Promoting Employee Flexibility Through HR Practices

Current competitive environments have created a growing interest in employee flexibility in firms. Recently researchers have differentiated between two facets of employee flexibility: behavior flexibility and skill flexibility. This study proposes a model of relationships between these two facets of employee flexibility and the extent to which HR practices influence them. This model is tested by estimating structural equation models on a sample of 226 commercial departments in Spanish companies. The results of the study show that the two facets of employee flexibility are interrelated, in that skill flexibility influences behavior flexibility. Furthermore, findings confirm the influence of job enrichment on employee flexibility and the significant effect of the internal fit among HR practices on employee flexibility. © 2013 Wiley Periodicals, Inc.     

Are interest rate options important for the assessment of interest rate risk?

Fixed income options contain substantial information on the price of interest rate volatility risk. In this paper, we ask if those options will also provide information related to other moments of the objective distribution of interest rates. Based on dynamic term structure models within the class of affine models, we find that interest rate options are useful for the identification of interest rate quantiles. Two three-factor models are adopted and their adequacy to estimate Value at Risk of zero-coupon bonds is tested. We find significant difference on the quantitative assessment of risk when options are (or not) included in the estimation process of each of these dynamic models. Statistical backtests indicate that bond estimated risk is clearly more adequate when options are adopted, although not yet completely satisfactory.     

Agency-Theory and Internal-Labor-Market Explanations of Bonus Payments: Empirical Evidence from Spanish Firms

This paper combines agency theory and internal-labor-market theories to explain the determinants of bonus payments among a large sample of top and middle managers from Spanish firms. A distinction is made between the decision whether to pay bonus or not and the size of the bonus. The empirical evidence confirms that the two decisions are determined by different factors. The results of the analysis show a trade-off between short-term and long-term incentives (bonuses and promotion opportunities) as well as differences in the pattern of compensation policies across economic sectors and functional areas inside the firm.     

Information Gathering Externalities for a Multi‐Attribute Good

Most goods and services vary in numerous dimensions. Customers choose to acquire information to assess some characteristics and not others. Their choices affect firms' incentives to invest in quality and so lead to indirect externalities in consumers' choices. We characterize a model in which a monopolist invests in the quality of a product with two characteristics, and consumers are heterogeneous ex‐ante. Consumers do not internalize their influence on the firm's investment incentives when choosing which information to acquire. Cheaper information affects consumers' information gathering and thereby firm investment. This can paradoxically reduce consumer surplus, profits, and welfare.     

Trade Credit: Suppliers as Debt Collectors and Insurance Providers

This article examines how in a context of limited enforceabilityof contracts suppliers may have a comparative advantage overbanks in lending to customers because they are able to stopthe supply of intermediate goods. Suppliers may act also asliquidity providers, insuring against liquidity shocks thatcould endanger the survival of their customer relationships.The relatively high implicit interest rates of trade creditare the result of insurance and default premiums that are amplifiedwhenever suppliers face a relatively high cost of funds. I explorethese effects empirically for a panel of UK firms. (JEL: G30,M130, D920)     

Is it punishment? Sovereign defaults and the decline in trade

Sovereign defaults are associated with declines in defaulting countries trade. Are these declines the result of trade sanctions as the trade sanctions argument of sovereign borrowing would suggest? We devise an empirical strategy to evaluate this issue based on the idea that if trade sanctions are causing the declines, bilateral trade with creditor countries should fall more than trade with other countries. We find that this is not the case. The analysis does not yield much evidence of broader punishment strategies including a league of major creditors either. These results contradict the predictions of the trade sanctions theory of sovereign borrowing.     

Negative Libor rates in the swap market model

We apply Stroock and Varadhan’s support theorem to show that there is a positive probability that within the Swap Market Model the implied Libor rates become negative in finite time. Mataix-Pastor received support from the Instituto Credito Oficial (ICO), Spain, and Fundación Caja Madrid.     

Search Cost and Price Dispersion in Vertically Related Markets: The Case of Bank Loans and Deposits

Using data on marginal interest rates of loan and deposit products by Spanish banks, we find that the level of interest rates on loans (deposits) across geographic markets decrease (increase) with the number of banks in each market, and that the level of interest rates on loans increases with the level of interest rates of deposits. We also find that the dispersion of interest rates of both loans and deposits increase with the number of banks. This evidence is interpreted as evidence of customer’s search costs in retail banking, consistent with predictions from the Carlson and McAfee (J Polit Econ 91:480–493, 1983) model of market competition with search costs.     

Institutional Constraints,Stakeholder Pressure and Corporate Environmental Reporting Policies

Within the theoretical framework of socio‐political economics, and more specifically of stakeholder theory, this work examines whether companies operating under different institutional constraints and stakeholder pressure tend to emphasize different models of corporate environmental reporting. Furthermore, the paper tests whether different corporate environmental reporting policies are driven by the countries' corporate governance systems. A sample of 3931 international companies was examined through a logistic biplot and conditional mean linear regression models. The main results reveal that companies follow two distinct environmental reporting approaches, which depend on specific stakeholders and institutional requirements. The first model, which is followed by firms within codified law countries, mostly focuses on water and emissions. The second approach, mainly followed by companies operating in common law countries, emphasizes materials and energy issues. This finding reveals that companies gradually modify their environmental strategies to make themselves more compatible with the characteristics of the social and institutional environment, which will result in several corporate benefits. The paper provides several outstanding implications for companies' strategic managers, national institutions and firms' stakeholders, especially for investors and customers. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment