Differentiation,labor market and globalization

We consider two countries with initially one firm in each country and the possibility for each firm to invest in the other country or commercialize its products, and for workers to immigrate (Common Labor Market; CLM). Interestingly, when firms compete on the product market with no competition on the labor market (Goods’ Mobility; GM), they do not differentiate their qualities. However, when competition is introduced in both markets (Foreign Investment; FI) firms differentiate their products. We compare the globalization scenarii and prove that they improve the global social welfare relative to autarky and that a cooperative choice by countries of a globalization scenario would lead to GM.     

Causality Between Corporate Social Performance and Financial Performance: Evidence from Canadian Firms

This study assesses the causal relationship between corporate social performance (CSP) and financial performance (FP). We perform our empirical analyses on a sample of 179 publicly held Canadian firms and use the measures of CSP provided by Canadian Social Investment Database for the years 2004 and 2005. Using the “Granger causality” approach, we find no significant relationship between a composite measure of a firm’s CSP and FP, except for market returns. However, using individual measures of CSP, we find a robust significant negative impact of the environmental dimension of CSP and three measures of FP, namely return on assets, return on equity, and market returns. This latter finding is consistent, at least in the short run, with the trade-off hypothesis and, in part, with the negative synergy hypothesis which states that socially responsible firms experience lower profits and reduced shareholder wealth, which in turn limits the socially responsible investments.     

Erratum to: Ethics,Diversity Management,and Financial Reporting Quality

This article proposes and empirically tests a theoretical framework incorporating Reidenbach and Robin’s (J Bus Ethics 10(4):273–284, 1991) conceptual model of corporate moral development. The framework is used to examine the relation between governance and business ethics, as proxied by diversity management (DM), and financial reporting quality, as proxied by the magnitude of earnings management (EM). The level of DM and governance quality are measured in accordance with the ratings of Jantzi Research (JR), a leading provider of social and governance research for institutional investors. This DM score is part of an index developed by JR that investment managers use to integrate DM criteria into their investment decisions. As expected, a negative relation between corporate DM development and financial reporting quality is found while controlling for other factors known in the literatures on governance and accounting choices to affect earnings quality. Despite some caveats presented in conclusion, this study contributes to the ethics, governance, and financial reporting literatures by studying the dynamics between governance and ethics in the prevention of EM.     

Democracy and competition: Vertical differentiation and labor in a general equilibrium model

We consider a general equilibrium model with vertical preferences and one or two firms, where workers and consumers are differentiated, respectively, by their sensitivity to effort and their preference for quality. The question in this paper is whether a decentralized choice through majority vote would lead to more or less competition. We compare the duopoly and the monopoly cases from the viewpoint of each individual, then we deduce the choice of the majority. We prove that, under concentrated ownership (where owners have a null density), duopoly is always preferred by the majority; while under egalitarian ownership (where firms are equally shared by all the population), the choice of the majority depends on the relative size of workers' and consumers' segments.     

Scheduling Shipbuilding Using a Constraint Directed Graph Search: DAS-ERECT

To build a scheduling system for shipbuilding, we have adopted a hierarchical architecture and developed a constraint directed graph search technique for erection scheduling at the dock. First, in the hierarchical architecture, detailed schedules for the lower-level assembly plants are delegated to the individual plant's schedulers as long as the requirements from the higher-level scheduler are satisfied. However, if lower-level scheduling is impossible, the higher-level scheduler attempts to adjust the original requirements. Second, in the constraint directed graph search, the concepts of graph expansion and constraint directed pruning are amalgamated into an algorithm. The approaches are implemented in the DAS-ERECT system which is a sub-system of the DAS project undertaken for the Daewoo Shipbuilding Company.     

Economic Effects of the Consumer‐oriented Genetically Modified Products in Markets with a Labelling Regime

This paper builds on the literature on the economic effects of the second‐generation, consumer‐oriented genetically modified products (GMPs). It analyses the market and welfare impacts of the introduction of these new products in markets, like the EU, that mandate the segregation and labelling of the first‐generation, producer‐oriented GMPs. Developing an empirically relevant model of heterogeneous consumers and producers, the study determines the effects of the consumer‐oriented GMPs on the markets of conventional, GM and organic products, and the welfare of consumers and agricultural producers. Analytical results indicate that the market effects of the new GMPs are case specific and depend on: (i) the consumer valuation of the quality‐enhancing attribute of the new GMP; (ii) the level of consumer aversion to GMOs; (iii) the strength of consumer preference for organic products; and (iv) the production costs and marketing margins in the different supply channels. The policy on the labelling of the first‐generation GMPs does not affect the impacts of the second‐generation GMPs on the quantities and market shares of the different products. However, it does affect their price effects and welfare implications. The introduction of consumer‐oriented GMPs under a mandatory labelling regime can result in losses for some GM consumers and all producers of the conventional product.     

Do corporations overinvest？ Evidence from Tunisia

The authors study the positive relationship existing between internal net worth and investment. This relationship has been interpreted in the financial literature as evidence showing that the management overinvests the free cash flow available to them in poorly-performing, sub-optimal investment projects. In this paper, the authors empirically tackle this problem in the case of the manufacturing and industrial Tunisian corporations and show that our empirical regularities do not stand for this interpretation. The authors conversely prove that overinvestment does not seem to occur on the basis of the grouping results. Hereby, there do not corroborate the empirical regularities documented in Lamont （1997）.     

Does the engaged public's evaluation of networking practices matter? The effects of polarized attitudes and the reputation of networking on individuals' word-of-mouth behaviors

The study examines the influence of individuals' attitudes and the perceived organization's ability to network with its stakeholders on their positive and negative word-of-mouth (WOM) behaviors. The study also examines how these relationships differ between the general and engaged public, taking the organization People for the Ethical Treatment of Animals (PETA) as a case study. The results show that individuals' attitudes toward PETA predict positive and negative WOM behaviors regardless of their previous engagement in PETA. Yet the influence of the perceived reputation of PETA's networking with other stakeholders on positive or negative WOM behaviors displayed different patterns between the general and the engaged public. For the engaged public, the idea that PETA has a good relationship with its members is considered more important than outreach to nonsupporters. In addition, how individuals perceive characteristics of stakeholders or their influence on organizations influences the relationship between the perceived reputation of networking and the engaged public's negative WOM behaviors.     

Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach

How do physical capital accumulation and total factor productivity (TFP) individually add to economic growth? We approach this question from the perspective of the quality of physical capital and labor, namely the age of physical capital and human capital. We build a unique dataset by explicitly calculating the age of physical capital for each country and each year of our time frame and estimate a stochastic frontier production function incorporating input quality in five regions of countries (Africa, East Asia, Latin America, South Asia and West). Physical capital accumulation generally proves much more important than either the improved quality of factors or TFP growth in explaining output growth. The age of capital decreases growth in all regions except in Africa, while human capital increases growth in all regions except in East Asia.