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tomers would likely be suspicious of a foreign firm using the local lan- guage, researchers explain. The researchers point to other markets such as Canada and Latin America, where ads often run in French-English and Spanish-English, respectively. Someone in Spain may be more influenced by a foreign firm's ad for a luxury car if it's deliv- ered in Spanish and English, for instance, than he would if the ad were in one language alone. These findings emphasize that multinational firms need to be care- ful when choosing the language they use in their marketing, Ahlu- walia notes. If a company is uncer- tain of which path to take, she says, "The safest bet is to use mixed- language ads when working with bilingual markets." Their paper, "Language Choice in Advertising to Bilinguals: Asym- metric Effects for Multinationals versus Local Firms," appeared in the December 2008 issue of The Journal of Consumer Research. Big Spenders and Bankruptcies In the past, illness and unemployment were major drivers of personal bankruptcy filings among Americans. Recent research from the University of Cali- fornia, Davis, finds that simple over- spending is now the primary trigger. Ning Zhu, associate professor of management at UC Davis, examined all 2003 personal bankruptcy filings in Delaware, the first U.S. state to make its filings available through the Public Access to Court Elec- tronic Record system. The state's demographics also resemble those nationwide. As he followed those cases to their conclusions, Zhu com- pared these households with solvent ones included in the Federal Reserve Board's national Survey of Con- sumer Finance. Zhu found that debt accounted for more than 50 percent of recent bankruptcies. Medical expenses accounted for only 5 percent, and job loss accounted for only 13 per- cent. The mortgages for bankrupt homeowners were 3.21 times high- er than annual household income, compared to 1.73 times for sol- vent households. Auto loans were double the annual income for bank- rupt households, compared to 0.4 times for solvent households. According to the American Bankruptcy Insti- tute, more than 2 million per- sonal bankrupt- cies were filed in 2005, nearly five times the number of bankruptcies filed in 1985. In the study, Zhu suggests that some Americans may deliberately spend beyond their means with the inten- tion of using the bankruptcy system to erase some or all of their debt. "Bankruptcy law reform should aim to address the issue," Zhu writes. He adds that current laws that focus on income, rather than consumption patterns, may not fairly distinguish between those who need bankruptcy protection because of adverse events and those who are deliberately taking advantage of the system. Zhu's paper, "Household Con- sumption and Personal Bankruptcy," is forthcoming in the Journal of Legal Studies. Reining in Powers of Influence Division managers who hold too much sway in an organization's power structure can be dangerous, say Chris McNeil, a professor of banking and finance at Appalachian State University's Walk- er College of Business in Boone, North Carolina, and Tom Smythe, a professor of business administra- tion at Furman University's Depart- ment of Business and Accounting in Greenville, South Carolina. If those managers carry too much weight in upper-level decision making, they may use their power to benefit their own divisions—or boost their own compensa- tion. McNeil and Smythe examined a national, random sample of 125 com- panies, representing 300 divisions, in Compustat's business segment file from 1999. The year 1999 was cho- sen because it was the first fiscal year that accounting standards required companies to include in their annual reports how their operations were organized. The two compared "influential" managers with those who carried less weight in their organizations. "Influential" managers shared four criteria: They served on the board of directors, they had served as heads of their divisions for a long period of time, they had a long tenure with the firm, and they earned high salaries. From these four criteria, McNeil and Smythe measured a manager's lobbying power, or "rela- tive power index." BizEd JANUARY/FEBRUARY 2009 53