Efficiency,economy and effectiveness—but what about ethics? Supreme audit institutions at a critical juncture

Ethics is increasingly recognized as one of several important dimensions of performance. Yet, performance audit, or value-for-money audit, as conducted by supreme audit institutions (SAIs), does not typically include this dimension. Instead, the focus is on the classical ‘three Es’ (efficiency, economy and effectiveness). The reluctance to address issues of ethical misconduct has taken the audit practice of SAIs to a critical juncture, where the legitimacy of these audits ultimately is at stake. This paper explains why SAIs need to add a fourth ‘E’— ethical audit. Possible implications are discussed.     

Domestic political connections and international expansion: It's not only ‘who you know’ that matters

Former politicians on the board of directors bring to the firm domestic political connections and political knowledge. Previous research has mainly highlighted the role of contacts, without fully recognizing the role of political knowledge accumulated at home. By focusing on the effect of domestic political connections on foreign direct investment, we show that domestic political knowledge also shapes foreign expansion. We argue that contacts provided by former politicians may not be useful for foreign expansion whilst their political knowledge can be of help in countries with discretionary governments and with similar institutional environments to the one of the home country.     

In the Bear’s Shadow? Russia’s International Image and Its Influence on Investments of Russian Companies in Post-Socialist Europe

The paper examines Russia’s international image and its influence on investment by Russian companies in post-socialist Europe. Findings are based on the cases of Gazprom’s South Stream Pipeline project, and Sberbank’s acquisition of Volksbank’s Central and Eastern European assets in Hungary and Serbia. The paper demonstrates that international positions and economic interests of two countries determinate decisions regarding investments of Russian companies, while Russia’s image to some extent accelerates these decisions in Serbia. The paper is based on the results of interviews with representatives of business communities conducted in Hungary and Serbia in 2012–2017, professional reports, and official documents.     

China and international market integration: Evidence from the law of one price in the Middle East and Africa

We model market integration in the Middle East and Africa by analyzing price dispersion and testing the law of one price (LOP) on highly-comparable actual local retail prices of 135 goods and services across 23 countries in the region over the period of 1990–2016. Second-generation panel estimators are applied to four price benchmarks: Regional average, South Africa, China, and US prices. Cross-regional price dispersion diminishes considerably over time up to 2008, particularly for non-tradeables around China price. The test of LOP indicates the percentage of convergent prices is highest in China price benchmark, followed by US, South Africa, and regional average benchmarks. Direct estimation of the convergence speed confirms this order. Overall, the results show evidence of increasing market integration in Middle East and Africa but it appears to be driven by global forces and, especially, the rise of China as a new economic power. The results show that some emerging market economies, such as China, can step up and promote integration while traditional economic powerhouses, such as the USA and UK, disengage from international economic relations.     

Size of nested cities

Models of cities based on conventional spatial market theory are unable to replicate a realistic size distribution. The stochastic process approach to size distribution, which assumes proportionate growth, does not provide an economic foundation for spatial trades. There is an apparent irreconcilability. We propose that since there is a continuum of equilibria in models of spatial markets with endogenous location, proportionate growth can work as equilibrium selection. We present computations for an urban configuration that has not been presented in the literature before. A small city locates inside a larger city's agricultural supply zone. This generates a larger variation in city size that may include a realistic size distribution.     

Integrating uncertain user-generated demand data when locating facilities for disaster response commodity distribution

This paper presents a new facility location problem variant with application in disaster relief. The problem is unique in that both verified data and unverified user-generated data are available for consideration during decision making. The problem is motivated by the recent need of integrating unverified social data (e.g., Twitter posts) with data from more traditional sources, such as on-the-ground assessments and aerial flyovers, to make optimal decisions during disaster relief. Integrating social data can enable identifying larger numbers of needs in shorter amounts of time, but because the information is unverified, some of it may be inaccurate. This paper seeks to provide a “proof of concept” illustrating how the unverified social data may be exploited. To do so, a framework for incorporating uncertain user-generated data when locating Points of Distribution (PODs) for disaster relief is presented. Then, three decision strategies that differ in how the uncertain data is considered are defined. Finally, the framework and decision strategies are demonstrated via a small computational study to illustrate the benefits user-generated data may afford across a variety of disaster scenarios.     

The major determinants of logistic performance in a global perspective: evidence from panel data analysis

The global logistics industry has grown significantly and logistics has become an important sector of the business economic system and a major global economic activity in recent years. Logistics activities accelerate economic and productivity growth. Efficient logistics is also important to a country’s competitiveness and source of employment. The purpose of this paper is to uncover and understand the major determinants of logistics performance (LP) to further lift the LP of countries. Using unbalanced panel data of 93 selected countries from 2007 to 2014, the present research attempts to critically investigate the major determinants of LP. In estimating the model, this study prefers to use static panel data approach owing to limited data. The findings of the present study reveal that (a) countries with low level of corruption and stable political environment are likely to yield a high level of LP; (b) improvement in resources supply such as infrastructure, technology, labour, and education also have a significant positive effect on LP. Therefore, institutional reforms and upgrading resources will effectively accelerate LP.     

面源污染视角下江西省耕地利用效率研究

[目的]在面源污染视角下考察耕地利用效率,可以为推动耕地可持续利用提供理论和参考依据。[方法]文章基于2000—2014年我国13个粮食主产省(区)耕地投入产出的面板数据,运用SBM方向性距离函数将耕地面源污染因素纳入到传统的效率分析框架,从省际比较的维度对江西省耕地利用效率进行了测度与分析。[结果]考虑面源污染因素对耕地利用效率测算产生了一定的影响;江西省耕地利用效率值呈现阶段性特征,耕地利用效率排名比较稳定,近年来排名有上升趋势;江西省耕地利用绩效一般,且与最佳实践者存在较大的差距。[结论]忽视面源污染因素的耕地利用效率评估是失真和不符合实际的,宜将面源污染因素纳入到耕地利用效率的测度框架,以此来更科学地量化评估耕地利用绩效;设计和完善相关政策,以有效控制耕地面源污染;加强与先进省(区)的交流与合作,学习其农业可持续耕作技术与管理经验,进一步推动江西省耕地产出与资源、环境协调发展。     

The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China

We examine how mandatory disclosure of corporate social responsibility (CSR) impacts firm performance and social externalities. Our analysis exploits China's 2008 mandate requiring firms to disclose CSR activities, using a difference-in-differences design. Although the mandate does not require firms to spend on CSR, we find that mandatory CSR reporting firms experience a decrease in profitability subsequent to the mandate. In addition, the cities most impacted by the disclosure mandate experience a decrease in their industrial wastewater and SO₂ emission levels. These findings suggest that mandatory CSR disclosure alters firm behavior and generates positive externalities at the expense of shareholders.     

Herding behaviour and the declining value relevance of accounting information: evidence from an emerging stock market

This article sheds light on the underlying mechanisms behind the changes in the value relevance of accounting information in the Karachi Stock Exchange (KSE) during the 1999–2010 period. We find that neither changes in earnings quality nor the earnings lack of timeliness hypothesis can explain the decline in the value relevance of accounting information in the KSE. Based on the stylized facts associated with the growth of the KSE and the broader economics literature, we argue that the reduction in the explanatory power of accounting information vis-à-vis stock returns was caused by herding behaviour. Empirical estimates from state-space model of herding behaviour confirm the existence of herding, and we find that the value relevance of accounting information is significantly lower in periods characterized by herding behaviour. This article is also amongst the first attempts to empirically demonstrate that an expansionary monetary policy and increases in foreign portfolio investment lead to increased levels of herding.