscal policy on large foreign investors, and potentially adverse social and environmental impacts. Ultimately, the quality of the host country’s institutions and governance determine whether inward FDI is a curse or a blessing. This is especially true for natural resource industries. This literature-based theoretical thesis paper argues that the institutional circumstances of least and less developed countries often have negative implications for inward foreign direct investment (FDI), such as weak governance structures and corruption. Therefore, it is imperative that home countries assume responsibility for their investors in these countries so that the right kind of foreign investors lead to a mutually beneficial outcome for investors and the host economy.
Causal Effects of Low Income on Obesity: Business and Health Insights From a National Survey and Machine Learning Analysis With Applied Econometrics Technique
This study investigates the causal impact of low income on Body Mass Index (BMI) using data from the 2017–2018 National Health and Nutrition Examination Survey (NHANES). While previous research has established a correlation between socioeconomic status and obesity, this study employs Double Machine Learning (DML) to identify causal effects, controlling for confounders such as age, gender, education, ethnicity, and household size. The full sample (n = 8,005) and two subgroups, high BMI and high BMI + low income, were analyzed. Results from DML indicate a statistically significant causal effect, with low-income status increasing BMI by approximately 0.49 units (p < 0.001). Subgroup analyses reveal that low-income individuals, especially older adults and females, face disproportionately higher obesity risks. These findings underscore the need for equity-centered public health strategies targeting the socioeconomic roots of obesity, including nutritional support, education, and community-based interventions.
An Experiential Study of Understanding Business Sophomores’ Questioning and Decision-Making Skills
The paper documents an experiential study that aims to understand business sophomores’ questioning and decision-making skill levels. The study is motivated by how to use the figures and facts in business organizations where business students will be employed. The study could add value to sophomore-level business students’ knowledge and help improve the skills needed in their careers. A three-step approach is applied to the experience: First, a concise case is provided to students. Second, they participated in the study by responding to the instructions provided. Finally, they participated in a survey to obtain their perceptions of the experience they were involved in. The results are empirically analyzed using qualitative and quantitative statistical techniques. The findings are interesting and encouraging because the experience documented in the study would help students improve questioning and decision-making skills even in the principle-level accounting courses in business schools.
Audit or Tax? Using Personal-Environment Fit to Help Choose a Public Accounting Career Path
Choosing between audit and tax is a critical early-career decision for aspiring public accountants, often made with limited knowledge and experience. This paper explores how personality traits influence job satisfaction and career fit in audit versus tax, using three established psychological frameworks: the Hurtt Skepticism Scale, the Myers-Briggs Type Indicator (MBTI), and the five-factor model (FFM). By aligning personality traits with professional demands, this study highlights how a better person-environment fit can enhance job satisfaction, performance, and retention in public accounting. Future empirical research is proposed to validate these theoretical findings.
Enhancing Employee Retention: Predicting Attrition Using Machine Learning Models
Employee attrition poses challenges for organizations, affecting productivity and costs. This study applies machine learning models to predict attrition using the IBM Employee Attrition dataset. To address class imbalance, we analyze ten supervised models, with Random Forest outperforming others, especially with SMOTE. Key predictors include overtime, stock options, job satisfaction, job level, and tenure with a manager. Causal inference techniques quantify their impact, providing understanding for retention strategies. These findings provide actionable insights for organizations to implement targeted retention strategies, reduce turnover, and enhance employee engagement. Future research should explore real-time analytics and ethical AI frameworks for workforce management.
Impact of Institutional Coordination on Analyst Decisions During Hedge Fund Activism
This study explores the influence of institutional investor coordination on analyst recommendations in the context of hedge fund activism. We find that analysts are more likely to upgrade and less likely to downgrade their recommendations for firms with growing institutional ownership, while institutional coverage primarily influences upgrade predictions. The effect is more pronounced when activists have a track record of acquiring firms with institutional investor backing. Our analysis also shows that during crisis, analysts emphasize collective institutional actions, whereas in normal periods, they focus on ownership levels. These findings suggest that institutional coordination reduces analyst uncertainty and positively shapes their opinions during activist campaigns.
Engagement and Satisfaction in OS Software Development: The Impact of Job Characteristics
Open source (OS) developers are contributing value to organizations and society as most contemporary organizations–including those that resisted their new way of developing software–now rely on the contributions of OS developers. This study examines the influence of job characteristics as drivers of engagement and satisfaction of developers in the OS environment. Using the job characteristics model (JCM) as the theoretical lens, we develop and assess a research model that examines engagement as a mediator in the relationship between job characteristics and satisfaction of OS developers. Findings indicate that several, but not all, job characteristics significantly influence the engagement of IS professionals working in Open-source software development (OSSD). The research contributes to the OS literature and extends our understanding of job characteristics, in the OSSD context. The study also provides new insight to organizations and individuals that are currently investing in OSSD or planning to do so soon.
New Recommendation Agent to Identify Innovators Utilizing User-Generated Content
Consumers who shop online are overwhelmed by the unlimited choices and options presented to them. Companies use different recommendation systems (agents), such as collaborative filtering that processes large volumes of data, to provide personalized and relevant recommendations for their customers to alleviate this problem. This paper explores a novel recommendation system that identifies consumers’ unique unobserved preferences by utilizing user-generated content (UGC), such as social tags or bookmarks. We propose better metrics and algorithms that can be used as recommendation agents for a successful new product campaign; our proposed method outperforms current popular recommendation algorithms (RA).
CEO Extraversion and Firm’s Entrepreneurial Orientation: The Role of CEO’s Bridging Social Capital and Top Management Team Support
CEO personality and its impact on entrepreneurial orientation (EO) is a sparking topic for scholars and practitioners. The influence of CEO extraverted personality on EO extensively studied but the mechanisms by which extraverted CEO influence the entrepreneurial orientation of firms are not adequately studied. Integrating Upper Echelon and Social Capital theories, this study has established a theoretical link between CEO extraversion and firm’s EO and underlying mechanisms with two contingent factors. The study proposes that the CEO’ s bridging social capital and top management team (TMT) support strengthen this relationship. Through rigorous literature review, the present study provides an important resolution for mixed findings in prior studies and important managerial insights for understanding the role of CEO extraversion on EO and the contingent effects of TMT support and CEO’s bridging social capital. Finally, the study offers future research options.
Exploring the Geometric Mean of Grouped Data
We introduce a new method to estimate the geometric mean of grouped data by deriving an unbiased estimate based on uniformly distributed values within class intervals. In the current literature, traditional approaches often rely on class midpoints or geometric means of class endpoints, which may lead to biased results. Our proposed estimator is shown to perform more accurately, particularly when it is applied to financial data, such as the annual growth rates of the S&P 500 index. This study demonstrates the estimator’s effectiveness through both analytical derivation and empirical testing, offering a valuable tool for analysis.
This paper examines whether consideration of corporate reputation is useful in forming investment portfolios. Portfolios are constructed using the Harris Poll Reputation Quotient and rebalanced periodically. We find that an equally-weighted allocation consisting of stocks with high corporate reputation outperformed those with low reputation and benchmarks. Individual investors can incorporate these findings in making portfolio decisions that consider social values as well as in generating wealth and managing risk.
The Influence of University Academic Factors on Student Retention in the College of Business at a U.S. Research University (RU/VH)
The primary purpose of this study was to determine the influencing university academic factors on the student retention in the College of Business at a Research University (RU/VH) in the United States. Student records of 786 in the entering class in the College of Business in the southern region of the United States were studied. The researchers examined the five university academic factors including number of credit hours earned, GPA achieved, whether or not students changed major or college, whether or not students resided in the Business Content Based Residential College (CBRC), and whether or not students were retained in their third semester in the College of Business. The findings suggest that some factors were more influential than others with participation in the Business Content-Based Residential College (CBRC) being unexpectedly less influential on retention of business students into their fifth semester in Business at a Re-search University.