Junior Management Science, Volume 10, Issue 3, September 2025

  1. Johannes Witter, Predicting Stock Returns With Machine Learning: Global Versus Sector Models, 561-581
  2. Robin Roskosch, Beware of Bullshit – A Qualitative Study on Young Adults’ Sustainability Awareness of Online Services, 582-608
  3. Nadhilla Mazaya, Board Gender Diversity: Evidence From Indonesia, 609-630
  4. Alexander Sake, Value Creation Opportunities of Generative AI – A Case Study, 631-656
  5. Justus Olbrich, The Effect of Changes in Internal Control Systems on Audit Risk, 657-676
  6. Jan Oliver Horstmann, Mandatory ESG Disclosure and Firm Value – A Quantitative Analysis of the Effect of Directive 2014/95/EU on Firm Value, 677-714
  7. Meret Anna Gläser, Government Interventions During the COVID-19 Pandemic, Culture, and Corporate Cost Behaviour, 715-747
  8. Zewei Shi, Modeling the Impact of Emission Credit Systems on Automotive Product Portfolios: A Mathematical Analysis of Policy Effects in Europe, China, and the U.S. Under Different Demand Scenarios, 748-780
  9. Hagen Alexander Hönerloh, Numerical Studies for the Scheduling of Continuous Annealing Lines, 781-809
  10. Lea Wedel, KPIs for Sustainability: Defining the Strategy for a Sustainable Future in the Insurance Industry, 810-830
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Predicting Stock Returns With Machine Learning: Global Versus Sector Models

Johannes Witter, Technical University of Munich (Master thesis)
Junior Management Science 10(3), 2025, 561-581

Recent studies highlight the superior performance of non-linear machine learning models, such as neural networks, over traditional linear models in predicting cross-sectional stock returns. These models are capable of capturing complex non-linear interactions between predictive signals and future returns. This thesis researches whether sector-specific neural networks can detect sector-related relationships to outperform a global neural network. It evaluates the predictive power of these models at the stock level and in portfolios based on return forecasts, constructing long-short portfolios from the networks’ sorted predictions. A global neural network model trained on the full sample of stocks dominates neural networks trained on individual GICS sectors in predicting the cross-section of US stock returns. Sector-specific neural networks fail to gain an advantage by capturing complex sector-specific interactions. They underperform the global neural network especially in the early out-of-sample period. The smaller sample size for each GICS sector requires a trade-off between model complexity and robust model estimation. Pooling the data for the global model solves this problem and supports the predictive power of neural networks for stock returns.

Keywords: cross-section of stock returns; machine learning; neural networks; return prediction; sector models.

DOI: https://www.doi.org/10.5282/jums/v10i3pp561-581

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Beware of Bullshit – A Qualitative Study on Young Adults’ Sustainability Awareness of Online Services

Robin Roskosch, University of Duisburg-Essen (Bachelor thesis)

Junior Management Science 10(3), 2025, 582-608

Since the surge of working in the ‘home office’ during the COVID-19 pandemic, information and communication technology has been seen as a problem solver for the global climate disruption, because it promises savings in emissions through digitalization. However, this is criticized for being a ‘double-edged sword’, as more use of ICT also means an increase in electricity consumption. This thesis poses the question if consumers using services fostering said digitalization are aware of this implication and can contribute to sustainable development by choosing wisely. Thus, this paper leads exploratory research on sustainability awareness of online services, from the perspective of both sustainably aware and technologically skilled individuals. This will be achieved by collecting qualitative data from interviews with two groups of university students from biology and computer science or information systems. The data will be evaluated using the approach of qualitative content analysis and will be investigated further with the help of the concept of bullshitting, to understand how consumers assess ambiguous and misleading sustainability claims about online services. One implication from the interviews is that both companies and consumers should strive to promote reliable knowledge on this topic, as there is a deficit in sustainability awareness of online services.

Keywords: bullshit; green IT; greenwashing; online services; sustainability.

DOI: https://www.doi.org/10.5282/jums/v10i3pp582-608

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Board Gender Diversity: Evidence From Indonesia

Nadhilla Mazaya, Humboldt University of Berlin (Master thesis)

Junior Management Science 10(3), 2025, 609-630

Board gender diversity continues to gain global attention, alongside a growing percentage of female board members in public companies. While board gender quotas have played a role in this increase, countries without such mandates have also experienced similar growth. This raises an important question: What drives companies to appoint women to corporate boards in the absence of compulsory regulations? Primarily, this paper examines the relationship between foreign institutional investors and female board members in supervisory and management boards within Indonesian public firms. This study analyzes data from 147 companies between 2019 and 2022 using OLS regression with lead and control variables. In contrast to the belief, the findings show that foreign institutional investors have a relatively low to no influence in shaping board gender diversity on each board. This lack of influence suggests that other factors may significantly affect companies‘ decisions to hire women on boards, highlighting the necessity to investigate these additional factors.

Keywords: board gender diversity; corporate boards; foreign investors.

DOI: https://www.doi.org/10.5282/jums/v10i3pp609-630

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Value Creation Opportunities of Generative AI – A Case Study

Alexander Sake, Technical University of Munich (Master thesis)

Junior Management Science 10(3), 2025, 631-656

The transformative potential of Generative AI promises novel capabilities within business environments. This study examines the value creation potential of Generative AI within a large multinational corporation. A single case study approach at Siemens was employed, combining extensive observations, interviews, and the application of existing AI frameworks. Findings reveal diverse use cases demonstrating value creation potential, particularly through smart assistants and lighthouse projects. This thesis proposes a novel framework for Generative AI adoption, emphasizing the distinctive exploration phase made possible by the technology’s accessibility to non-technical domain experts, while also outlining essential scaling strategies. This study offers valuable insights into a company’s approach to Generative AI, provides practical implications, and expands ongoing research on AI-driven value creation.

Keywords: artificial intelligence; exploration; generative AI; scaling; technology adoption; use cases; value creation.

DOI: https://www.doi.org/10.5282/jums/v10i3pp631-656

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The Effect of Changes in Internal Control Systems on Audit Risk

Justus Olbrich, Ludwig Maximilian University of Munich (Bachelor thesis)

Junior Management Science 10(3), 2025, 657-676

Internal control weaknesses influence audit fees and audit risk, making their remediation a crucial aspect of corporate governance. While prior research focuses on auditors, this study examines the corporate perspective, analyzing how the remediation of internal control weaknesses affects audit fees and audit risk. Using a dataset of 450 observations, the audit fee model shows a significant negative association between audit fees and the remediation of internal control weaknesses, indicating that audit fees decrease as the company remediates its internal control weaknesses. The restatement model shows no significant relationship between abnormal audit fees and the probability of restatements, suggesting that changes in audit fees due to changes in internal control systems have no impact on audit risk. However, the remediation of internal control weaknesses is significantly negatively associated with the probability of restatements, meaning that firms that remediate their internal control weaknesses experience a lower audit risk and higher audit quality. These findings highlight the economic significance of internal control quality and its implications for firms, regulators, and auditors in mitigating audit risk.

Keywords: audit fee model; audit quality; audit risk model; internal control weaknesses; restatement model.

DOI: https://www.doi.org/10.5282/jums/v10i3pp657-676

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Mandatory ESG Disclosure and Firm Value – A Quantitative Analysis of the Effect of Directive 2014/95/EU on Firm Value

Jan Oliver Horstmann, WHU – Otto Beisheim School of Management (Master thesis)

Junior Management Science 10(3), 2025, 677-714

This work offers novel insights into how the introduction of the Non-Financial Reporting Directive in the European Union in 2014 affected firm value. Based on the theoretical discourse, it seems ex-ante unclear how this ESG disclosure directive is perceived by capital markets and affects firm value. Hence, this work aims to shed more light on the topic and add to the scant evidence literature offers. Specifically, the implications of the first-time mandate of ESG information disclosure are investigated using an instrumental variable and a difference-in-difference approach on a propensity score-matched sample of 708 firms based in the European Union and the U.S. Difference-in-difference results imply that firm’s ESG performance, measured by Refinitiv’s ESG scores, significantly increases after the adoption of the directive. Subsequent instrumental variables analysis suggests that the increased ESG performance resulting from the directive is associated with relatively weak, negative effects for Tobin’s Q as the measure of firm value. In addition to confirming anticipatory effects for Tobin’s Q as early as 2014, significant evidence reveals that firms (sectors) with higher ESG performance had a more negative market reaction than firms (sectors) with lower ex-ante ESG performance.

Keywords: disclosure regulation; firm value; mandatory ESG reporting; market reaction; non-financial reporting directive (NFRD).

DOI: https://www.doi.org/10.5282/jums/v10i3pp677-714

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Government Interventions During the COVID-19 Pandemic, Culture, and Corporate Cost Behaviour

Meret Anna Gläser, Ludwig Maximilian University of Munich (Master thesis)

Junior Management Science 10(3), 2025, 715-747

The COVID-19 pandemic triggered unprecedented government interventions, creating a unique setting to examine implications on corporate cost behaviour. This study explores the relationship between the stringency of government interventions during the pandemic and labour cost stickiness, as well as the moderating role of national culture, using 15,446 firm-year observations from 3,383 listed firms across 25 European countries from 2017 to 2022. A difference-in-differences regression analysis reveals that stringent interventions are related to increased labor cost stickiness, suggesting that managers view such measures as a signal of pandemic control which reduces their pessimism about future demand. Additionally, a median-based sample split shows that several dimensions of national culture moderate the relation between governmental stringency and labour cost stickiness, highlighting that culture influences how managers form future expectations based on stringent government interventions. The study connects formal institutions, i.e. governmental interventions, and informal institutions, i.e. national culture, with cost asymmetry as well as expands firm-level cost behaviour research in the context of the COVID-19 crisis.

Keywords: cost stickiness; COVID-19; culture; interventions.

DOI: https://www.doi.org/10.5282/jums/v10i3pp715-747

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Modeling the Impact of Emission Credit Systems on Automotive Product Portfolios: A Mathematical Analysis of Policy Effects in Europe, China, and the U.S. Under Different Demand Scenarios

Zewei Shi, Technical University of Munich (Master thesis)

Junior Management Science 10(3), 2025, 748-780

In the midst of the global climate crisis, governments worldwide have implemented a range of emission policies aimed at encouraging more production of the environmentally friendly vehicle. However, the exact impact of these policies on automakers’ production portfolios and profitability remains uncertain and challenging to anticipate. This paper presents a comprehensive analysis of three major emission regulation policies enacted by the European Union (EU), China, and the United States (U.S.), evaluating their influence on car manufacturers. Leveraging a mathematical model, this paper adopt the perspective of individual manufacturers seeking to maximize revenue, delving into the intricacies of these policies. Furthermore, this article conduct sensitivity and factorial analyses to assess the impact of policy parameters. The findings reveal that all three major emission policies contribute to an increase in the production of low-emission vehicles. However, China’s policy has the least impact on manufacturers’ profits and relies more on market demand to reduce the average carbon fleet emissions compared to the policies in the EU and the U.S. In conclusion, this paper underscores that different policy systems yield varying profit outcomes for manufacturers, necessitating adjustments to production portfolios for sustained profitability and the significance of mathematical models in aiding manufacturers’ understanding of evolving policies and making informed predictions in a dynamic regulatory landscape.

Keywords: automotive production; green transition; international emission policies; regulatory impact; sustainability.

DOI: https://www.doi.org/10.5282/jums/v10i3pp748-780

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Numerical Studies for the Scheduling of Continuous Annealing Lines

Hagen Alexander Hönerloh, Leibniz University Hannover (Bachelor thesis)

Junior Management Science 10(3), 2025, 781-809

The continuous annealing of flat steel improves its properties for applications such as automotive manufacturing. Scheduling these processes on Parallel Heterogeneous Annealing Lines (PHALs) is complex due to diverse coil properties, incompatible process modes, and due date constraints. Introducing stringers to address incompatibilities between steel sheets raises costs, energy use, and CO2 emissions, highlighting the need for optimized scheduling. This thesis implements a mathematical model in Python using the Gurobi solver to optimize PHAL scheduling by minimizing stringer usage while meeting tardiness constraints. The model is extended to include coil-specific release dates and expanded to address trade-offs between stringer use, tardiness, and due date deviations, including earliness. A computational study evaluates the model under various scenarios, examining the effects of coil heterogeneity, urgency, process flexibility, and stringer processing times. Results show that optimized schedules reduce stringer use and delays, particularly under high process flexibility. These findings demonstrate the potential of optimization to improve efficiency and sustainability in steel production while guiding future research in dynamic scheduling approaches.

Keywords: continuous annealing lines; Gurobi solver; scheduling optimization; steel industry; stringer minimization.

DOI: https://www.doi.org/10.5282/jums/v10i3pp781-809

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KPIs for Sustainability: Defining the Strategy for a Sustainable Future in the Insurance Industry

Lea Wedel, Technical University of Munich (Bachelor thesis)

Junior Management Science 10(3), 2025, 810-830

Sustainability transformation has gained traction across industries worldwide. Given their critical risk exposure, this transformation is of extreme precarity to the insurance industry. Yet, literature lacks a comprehensive approach for the development of a sustainability strategy covering the environmental, social and governance (ESG) dimensions. This work bridges the gap by evaluating methods for defining sustainability Key Performance Indicators (KPIs) and their integration into strategy. A roadmap is then developed that guides successful strategy implementation. Based on a systematic literature review of 5.000+ academic papers, this work features a quantitative and qualitative analysis of literature and evaluates four core papers on the definition of sustainability KPIs for the insurance industry. Leadership commitment and ESG integration into core business emerge as the most important factors towards a successful transformation. The resulting sustainability roadmap provides a blueprint for insurers to embed ESG values, enabling businesses of all sizes to participate. This work contributes to academia and industry by supporting the development of comprehensive and successfully integrated sustainability strategies.

Keywords: insurance; KPIs; strategy; sustainability; transformation.

DOI: https://www.doi.org/10.5282/jums/v10i3pp810-830

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