Banks' environmental policy and business outcomes: The role of competition

By integrating the two areas of competition–performance and environment–performance, this research explores if competition matters in the relationship between environmental practices and interest margins in the market. A panel of 458 banks from 74 countries for the period of 2006–2016 is used, and the sample is further divided into developed and developing countries. This paper uses the system Generalized Method of Moments estimator to tackle potential omitted variable bias, endogeneity, and simultaneity issues. Without competition, environmental practices only affect banks in developing countries; however, the results show a significant impact for the full sample, including developed countries, when the competition is taken into consideration, suggesting that competition might play a role in the relationship of environmental practices and interest margins. In the full sample, competition impacts the relationship negatively after a moderate level of competition is reached in the market. The environmental practices in developing countries are prone to competition in the market. In developed countries, the competition is found to be lightly positively moderating the impact of environmental practices on interest margins. Based on these findings, it is recommended that developing countries should have a low or moderate level of competition to encourage environmental practices. For developed countries, however, high competition should be preferred to encourage banks to consider environmental practices as one of their core business strategies. These findings are found robust to different statistical estimators.     

Fuel consumption for various driving styles in conventional and hybrid electric vehicles: Integrating driving cycle predictions with fuel consumption optimization*

Improving fuel economy and lowering emissions are key societal goals. Standard driving cycles, pre-designed by the US Environmental Protection Agency (EPA), have long been used to estimate vehicle fuel economy in laboratory-controlled conditions. They have also been used to test and tune different energy management strategies for hybrid electric vehicles (HEVs). This paper aims to estimate fuel consumption for a conventional vehicle and a HEV using personalized driving cycles extracted from real-world data to study the effects of different driving styles and vehicle types on fuel consumption when compared to the estimates based on standard driving cycles. To do this, we extracted driving cycles for conventional vehicles and HEVs from a large-scale U.S. survey that contains real-world GPS-based driving records. Next, the driving cycles were assigned to one of three categories: volatile, normal, or calm. Then, the driving cycles were used along with a driver-vehicle simulation that captures driver decisions (vehicle speed during a trip), powertrain, and vehicle dynamics to estimate fuel consumption for conventional vehicles and HEVs with power-split powertrain. To further optimize fuel consumption for HEVs, the Equivalent Consumption Minimization Strategy (ECMS) is applied. The results show that depending on the driving style and the driving scenario, conventional vehicle fuel consumption can vary widely compared with standard EPA driving cycles. Specifically, conventional vehicle fuel consumption was 13% lower in calm urban driving, but almost 34% higher for volatile highway driving compared with standard EPA driving cycles. Interestingly, when a driving cycle is predicted based on the application of case-based reasoning and used to tune the power distribution in a hybrid electric vehicle, its fuel consumption can be reduced by up to 12% in urban driving. Implications and limitations of the findings are discussed.     

Personality and balanced psychological contracts: The mediating roles of epistemic curiosity and rule‐following behavior

This study extends prior research on the relationships between personality constructs and types of psychological contracts by exploring how the Big Five traits predict balanced psychological contracts. Further, we determine whether epistemic curiosity and rule‐following behavior are key mediators of the proposed relationships. We tested our proposed hypotheses using three‐wave time‐lagged data from 469 respondents. The results indicated that openness to experience was positively associated and both conscientiousness and neuroticism were negatively associated with balanced contracts. Extraversion and agreeableness were not associated with balanced contracts. We also established the mediating role of epistemic curiosity in the relationships between personality traits and balanced contracts, but there was no support for the mediating role of rule‐following behavior in the present study. These findings have important implications for managers and organizations in terms of selecting the right person for a job (person‐job fit) and ensuring employee retention (person‐organization fit), hence having a bottom‐line effect on firm performance. Future research directions are also discussed.     

Developing a Website Service Quality Scale: A Confirmatory Factor Analytic Approach

The surge in online consumers and their preference to buy over the Internet is nudging marketers to embrace e-commerce, but mere online presence without distinct user experience may not help attract and retain customers. Research suggests that website service quality is a determining factor in Internet buyer behavior. Several measurement tools have been used in the context of developed economies to measure e-service quality. The very few empirical researches in emerging economies, including India, motivated the researchers in the present study to refine the WEBQUAL 4.0 scale developed by Barnes and Vidgen (2002 Barnes, S. J., and R. T. Vidgen. 2002. An integrative approach to the assessment of e-commerce quality. Journal of Electronic Commerce Research 3 (3):114–27. [Google Scholar]) to measure the service quality at shopping websites. The present study employs tools like SPSS 20.0 and AMOSS 20.0 to analyze the data through exploratory factor analysis and confirmatory factor analysis. Study results suggest a 14-item WEBQUAL four factor (Ease of Use, Information Quality, Reliability, and Empathy) scale that is appropriate for Indian settings.     

Balance sheet conservatism and audit reporting conservatism

Financial reports are prepared on a going‐concern (GC) basis rather than a liquidation basis even when companies are highly distressed. This allows distressed companies to report book values of assets that greatly exceed their liquidation values, implying a lack of conservatism in the balance sheet. We argue that auditors issue going‐concern opinions in order to warn investors about this lack of balance sheet conservatism. This argument leads to two testable hypotheses. First, for companies that are at risk of bankruptcy, auditors are more likely to issue GC opinions when the book values of assets under the GC assumption are high relative to the expected liquidation values of assets (i.e., when the GC assumption causes the balance sheet to lack conservatism). Second, for companies that enter bankruptcy, the issuance of a prior GC opinion has predictive information content with respect to the wedge between the book values of assets and the future liquidation values of those same assets. Our results strongly support both hypotheses. The findings are important because they indicate that conservative audit reporting helps to compensate for a lack of conservatism in the balance sheet, which arises because the GC assumption permits the book values of assets to exceed their liquidation values.     

Overconfidence and Corporate Tax Policy

Review of Accounting Studies - Using a sample of firms experiencing exogenous CEO departures, we investigate whether firms with overconfident CEOs avoid more tax. We find robust evidence of a...     

Estimation risk and auditor conservatism

Estimation risk occurs when individuals form beliefs about parameters that are unknown. We examine how auditors respond to the estimation risk that arises when they form beliefs about the likelihood of client bankruptcy. We argue that auditors are likely to become more conservative when facing higher estimation risk because they are risk-averse. We find that estimation risk is of first-order importance in explaining auditor behavior. In particular, auditors are more likely to issue going-concern opinions, are more likely to resign, and charge higher audit fees when the standard errors surrounding the point estimates of bankruptcy are larger. To our knowledge, this is the first study to quantify estimation risk using the variance-covariance matrix of coefficient estimates taken from a statistical prediction model.     

Hospitality crisis management practices: The case of Indian luxury hotels

This study examines hospitality crisis management practices within the context of the Indian hospitality industry. The study is a replication of a study previously conducted in Israel. The study employs a questionnaire that evaluates the importance and usage of four themes of practices: marketing, hotel maintenance, human resources and governmental assistance. The findings illustrate which practices managers consider important and which practices managers actually use during a crisis. The paper concludes with recommendations for future research and management of crises.     

Regulating Audit beyond the Crisis: A Critical Discussion of the EU Green Paper

With the European Commission making global leadership claims in the field of audit regulation, the content of its 2010 Green Paper on ‘Audit Policy: Lessons from the Crisis’ warrants careful scrutiny. Important issues raised in the Green Paper include regulatory oversight, competition in the audit market, the dangers of having very few firms with the capacity to audit global transnational corporations, professional judgement, innovative audit practices and, last but not least, social responsibility. This article analyses the principal perspectives and assumptions underpinning the construction of the Green Paper. The aims are threefold: to enhance understanding of the contemporary regulatory mindset of the European Commission, contribute to policy debate and inspire future research.