Business Analytics

Airlines have long competed to enhance their on-time performance, and research from the University at Buffalo School of Management reveals the most effective strategies for improving rankings in this key indicator of punctuality and service reliability.

Available online ahead of publication in Production and Operations Management Society, the study found that operational changes — such as efforts to reduce travel time, increase boarding efficiency and minimize gate-related delays — are the best way to improve on-time performance, followed by schedule padding (where airlines allow themselves extra time to prevent official delays). Changes in network structure such as flight routes and schedules had the lowest impact.

“The airlines that take action to change their operations will see the biggest improvement in on-time performance and rankings,” says study coauthor Milind Sohoni, professor of operations management and strategy. “Understanding the relative impact of active and passive strategies is crucial for airlines aiming to stay competitive in a dynamic industry.”

Research from the University at Buffalo School of Management made an impact on new rules adopted by the U.S. Securities and Exchange Commission related to Special Purpose Acquisition Companies (SPACs).

Regulators were concerned that these blank-check companies were misleading investors, and a study from Michael Dambra, the Kenneth W. Colwell Chair of Accounting and Law in the UB School of Management, found that the more revenue growth a company projects when it announces it will be acquired by a SPAC, the more investors buy the SPAC’s stock—and the less likely those projections are to come true.

So Dambra and his study co-authors, Omri Even-Tov, assistant professor of accounting; and Kimberlyn George, PhD candidate, both from the University of California Berkley Haas School of Business, drafted a comment letter to the SEC summarizing their findings. As a result, the SEC removed safe harbor protections for companies that go public via a SPAC, and citied their letter 17 times in their ruling.

Accounting standards don’t properly reflect the difference between losses driven by investments and actual business performance shortfalls, according to new University at Buffalo School of Management research.

Published in the Review of Accounting Studies, the study found that Generally Accepted Accounting Principles (GAAP) mask the true value of companies by marking investments in intangibles like technology, brands and human capital as losses.

“This is just another indication of how broken accounting is. We need to treat intangible investments as real economic assets,” says study co-author Feng Gu, chair and professor of accounting and law.

Increased investment in information technology doesn’t necessarily improve a nation’s economic performance — raising questions about the effectiveness of IT spending — according to new University at Buffalo School of Management research.

Published in Asia Pacific Management review, the study analyzed how IT, along with unemployment and inflation rates, affect a country’s performance and found that the productivity paradox (a slowdown in productivity growth that occurred in the 70s and 80s despite rapid IT development) remains in some developed countries.

“While increased IT spending doesn’t always increase productivity, IT investment can pay off when countries leverage available complementary resources, such as e-commerce, traditional capital and traditional labor,” says the study’s lead author Winston Lin, professor of operations management and strategy.

Early, enhanced information provided by a 10-K (an annual report required by the SEC about a company’s financial picture) helps investors with risk management, according to new research from the University at Buffalo School of Management.

Published in the Journal of Accounting and Public Policy, the study examines the impact of the risk factor disclosures the Securities and Exchange Commission (SEC) has required since 2005 — and whether those disclosures lessen the chance a firm will experience a large decline in stock returns.

“This research supports the SEC and other regulatory agencies’ drive to increase disclosure. Enhanced disclosure can improve a firm’s information environment, leading to better outcomes for firms and market participants alike,” says study co-author Szu-Yin “Jennifer” Wu, clinical assistant professor of finance.

Algorithms have increasingly replaced stock traders over the past few decades, but a new University at Buffalo School of Management study has found that market quality decreases when humans are removed from the equation.

Published in the Journal of Finance, the study analyzed how the New York Stock Exchange was affected after floor trading was suspended in 2020 due to the COVID-19 pandemic. Of the 13 registered exchanges in the U.S., only the NYSE continues to use human floor traders — the rest are 100% electronic.

“The closure of the NYSE trading floor due to COVID led to worse market quality across a variety of measures, including liquidity, price efficiency and auction quality,” says study co-author Dominik Roesch, PhD, associate professor of finance.