Sense and sensibility: Testing an attention-based view of organizational responses to social issues

According to attention-based theories, to explain organizational attention is to explain organizational behavior. In our study, we test the model of situated attention and firm behavior by examining the effects of attention structures and allocation of attention on organizational outcomes. We hypothesize a positive relationship between attention structures and the allocation of organizational attention that, in turn, has an effect on financial performance. Using a unique data set composed of indicators of social responsibility published by 338 Brazilian organizations between 2001 and 2007, we find support for our hypotheses. Our findings suggest that organizational attention to social issues fully mediates the relationship between attention structures and financial performance.     

Trends in stock-bond correlations

Previous studies document the existence of long-run trends in comovements in the stock and bond markets. Following these findings, this article examines possible trends in stock-bond return correlations. To this end, we introduce a trend component into a smooth transition regression (STR) model including the multiple transition variables of Aslanidis and Christiansen (2012). The results indicate the existence of significant decreasing trends in stock-bond correlations for many advanced safer countries. In addition, although stock market volatility continues to be an important factor in stock-bond correlations, the short rate and yield spread become only marginally significant once we introduce the trend component. Our out-of-sample analysis also demonstrates that the STR model, including the volatility index and time trend as the transition variables, dominates other models. Furthermore, we find a significant increase in stock-bond correlations for riskier euro countries around the beginning of the euro crisis. Our findings of decreasing and increasing trends in stock-bond correlations can be considered a consequence of the decreasing effects of diversification and more intensive flight-to-quality behaviour that have taken place in recent years and after the euro crisis.     

Sources of exchange rate fluctuations: Are they real or nominal?

I analyze the role of real and monetary shocks on exchange rate behavior using a structural vector autoregressive model of the US vis-à-vis the rest of the world. The shocks are identified using sign restrictions on the responses of the variables to orthogonal disturbances. These restrictions are derived from the predictions of a two-country DSGE model. I find that monetary shocks are unimportant in explaining exchange rate fluctuations. By contrast, demand shocks explain between 21% and 37% of exchange rate variance at 4-quarter and 20-quarter horizons, respectively. The contribution of demand shocks plays an important role but not of the order of magnitude sometimes found in earlier studies. My results, however, support the recent focus of the literature on real shocks to match the empirical properties of real exchange rates.     

Speculation in the Oil Market

The run‐up in oil prices since 2004 coincided with growing investment in commodity markets and increased price co‐movement among different commodities. We assess whether speculation in the oil market played a role in driving this salient empirical pattern. We identify oil shocks from a large dataset using a dynamic factor model. This method is motivated by the fact that a small‐scale vector autoregression is not informationally sufficient to identify the shocks. The main results are as follows. (i) While global demand shocks account for the largest share of oil price fluctuations, speculative shocks are the second most important driver. (ii) The increase in oil prices over the last decade is mainly driven by the strength of global demand. However, speculation played a significant role in the oil price increase between 2004 and 2008 and its subsequent collapse. (iii) The co‐movement between oil prices and the prices of other commodities is mainly explained by global demand shocks. Our results support the view that the recent oil price increase is mainly driven by the strength of global demand but that the financialization process of commodity markets also played a role. Copyright © 2014 John Wiley & Sons, Ltd.     

The effect of religiosity on luxury goods: The case of Chilean youths

Religion has always rejected the concept of materialism and urged people to live in simplicity and moderation. Nonetheless, reality reveals a different phenomenon. Studies on religion and materialism have found inconsistent results. We examine the effect of religion on materialism and affective attitudes towards luxury goods and the mediating effect of materialism on affective attitude towards luxury goods. We propose the idea that many religious people reject the concept of materialism, but they consider luxury goods consumption compatible with their religious beliefs. 355 university students show that youth consumers with high intrinsic religiosity possess an affective attitude towards luxury goods. The results show that consumers perceived materialism and luxury goods as two separate constructs. Religious consumers reject the concept of materialism as an attachment to worldly possessions, but they maintain their emotional affection towards luxury goods. The results have several implications for both business and religious leaders. First, from a business perspective, there are no significant differences between religious and nonreligious youth consumers, especially in their acceptance of luxury goods. Simply put, religious youth consumers love God, but they also love Gucci (i.e., luxury goods). On the other hand, if religious leaders are teaching their congregations to reject materialism, they may need to shift the focus of their teaching from materialism to the role of luxury goods in their lives and how the purchase and ownership of luxury items may not reflect the true values of their beliefs.     

Ownership structure and dividend policy: Evidence from Italian firms

Abstract

This paper reports on empirical investigations into the relationship between dividend policy and ownership structure of firms, using a sample of 139 listed Italian companies. Ownership structure in Italy is highly concentrated and hence the relevant agency problem to analyse seems to be the one that arises from the conflicting interests of large shareholders and minority shareholders. This paper therefore attempts to test the rent extraction hypothesis by relating the firm’s dividend payout ratio to various ownership variables, which measure the degree of concentration in terms of the voting rights of large shareholders. The hypothesis that other non-controlling large shareholders may have incentives to monitor the largest shareholder is also tested. The results of the empirical analysis reveal that firms make lower dividend payouts as the voting rights of the largest shareholder increase. Results also suggest that the presence of agreements among large shareholders might explain the limited monitoring power of other ‘strong’ non-controlling shareholders.     

The Innovation Process and the Development of a Sustainability Strategy

ABSTRACT

This article analyzes what influences a firm's choice of strategy—why some firms stick to defensive strategies while others rely on offensive ones. With this in mind a survey was conducted on mineral sector companies associated with the Brazilian Mining Institute. The results show that the majority of companies use an offensive strategy and that some companies use more than one strategy at the same time. That is, they possess a corporate strategy and a sustainability strategy.     

Product differentiation, firm heterogeneity and international trade: Exploring the Alchian–Allen effect

In a model of international trade with horizontally differentiated goods, increasing returns and monopolistically competitive markets, this paper proposes that the degree of differentiation in a product mix–defined as the ratio of the number of varieties to the total value of imports–can be regarded as another aspect of quality. Furthermore, this paper draws a parallel to the Alchian–Allen effect and shows that, when firms are heterogeneous in either fixed or variable costs, the degree of differentiation is increasing in per unit transportation costs.     

City of art as a High Culture local system and cultural districtualization processes: the cluster of art restoration in Florence

This article engages in the debate on cultural economics that has recently become more intense in Italy, in order to focus on two particular aspects: the city of art as an autonomous socio‐economic unit of analysis, and the hypothesis of its districtualization as a driving force for culture‐driven and sustainable economic development. In the article we consider the city of art as a typology of a High Culture local system and we test some hypotheses of cultural districtualization in the art city of Florence. Thus, we concentrate on the ‘artistic component’ of the productive factor CANH, taking into account only private firms that operate in the field of art restoration and are localized in the Florence city territory. With this as our aim, we undertook an analysis and integration of the questionnaires collected in research by ARTEX (1998) that accounted for 145 firms in the cluster of art restoration. Our analyses brought to light a few interesting signs that evidence the occurrence of different degrees of cultural districtualization. Cet article participe au débat sur l'économie culturelle qui s'est récemment animé en Italie, et vise deux aspects particuliers: la ville d'art en tant qu'unité d'analyse socio‐économique autonome et l'hypothèse de sa constitution en districts en tant que moteur de développement économique durable propulsé par la culture. La ville d'art est considérée comme une typologie de système local de culture élevée; ainsi, sont testées quelques hypothèses sur les districts culturels dans la cité d'art de Florence. Les travaux se concentrent sur la ‘composante artistique’ du facteur productif (CANH), tenant compte uniquement des entreprises privées qui uvrent dans la restauration d'art et sont implantées sur le territoire urbain de Florence. Etant donné ce but, une analyse a été entreprise, en intégrant des questionnaires collectés par une enquête d'ARTEX (1998) couvrant 145 entreprises dans le secteur de la restauration d'art. L'étude a mis en avant quelques signes intéressants qui montrent l'occurrence de plusieurs degrés de ‘districtualisation’ culturelle.