Shaping the landscape: Agricultural policies and local biodiversity schemes

This paper analyses the potential effect of local agro-environmental policies in promoting multifunctionality in a rural landscape, with a two-scale modelling framework: a regional scale for food demand and a local scale for the forces driving land use. The framework has been designed in four steps. First, the relative influence of the driving factors on the current land use pattern has been analysed. Two scenarios are designed that vary the external demand for the total land use, and alter more or less quickly the specific location factors that drive the landscape pattern. The first scenario considers trends in the external and internal driving forces. The second relies both on totally decoupled farm subsidies and unregulated housing growth. In both scenarios a local agro-environmental policy is introduced and we compare its consequences with the previous scenario's landscape pattern. The third step consists of a modelling exercise that analyses the likely outcome of each scenario on the development of land use patterns on a local scale. Last, these landscape patterns have been translated into ecological indexes that assess the effect of the policy options on the multifunctionality of the local landscape.     

The role of Great Barrier Reef tourism operators in addressing climate change through strategic communication and direct action

The projected decline in reef health worldwide will have huge repercussions on millions of stakeholders depending upon coral reefs. Urgent action is needed to sustain coral reefs into the future. Tourism operators are recognised as stewards of Australia's Great Barrier Reef (GBR), a World Heritage Site, and are taking action on climate change, through their business practices and by engaging guests with interpretation and targeted messages. Yet little is known about how tourism operators along the GBR perceive climate change, or what actions they believe are most effective to address climate change impacts on the GBR. We describe a set of semi-structured interviews with 19 tourism operators in the Whitsundays and Cairns, the most popular tourism destinations along the GBR. Using a thematic analysis to code and report patterns within the data, we show tourism operators recognise the threat of climate change and strongly support increased action to address it. Most respondents are hesitant to engage their guests about climate change despite acknowledging an interest, expertise, and responsibility to do so. Understanding the barriers preventing tourism operators from addressing climate change is an important step towards helping them, and the tourists visiting the region, take action to protect the GBR.     

The relationship between enterprise risk management,value and firm characteristics based on the literature

In the wake of the increasing importance of comprehensive enterprise-wide risk management approaches (ERM) in the last years, e.?g. due to stronger regulatory requirements, the field of research on ERM has attracted a considerable amount of attention in the literature. The aim of this paper is to provide a literature-based analysis of the theoretical arguments and empirical findings regarding firm characteristics in the context of measuring the impact of ERM on firm value. Due to the endogeneity problem, we focus on the direct impact as well as on the indirect impact (via ERM) of firm characteristics on firm value.     

MANAGEMENT CONTROL SYSTEMS IN FAMILY FIRMS: A REVIEW OF THE LITERATURE AND DIRECTIONS FOR THE FUTURE

Family firms play a significant role in the global economy. Although family firm literature has devoted much time and effort to investigating topics concerning corporate governance, leadership, ownership and succession, accounting issues have received relatively scant attention. In this paper, we assemble and critically review extant literature on the choice of management controls. This is an essential topic for firms as management control systems (MCS) are used to make sure subordinates behave in function of the goals of the firm. Family firms, however, have distinct features, such as differences in governance structures and goals, which can have a significant impact on whether and how MCS are used. We conclude this review paper by providing avenues for future research that can advance our understanding of both the determinants and the outcomes of the choice of MCS.     

When the Former CEO Stays on Board: The Role of the Predecessor’s Board Retention for Product Innovation in Family Firms

Understanding product innovation in family firms is an important research endeavor given the economic predominance of those firms, their idiosyncrasies, and the importance of constant renewal for those firms to achieve transgenerational survival. Recently, family firm research has highlighted the role of next-generation chief executive officers (CEOs; i.e., successors) who are often seen as drivers for innovating a family firm’s products. However, prior research has typically neglected that predecessors, who are often portrayed as less willing to introduce product innovation, frequently remain involved postsuccession through occupying board positions and thus still substantially influence the decision-making processes and outcomes of family firms, such as product innovation. As a result, our understanding of the role of predecessors and their postsuccession involvement in family firms’ product innovation remains unclear. Building on stakeholder salience theory and on insights from the literature on innovation and succession in family firms, we develop hypotheses about how and under which conditions the predecessor’s board retention affects product innovation in family firms after succession. Building on more than 200 family firm CEO succession cases in small- and medium-sized, privately owned family firms, our results reveal that the predecessor’s board retention negatively affects product innovation. This negative effect is strengthened with increasing involvement of the predecessor in the successor selection process, and it is offset in the case of family succession. Our findings contribute to the emerging stream of research on family firm succession and product innovation and provide important implications for practice.     

Taxing multi-nationals under union wage bargaining

This paper investigates corporate taxation under separate accounting (SA) and formula apportionment (FA) in a model with union wage bargaining and multi-national firms. Under SA, we find that increases in the corporate tax rate raise the wage level of domestic workers, while they lower the remuneration of foreign workers. The main insight emerging from a tax competition game is that the endogenous wage level gives rise to an ambiguous fiscal externality, which may dampen the race-to-the-bottom in corporate tax rates. A switch to a tax system with FA principles reverses the impact of corporate taxes on negotiated wages. While increases in the corporate tax rate reduce domestic wages, they raise the wage level of foreign workers. In a tax competition game, the endogenous wage level gives rise to a positive fiscal externality that enforces the race-to-the-bottom in corporate tax rates.     

Agglomeration and social return to R&D: Evidence from French plant productivity changes

This paper investigates the effect of inter-firm and intra-firm spillovers on the productivity of firms, using French data. The Luenberger Productivity Indicator (LPI) is used to estimate the productivity and to break it down into several components (e.g. efficiency, biased technical progress, scales effects, etc.). Using this approach, negative productivity changes are found due to the unfavourable economic situation over 2000-2002. Diverse forms of intra- and inter-firm externalities are then investigated through a Maximum Likelihood Random Effect (MLRE) model. Spillover effects due to spatial agglomeration - influencing Total Factor Productivity (TFP) and its correspondent components, technological and efficiency changes, are found.     

On risk charges and shadow account options in pension funds

This paper studies the economic implications of regulatory systems which allow equityholders of pension companies to not only charge a specific premium to compensate them for their higher risk (compared to policyholders), but also to accumulate these risk charges in a so-called shadow account in years when they are not immediately payable due to e.g. poor investment results. When surpluses are subsequently reestablished, clearance of the shadow account balance takes priority over bonus/participation transfers to policyholders. We see such a regulatory accounting rule as a valuable option to equityholders and our paper develops a model in which the influence of risk charges and shadow account options on stakeholders’ value can be quantified and studied. Our numerical results show that the value of shadow account options can be significant and thus come at the risk of expropriating policyholder wealth. However, our analysis also shows that this risk can be remedied if proper attention is given to the specific contract design and to the fixing of fair contract parameters at the outset.     

The drivers and value of enterprise risk management: evidence from ERM ratings

In the course of recent regulatory developments, holistic enterprise-wide risk management (ERM) frameworks have become increasingly relevant for insurance companies. The aim of this paper is to contribute to the literature by analyzing determinants (firm characteristics) as well as the impact of ERM on the shareholder value of European insurers using the Standard & Poor’s ERM rating to identify ERM activities. This has not been done so far, even though it is of high relevance against the background of the introduction of Solvency II, which requires a holistic approach to risk management. Results show a significant positive impact of ERM on firm value for the case of European insurers. In particular, we find that insurers with a high quality risk management (RM) system exhibit a Tobin’s Q that on average is about 6.5% higher than for insurers with less high quality RM after controlling for covariates and endogeneity bias.