In Which Context is the Option Clause Desirable?

The option clause is a contractual device from free banking experiences meant to prevent banknote redemption duels. It has been used within the Diamond and Dybvig (J Pol Econ 91: 401–419, 1983) framework to suggest that very simple contractual solutions can act as an alternative to deposit insurance. This literature has, however, been ambiguous on whether the option clause can replace deposit insurance outside of those two contexts. It will be argued that the theoretical clause does not generally affect the likelihood that a solvent bank goes bankrupt because of a bank run, as empirical evidence suggests it is already near null, and that the exercise of the clause will have the effect of diminishing the size of creditor claims on bank assets because it exacerbates the agency problem of bank debt. It will therefore be argued that the clause is only desirable in (a) free banking systems that are historically devoid of bank runs in the first place and have other means of managing debt-related agency problems and (b) under the unrealistic assumption that bank runs are self-fulfilling prophecies. It will be argued that the agency problem of bank debt makes the option clause undesirable outside of free banking systems.     

Voting in Hiring Committees: Which “Almost” Rule is Optimal?

We determine the scoring rule that is most likely to select a high-ability candidate. A major result is that neither the widely used plurality rule nor the inverse-plurality rule are ever optimal, and that the Borda rule is hardly ever optimal. Furthermore, we show that only the almost-plurality, the almost-inverse-plurality, and the almost-Borda rule can be optimal. Which of the “almost” rules is optimal depends on the likelihood that a candidate has high ability and how likely committee members are to correctly identify the abilities of the different candidates.     

Financial Instruments and Promotional Banking in the EU are Growing — But is this Justified?

Institutions and the European Investment Bank are at the forefront of EU investment policy. Their role is expanding and it is now a widely-held position that an improvement in the economy will not eliminate the need for their intervention. The proposals for the 2021–2027 MFF launch more financial instruments and present ‘InvestEU’ as a larger more powerful version of the European Fund for Strategic Investments (EFSI). However, promotional banking is often misunderstood and so is the actual size of promotional banking in Europe in which InvestEU will operate.     

Which is the safe haven for emerging stock markets,gold or the US dollar?

This paper examines whether gold or the US dollar is a safe haven for emerging stocks. By calculating the low-high tail dependence between markets via copulas and the downside risk gains of portfolios, we find that both gold and the US dollar can serve as a safe haven for emerging stocks; that the US dollar is better than gold in most cases, while its superiority in hedging infinitely extreme risks is weakened in the subsample of global financial crisis and the out-of-sample; and that the downside risk gains offered by the US dollar for China and Thailand are very attractive.     

Which Dimension of Corporate Social Responsibility is a Value Driver in the Oil and Gas Industry?

The oil and gas (O&G) industry suffers from a negative perception of poor sustainability. O&G companies are therefore engaged in several socially sustainable activities related to community development and environmental protection. This article determines whether the social, environmental, and economic dimensions of corporate social responsibility (CSR) are equally value‐additive to O&G companies. We measure the company‐specific level of CSR activities from the information provided in the annual financial reports of O&G companies and determine the effects of CSR dimensions on firm value. We find that CSR enhances firm value of O&G companies. While social activities such as employee well‐being and community development are key value‐drivers, environmental and economic sustainable activities have an insignificant impact on the market value of O&G companies. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd     

Which Brands Gain Share from Which Brands? Inference from Store-Level Scanner Data

Market share models for weekly store-level data are useful to understand competitive structures by delivering own and cross price elasticities. These models can however not be used to examine which brands lose share to which brands during a specific period of time. It is for this purpose that we propose a new model, which does allow for such an examination. We illustrate the model for two product categories in two markets, and we provide share-switching estimates. We also demonstrate how our model can be used to decompose own and cross price elasticities.JEL Classification: C10, C51, C53, M31     

Which institutions encourage entrepreneurial growth aspirations?

We develop entrepreneurship and institutional theory to explain entrepreneurial growth aspirations across individuals and institutional contexts. Our framework generates hypotheses at the national level about the negative impact of higher levels of corruption, weaker property rights and greater government activity on entrepreneurs' aspirations to increase employment. We further explore whether individual's social networks compensate for weaknesses in national institutions. We use the Global Entrepreneurship Monitor surveys in 42 countries for 2001–2006, applying a multilevel estimation framework to test our ideas. We find that the relationship between growth aspiring entrepreneurs and institutions is complex; they benefit simultaneously from strong government (in the sense of property rights enforcement), and smaller government, but are constrained by corruption. Social networks mediate some but not all institutional deficiencies.     

Which manufacturing firms learn by exporting?

Using a longitudinal database (1996–2003) at the plant level, this article analyses the causal nexus between international trade engagement and productivity in Portugal. By applying the propensity score matching and a differences-in-differences estimator, the learning-by-exporting hypothesis is analysed in particular. A higher growth of labour productivity and total factor productivity is found for new exporting firms. To uncover the channels through which the learning effects are driven, the same methodology is applied to some sub-samples. Learning effects are higher for new exporters that are also importers or start importing at the same time. Other factors affecting learning ability are found in firms exporting to more developed markets, in those that achieve a certain threshold of export intensity and mainly for those firms that belong to sectors where Portugal has a comparative disadvantage.     

Which Is the Better Option? Quicker or Cheaper?

Both time and money are valuable scarce resources, but their different characteristics lead to different perceived value in saving time and saving money. The perishability and fixed supply associated with time may enhance its value; however, its inherent nature, difficulty accounting for value of time, infungibility, and perceived slack may weaken its value. Drawing on theories and findings in the domains of temporal and monetary judgment, this research study posits that people usually underappreciate the value of time because the information pertinent to the value of time is less accessible in peoples’ memory compared with monetary value. Hence, prompting people regarding the value of time and the value of money could make their preference for saving time similar to that of saving money. Additionally, people typically expect more time slack than money in the future, thereby discounting their preference for saving time faster than for saving money. The results of a series of experiments support these hypotheses.     

What is Capital Flight?

This paper offers a definitive distinction between capital flight and capital outflows. It unifies and synthesises the capital flight concept as used in both theoretical and empirical work and shows that various definitions have two common elements. These are: (1) capital flight is a subset of capital outflows from developing countries by its residents; (2) these outflows must be motivated by risks and uncertainties that are peculiar to developing countries. The former points to the counter‐intuitive nature of these outflows. The latter gives these counterintuitive outflows’ explanation. We then propose an econometric method to measure this concept, and illustrate its use by applying it to Korea.     

Desire to be ethical or ability to self‐control: Which is more crucial for ethical behavior?

Promoting ethical decisions and behaviors is challenging for any organization. Yet managers are still required to make ethical decisions under conditions which deplete their self‐control resources, such as high stress and long hours. This study examines the relationships among symbolic and internal moral identity, self‐control, and ethical behavior, and investigates whether self‐control acts as the mechanism through which moral identity leads to ethical behavior. Findings indicate that internal moral identity overrides symbolic moral identity in the relationship with self‐control and that self‐control fully mediates the relationship between internal moral identity and ethical behavior. The implications for organizations is that while rules, procedures, and ethics training are useful, managers with a strong moral compass will be more likely to practice self‐control leading to more ethical behaviors.     

Exchange Rate Shocks and U.S. Services and Agricultural Exports: Which Export Sector is More Affected?

In this article, a vector autoregressive model is constructed with monthly data from 1992:1 to 2009:12 to investigate the exchange rate propagation mechanisms to real exports of U.S. services and agricultural sectors. Using plausible identification assumptions consistent with many open economy macro models, the results indicate that exchange rate shocks impact services exports more than they do on agricultural exports. Moreover, the shocks are more persistent on services relative to agricultural exports.     

Which Dimensions of Social Responsibility Concern Financial Investors?

Social and environmental ratings provided by social rating agencies are multidimensional. The first goal of our paper is to identify a small number of independent and relevant socially responsible (SR) dimensions reflecting a firms’ coherent posture toward social issues. We put forward that these dimensions are not exactly the same as the ESG ones (Environment, Social, and Governance). Using the six sub-ratings provided by the Vigeo rating agency, we perform a principal component analysis and we highlight three main independent SR dimensions related to (1) business stakeholders (employees, customers, and suppliers), (2) societal stakeholders (environment and society), and (3) financial stakeholders (stockholders and debt holders). The second objective of our paper is to explore the link between stock returns and these three SR dimensions. Our most notable finding is that for each SR dimension, investors ask for an additional risk premium when they accept to hold non-socially responsible stocks. The cost of equity is thus lower for SR firms. The average premium over the period 2003–2010 is larger for the components “business stakeholders” and “financial stakeholders” than for the component “societal stakeholders.” The premium for this last component has only existed since the end of 2008. Since that time, environment and community involvement have become important risk factors strongly considered by investors. For the three dimensions, investors notably penalize large non-social firms and reward small social firms.