At the center’s recent Research Lightning Talks event, researchers presented key takeaways on projects spanning topics such as the impact of diversity in online marketing and fintech’s disruption of the automotive industry. 

Here are four highlights from the session:

1. Mandated financial reporting leaves employees worse off.

The motivations behind disclosure regulation differ greatly between the United States and the European Union: The former focuses on protecting shareholders, while the latter focuses on protecting a wider group of stakeholders, including employees. These different approaches have led to contrasting impacts on employees and organizations, according to research by CBS PhD student Anthony Le.

His work shows that employees who work for organizations subject to mandatory financial reporting saw wages that were approximately 2 percent lower than those at other companies as well as lower employment levels. This is because mandated reporting in certain product markets leads to proprietary information leakage. Additionally, organizations that are mandated to provide financial information tend to be worse off financially than those that are not.

2. Fintech is disrupting the car loan industry — and contributing to financial distress.

As personal debt rises across the United States, more households are finding themselves in financial distress, burdened by higher loan costs. 

Auto loans represent one of the largest credit products in the country, as highlighted by the work of CBS PhD student Brian Jonghwan Lee. Approximately 60 million car sales occur annually in the United States, says Lee, with a significant 85 percent of those transactions financed through loans.

Through his research on vehicle financing, Lee found that auto loans originating from used car dealerships were significantly more likely to trigger financial distress in US households, even after controlling for borrower characteristics. 

The findings come as online platforms for buying and selling used cars, such as Carvana and Vroom, increase in popularity, especially among millennial buyers. Unlike traditional used car dealers, these fintech firms focus more on marketing and advertising. 

3. When it comes to workplace discrimination, names don’t tell the whole story.

As policymakers look to characterize discrimination in the workplace, much attention is paid to names, race, and sex. However, research by CBS PhD student Lan Luo shows that faces and related inferences about gender identity can have a huge impact on how people are perceived professionally and personally.

Using a type of neural network known as a generative adversarial network, Luo created 20 artificial headshots with varying degrees of facial femininity. He then asked study participants to rate the faces on their perceived trustworthiness and competence. 

Luo’s findings showed that for both men and women, facial femininity increases perceptions of trustworthiness. Participants also perceived women with more facial femininity as more competent, though the same did not apply to more masculine faces. 

4. More firms are embracing racial diversity in advertising — especially in times of civil unrest.

Digital advertising that features Black models sharply increased in the six  months following the murder of George Floyd in May 2020, as well as for a short time during the trial of Derek Chauvin, the former Minneapolis police officer convicted of killing him, according to a study by CBS Professor Oded Netzer.

While Black models still remain underrepresented in advertising compared with their white counterparts, ads that did feature Black models saw a higher clickthrough rate than those that featured only white models, Netzer found. This trend was true prior to May 2020 but was accelerated during the ensuing movement against police brutality, according to the study. 

The research consisted of vastly different industries, including perfume, wine, and beauty, suggesting the trend existed regardless of industry and even when models’ faces were partially covered, such as by a face mask.


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