How to fight against southern pine beetle epidemics: An insurance approach

The southern pine beetle (SPB) is among the leading biological agents killing southern pine species in the eastern United States. In light of recognized spatiotemporal autocorrelation in SPB outbreaks, we devise a spatiotemporal block bootstrapping method that can be applied to analyze spatiotemporally dependent infestations. We also identify the relevant risk determinants and evaluate their impacts on the frequency of SPB outbreaks. For example, we find forest type, climate, and natural disasters like storm and forest management are all significantly associated with SPB risks. Using the results of a statistical model, we design a county-level group index insurance plan that generates estimates of actuarially fair premium rates for timber stands containing southern pine species. Given that no government-provided compensation scheme for SPB epidemics currently exists, application of this new insurance product could reduce forest owners losses. Our study offers an approach to analyzing and protecting against risks of other destructive pests affecting the timber sector.     

Alternative balanced scorecards built from paradigm models in strategic HRM and employment/industrial relations and used to measure the state of employment relations and HR system performance across U.S. workplaces

This paper constructs alternative balanced scorecards based on high‐performance work system (HPWS) and employment relations system (ERS) models. The models are depicted and compared in diagrams and used as framework skeletons for building separate HPWS and ERS scorecards, intended to provide a detailed data picture of the operational health and performance of an organization's employment/HR system and its operations, processes, and inputs/outputs. The scorecards are filled in with nationally representative data from 2,000+ U.S. workplaces using more than 50 employment/HR indicators, as reported by separate panels of managers and employees. The indicators for each workplace are aggregated into an overall HR/employment system score, ranked from low‐to‐high, and graphed as frequency distributions. These distributions provide a unique snapshot picture of the mean and dispersion of the state of employment relations and HR system performance for companies across the United State. They also reveal that “models matter” since the HPWS and ERS scorecards provide distinctly different evaluation assessments.     

Disproportionate insider control and firm performance

The effect of disproportionate insider control on firm performance is ambiguous. Disproportionate control may enhance insiders’ ability to expropriate perquisites; on the other hand, it may provide stability of management and reduce short‐term market pressures. Using a hand‐collected sample of U.S. dual‐class firms, we find that disproportionate control is positively associated with accounting‐based performance, but negatively associated with Tobin's Q. These results are consistent with the incentives of entrenched insiders who are interested in profitability but less beholden to capital markets.     

Cost‐reflective pricing: empirical insights into irrigators’ preferences for water tariffs

Using prices to improve the efficiency with which water resources are allocated is now widely accepted in principle if somewhat difficult to achieve in practice. Whilst there are some technical difficulties associated with full‐cost recovery in irrigation, the lack of political will to tackle reform remains a significant impediment. This article reports the results of an empirical investigation into farmers’ preferences for changes to water prices and tariff structures. We conclude that some of the preferences of farmers are conducive to price reform. We also find evidence that public subsidy of infrastructure in irrigation is not always aligned with the preferences of farmers.     

Moral hazard and subsidized crop insurance

Along with adverse selection, moral hazard is one of the major hurdles that private and public insurance plans must contend with. Moral hazard occurs if risks are endogenous to a producer's behavior and if the insurer is unable to properly monitor the insured. We review the role of moral hazard in the US crop insurance program. We conduct an empirical analysis of one important aspect of the US crop insurance program—prevented planting. This provision provides indemnity payments if conditions are not suitable for planting. The program has been the subject of considerable controversy, especially during 2019, when the rate of claims is expected to be especially high. Because loss adjustors may encounter difficulties in assessing the weather conditions associated with prevented planting claims, the program is susceptible to moral hazard. We consider the extent to which prevented planting claims may be endogenous to prices. We find significant evidence of moral hazard. The likelihood of prevented planting claims increases as the expected market price decreases or as fertilizer costs increase for corn and soybeans in the Prairie Pothole Region and for grain sorghum and cotton in all states.     

Mars or Mercury redux: The geopolitics of bilateral trade agreements

We analyse the role of economic and security considerations in bilateral trade agreements. We use the pre‐World War I period to test whether trade agreements are governed by standard gravity variables, or by instead—or in addition—geopolitical factors. While we like others find support for standard gravity variables, we also find that defence pacts boost the probability of trade agreements by as much as 20 percentage points. Our estimates imply that were the U.S. to alienate its geopolitical allies, the likelihood and benefits of successful bilateral agreements would fall significantly. Trade creation from an agreement between the U.S. and E.U. countries would decline by about 0.6 per cent of total U.S. exports.     

The Multiplicity of Performance Management Systems: Heterogeneity in Multinational Corporations and Management Sense‐Making

This field study examines the workings of multiple performance measurement systems (PMSs) used within and between a division and Headquarters (HQ) of a large European corporation. We explore how multiple PMSs arose within the multinational corporation. We first provide a first‐order analysis which explains how managers make sense of the multiplicity and show how an organization's PMSs may be subject to competing processes for control that result in varied systems, all seemingly functioning, but with different rationales and effects. We then provide a second‐order analysis based on a sense‐making perspective that highlights the importance of retrospective understandings of the organization's history and the importance of various legitimacy expectations to different parts of the multinational. Finally, we emphasize the role of social skill in sense‐making that enables the persistence of multiple systems and the absence of overt tensions and conflict within organizations.     

Can countries rely on foreign saving for investment and economic development?

Contrary to widespread presumption, a surprisingly large number of countries have been able to finance a significant fraction of their investment for extended periods using foreign finance. While many of these episodes are in countries where official finance is important, we also identify episodes where a substantial fraction of domestic investment is financed by private capital inflows. Although there is evidence of a positive growth effect of such inflows in the short run, that positive impact dissipates after 5 years and turns negative over longer horizons. Many such episodes end abruptly, with compression of the current account and sharp slowdowns in investment and growth. Summing over the inflow (current account deficit) episode and its aftermath, we find that growth is slower than when countries rely on domestic savings. The implication is that financing growth and investment out of foreign savings, while not impossible, is risky and too often counterproductive.     

Valuing improvements in urban water security: evidence of heterogeneity derived from a latent class model for eastern Australia

In many Australian cities the response to drought has included the imposition of mandatory constraints over how water is used by households, often termed ‘water restrictions’. A similar rationing approach has been witnessed in California’s recent drought. The aim of water restrictions is to slow the depletion of water storage but restrictions have also been criticized for the costs they impose on specific water users. In order to gain insight into the potential magnitude of the cost of water restrictions, this study uses a choice experiment to investigate the non-market values for specific attributes associated with the outcomes of drought restrictions. This information was sought to understand the community’s willingness to pay for attributes related to the extent, frequency and duration of water restrictions. The article reports a latent class choice model for a major city in eastern Australia and investigates heterogeneity in preferences towards increasing water availability during drought. This study departs from the existing literature by conducting the choice experiment in a context where water supply is relatively abundant. This unique framing of the choice experiment allows for a useful comparison with existing studies and also raises challenges about the interpretation of the data for planning purposes.