Toward a conceptual framework of the harmonization of bank financial reporting standards in transition economies: The case of Mexico

In recent years banks in emerging and transition economies throughout the world have been compelled to change lending and financial reporting practices in response to the economic transition of their countries. Correspondingly, on the basis of the theory of soft budget constraints (SBC), economists have studied the relationship between economic development, banks' lending practices, and banks' penchant to overstate loans. However, very little research has been performed by accounting researchers regarding the nature of bank loan overstatement during times of financial crisis in emerging markets. Accordingly, this paper uses the theory of soft budget constraints to develop a four stage conceptual framework of the harmonization of bank financial reporting standards during times of economic transition. Emphasis is placed on using the theory of soft budget constraints to characterize the harmonization of standards and practices with respect to bank loan overstatement. The framework is applied to the harmonization of Mexican bank financial reporting during the country's economic transition of the late 1990s. The Mexican harmonization process during this period generally followed the framework.     

When is FDI a capital flow?

In this paper we analyze the conditions under which a foreign direct investment (FDI) involves a net capital flow across countries. For this purpose, we investigate how multinational firms finance their foreign affiliates, globally or locally. We develop a contract theoretical model in which the financing structure is used to govern the incentives of managers. We find that the investment tends to be financed locally if managerial incentive problems are large. Thus, microeconomic governance problems may have macroeconomic implications for the net capital flow to host countries. Our results are consistent with survey data on German and Austrian investment flows of firms to Eastern Europe.     

The Role of Identity Salience in the Effects of Corporate Social Responsibility on Consumer Behavior

Based on the assumption that consumers will reward firms for their support of social programs, many organizations have adopted corporate social responsibility (CSR) practices. Drawing on social identity theory, a model of influence of CSR on loyalty is developed and tested using a sample of real consumers. Results demonstrate that CSR initiatives are linked to stronger loyalty both because the consumer develops a more positive company evaluation, and because one identifies more strongly with the company. Moreover, identity salience is shown to play a crucial role in the influence of CSR initiatives on consumer loyalty when this influence occurs through consumer-company identification. A strong identifier is not necessarily in a constant state of salience, but activating identity salience of a particular consumer social identity (a company) will affect consumer reactions to product stimuli, increasing consumer loyalty.     

Discounting and divergence of opinion

Agents impatience rate and their anticipations about the future of the economy, are two essential determinants of the equilibrium discount rate, as illustrated by the Ramsey formula. Heterogeneity in time preference rates and in anticipations is widely acknowledged. Our objective is to determine the equilibrium discount rate when this heterogeneity is taken into account. Among others we tackle the following questions: As an additional risk or uncertainty, can dispersion in agents' characteristics lead to lower discount rates? What is the asymptotic behavior of the discount rate in such a setting? More generally, what is the shape of the yield curve?     

Import-led innovation: The case of the Austrian textile industry

Zusammenfassung Vom Import getragener Innovationsproze\: Der Fall der ?sterreichischen Textilindustrie. - Die empirische Evidenz dieses Artikels zeigt, da\ die ?sterreichische Textilindustrie deutlich auf die massive und haupts?chlich aus den anderen Industriel?ndern kommende Konkurrenz reagierte. Der technische Fortschritt wurde aus technologisch weiter entwickelten L?ndern importiert, w?hrend inl?ndische Forschungsaktivit?ten nur bei kleinen Unternehmen eine Rolle spielten, da diese es schwer hatten, am Technologietransfer teilzunehmen. Ein wesentlicher Teil des Produktivit?tsfortschritts l?\t sich auf den Import der im Ausland am besten bew?hrten Technologie zurückführen. Der Import ausl?ndischer Proze\innovationen half der Industrie, im internationalen Preiswettbewerb zu bestehen: Sie konnte die Produktqualit?t und das Design verbessern und dadurch die Exportpreiselastizit?t ?sterreichischer Textilprodukte verringern.

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Résumé Innovation conduite par des importations: le cas de l’industrie textile autrichienne. - L’évidence empirique trouvée dans cet article suggère que l’industrie textile autrichienne répondit bien à la compétition massive étrangère qui provient principalement des autres pays industrialisés. Le progrès technique dans cette industrie fut importé des pays technologiquement plus avancés pendant que les activités locales en recherche n’étaient importantes que pour les petites entreprises qui souffrirent d’une contrainte en transfert téchnologique de l’étranger. L’industrie gagnait une partie significative de sa croissance de productivité par l’importation de la meilleure technologie pratiquée à l’étranger. L’importation des innovations pour le procédé de fabrication a aidé l’industrie à passer la compétition internationale de prix en améliorant les produits en qualité et en modèle. Ce progrès a contribué à réduire l’élasticité de prix exportatrice vis-à-vis des produits de textile autrichiens.

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Resumen Innovation através de las importaciones: el caso de la industria textil austríaca. - La evidencia empírica presentada en este trabajo sugiere que la industria textil austríaca ha respondido a la importante competencia extranjera que proyino particularmente de otros países industrializados. El progreso tecnológico en esta industria fué importado de países tecnológicamente más avanzados, mientras que actividades de investigatión nacionales sólo jugaron un papel para las empresas peque?as, al gozar éstas de una transferencia de tecnología del exterior restringida. La industria debe gran parte del aumento de la productividad a la importatión de la mejor tecnología extranjera. La importación de innovaciones de proceso ayudó a la industria a enfrentar a la competencia international mediante mejoras en la calidad de sus productos y dise?os que redujeron la elasticidad precio de exportatión de los productos textiles austríacos.

     

Firm formation with heterogeneous management and labor skills

When both management skills and labor skills differ in the population, the nature of firm formation can differ radically from the equilibrium we are used to dealing with: The best potential managers could end up as wage workers. This happens when managerial skills are positively correlated with working skills, and there is some empirical evidence that this is indeed the case.     

Can economic incentive help in reducing food waste: experimental evidence from a university dining hall

We show that a fixed financial incentive reduces the amount of food waste in an all-you-can-eat university-dining hall. Results indicate that the incentive increased the likelihood of students cleaning their plates, but did not affect the amount of food taken. These results raise important questions about implementing well-studied policies in modifying food consumption. An unintended consequence of the monetary incentive might have led students to consume relatively more food, thus encouraging unwanted eating habits.