2022 Social Science and Humanities Research Council (SSHRC) Grant Recipients

Insight Development Grant: Customer-supplier relationships and corporate diversification

When suppliers are developing their business strategy, is having major customers a good or bad thing for business?

Associate Professor of Accounting Jin Lei is looking to better understand the customer-supplier relationship and how firms might be able to mitigate supply chain disruptions using this knowledge.

“Most of the current literature examines the dark side of a firm having major customers such as rent extraction and credit risk contagion,” Lei said. “The early results of this research have revealed there’s also a bright side to it too.”

Lei found that benefits to having major customers include knowledge spillover, which can lead to lower costs and potentially more research and development.

Major customers can monitor and deter supplier firm managers from agency-induced over-diversification and misallocation of internal capital market funds. As a result, diversified suppliers with major customers are more core-focused and enjoy superior operating efficiency and performance. Lei also found that suppliers diversify to co-insure against the operating risk that stems from major customers and diversify into new product markets.

Lei hopes this project will provide information businesses need to identify the trade-offs of having major customers and provide details on how they might mitigate potential risks from whatever strategy they undertake by helping organizations choose an optimal structure.

This project uses data from publicly traded, non-financial and non-utility suppliers listed in the Wharton Research Data Services (WRDS) data platform from 1980 to 2019 and the work compares firms with major customers to those without.

Insight Development Grant: The Metaverse: Understanding ethical risks and opportunities for businesses and consumers

‘Metaverse’ was runner-up for the Oxford English Dictionary’s Word of the Year in 2022. But for all its prevalence in the current zeitgeist, what is the metaverse anyway?

Waqar Nadeem, Associate Professor of Marketing, defines it as the “new internet,” a place where the digital and physical realms converge by combining video, augmented reality and virtual reality to allow users to do everything from business dealings to vacationing in a digital environment.

Nadeem also knows this next big technology-driven platform, with an estimated market potential of $800 billion, will have significant societal implications. There will be benefits: businesses and consumers will be able to engage in novel ways. But there are also potential ethical risks with something that is still largely unfamiliar, including surveillance, unsolicited data harvesting and behavioural targeting.

Substantial research is needed to more fulsomely understand the risks and opportunities for businesses and consumers presented by the metaverse, and Nadeem intends to grow the knowledge around both. He will also investigate how businesses can use the metaverse for value creation.

With this information, he can then tackle another critical need: defining ethical and unethical use of the metaverse to establish guidelines and a framework for responsible use of this platform.

“The potential for new forms of commerce, entertainment, education, and communication makes the metaverse so fascinating,” Nadeem says. “We hope to gain new insights into the metaverse, specifically regarding how brands can thrive in this virtual world. Furthermore, we aim to explore the strategies that companies can adopt to provide exceptional customer experiences within the metaverse. These insights will be highly beneficial for both industry practitioners and researchers alike.”

Insight Development Grant: Railroad transportation of dangerous goods in Canada: Data-driven risk analysis and emergency management

Canadians watched in shock and outrage in the aftermath of the Lac-Megantic train derailment in 2013. The disaster saw about 6 million litres of crude oil spill in this small Quebec town, resulting in fire and explosion, and tragically, the deaths of 47 people.

Such a significant event is rare, says Ali Vaezi, Assistant Professor of Operations Management, but the consequences are disastrous. With the movement of hazardous materials (hazmat), including crude oil, by rail on the rise in Canada, the inherent risks and possibility of a catastrophic event like Lac-Megantic can’t be underestimated, even with rail’s favourable safety statistics, he notes.

Applying advanced data analysis techniques to rail traffic and incident data, Vaezi intends to shed light on risk factors that could lead to future rail hazmat incidents. He wants to use these insights to develop proper risk mitigation strategies that align with Public Safety Canada’s strategic framework to enhance public safety related to hazmat shipments by train.

Vaezi’s efforts stand to benefit more than Canadians, however. His findings, which will be useful to those in operations management, transportation, risk analysis and emergency management, can be applied to how dangerous goods are moved by train elsewhere in world, minimizing incidents and maximizing public safety globally.

“Our data-driven methodology would allow us to more accurately analyze and predict the risk associated with rail hazmat shipments, which would, in turn, form a solid basis for the development of risk reduction measures,” Vaezi says. “This is not a location-specific methodology and hence, it is capable of providing insights and suggesting measures in other contexts as well.”

Insight Grant: How to choose a charity: A data science-based investigation

The charitable sector in the US and Canada is a billiondollar industry. With so many charities competing for a limited number of funds, it’s hard to know who to support. Donors want to make sure groups they fund are using the money responsibly.

Professor of Accounting Hemantha Herath is among those challenging the conventional way charities calculate and report their program expenses.

With funding from the federal government’s Social Sciences and Humanities Research Council of Canada (SSHRC) Insight Grant, Herath is researching how data science techniques can be integrated into current reporting methods to give a fuller picture of charities’ performances.

Herath will use his funding to research how to recalculate the program expense ratio, which measures costs incurred by programs, services and other activities fulfilling a non-profit’s mission compared to its total costs.

“This data-driven approach will generate more reliable information that will help donors, resource providers and the public evaluate the effectiveness of non-profit organizations so that they can make better funding decisions,” Herath said.

He is exploring how to integrate statistical techniques, including cluster analysis, which groups data that share similar properties, and text mining, which involves the process of examining large collections of documents to discover new information, into the accounting process.

“The public opinions of charities affect donor decisions and hence is why transparency in the charitable industry is so important,” he said. “The hope is to generate more reliable information in evaluating effectiveness of non-profit organizations."