Corporate boards and outside stakeholders as determinants of environmental litigation

Each year, hundreds of firms are prosecuted for violating environmental laws and hundreds of millions of dollars in penalties are assessed. At the same time, a much larger number of firms escape the various costs associated with litigation by adhering to the provisions of the same laws and regulations. It is not a priori apparent why this dichotomy exists. In this paper we draw on corporate governance and stakeholder theories to empirically investigate environmental lawsuits. Specifically, we compare the pre‐lawsuit profile of 209 violators to a sample of matched control firms between 1994 and 1998. We find that the likelihood of becoming a lawsuit defendant increases with board size, with the fraction of directors in industrial firms, and with the fraction of inside ownership, and decreases with the number of directorships held by outside directors. These findings are robust to alternative dependent variable specifications. Together, our results suggest that managers, researchers, and policy‐makers need to direct their attention to the corporate board as the core decision‐making unit forming corporate environmental policies. Copyright © 2002 John Wiley & Sons, Ltd.     

The relationship of mentoring and network resources with career success in the Chinese organizational environment

The relationship of mentoring and network resources, the two components of social capital, with career success was investigated in a sample of 113 Chinese white-collar workers. The findings suggested that the prevalence of mentoring in the Chinese workplace is substantially higher than in the Anglo-Saxon workplace, and that Chinese employees do not distinguish their network ties or Guanxi into expressive and instrumental. These results were in line with the presumption that mentoring is an integral part of the Chinese culture and with the view that network ties or Guanxi in the Chinese society cannot exist in a purely instrumental form. In contrast to hypotheses, however, the findings suggest a limited relationship between social capital and career success. In particular, the amount of mentoring, participants reported they had received, was related to their intrinsic career success but not to their extrinsic career success; and the amount of network resources or Guanxi was related neither to extrinsic nor to intrinsic career success. These results were largely at odds with the accumulated knowledge on the benefits of social capital for career success. The findings are discussed with respect to the changing nature of the Chinese business and organizational environment, and their implications for human resource practices.     

An investigation on the attitudes of Chinese workers towards individually based performance-related reward systems

The study investigated the attitudes of Chinese workers towards individually based performance-related reward systems (IBPRRS). Participants were 106 white-collar workers employed in a Chinese new state-owned enterprise. In line with hypotheses, attitudes towards equality and equity-based rewarding were negatively and positively related, respectively, with attitudes towards IBPRRS. Also in line with expectations, both concern for loosing face (‘Mianzi’) and the belief that performance evaluations are affected by interpersonal relationships (‘Guanxi’) were negatively related to the attitude towards IBPRRS. However, in contrast to hypotheses, participants reported a more positive attitude towards equity than towards equality-based rewarding. Furthermore, in sharp contrast to the relevant hypothesis, the attitude of participants towards IBPRRS was positive. Ad hoc interviews with middle managers corroborated these findings and, furthermore, suggested that Guanxi and Mianzi were indeed impacting evaluations of performance, especially where there was an absence of objective performance criteria. The implication of the study is that although the views of Chinese employees towards IBPRRS are in principle positive, the cultural characteristics of China, and in particular Guanxi and Mianzi, must be taken into account for the successful design and functioning of such systems in the Chinese organizational context.     

International graduate students' perceptions and interest in international careers

This research developed and tested a comprehensive model of the antecedents of international graduate students' interest in an international career. Based largely on Social Cognitive Career Theory (SCCT), the model included elements that pertain to perceptions of external constraints (perceptions of the labor market, family pressure to return), international student experience (adjustment in the foreign country during graduate studies, exposure and immersion to the international context) and individual factors (self-efficacy with respect to working abroad and outcome expectancy). Participants were 139 international graduate students in the UK. Individual factors and perceived constraints were directly related to interest in an international career. The factors that comprised current international student experience were indirectly related to interest via their relationship with self-efficacy, while adjustment moderated the relationship between self-efficacy and interest. Although the hypothesized moderating role of family pressure to return did not materialize, the findings suggest that perceptions of constraints play a more substantial role in the formation of interest than has been assumed by SCCT theory thus far. The findings are discussed with respect to their implications for the literature and for the policies of host country stakeholders.     

The formation of forward freight agreement rates in dry bulk shipping: Spot rates,risk premia,and heterogeneous expectations

We examine the formation of forward rates in the dry bulk shipping industry. We illustrate that the bulk of basis volatility can be attributed to expectations about future physical market conditions rather than expectations about future risk premia. However, there exists significant predictability of risk premia by both price-based signals and economic variables. To explain this finding, we develop a dynamic asset pricing framework where, apart from having different objective functions, agents might also differ in the way they form expectations about future market conditions. Accordingly, we argue that the average investor should hold “near-rational” but slightly contrarian beliefs.     

Modeling the fiscal costs and benefits of alternative treatment strategies in the United Kingdom for chronic hepatitis C

Background: Hepatitis C (HCV) infection causes substantial direct health costs, but also impacts broader societal and governmental costs, such as tax revenue and social protection benefits. This study investigated the broader fiscal costs and benefits of curative interventions for chronic Hepatitis C (CHC) that allow individuals to avoid long-term HCV attributed health conditions.

Methods: A prospective cohort model, assessing the long-term fiscal consequences of policy decisions, was developed for HCV infected individuals, following the generational accounting analytic framework that combines age-specific lifetime gross taxes paid and governmental transfers received (i.e. healthcare and social support costs). The analysis assessed the burden of a theoretical cohort of untreated HCV infected patients with the alternative of treating these patients with a highly efficacious curative intervention (ledipasvir/sofosbuvir [LDV/SOF]). It also compared treating patients at all fibrosis stages (Stages F0–F4) compared to late treatment (Stage F4).

Results: Based on projected lifetime work activity and taxes paid, the treated cohort paid an additional £5,900 per patient compared to the untreated cohort. Lifetime government disability costs of £97,555 and £125,359 per patient for treated cohort vs no treatment cohort were estimated, respectively. Lifetime direct healthcare costs in the treated cohort were £32,235, compared to non-treated cohort of £26,424, with an incremental healthcare costs increase of £5,901 per patient. The benefit cost ratio (BCR) of total government benefits and savings relative to government treatment costs (including LDV/SOF) ranged from 1.8–5.6. Treating patients early resulted in 77% less disability costs, 43% lower healthcare costs, and 33% higher tax revenue.

Conclusion: The ability to cure Hepatitis C offers considerable fiscal benefits beyond direct medical costs and savings attributed to reduced disability costs, public allowances, and improved tax revenue. Changes in parameters, such as productivity, wage growth, and tax rates, can influence the conclusions described here.     

Measuring systemic risk in the European banking sector: a copula CoVaR approach

We propose a new methodology based on copula functions to estimate CoVaR, the Value-at-Risk (VaR) of the financial system conditional on an institution being under financial distress. Our Copula CoVaR approach provides simple, closed-form expressions for various definitions of CoVaR for a broad range of copula families and allows the CoVaR of an institution to have time-varying exposure to its VaR. We extend this approach to estimate other ‘co-risk’ measures such as Conditional Expected Shortfall (CoES). We focus on a portfolio of large European banks and examine the existence of common market factors triggering systemic risk episodes. Further, we analyse the extent to which bank-specific characteristics such as size, leverage, and equity beta are associated with institutions' contribution to systemic risk and highlight the importance of liquidity risk at the outset of the financial crisis in summer 2007. Finally, we investigate the link between macroeconomy and systemic risk and find that changes in major macroeconomic variables can contribute significantly to systemic risk.     

Googlemetrie und Arbeitsmarkt

Zusammenfassung  Wirtschaftsprognosen sind in „stürmischen Zeiten“ besonders schwierig. Indikatoren, die mit einer nennenswerten Vorlaufzeit Entwicklungen vorhersagen k?nnen, sind daher dringend gesucht. Klaus F. Zimmermann und Nikos Askitas sch?tzen hier auf Basis der Internetzugriffe für bestimmte Schlüsselw?rter die zu erwartende Entwicklung der Arbeitslosenquote. Prof. Dr. Klaus F. Zimmermann, 56, ist Direktor des Bonner Instituts zur Zukunft der Arbeit (IZA) und Pr?sident des Deutschen Instituts für Wirtschaftsforschung (DIW Berlin) sowie Professor für wirtschaftliche Staatswissenschaften der Universit?t Bonn. Dr. Nikos Askitas, 44, ist Leiter des Internationalen Datenservicezentrums (IDSC) des IZA und stellvertretender Leiter der IT-Abteilung des IZA.     

James Andreoni and the quest for others in our utility functions

Over the past 30 years, James Andreoni has produced a body of work like few others in public economics. Motivated by a personal need to understand the determinants of prosocial behavior, and by offering a rare blend of insights from formal theory, controlled experiments, and field data, Andreoni has succeeded in elucidating the broader relevance of prosocial motives and their far‐reaching economic implications. This article offers an overview of his work on prosociality, highlighting some of his seminal contributions and placing them in a historical context. We argue that James Andreoni has had a unique role in the quest to ensure that others have a place in our utility functions.