Moral Support Structures in Private Industry -- The Swedish Case

This study was designed to survey the extent to which private companies in Sweden take structural measures within the field of business ethics: Codes of Ethics; Ethics Committees; Ethics Officers and Ethics Training. This was done in two steps. Through a nation-wide telephone survey, a population of "active" companies were identified. These companies received a questionnaire with detailed questions regarding the design, usage and effects of these measures. The percentage of active companies were found to be a high 46%. National and industry characteristics are proposed as explanatory factors.     

Impact of Shareholder Proposals on the Functioning of the Market for Corporate Control

Firms receiving shareholder proposals are 16% more likely to become a target of acquisition. Such companies earn approximately 7.2% lower acquisition returns compared to gains for targets with no proposals. Higher acquisition likelihood and lower target returns are primarily associated with proposals drawing a larger proportion of favorable votes, larger voter turnout, as well as with proposals submitted shortly before takeover announcements, and motivated by the removal of antitakeover provisions. Our findings suggest that shareholder proposals can assist bidders in the identification of targets or signal the willingness of target shareholders to accept bids with lower premiums.     

Do Stars Shine? Comparing the Performance Persistence of Star Sell-Side Analysts Listed by Institutional Investor,the Wall Street Journal,and StarMine

We investigate the profitability persistence of the investment recommendations from analysts listed in four different star rankings, Institutional Investor magazine, StarMine’s “Top Earnings Estimators” and “Top Stock Pickers”, and The Wall Street Journal, and show the predictive power of each evaluation methodology. We found that only Buy and Strong Buy recommendations from the entire group of Star analysts outperform those of the Non-Stars in the year after election, while Sell and Strong Sell recommendations performed as those of the Non-Stars. We document that the highest average monthly abnormal return of holding a long-short portfolio, 0.97 %, is obtained by following the recommendations of the group of star sell-side analysts rated by StarMine’s “Top Earnings Estimators” during the period from 2003 to 2014. Since earnings are one of the main drivers of stock prices, the results obtained are in line with the notion that focusing on superior earnings forecasts is one of the top requirements for successful stock picks.     

Environmental Production Factors and Efficiency of Smallholder Agricultural Households: Using Non‐parametric Conditional Frontier Methods

External environmental factors play a significant role in the agricultural production of smallholder farmers. This is especially the case in developing countries where production is less technologically intensive. These factors are mainly exogenous and affect both the farmers’ input choices and the final output levels. However, previous studies of technical efficiency of smallholder agricultural production either ignore these factors or assume separability between environmental factors and input choice, which is often not the case in developing counties. Using data on smallholder farmers in Ethiopia, we relax this separability assumption and investigate the importance of external environmental factors in farmers’ performance and efficiency variation across regions. The empirical analysis is based on a non‐parametric conditional order‐m estimation method that relaxes some of the traditional strong assumptions in efficiency modeling and, more importantly, the separability between environmental factors and the choice of physical inputs. Using data from four major agricultural regions of Ethiopia, we show the extent that environmental factors contribute to the technical efficiency and the significance of environmental factors in farmers’ performance.     

Negativity Bias in Attention Allocation: Retail Investors’ Reaction to Stock Returns

We argue that negative stock market performance attracts more attention from retail investors than comparable positive performance. Specifically, we test and confirm the hypothesis that retail investors pay more attention to negative extreme returns than positive ones. We present a measure of attention at the aggregate and company‐specific levels using Google's internet search volume indexes. These measures correlate with, but are different from, existing proxies of attention. Our empirical results strongly support the position that investors display a negativity bias in attention allocation with respect to extreme stock returns. Across all specifications, lagged negative extreme returns are stronger predictors of high attention at the individual‐stock and stock market levels than positive ones.     

On‐the‐job training: a skill match approach to the determinants of lifelong learning

A recurrent finding in on‐the‐job training research is the ‘training gap’ in formal training: the positive correlation between initial education and continuing training. This finding is here examined from the perspective of two important distinctions: (i) between employee skill supply and job skill demand and (ii) between formal and informal training. Less‐educated workers may hold jobs with low skill requirements demanding little further formal training because the use of high skills is irrelevant, jobs that moreover provide little informal training. Exploring these issues on representative Swedish survey data using the educational mismatch (overqualified, the rightly qualified and the underqualified) model, we find that job requirements are strongly correlated with the incidence of both formal and informal training. Rather than, as has previously been argued, employee training decisions being the cause of the gap, this suggests that employer decisions regarding how to structure jobs and whom to hire are the primary factors behind the training gap.     

Social Comparisons and Optimal Taxation in a Small Open Economy

In this paper, we analyze how international capital mobility affects the optimal labor and capital income tax policy in a small open economy when consumers care about relative consumption. The main results crucially depend on whether the government can tax returns on savings abroad. If the government can use flexible residence‐based capital income taxes, then the optimal policy rules from a closed economy largely carry over to the case of a small open economy. If it cannot, then capital income taxes become completely ineffective. The labor income taxes must then indirectly also reflect the corrective purpose that the absent capital income tax would have had.     

Employment protection regulation,trade unions and tenure of employment: An analysis in 23 European countries

This article focuses on the relationship between employment protection regulation (EPL), trade unions and tenure of employment. A main hypothesis is that EPL strictness tends to prolong tenure, because rigorous rules imply that remaining with the same employer gives more job security. The role of unions can be expected to be similar. These assumptions are related to issues regarding dualisation in the labour market. Data used are the European Working Conditions Survey 2010—including 23 countries and more than 18,500 employees—combined with national‐level data on EPL, unemployment, union density and collective bargaining coverage. The analyses reveal that EPL strictness and bargaining coverage are associated with longer tenure. The same goes for having an employee representative in the workplace. The institutional variables work through interactions with individual‐level variables. For example, the impact of age, which is strongly linked to tenure, increases with stricter EPL and higher bargaining coverage.     

BANK COMPETITION AND FINANCIAL STABILITY: MUCH ADO ABOUT NOTHING?

The theoretical literature gives conflicting predictions on how bank competition should affect financial stability, and dozens of researchers have attempted to evaluate the relationship empirically. We collect 598 estimates of the competition‐stability nexus reported in 31 studies and analyse the literature using meta‐analysis methods. We control for 35 aspects of study design and employ Bayesian model averaging to tackle the resulting model uncertainty. Our findings suggest that the definition of financial stability and bank competition used by researchers influences their results in a systematic way. The choice of data, estimation methodology, and control variables also affects the reported coefficient. We find evidence for moderate publication bias. Taken together, the estimates reported in the literature suggest little interplay between competition and stability, even when corrected for publication bias and potential misspecifications.     

Antecedents and Performance Outcomes of Strategic Environmental Sourcing: An Investigation of Resource‐Based Process and Contingency Effects

This study develops an understanding of the antecedents and performance‐related consequences of strategic environmental sourcing (SES). Institutional pressure and the firm's environmental engagement serve as antecedents to SES, with performance dimensions including environmental, product development, and product quality performance. While direct relationships between these dimensions and SES have been studied in prior work, the present research adds greater specificity and depth by investigating process and contingency effects on product‐level outcomes. The resource‐based theory provides the theoretical motivation for these relationships, which are tested via survey data collected from sourcing professionals in the U.S. manufacturing industry. The results emphasize environmental engagement as an important process element between institutional pressure and SES, and highlight the ability of institutional pressure to strengthen the relationship between environmental engagement and SES. Environmental performance was found as an influential conduit in the relationship between SES and both product quality and product development performance, with SES also serving as a contingency.