Managing the world's forests

Forests play a vital role in balancing natural systems: the stabilization of global climate and the management of water and land. 30% of the earth's total land area is forested. 66% of the tropical moist forests are in Latin America and the remainder in Africa and Asia. 75% of tropical dry forests are in Africa. Temperate forests are primarily in developed countries. Deforestation and misuse of forests occurs primarily in developing countries at significant social, economic, and environmental costs. Losses have occurred in fuelwood, fodder, timber, forest products, biological diversity, habitats, genetic materials for food and medicine. The World Bank's evolving role in forestry is briefly described. Agreement has not been reached among people or nations about the most appropriate means to balance conservation and development goals. The challenge is to stabilize existing forests and increase forest planting. The causes of forest degradation must be understood. Direct causes include agricultural encroachment, cattle ranching, fuelwood gathering, commercial logging, and infrastructure development. These direct causes are driven by economic, social, and political forces: market and policy failures, population growth, and poverty. The market failures include: 1) the lack of clearly defined property rights on forest resources for now and the future, 2) the conflict between individual and societal needs, 3) the difficulty in placing a value on nonmarket environmental services and joint products, and 4) the separation between private and social costs. The solution is action at the local, national, and global levels. Countries must establish forest policy. The existing government incentives which promote deforestation must be changed. For example, concession policy and royalty systems must be corrected; explicit and implicit export subsidies on timber and forest products must be stopped. Private incentives must be established to promote planting of trees, practicing preservation, and setting up sustainable management systems. Property rights must be clearly defined and land use policies must spell out forest use patterns. A global strategy for forest management is needed for conservation, protection, reforestation, agricultural and rural development, sustainable use, and research with funding.     

Fiduciary Duties of Corporate Directors in Uncertain Times

Confronting new political uncertainties, heightened challenges, and asserted “best practices,” directors may wonder whether their fiduciary duties have changed. The authors synthesize the latest decisions of the Delaware courts on the standards of conduct for directors and the standards by which their conduct is reviewed. While directors should expect uncertainty to be a fact of corporate life, neither the fiduciary duties of directors nor the protections afforded them have changed. Disinterested and independent directors, acting in good faith to make decisions they deem in the best interests of the corporation, continue to have broad protections under the business judgment rule. This legal framework enables and encourages active directors to make hard choices when they need to do so. The paper includes flowcharts illustrating how the standards of judicial review apply to various categories of business decisions that directors may have to make. It concludes with practical suggestions for directors and General Counsels to establish business judgment rule protection for board decisions or, where applicable, withstand more stringent standards of review.     

Muslim religiosity and purchase intention of different categories of Islamic financial products

Considering the rapid growth of Islamic Financial Products (IFPs) worldwide and the limited research on Muslims’ buying behaviour of such products, this research examines the relationship between religiosity, consumer buying attitude and purchase intention towards different categories of IFPs. The findings suggest that buying attitude has full mediation for deposit, credit and capital market products and partial mediation for insurance products on the association between Muslim religiosity and their purchase intention. Interestingly, religiosity influenced positively even for insurance and capital market products. This is in contrast with our hypothesised relationships for capital and insurance products. The study contributes to the literature by enhancing our understanding of the complex mediating religiosity – buying attitude – purchase intention relationships for different categories of IFPs.     

Motivating high‐impact innovation: Evidence from managerial compensation contracts

We investigate the relationship between Chief Executive Officer (CEO) compensation and firm innovation and find that long‐term incentives in the form of options, especially unvested options, and protection from managerial termination in the form of golden parachutes are positively related to corporate innovation, and particularly to high‐impact, exploratory (new knowledge creation) invention. Conversely, non‐equity pay has a detrimental effect on the input, output and impact of innovation. Tests using the passage of an option expensing regulation (FAS 123R) as an exogenous shock to option compensation suggest a causal interpretation for the link between long‐term pay incentives, patents and citations. Furthermore, we find that the decline in option pay following the implementation of FAS 123R has led to a significant reduction in exploratory innovation and therefore had a detrimental effect on innovation output. Overall, our findings support the idea that compensation contracts that protect from early project failure and incentivize long‐term commitment are more suitable for inducing high‐impact corporate innovation.     

Predictors of flexible working arrangement provision in small and medium enterprises (SMEs)

SMEs comprise 99.7% of all private sector businesses in Australia and employ 70% of the private sector workforce. They are therefore important to policies on flexible work arrangements (FWAs). The provision of FWAs has been found to usually contribute positively to employee well-being and business performance. However, the majority of studies focus on large firms and it is unclear whether these associations apply equally to SMEs. Using data from the Australian Bureau of Statistics Business Longitudinal database for 2007–2011(n = 2788), this study investigates the extent to which factors such as firm size, industry sector, terms of employment, employees’ skills and use of the internet at work affect the provision of FWAs in SMEs. The findings show that smaller businesses are constrained by resources to provide FWAs, but do so in pursuit of industry norms and/or as a result of the profile of their employees. It is also easier to provide FWAs in certain industries than in others and use of the internet facilitates the provision of FWAs.     

FDI and Innovation: An Investigation into Intra- and Inter-industry Effects

It is often believed that transfer of technology and know-how resulting from foreign direct investment (FDI) goes beyond the actual projects undertaken by foreign investors and, spills over to domestic firms affecting their knowledge base and productivity. This paper is an endeavour to investigate the existence of spillovers and their impact on the innovative performance of domestic firms active in the manufacturing sector of India. By employing data on FDI by industry and merging it with information on time-variant buyer–supplier linkages obtained from a series of national input–outputs tables, the study develops intra-industry and inter-industry measures to capture the effects of FDI on innovation performance of the incumbent firms’ active in the same sector as the MNC and in upstream and downstream sectors. The econometric analysis after accounting for endogeneity issues reveals that FDI has a moderate impact on innovative performance of firms residing in identical industries. However, impact on the innovative performance of firms in supplying sectors appears to be statistically strong.     

Measuring service performance in mobile communications

With the rapid growth in the size of the cellular phone market, performance standards are emerging as the strategic imperative for the service providers in ensuring customer satisfaction. This article develops and validates a psychometrically sound multi-item measure of service performance in mobile communications. A pool of 16 items was developed to cover the hypothesised multiple aspects of service performance and tested using a sample of 120 customers. The construct validity of the multi-aspect service performance measure was evaluated through assessing convergent, discriminant and predictive validity.