On government-created credit markets for education and endogenous growth

Interest in public loans to fund (higher) education has been increasing in the last decades. This paper explores the general welfare properties of government-created credit markets for education in a three-period overlapping generations model with physical and human capital. It shows that the mere existence of public credit markets is second-best in nature, and cannot decentralize the optimum. Achieving the first-best “Golden Rule” balanced growth path requires a government loan system that lends the amounts required for optimal investments in education and an optimally chosen pure pay-as-you-go social security system. Student loans and pensions thus appear as two inseparable elements of the policy that maximizes social welfare.     

Performance appraisal: dimensions and determinants

Abstract

Using a sample of Spanish establishments in the manufacturing sector, this article analyses the determinants of the dimensions of performance appraisal. The dimensions examined are performance measures, who evaluates performance and frequency. The results show that the degree of autonomy of the workforce affects positively the use of subjective criteria. It is also more likely that performance appraisal is carried out by the supervisor in the presence of teams and internal promotions. Regarding the explanation of the frequency, teams affect negatively this dimension of performance appraisal.     

Why firms adopt empowerment practices and how such practices affect firm performance? A transaction cost-exchange perspective

Complementing the current management literature's focus on the value-creation side of empowerment practices, this paper offers a transaction cost-exchange perspective to explain why firms adopt empowerment practices and how such practices affect firm performance. Specifically, we theorize how performance ambiguity and human asset specificity, two major characteristics of employee-employer exchange, shape firms' decisions to adopt empowerment practices, both independently and interactively. Our model also develops a contingency perspective of how empowerment practices affect firm performance by delineating the moderating role of empowerment practices in the relationship between employee-employer exchange characteristics and firm performance.     

Corruption,workforce selection and mismatch in the public sector

We examine the impact of corruption on workforce selection and personnel allocation in the public sector. Using Italian data, we find that the selection of public employees in terms of human capital worsens in comparison to that of their private sector counterparts in areas with higher levels of corruption. Moreover, corruption is associated with educational mismatch in the allocation of human resources and, in particular, with an increase in the rate of under-qualification. These results are robust to several alternative indicators and specifications, including IV estimation using past dependence on public spending and the historical relevance of foreign domination as exogenous sources of variation for current corruption.     

REVIEW OF LITERATURE ON WORKING CAPITAL MANAGEMENT AND FUTURE RESEARCH AGENDA

The purpose of this study is to take a stock of what has been studied on working capital management (WCM) so far and ascertain the factors which are more likely to be impacted by poor WCM. Moreover, it aims to spell out the areas for further research on WCM so that the body of knowledge can be expanded. A systematic literature review of the research works on WCM has been performed using Google Scholar. Articles with citations of 50 and above as of June 05, 2018 are considered for the detailed citation based analysis. Further, classification of such articles has been done on the basis of common themes followed by a thorough content analysis. The citation based analysis suggests that there is a growing popularity of studies related to WCM in recent times. However, majority of the impactful studies are published in relatively lower category journals. This further intrigues us to explore the content of such studies. Based on the content, the studies are classified under five different themes. It is found that majority of the highly cited articles have examined the relation between the WCM and profitability of the firms. Moreover, repetitive uses of few proxies in such studies have also been identified. This finding most probably explains the reason behind so many highly cited articles getting published in relatively lower category journals. In view of this, this study tries to explore further scope of research on WCM and lists down potential research questions for the future researches. Firstly, it provides an idea about the most cited area of researches related to WCM and the recent growth of studies in this domain. Academicians can decide upon their future area of research based on the findings related to the proxies and outcome from these studies. Secondly, it shows the most popular avenue of publishing the articles related to WCM which will certainly motivate the researchers to pursue such study. It has been found from the analysis that majority of the impactful articles are published in lower category journals. Therefore, this study identifies the reason behind the same and lists down some innovative research questions to provide some future research directions. Thirdly, the finance managers can use this finding to identify the relevant consequences of poor WCM. Finally, it can serve as a reference point for all future ideas related to WCM. The paper classifies the present literature on WCM into five major themes and performs a content analysis of the same. This is essential as the content analysis highlights different proxies used as inputs which effectively drive efficient WCM. Moreover, the study also identifies the huge scope of future research in the domain of WCM. According to our limited knowledge, such extensive literature review on WCM is rare.     

Is debt conservatism the solution to financial constraints? An empirical analysis of Japanese firms

ABSTRACT

This paper investigates why firms choose the conservative financing strategy known as non-positive net debt policy, which is a more recent prevalent trend among Japanese firms. The analysis reveals that Japanese firms are more likely to be financially conservative if they are smaller, older and more profitable and have fewer growth opportunities and tangibility. The survival analysis further investigates the duration of conservative debt policy and ordinary debt policy. The evidence shows that firms adopt/abandon the conservative policy with different motivations and preferences over debt conservatism. In particular, we argue that the more financially constrained firms abandon the conservative debt policy sooner than their counterparts, while less financially constrained firms abandon the ordinary (less conservative) debt policy sooner than their counterparts. The results suggest that a firm uses a conservative debt policy in terms of net leverage as a temporary buffer to mitigate financial constraints.     

风险投资声誉和股价“传染”效应——来自中国上市公司立案公告的证据

本文以我国2007-2015年证监会立案调查事件为样本,研究当风险投资支持的上市公司涉嫌违规,同一风险投资所支持的其他上市公司(即关联公司)的股价是否会被“传染”。实证结果表明,有风投背景的上市公司在立案公告日有显著的负面市场反应(约-8%),并且这种负面反应会通过共同的风险投资链条“传染”给关联公司(约-1.2%)。我们还发现,风险投资机构的声誉越高,风险投资对涉嫌违规企业参与度越高,则立案调查事件对风险投资的声誉损害越严重,市场对关联上市公司的惩罚也越严重。     

A Close Connection between the Disciplines of Industrial Organization and Finance: A Worthy Objective or a Bridge Too Far?

Periodically, the question of whether there ought to be a substantially closer connection between the disciplines of industrial organization (IO) and finance has been a topic of conversation within the IO discipline. After documenting three such initiatives that ultimately failed to have lasting effects, this article argues that a goal of a close interweaving of IO and finance is a chimera – but that more modest interactions have been and continue to be possible.     

International Debt Shifting: The Value-Maximizing Mix of Internal and External Debt

Abstract

We study the capital structure of multinationals and expand previous theory by incorporating international debt tax shield effects from both internal and external capital markets. We show that: (i) multinationals’ firm value is maximized if both internal and external debt are used to save tax; (ii) the use of internal and external debt is independent of each other; and (iii) multinationals have a tax advantage over domestic firms, which cannot shift debt across international borders. We test our model using a large panel of German multinationals and find that internal and external debt shifting are of about equal importance.     

Explaining the East Asia miracle: The role of urbanization

Defying the law of diminishing marginal returns, many countries experienced high rates of investment for a prolonged period of time during their take-offs. This paper represents a first attempt to explain this contradiction from the perspective of urbanization. Urbanization provides opportunities for investment and helps moderate the capital/labor ratio in the urban sector. In particular, it promotes knowledge accumulation through “learning by doing”. This can explain why the law of diminishing marginal returns to capital is not applicable to economies in the early period of their catching-up. More specifically, we construct a two-sector general equilibrium model incorporating urbanization and “learning by doing”, predicting that in the presence of urbanization, as long as the “learning by doing” effect is sufficiently large, capital return will depict an inverted U-shape as capital accumulates or urbanization proceeds. Empirical evidence from China confirms the theoretical prediction.