A statistical equilibrium model of competitive firms

We find that the empirical density of firm profit rates, measured as returns on assets, is markedly non-Gaussian and reasonably well described by an exponential power (or Subbotin) distribution. We start from a statistical equilibrium model that leads to a stationary Subbotin density in the presence of complex interactions among competitive heterogeneous firms. To investigate the dynamics of firm profitability, we construct a diffusion process that has the Subbotin distribution as its stationary probability density. This leads to a phenomenologically inspired interpretation of variations in the shape parameter of the Subbotin distribution, which essentially measures the competitive pressure in and across industries. Our findings have profound implications both for the previous literature on the ‘persistence of profits’ as well as for understanding competition as a dynamic process. Our main formal finding is that firms' idiosyncratic efforts and the tendency for competition to equalize profit rates are two sides of the same coin, and that a ratio of these two effects ultimately determines the dispersion of the equilibrium distribution.     

International commodity taxation in the presence of unemployment

In this paper, we evaluate the impact of commodity tax competition on welfare and employment under the destination and origin principles, when the labor market is imperfectly competitive owing to a binding fixed wage. Our main finding is that commodity taxation causes an employment externality whose signs may be opposite under the two principles. While tax competition leads to inefficient tax rates under both principles, we also prove that the origin principle guarantees lower unemployment and higher welfare when the fixed wage is high. Finally, we show that the employment externality still exists in a standard union model of wage determination.     

Analyzing the global human appropriation of net primary production — processes, trajectories, implications. An introduction

Humanity's role in shaping patterns and processes in the terrestrial biosphere is large and growing. Most of the earth's fertile land is used more or less intensively by humans for resource extraction, production, transport, consumption and waste deposition or as living space. Biomass production on cropland, grazing areas and in managed forests dominates area requirements, but other processes such as soil degradation, human-induced fires and expansion of settlements and infrastructure play an increasingly important role as well. The growing human domination of terrestrial ecosystems contributes to biodiversity loss as well as to a reduced capability of ecosystems to deliver vital services such as buffering capacity, soil conservation or self-regulation. This special section is devoted to the presentation of recent research into the patterns, determinants and implications of the human appropriation of net primary production (HANPP), an integrated socio-ecological indicator of land use intensity. By measuring the combined effect of land conversion and biomass harvest on the availability of trophic energy (biomass) in ecosystems, HANPP explicitly links natural with socioeconomic processes and allows for integrated analyses of land systems. This introductory article explains the rationale that links current HANPP research to Ecological Economics and discusses issues of definition and methods shared by all articles included in the special section. Finally, it gives an overview of the individual papers, provides some general conclusions and presents an outlook for future research: a better understanding of long-term trajectories of HANPP, of the significance of trade patterns as well as of the future role of bioenergy are highlighted as important issues to be addressed in the coming years.     

Implementing on‐the‐job training: critical success factors

Post Offices Inc. in The Netherlands has developed and implemented a new instruction model for the training of desk employees. The quality of the new instruction model was assessed by means of the evaluation model of Jacobs and Jones for on‐the‐job training. It is concluded that the implementation of the training model has not been completely successful. Critical success factors, such as the performance of the mentors as well as the quality of the self‐study material, have to be improved. Mentors are expected to serve as a behavioural model, to provide feedback, arrange an adequate environment for self‐study, motivate trainees for self‐study and evaluate trainees’ progress on a regular basis. This study shows that mentors must be fully convinced of the benefit of a new instructional model, if not, the implementation will not be successful. Besides, the study shows that the quality of the self‐study material depends very much on the similarity between the knowledge needed in work and the knowledge presented in the self‐study material.     

Unethical,neurotic, or both? A psychoanalytic account of ethical failures within organizations

This paper aims to integrate insights from psychoanalytic theory into business ethics research on the sources of ethical failures within organizations. We particularly draw from the analysis of sources and outcomes of neurotic processes that are part of human development, as described by the psychoanalyst Karen Horney and more recently by Manfred Kets de Vries; we interpret their insights from a stakeholder theory perspective. Business ethics research seems to have overlooked how “neurotic management styles” could be the antecedents of unethical behavior within organizations. After showing the connection between five managerial neuroses and the corresponding potential ethical failures within organizations that have been already identified within business ethics research, we suggest three organizational strategies to counteract these failures. First, we argue that managers should pay greater attention at the complexity of human motivation, avoiding the simplistic view of compliance‐based approaches. Second, we discuss the importance of developing a conversation around values within organizations, enabling healthy individual growth and limiting the emergence of neurotic processes. Finally, we discuss the role of the business ethicist in facilitating such a process, suggesting a parallel between the role of the business ethicist and that of the psychoanalytic therapist.     

Individual risk tolerance and herding behaviors in financial forecasts

Financial analysts tend to demonstrate herding behavior, which sometimes compromises accuracy. A number of explanations spanning rational economic logic, cognitive biases, and social forces have been suggested. Relying on an experimental setting where participants forecast future earnings from a rich information set, we posit and obtain support for individual risk tolerance (or lack thereof) as an explanatory variable for herding behaviors. Specifically, less risk‐tolerant individuals forecast with less boldness and instead issue forecasts in agreement with the consensus forecast. The results are argued to be at least partially a product of cognitive biases and an intuitive reaction to uncertainty.     

The determinants of business contribution to the 2030 Agenda: Introducing the SDG Reporting Score

Within the 2030 Agenda, the United Nations have explicitly required that the Member States introduce within their jurisdictions new forms of regulations about non-financial reporting practices. The aim of this paper is to investigate the effects related to the transposition of Directive 2014/95/EU by analyzing firm-level, governance-level, and report-level determinants of business reporting on the Sustainable Development Goals (SDGs). To conduct such an analysis, this study defines and introduces the SDG Reporting Score (SRS)—a qualitative proxy representing a firm orientation toward SDG reporting. The study sample includes the non-financial reports of 153 Italian Public Interest Entities. The results show a positive relationship between a firm's SRS and various determinants, such as the presence of independent directors on the board, expertise with non-financial reporting, and length of the report. Finally, the highest levels of SRS are achieved by firms operating in environmental sensitive sectors.     

How Can the European Union Adapt to Climate Change?

Intereconomics - Europe must increasingly deal with the harmful impacts of climate change, regardless of its success in reducing emissions. These impacts have significant cross-border effects and...     

The Role of Social Capital for Organizational Identification: Implications for Strategic Communication

Scholars in the fields of organization and strategic communication have long been interested in organizational identification as a phenomenon favoring employees’ alignment with corporate values and consequently achievement of the organizational mission. To date, most studies on the subject have relied on social identity theory, which focuses on cognitive categorization processes but overlooks the role of employees’ relationships within their organization. In this research, we introduce a social capital perspective into organizational identification models. We propose and test a model looking at the influence of an individual’s social capital, a variable deriving from different dimensions of an individual’s communication network (i.e., prestige, resourceful others, friendship), on organizational identification, mediated by the attractiveness of perceived organizational identity. The results from a survey conducted in a business organization suggest that a person’s social capital influences organizational identification, both directly and through the attractiveness of perceived organizational identity. Our organizational identification model contributes to extend knowledge on the complementarity of the cognitive and relational perspectives of strategic communication and on the role of relationship building and networks in strategic communication management.