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business school research

Jacob Wackerhausen

The Globe's roundup of research from business schools.

A 2010 British study confirmed a long-held belief: Men drive more miles each year while they're lost than women do because of their reluctance to ask for directions.

Does the same hold true in the business world? Yes, according to a study by researchers at the University of British Columbia's Sauder School of Business in Vancouver. They examined about 500 mergers and acquisitions between 1997 and 2010 and found that companies with corporate boards that had a higher proportion of women were more likely to seek outside advice from top-ranked financial advisers when faced with a takeover offer. The same didn't hold true when the firm was the bidder in a takeover deal.

A 10-per-cent increase in female board directors translated into a 7.6-per-cent increase in the likelihood of a firm seeking financial advice, the study found. The reason, the researchers say, is because fewer women are overly confident in their decisions, which makes them more likely to seek advice from others.

"Women do make a difference in business," the authors write. "We conclude that gender diversity on boards, not independence of boards, matters more in seeking high-quality financial advice."

The article was co-authored by Maurice Levi and Kai Li, finance professors at UBC, and Feng Zhang, a former UBC doctoral student and now assistant professor at the David Eccles School of Business at the University of Utah. The article was published in the February issue of the Journal of Risk and Financial Management.

Canadian CFOs see bright future for the economy

Canadian chief financial officers are optimistic about the country's economic outlook in 2015 and the prospects of their own firms, according to a survey by the Laurier Financial Services Research Centre at Wilfrid Laurier University's School of Business and Economics. But the level of optimism varies by sector, the survey shows.

On a scale from zero to 100, CFOs rated their outlook for the economy at 62. CFOs in the manufacturing, technology and service sectors were more optimistic than those working at mining and retail firms. "Oil prices and the weak Canadian dollar are the two factors that are driving the results of the survey," says Fabricio Perez, director of the centre and a finance professor. Companies with high foreign sales, which benefit from a weaker dollar, were also more optimistic, he notes.

The survey was part of the Duke University/CFO Magazine Global Business Outlook, which has been surveying CFOs in the United States and around the world for 76 consecutive quarters. This was the first time that Canadian CFOs were included in the survey. Researchers at Waterloo, Ont-based Laurier conducted the Canadian portion in early 2015, ending March 6. About 1,000 CFOs, including 28 from Canada, took part.

Although Canadian CFOs generally remain optimistic, their level of optimism had declined from the previous quarter and was lower than that of their U.S. counterparts, the survey indicated. When asked if they were more or less optimistic about the economy compared to the previous quarter, just 10.7 per cent of Canadian respondents said they were more optimistic, compared with 46.5 per cent in the United States.

Canadian CFOs were optimistic about their own company's outlook, predicting higher revenues, earnings and capital spending over the next year. However, they forecast little change in employment levels. Dr. Perez says projected employment increases in some sectors were offset by projected declines in others, again reflecting the impact of weaker oil prices and a weaker currency.

Meanwhile, CFOs in the United States predicted a 2.5-per-cent increase in full-time domestic employment, indicating an end to the so-called jobless recovery there, he notes. Dr. Perez says the Financial Services Research Centre plans to expand the survey to include more CFOs and to provide a provincial breakdown of results.

How online price-comparison sites affect consumer shopping habits

Consumers are increasingly turning to online sites to compare prices before purchasing a product, whether buying it online or at their local shopping mall. The practice has spawned a host of price-comparison sites such as PriceGrabber and Shopzilla. These sites list not only product prices but also product reviews, the retailers that stock the product and retailer reviews.

With all this information so readily available, you'd think finding and buying a product at its lowest price would be a no-brainer. But price is only one element consumers consider when making purchasing decisions, according to Onur Bodur, marketing professor at Concordia University's John Molson School of Business in Montreal.

In three experiments, Dr. Bodur and his co-authors provided participants with search results from an online price-comparison site for a heart rate monitor. The results included a list of retailers, the price of the product and retailer ratings. The participants were then asked to evaluate another price offer for the identical product found at a local store.

The study showed that consumers consider retailer ratings and the frequency with which a certain price occurs across retailers when making a purchasing decision. Favourable retailer ratings will make consumers more likely to pay a higher price for a product over buying the same product at a lower price from a less reputable seller. Similarly, consumers are willing to pay a higher price for a product if the price level occurs more frequently across retailers. That's because these prices are perceived as being "more valid" in the eyes of consumers, Dr. Bodur explains.

The findings should dispel the commonly held belief that online shopping is killing offline retailers, he says. Consumers use price comparison sites as a reference point to evaluate prices at their local stores and not necessarily to make online purchases, he explains.

The study also suggests that providing a price-matching guarantee may not be the best strategy for retailers trying to compete with their online counterparts, Dr. Bodur adds. Rather, retailers should pay closer attention to the prices offered by competitors with the highest online ratings and the most common price for the product, he explains.

The study was published in the January issue of the Journal of Retailing.

Rosanna Tamburri can reached at tamburrirosanna@gmail.com