Reconciling quantile autoregressions of firm size and variance–size scaling

The aim of this paper is to understand what economic mechanisms may cause the Law of Proportionate Effect to break down for fast-growing and shrinking firms. Recent evidence has highlighted that the first-order coefficients of quantile auto-regression of firm size decline across quantiles. Our theoretical results show that negative variance–size scaling is sufficient to yield a decline in quantile auto-regression coefficients if firm log-size is Laplace-distributed, conditional on size one period ahead. However, it is sufficient only for declining auto-regression coefficients for fast-growing firms under Asymmetric Laplace conditional log-size if skewness is decreasing with size. In other words, if the growth of large firms is less dispersed and more left-skewed, size is a disadvantage for the growth of fast-growers, but not necessarily an advantage for fast-decliners. Thus, size-related determinants of negative growth skewness, such as diseconomies of growth, market power, and managerial attention issues, impact on how the LPE is violated. Using data on Dutch manufacturing companies from the Business Register of Enterprises observed between 1994 and 2004, our empirical estimates of quantile regression models confirm the evidence of declining quantile regression coefficients for small–medium firms (20–199 employees) mainly in the right-most quantiles, and for the same subsample, we find that growth rates variance and skewness are decreasing with size. The theoretical propositions of the paper are thus corroborated.     

Do green packages lead to misperceptions? The influence of package colors on consumers’ perceptions of brands with environmental claims

Consumers need accurate information about brands’ environmental impacts to guide their purchase decisions. Researchers have studied consumers’ perceptions of green products and marketers’ environmental claims. Policy makers provide guidelines to minimize deceptiveness of environmental claims. Yet, little attention has been paid to what contextual cues can influence consumers’ judgments of environmental claims and green products. Drawing on conceptual fluency theory, the current research proposes that a color that matches the content of a message makes the information easier to process, thereby increasing the appeal of the message. The authors demonstrate that using the color green on a product’s package can enhance consumers’ perceptions of the brand’s environmental impact. Ironically, this positive effect of green can also lead to consumers’ misperceptions of the brand’s environmental impact if green is used for brands that are not environmentally superior. Implications and suggestions for policy makers, marketers, and consumers are provided.     

An analysis of stability of the north–south growth model of trade: Saddle-path stability of the generalized grossman–helpman model with skilled and unskilled labours

Abstract

Following the Common Agency approach to political equilibrium, we examine how domestic interest groups can influence national policies toward FDI and how the choice of instrument by the government can affect lobbying activities. Domestic firms lobby for lower subsidies when a discriminatory subsidy on FDI is applied. However, when a subsidy is applied uniformly to both groups, they may lobby for higher subsidies. The nature of lobbying is also different for proportional and lump-sum profit subsidies when uniformly applied. The qualitative effect of the number of domestic firms or the degree of corruption on the equilibrium depends on the choice of instruments. Finally, with the help of numerical simulation, we examine whether there is any potential conflict between the government and the lobby groups on the choice of the instrument.     

Misleading Consumers with Green Advertising? An Affect–Reason–Involvement Account of Greenwashing Effects in Environmental Advertising

Drawing from the affect–reason–involvement model, we examine how misleading advertising about the environmental features of products, or greenwashing, affects how consumers perceive ads and brands. Using data from two experimental studies with quota-based samples in the United States (N = 486) and Germany (N = 300), we compare nondeceptive claims with two types of claims often used in greenwashing: vague claims and false claims. We also identify the presence of pleasant nature-evoking images and test for interaction effects with two types of environmental involvement: environmental concern and environmental knowledge. Results indicate that while vague claims do not enhance consumers' perceived greenwashing regardless of their environmental knowledge or concern, false claims do, which consequently harms consumers' attitudes toward those ads and brands. In the United States, consumers' environmental knowledge moderates that effect, whereas all consumers in Germany could identify false claims as attempts at greenwashing. Moreover, associating greenwashing claims with nature-evoking images activates an affective persuasive mechanism that appeals to consumers' affinity for nature, which not only positively influences their evaluations of ads and brands but also influences their attitudes toward ads and brands more strongly than perceived greenwashing. In closing, we discuss the theoretical and practical implications of these findings.     

Compliance with Mandatory Environmental Reporting in Financial Statements: The Case of Spain (2001–2003)

Corporate, Social, Ethical and Environmental Reporting (SEER) should ideally discharge the accountability of an organisation to its stakeholders. Voluntary reporting has been characterised by a dearth of neutral and objective information such that the advocates of SEER recommend that it be made compulsory. Their underlying rationale is that legally specified disclosure requirements and enforcement mechanisms will enhance the quality of such reporting. This paper sets out to explore how realistic this scenario actually is, in view of the conflicting interpretations in the literature on this subject. To that end, a survey of the reporting patterns of 78 of the largest Spanish companies between 2001 and 2003 examines the extent of their compliance with the ICAC-2002 standard, which obliged them to make environmental disclosures in their financial statements. The results suggest that progressive and improved regulation could increase the volume and quality of SEER disclosures. They also suggest, however, that persistent non-compliance means that the problems associated with voluntary disclosure still exist. Finally, through an impression management perspective, the study reveals, the diverse strategies, ranging from dismissal to concealment, that are employed by companies to avoid transparency. As regulation improves and enforcement expectations rise, it becomes more difficult to dismiss compulsory reporting norms. As a result, some firms engage in more complex concealment strategies to attain corporate legitimacy, depriving stakeholders of regulatory information. The latter point serves to reconcile apparently contradictory explanations in the literature as to whether legitimacy theory might explain partial compliance with SEER regulation. Irene Criado-Jiménez is a Doctoral Candidate at the Departamento de Economía y Administración de Empresas, Universidad de Burgos. Her research interests include accounting for sustainable development and corporate accountability. Manuel Fernández-Chulián is a Doctoral Candidate at the Departamento de Economía y Administración de Empresas, Universidad de Burgos. His research interests include sustainability reporting and full cost accounting. Francisco Javier Husillos-Carqués is Assistant at the Departamento de Gestión de Empresas, Universidad Pública de Navarra and a Doctoral Candidate at the Universidad de Burgos. His research interests include social and environmental reporting and environmental management. Carlos Larrinage-González is Associate Professor at the Departamento de Economía y Administración de Empresas, Universidad de Burgos. His research interests include social and environmental accounting. He writes for interdisciplinary journals in accounting. He has co-edited special issues in European Accounting Review and Accounting, Auditing and Accountability Journal and currently is an Associate Editor of the Revista de Contabilidad-Spanish Accounting Review.     

Is the speed of post-acquisition integration manageable? Case study: post-acquisition integration of HSBC with the Mercantile Bank, 1959–84

This study aims to fill in the gaps in existing business history research regarding post-acquisition integration by adopting a case study of the post-acquisition integration process between HSBC and Mercantile Bank (MB) 1959–84. It explores the impact of the institutional environment and organisational transformation on the speed of integration and tries to explain why the integration between HSBC and MB took so long. This study may also give some indications to the current emerging multinational companies (MNCs) from the developing countries.     

Firm size,firm growth,and persistence of chance: Testing GIBRAT's law with establishment data from Lower Saxony, 1978–1989

Using data for some 7000 manufacturing establishments from Lower Saxony for 1978–1989 we tested for the validity of GIBRAT's Law of Proportionate Growth. We found that the law is only valid for very few groups of firms in some of the periods covered. However, we did not find that small firms grew systematically faster or slower than larger firms, or vice versa. On the other hand, we found persistence of chance in the sense that a firm grows faster if it happened to grow faster in the past, too.This paper is part of the research project Production, Employment Growth, and Exports by Lower Saxonian Firms. The computations based on the establishment level data from the official surveys of the manufacturing sector were made possible by a special arrangement between the Ministry of Economics, the Statistical Office, and the Labour Research Group at the Department of Economics, Hannover University. I am grateful to Uwe Rode for preparing the data base, to Wihelm Lorenz for writing a program that makes it possible to use these large data set on a PC, and to an unknown referee for helpful comments on an earlier version of this paper.     

The impact of a U.S.–U.K. free trade agreement on workers: a CGE model with worker displacement

Business Economics - On May 5, 2020, the U.S. Trade Representative announced plans to negotiate a free trade agreement with the United Kingdom (USUKFTA). We use GTAP to model the economic...     

Correction to: The impact of a U.S.–U.K. free trade agreement on workers: a CGE model with worker displacement

Business Economics -