Cutting the web of interests: Pitfalls of formalizing property rights

Property rights to land can be thought of as a web of interests, with many different parties having a right to use, regulate, or manage the resource, which may be based on a range of customary institutions or local norms as well as state law. These interests often play a critical role in livelihoods, social relations, and ecological functions. The formalization of property rights has historically led to a cutting of this web, creating more exclusive forms of rights over the resource. Drawing from case studies in Kenya the paper emphasizes the risk of excluding legitimate claimants in formalization processes that focus on individual titling. By collapsing all rights within individuals, such programs have negated the distinct multiple claims by women, youths, and seasonal users, among others. We examine ways in which formalization processes can secure diverse claims, and highlight the need for a better understanding of the social and ecological implications of existing land tenure before they are undermined by formalization.     

The Effects of CEO Trustworthiness on Directors’ Monitoring and Resource Provision

This research investigates the interplay between leadership styles and institutional corporate social responsibility (CSR) practices. A large-scale field survey of managers reveals that firms with greater transformational leadership are more likely to engage in institutional CSR practices, whereas transactional leadership is not associated with such practices. Furthermore, stakeholder-oriented marketing reinforces the positive link between transformational leadership and institutional CSR practices. Finally, transactional leadership enhances, whereas transformational leadership diminishes, the positive relationship between institutional CSR practices and organizational outcomes. This research highlights the differential roles that transformational and transactional leadership styles play for a firm’s institutional CSR practices and has significant implications for theory and practice.     

Cultural compatibility in internal knowledge transfers: an application to hotel chain growth

This work addresses the internal transfer of knowledge from a cultural perspective when hotel chains grow. The analysis begins with an approach to the intra-organisational transfer of knowledge in hotel chain expansion. Later, culture in organisations is addressed; this gives rise to the proposal of cultural compatibility as a determinant of the intra-firm transfer of knowledge. Moreover, reference is made to possible sources of cultural incompatibility: location abroad of the new hotel, conversions where most employees stay, and small size of the new hotel. The hypotheses are tested in the Spanish hotel context. The results show effects and causes of the compatibility between the cultural context in which the knowledge to be transferred originated and the cultural framework in which it is to be implemented.     

Ownership structure and diversification in a scenario of weak shareholder protection

This work examines the influences of ownership concentration and insider ownership on corporate strategies for diversification within a scenario characterized by poor protection of shareholder interests. We find evidence of a quadratic relationship between ownership concentration and diversification, and a cubic relationship between diversification and insider ownership. These results point towards the high probability of both expropriation and entrenchment phenomena, respectively, in this kind of scenario. We also find that concentrated ownership requires high levels of insider ownership, in order to prevent negative externalities of diversification. Another result shows that entrenchment externalities affect diversification before they erode firm value, which suggests that for low levels of diversification, firm value is still not negatively affected. Additionally, our results show that control mechanisms, such as debt, director remuneration and compliance with codes of good practice, are negatively related to the level of diversification. Overall, our results confirm the theoretical relevance of agency theory in explaining managerial attitudes towards corporate strategy, i.e. diversification. Furthermore, companies characterized by deficiencies in shareholder legal protection, concentrated ownership structures and a higher likelihood of managers being entrenched, should focus on the correct functioning of corporate governance mechanisms.     

Has China’s fast industrial growth been efficient? An industry-level investigation with a newly constructed data set

We adopt contemporaneous, nonradial and variable returns to scale assumptions in a data envelopment analysis (DEA) exercise to address the inefficiency problem in Chinese industries in different policy regimes using a newly constructed data set for 24 Chinese manufacturing industries in 1952–2008. While confirming that the central planning period was indeed a ‘graveyard’ for productivity that entailed severe technical regress and efficiency losses, we do not find a steady improvement in efficiency during the reform period despite strong technical progress. We argue that the resurgent prominence of the government and the state sector since the late 1990s, especially following China’s World Trade Organization accession, has obstructed the efficiency improvement.     

Distorting taxes and interest on reserves

Few governments in developed economies currently pay interest on reserves. However, Goodfriend (2001) [Goodfriend, M., 2001. Interest on reserves and monetary policy, mimeo, Federal Reserve Bank of Richmond] concludes that it is a useful tool to implement monetary policy. In a monetary growth model with a financial intermediary and a firm who needs to borrow to pay wages, it is shown that paying interest on reserves financed by a labor tax reduces welfare.     

Properties of the Sample Autocorrelations of Nonlinear Transformations in Long-Memory Stochastic Volatility Models

The autocorrelations of log-squared, squared, and absolute financialreturns are often used to infer the dynamic properties of theunderlying volatility. This article shows that, in the contextof long-memory stochastic volatility models, these autocorrelationsare smaller than the autocorrelations of the log volatilityand so is the rate of decay for squared and absolute returns.Furthermore, the corresponding sample autocorrelations couldhave severe negative biases, making the identification of conditionalheteroscedasticity and long memory a difficult task. Finally,we show that the power of some popular tests for homoscedasticityis larger when they are applied to absolute returns.     

Prediction intervals in conditionally heteroscedastic time series with stochastic components

Differencing is a very popular stationary transformation for series with stochastic trends. Moreover, when the differenced series is heteroscedastic, authors commonly model it using an ARMA-GARCH model. The corresponding ARIMA-GARCH model is then used to forecast future values of the original series. However, the heteroscedasticity observed in the stationary transformation should be generated by the transitory and/or the long-run component of the original data. In the former case, the shocks to the variance are transitory and the prediction intervals should converge to homoscedastic intervals with the prediction horizon. We show that, in this case, the prediction intervals constructed from the ARIMA-GARCH models could be inadequate because they never converge to homoscedastic intervals. All of the results are illustrated using simulated and real time series with stochastic levels.     

The 'Hojas de Ganado' of the Monastery of Guadalupe, 1597-1784: an accounting instrument for fundamental economic decisions

This paper examines the development of a new form of accounting system which was introduced at the Monastery of Guadalupe around 1597. Increasing financial pressure on those charged with the management of the economic activities of the Monastery necessitated the development of an accounting system which would enable decision making. The system that was introduced led to the production of documents known as 'Hojas de Ganado', or 'Livestock Sheets'. The nature of the information contained in these sheets suggests a move away from the traditional form of cash accounting, prevalent at the time, towards a more modern system of accounting which enabled the Monastery's management to make decisions, on the basis of profit figures, as to the best way to manage its lands and economic operations.     

The relationship between the migration experience and risk perception: A factor in the decision to become an entrepreneur

This study examines the proposition that the migration experience influences perceptions of risk and, as such, the ‘migrant condition’ is a factor in explaining relatively high rates of entrepreneurship among immigrants in many host countries. The study analyses data obtained from the Global Entrepreneurship Monitor (GEM) Spain 2009 Survey with regard to perceptions of risk in beginning a new venture. The study finds that immigrants to Spain, irrespective of their origin or ethnicity, are less likely than native Spaniards to perceive business creation as a risky situation. Moreover, the findings suggest that the perception of risk has a significant impact on the decision to engage in business start-up activity.