The anatomy of bank diversification

We use panel data from nine countries over the period 1996–2008 to test how revenue diversification affects bank value. Relying on a comprehensive framework for bank performance measurement, we find robust evidence against a conglomerate discount, unlike studies concerned with industrial firms. Rather, diversification increases bank profitability and, as a consequence also market valuations. This indirect performance effect does not depend on whether diversification was achieved through organic growth or through M&A activity. We further demonstrate that previous results in the literature on the impact of diversification on bank value presumably differ due to the way diversification is measured, and the negligence of the indirect value effect via bank profitability. Our evidence against a conglomerate discount in banking remains robust also during the sub-prime crisis.     

A pragmatic approach for soil erosion risk assessment within policy hierarchies

This paper presents a methodological framework for scale-specific assessment of soil erosion by water. The framework enables the definition of hierarchical, functional and modular nested reference units which result from the integrated consideration of policy, process and model hierarchies. The framework is applied on three planning levels: at first, large scale zones are designated that show a defined risk potential for soil erosion (first level: catchments and drainage areas in the German Federal State of Saxony-Anhalt, ca. 20,000 km²). By both increasing model complexity and spatio-temporal resolution of input data, the results are locally specified within these risk zones (second level: designated farms and fields in a study area of 141 km²). This is the basis for the prediction of soil erosion areas and sediment transport to hydrologic drainage networks as well as for small scale management and measure planning (third level: designated field blocks in the study area). On this level, the mitigation of soil erosion and sediment entry to the river system is demonstrated by simulating the introduction of conservation management practices, vegetation and riparian buffer strips.     

A design-led conceptual framework for developing school integrated STEM programs: the Australian context

International Journal of Technology and Design Education - Integrated Science, Technology, Engineering, and Mathematics (STEM) education is recognised as the latest development stage on the pathway...     

When Do Firms Adjust Bonus Targets Intrayear? Evidence from Sales Executives' Targets*

This study investigates when and why intrayear bonus target revisions occur. This is important as intrayear target revisions occur regularly in practice but are not well understood. Specifically, we analyze two potential drivers of intrayear bonus target revisions: reduced managerial incentives owing to managers dropping out of the incentive zone of their piecewise defined bonus function and potential spillovers from planning target revisions that reflect changes in performance expectations during the year. We also investigate the effects of organizational characteristics on intrayear bonus target revisions. Using data collected from sales executives via multiple waves of surveys, we find evidence for both predicted drivers. In addition, consistent with our predictions, we find that the levels of delegated decision authority, intrafirm interdependencies, and information asymmetry negatively moderate the positive association between reduced managerial incentives and revision likelihood. Our paper contributes to the target setting literature by being the first study to investigate intrayear bonus target revisions and shed light on when firms commit to not revising such targets intrayear.     

Trading and liquidity in the catastrophe bond market

We provide first insights into secondary market trading, liquidity determinants, and the liquidity premium of catastrophe bonds. Based on transaction data from TRACE (Trade Reporting and Compliance Engine), we find that cat bonds are traded less frequently during the hurricane season and more often close to maturity. Trading activity indicates that the market is dominated by brokers without a proprietary inventory. Liquidity is high in periods of high trading activity in the overall market and for bonds with low default risk or close to maturity, which results from lower order processing costs. Finally, using realized bid–ask spreads as a liquidity measure, we find that on average, 21% of the observable yield spread on the cat bond market is attributable to the liquidity premium, with a magnitude of up to 141 bps for high-risk bonds.     

Sentimental Sustainability: Does What Companies Say Tell More Than What Companies Do?

Based on a sample of more than eleven thousand unique 10-K reports of US companies filed with SEC in period 2013 to 2018, this study examines the relationship between actual sustainability performance of companies, evaluated by MSCI ESG performance scores, and the extent and the scope of environmental, social, and governance information disclosure in their annual reports. The study shows empirical evidence supporting the signalling theory view of voluntary disclosure of ESG information in annual reports for most industries, while environmentally unfriendly companies belonging to the Mining industry division show excessive reporting behavior favoring environmental topics, which is consistent with incentives to improve public image and mitigate social, political, and legal risks in line with the legitimacy theory of information disclosure. When differentiating between forward-looking and non-forward-looking ESG statements, the study shows that companies providing more forward-looking ESG information in annual reports show better next-year ESG performance. This study implements established content analysis techniques with focus on ESG reporting and performance, building up on the study of Baier, Berninger, and Kiesel (2020) that proposed an ESG-tailored dictionary for textual analysis purposes.     

Social preferences and sales performance

We use an incentivized experimental game to uncover heterogeneity in social preferences among salespeople in a large Austrian retail chain. Our results show that the majority of agents take the welfare of others into account but a significant fraction reveal selfish behavior. Matching individual behavior in the game with firm data on sales performance shows that agents with social preferences achieve a significantly higher revenue per customer. However, at the same time, they achieve fewer sales per day. Both effects offset each other, so that the overall association with total sales revenue becomes insignificant. Our findings highlight the nuanced role of selfish versus social preferences in sales contexts with important implications for economic research.     

Predators in the web of life: World ecology of historical human–wolf relations in Finland

To better understand current conflicts related to human–wolf interactions in Finland, this article undertakes a longue-durée examination of societal structural transformations and how they have influenced ways of relating to nature in the country. Through a world-ecological perspective, we weave together a historical review and results of ethnographic fieldwork to explain how and why human–wolf relations in Finland transformed from indifferent coexistence to purposeful eradication in the late 19th century and ultimately to contemporary contested protection. We argue that the nature-making capacities of capitalist development are an integral part of the historical circumstances that led to the eradication of wolves, which was not only the result of animosity towards wolves but also fuelled by the interests of elite hunters. The resulting negative perceptions, coupled with changes in practices and landscapes during the wolf-less era, are central in current contestations, illustrating the deep ideological, emotional, and practical nature relations that capitalism creates.     

Perceiving Control over the Exchange on Peer-to-Peer Platforms: Measurement and Effects in the Second-Hand Market

Marketing Letters - While the emergence of peer-to-peer (P2P) platforms has revolutionized the way people exchange goods, these platforms face the need to provide appealing products offered by...     

The innovator's media dilemma: How journalists cover incumbents' adoption of discontinuous technologies

We offer a new vantage to the literature on the role of infomediaries in incumbent firms' struggles to adopt discontinuous technologies: the perspective of news media. Specifically, we combine the discontinuous technology literature with studies on news media journalism to theorize that journalists cover an incumbent's new product introductions differently, depending on whether a given new product builds on a discontinuous technology or on the respective established, continuous technology. First, discontinuous-technology-based product introductions receive a greater volume of coverage than continuous-technology-based product introductions because journalists prefer covering issues that are novel, deviate from the conventional, and potentially strongly impact society. Second, the coverage of discontinuous-technology-based product introductions is more divergent in tenor than the coverage of continuous-technology-based product introductions, as journalists seek to present opposing and thus more engaging opinions. Our analyses of unique archival data from two samples of product introductions in the automotive and photography industries, respectively, support our hypotheses. We also find intriguing indications that news media coverage of new products introductions using hybrid technologies is significantly context-dependent. Overall, our study points to so-far undescribed, media-related dilemmas for incumbent firms that aim to adopt discontinuous technologies.