Estimating global bank network connectedness

We use LASSO methods to shrink, select, and estimate the high‐dimensional network linking the publicly traded subset of the world's top 150 banks, 2003–2014. We characterize static network connectedness using full‐sample estimation and dynamic network connectedness using rolling‐window estimation. Statically, we find that global bank equity connectedness has a strong geographic component, whereas country sovereign bond connectedness does not. Dynamically, we find that equity connectedness increases during crises, with clear peaks during the Great Financial Crisis and each wave of the subsequent European Debt Crisis, and with movements coming mostly from changes in cross‐country as opposed to within‐country bank linkages.     

Capital Regulation with Two Banking Sectors: Cyclicality and Implementation

We present a capital regulation policy in a model in which banks can choose to be unregulated, by operating in the shadow banking sector, when the cost of being regulated (restriction on portfolio risk) exceeds the benefit (cheaper funding/insurance). We show that the welfare maximizing capital requirement policy can be procyclical: lower requirement during booms and higher requirement during recessions. Our policy specifies the level of capital requirement as a function of the observed relative size of the unregulated and regulated banking sectors. This specification achieves the optimal aggregate risk exposure by obtaining the right mix of the two sectors.     

Unpredictable times: the extent,characteristics and correlates of insecure hours of work in Britain

This article presents new British evidence that suggests that cutting working hours at short notice is twice as prevalent as zero-hours contracts and triple the number of employees are very anxious about unexpected changes to their hours of work. The pay of these employees tends to be lower, work intensity higher, line management support weaker and the threat of dismissal and job loss greater. In addition, the well-being of these employees is lower and they are less committed to the organisations that employ them. However, the prevalence of insecure working hours is reduced by workplace level employee involvement exercised individually or through collective representation.     

Random Effects Misspecification Can Have Severe Consequences for Random Effects Inference in Linear Mixed Models

There has been considerable and controversial research over the past two decades into how successfully random effects misspecification in mixed models (i.e. assuming normality for the random effects when the true distribution is non‐normal) can be diagnosed and what its impacts are on estimation and inference. However, much of this research has focused on fixed effects inference in generalised linear mixed models. In this article, motivated by the increasing number of applications of mixed models where interest is on the variance components, we study the effects of random effects misspecification on random effects inference in linear mixed models, for which there is considerably less literature. Our findings are surprising and contrary to general belief: for point estimation, maximum likelihood estimation of the variance components under misspecification is consistent, although in finite samples, both the bias and mean squared error can be substantial. For inference, we show through theory and simulation that under misspecification, standard likelihood ratio tests of truly non‐zero variance components can suffer from severely inflated type I errors, and confidence intervals for the variance components can exhibit considerable under coverage. Furthermore, neither of these problems vanish asymptotically with increasing the number of clusters or cluster size. These results have major implications for random effects inference, especially if the true random effects distribution is heavier tailed than the normal. Fortunately, simple graphical and goodness‐of‐fit measures of the random effects predictions appear to have reasonable power at detecting misspecification. We apply linear mixed models to a survey of more than 4 000 high school students within 100 schools and analyse how mathematics achievement scores vary with student attributes and across different schools. The application demonstrates the sensitivity of mixed model inference to the true but unknown random effects distribution.     

Audit Committee Effectiveness in Victorian Local Government

This research addressed the questions: do audit committees (AC) in Victorian local government function effectively? Qualitative and quantitative data were collected to measure the perceptions, attitudes and perspectives of mayors, chief executives and chairs of the AC. The results were compared with perceptions of committee members of the Local Government and Shires Association of New South Wales and board members of the Municipal Association of Victoria as the representative bodies of local government in New South Wales and Victoria. There was a similarity of views in relation to: (1) inputs of an AC; (2) the behavioural nuances of the rigour of debate, trust and effective communications; and (3) the relationships with councillors and management. Limitations to effectiveness included: (1) attraction and retention of members; (2) the variability of expertise and the skills of the members; (3) continuing professional development for members; (4) ‘gaming’ behaviours; (5) power games associated with the appointment process; and (6) domination of the AC by members or management. The suggested way forward is the reinforcement of a strong governance culture in local government and an effective AC providing oversight of compliance, governance, internal control and risk processes.     

Assessment of vehicle speeds on different categories of roadways in Ghana

Empirical evidence from road safety literature suggests that vehicular speed is an important risk factor in the incidence and severity of road traffic crashes globally. Speed studies are at rudimentary stages in developing countries, thus making vehicular speed research imperative. The main aim of the study was to establish two major speed parameters, namely, the mean and dispersion, and their implications for more extensive and long-term speed monitoring in Ghana. Research workers stationed themselves in a parked car and used a radar gun to unobtrusively measure the travelling speeds of 28,489 vehicles at 15 different inter-urban locations on three highway categories. Excessive speeding is very pervasive on all highway categories in Ghana. Travelling speeds through settlements where a speed limit of 50 km/hour is mandatory were particularly excessive. Generally, 98%, 90% and 97% of vehicles exceeded the posted speed limit of 50 km/hour on national, inter-regional and regional roads respectively. Mean speeds and speed dispersions (as assessed by the standard deviations) through built-up areas were 81.3 +/- 17.3 km/hour on national roads, 64.7 +/- 12.3 km/hour on inter-regional roads and 72.6 +/- 13.4, km/hour on regional roads. On rural undivided highways with an 80 km/hour speed limit, mean and speed dispersions were 90 +/- 18.9 km/hour on national roads, 80.1 +/- 16 km/hour on inter-regional roads and 84.4 +/- 15.6 on regional roads; also translating into 66%, 47% and 60% of vehicles exceeding recommended speeds. In all cases, speed dispersions were notably higher than the value of 10 km/hour generally found in developed countries. Excessive speeding and wide speed dispersions are highly prevalent on Ghana's highways. These factors likely account for the high incidence of traffic crashes and fatalities in Ghana. An integrated speed monitoring and control programme and by-passing small and medium settlements would be required for the reduction of speed-related crashes, fatalities and injuries.     

What Are the Characteristics That Software Development Project Team Members Associate With a Good Project Manager?

In this study we investigate what software development project team members consider to be a good project manager. Previous research has been carried out using project manager self‐assessments, other project stakeholder views, or recruiters’ views. This qualitative study used the repertory grid technique to identify the characteristics that project team members associate with a good project manager. This technique has been adopted because of its strength in eliciting personal constructs. Among the 18 characteristics identified, the seven most relevant were classified and compared with previous findings, which reveals differences between the team members’ and project managers’ and other stakeholders’ perceptions. Those findings complement the existing skill set and could be considered when recruiting and training project managers and staffing projects.     

CEO Connectedness and Corporate Fraud

We find that connections CEOs develop with top executives and directors through their appointment decisions increase the risk of corporate fraud. Appointment‐based CEO connectedness in executive suites and boardrooms increases the likelihood of committing fraud and decreases the likelihood of detection. Additionally, it decreases the expected costs of fraud by helping conceal fraudulent activity, making CEO dismissal less likely upon discovery, and lowering the coordination costs of carrying out illegal activity. Connections based on network ties through past employment, education, or social organization memberships have insignificant effects on fraud. Appointment‐based CEO connectedness warrants attention from regulators, investors, and corporate governance specialists.     

Fits,misfits and interactions: learning at work,job satisfaction and job‐related well‐being

The resource‐based view (RBV) of the firm has focused attention on the importance of aligning employees' needs with the requirements of the jobs they do. This article focuses on how these needs and requirements interact in terms of learning. It does so in two ways. First, it develops new survey instruments to capture the learning demands of jobs and the learning dispositions of workers and uses them for the first time in a survey of 2,810 employees. Second, it examines how these person and job characteristics correlate with specific aspects of job satisfaction and job‐related well‐being. The results show that although learning alignment is associated with high levels of satisfaction and well‐being, not all learning misalignments are associated with the reverse.     

Using Compulsory Mobility to Identify School Quality and Peer Effects

Education production functions that feature school and student fixed effects are identified using students' school mobility. However, student mobility is driven by factors like parents' labour market shocks and divorce. Movers experience large achievement drops, are more often minority and free meal students, and sort endogenously into peer groups and school types. We exploit an English institutional feature whereby some students must change schools between grades 2 and 3. We find no evidence of endogenous sorting of such compulsory movers across peer groups or school types. Non‐compulsory movers bias school quality estimates downward by as much as 20% of a SD.