Effects of subject pool culture and institutional environment on corruption: Experimental evidence from Albania

This research uses experimental methods to investigate whether subject pool culture and institutional environment have an effect on participants’ corrupt behavior in the laboratory. While we find that subject pool culture does not affect the overall magnitude of corruption of laboratory participants, it does affect the likelihood of corruption and its distribution. Additionally, we find that the effect on corrupt behavior differs with the framing of the experiment’s instructions. Interestingly, in the context of a weak rule of law and high levels of corruption, loaded negative instructions positively affect corrupt behavior of firms and public officials. Previous research in the context of a country exhibiting a strong rule of law and low levels of corruption finds no framing effects. We also find that increasing the probability of detection significantly reduces corruption as measured by the amount of the bribes offered/accepted and the probability of offering/accepting a bribe. Finally, we find that individual risk preferences negatively affect the level of corrupt behavior.     

When Auditors Say ‘No,’ Does the Market Listen?

Previous research on whether the market responds to auditors’ opinions has provided mixed results. We revisit this issue in China, where individual investors who are more likely to neglect value-relevant information dominate the stock market. In addition to going concern opinions (GCOs), China permits modified audit opinions (MAOs) on violations of accounting standards or disclosure rules (GAAP/DISC MAOs), providing an opportunity not available in the literature to enrich the study of audit-opinion pricing. We find that, ceteris paribus, MAO recipients underperform in the future and have a higher incidence of adverse outcomes such as misreporting and stock delisting, and the market reacts negatively to MAOs during the short window around MAO disclosure. Importantly, MAO disclosure is not followed by negative long-term stock returns, suggesting stock price adjustments to MAOs are speedy and unbiased. These findings hold for both GCOs and GAAP/DISC MAOs. Together, our findings support the informativeness of audit opinions and cast doubt on the argument that investors inefficiently price audit opinions due to information-processing bias.     

Analysis of territorial compatibility for Seveso-type sites using different risk assessment methods and GIS technique

The increasing size of chemical plants and rapid growth in residential areas has led to many incompatible land-use scenarios in the last 100 years. In this context, the authors assume that assessment and planning have their significant role in preventing the juxtaposition of hazards and population, and that, in this field, there is a broad recognition of the need for legislative and policy consistency across the European Union. The paper presents a comparative case study in which the Romanian land-use planning (LUP) criteria and the risk-based quantitative approach for a chemical plant are applied. Accident scenarios involving chlorine and propylene arecomprehensively analyzed using consequence and risk modelling software and GIS technique for the territorial compatibility assessment. The objective of the paper is threefold. Firstly, it presents an overview about current risk analysis methods; secondly, the authors advance an understanding of risk assessment practices used in several countries for the prevention and control of major industrial accidents involving dangerous substances and, also, for LUP. Thirdly, a method targeting an improved risk assessment framework for LUP, encompassing Romania’s determinants is outlined. The results obtained using the two different approaches indicate significant differences regarding the possibly affected areas and territorial compatibility. Furthermore, based on the findings, the paper ends with a set of recommendations that can be transformed into the foundation for future enactments of new safety standards that cover risk assessment for LUP. Consequently, the present study aims to become a frame of reference for decision-makers towards more sustainable and updated risk assessment practices in the field of industrial activities.     

劳动力价格、信息不对称与农户精细管理技术投入——基于质量识别能力差异的视角

近年来,劳动力价格的快速上涨已然成为中国农业生产所必须面对的内在挑战。对于机械作业难度相对较大的劳动密集型作物而言,在缓解劳动力约束瓶颈的同时,更应通过精细化的果园管理,以提高产品质量,进而提高其市场价格。然而,由于农产品具有典型的经验品属性,在信息不对称的外部约束下,农户通常难以获得应有的"质量溢价"。基于此,本文通过构建理论分析框架,以果品质量关键环节的精细管理技术作为研究对象,系统分析在劳动力价格上涨背景下农户精细管理技术投入的决策机制,以及在不同农产品质量识别程度中,劳动力成本变化对其影响的异质性,并基于全国18个省份农户的调研数据进行实证研究。研究结果表明:农户交易对象质量识别能力的提高,能够缓解农户与购买者之间存在的信息不对称性,将农产品质量信息传递给购买者,使农户获得更高的销售价格,进而在有效提高农户精细管理技术投入水平的同时,能够弱化劳动力价格对其所产生的负面影响。     

Time-varying beta in functional factor models: Evidence from China

In this paper, we introduce a functional method to investigate how betas change over time in factor models. Based on the China A-share data, we drop the constant beta assumption in the CAPM and multi-factor models to estimate the time-varying betas directly from the functional data regression. The empirical results show that exposures to all risk factors have certain time-varying patterns in the Chinese A-share stock market.     

Exploring the nexus between bank market power and exports

Although the literature underlines the importance of finance in international trade, no prior study has examined the causal links between market power in banking and export performance. Using a world sample over the 1997-2010 period, and accounting for both observed and unobserved country heterogeneity, we find a positive effect of bank market power on exports, especially in high-income countries. We also document that this export-enhancing effect is more potent in informationally opaque markets. Our findings accord with information hypothesis which suggests that market power in banking induces stronger bank-firm relationships which can generate benefits for both borrowers and lenders. Policy interventions should, therefore, promote the supply of relationship lending as a means to mitigate informational asymmetries in the export market.     

Does top management Team’s academic experience promote corporate innovation? Evidence from China

This study investigates whether top management teams’ academic experience affects corporate innovation, using manually-collected data on Chinese firms from the period of 2008–2017. The results indicate that academic experience has a strong positive effect on corporate innovation. The positive effect of academic experience on corporate innovation is more pronounced, when firms grow faster or are non-state-owned. By exploring the transmission channels, the results generally show that academic experience influences corporate innovation by improving internal controls and reducing the degree of information asymmetry. These findings are among the first empirical evidence of the association between academic experience of top management teams and corporate innovation.     

Risk,uncertainty, and leverage

Using mostly theoretical models and traditional risk/uncertainty measures (VIX index, panic, precaution, scary bad news, etc.), the current literature tries to clarify the risk/uncertainty-deleveraging pattern. The findings are not sufficient to explain the dynamic empirical relationship between modern risk/uncertainty indicators and leverage. We fill this gap in the literature by using US quarterly data, from 1985:1 to 2018:4, Granger causality tests, and a structural vector autoregression model. We find that commercial bank leverage rises when geopolitical risk and macroeconomic, policy, and equity uncertainty increase. Client-based business relationships of banks and high government borrowing from banks during crises periods are responsible for this relationship. We find that the leverage of broker-dealers and shadow banks declines when Chicago risk and macroeconomic, policy, financial, and equity uncertainty increase. We argue that the vulnerability of broker-dealers and shadow banks to the risk/uncertainty of the entire market system is responsible for this relationship.     

Information technology and firm performance: mediation role of absorptive capacity and corporate entrepreneurship in manufacturing SMEs

ABSTRACT

The success of small and medium-sized enterprises (SMEs) depends on dynamic capabilities, as it provides opportunities to remain competitive and perform well in the dynamic business environment. Although several studies show the significant positive impacts of dynamic capabilities on firm performance, our knowledge of the underlying mechanism through which IT capabilities affect the firm performance is not yet clear. Applying the dynamic capability view, this study investigates the intervening role of absorptive capacity and corporate entrepreneurship. The data of 417 respondents is collected from medium-sized manufacturing sector SMEs in Punjab, Pakistan. The research hypotheses have been analysed through the structural equation modelling method by using the Smart-PLS software. The research findings show that absorptive capacity and corporate entrepreneurship partially mediates the relationship between IT capabilities and firm performance. Furthermore, the sequential path of IT technical skills, absorptive capacity, corporate entrepreneurship, and firm performance is highly significant as compared to other paths.     

‘Real without being concrete’: the ontology of public concern and its significance for the Social Amplification of Risk Framework (SARF)

Abstract

Public concern is a pivotal notion in the risk perception, communication and management literature. It is, for example, a central concept with regard to the social amplification of risk, and as a justification for policy attention. Despite its ubiquity, the notion of public concern remains a ‘black box’ presenting a poorly understood state of affairs as a reified matter-of-fact. Paying attention to the deployment and metrics of public concern, and the work it is required to do, will enhance the power of approaches to understanding risk, and policymaking. Thus, the broad purpose of this paper is to unpack the notion of public concern by adopting an ontological yet critical perspective, drawing on a range of literature that considers ontology. We reflect on how publics and public concern have been conceptualised with regard to the dichotomies of individual/social and private/public, given that they imply different levels and dimensions of concern. We draw on empirical work that illuminates the assessment and measurement of public concern and how the public have responded to risk events. Considering public concern through an ontological lens affords a means of drawing renewed critical attention to objects that might otherwise appear finished or ready-made.