NEWS
Clips

Entrepeneurial Spirit Weathers Downturns
Despite the recent failure of dot-coms, M.B.A. students still are filled with entrepreneurial spirit, according to the April 30 Wall Street Journal Europe. While many M.B.A. graduates temporarily are choosing safer career paths such as banking, they plan to "strike out on their own" as soon as the economy improves, the paper reported. According to Ellen Rudnick, '73, clinical professor of entrepreneurship and executive director of the Entrepreneurship Program at Chicago GSB, even economic downturns are not enough to crush the entrepreneurial spirit. While economic hardships may mean less funding for new ventures, Rudnick said they also foster the corporate dissatisfaction that motivates entrepreneurs.

Debate over Single-Stock Futures
Buying a futures contract on a company's stock was unheard of until Congress legalized single-stock futures and sparked debate over the shares' merits and drawbacks. Owen Lamont, associate professor of finance, took a positive view of single-stock futures in the May 12 Rocky Mountain News. "Any time you give investors more tools, that's good," Lamont said. "In general, economists think people should be allowed to decide how much leverage to take." Lamont disagreed with claims that single-stock futures pose a unique threat to unwary investors. "There are already so many ways to go broke. If investors want to find a way to go broke, they can find it without single-stock futures," he said.

Capital Spending: A Sign of Hope?
In a May 2 Reuters News Service article, Austan Goolsbee, professor of economics, pointed to strong capital spending as a sign that the economy may be in better shape than it appears. Traditionally, companies respond to economic downturns by cutting back on capital expenditures, such as spending on buildings or machinery. However, a Reuters survey of Dow Jones companies revealed that not all of the companies are cutting these expenses--a fact that Goolsbee found encouraging. "It is a bad sign when capital expenditures start going down, so given the possibility of a recession, maybe it's not a bad sign that some of the bigger companies are raising capital spending," he said.

E-Business Methods Still Profitable
In the May Economic Bulletin, Steven N. Kaplan and Luis Garicano, Ph.D. '98, argue that the methods of e-business are still useful if companies are sure that these practices will reduce costs when compared to traditional business methods. In their research, Garicano, assistant professor of economics and strategy, and Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, have proposed a framework that identifies ways in which business- to-business e-commerce affects transaction costs. This framework can assist companies in determining whether taking B2B transactions online is a prudent financial strategy.

Aging with Style
As the baby boomer generation ages, manufacturers of such geriatric products as arthritis medication, eyeglasses, and hearing aids have been searching for ways to make their products palatable to a status-conscious generation. The result has been a flood of advertising that portrays products traditionally associated with aging as cutting edge and hip. In a June 8 article, the Detroit News asked whether these marketing strategies simply exploit personal insecurities. Stijn van Osselaer, assistant professor of marketing, told the paper that he doesn't think so. "There's nothing wrong in trying to develop products and make sure boomers know about them, especially if they're built to satisfy the needs of boomers," he said. His comments also ran in the Pittsburgh Post-Gazette and the Harrisburg Patriot. --E.H.

In Clips, Chicago GSB highlights faculty appearances in the media.