Prospects for the Euro: Why has it been so weak?

In this article, Stephen Hall and Brian Henry consider the reasons for the Euro's weakness since its introduction and ask what are the likely prospects for a recovery to near-fundamental levels over the medium term. They conclude that the major factor leading to the currency's depreciation since 1999 has been a rise in the risk premium surrounding the Euro. A successful launch of Euro notes and coins may help to eliminate this premium.     

Why do the poor live in cities? The role of public transportation

More than 19 percent of people in American central cities are poor. In suburbs, just 7.5 percent of people live in poverty. The income elasticity of demand for land is too low for urban poverty to come from wealthy individuals' wanting to live where land is cheap (the traditional explanation of urban poverty). A significant income elasticity for land exists only because the rich eschew apartment living, and that elasticity is still too low to explain the poor's urbanization. The urbanization of poverty comes mainly from better access to public transportation in central cities.     

Why does forecast combination work so well?

Forecast combinations were big winners in the M4 competition. This note reflects on and analyzes the reasons for the success of forecast combination. We illustrate graphically how and in what cases forecast combinations produce good results. We also study the effects of forecast combination on the bias and the variance of the forecast.     

Why is equity order flow so persistent?

Order flow in equity markets is remarkably persistent in the sense that order signs (to buy or sell) are positively autocorrelated out to time lags of tens of thousands of orders, corresponding to many days. Two possible explanations are herding, corresponding to positive correlation in the behavior of different investors, or order splitting, corresponding to positive autocorrelation in the behavior of single investors. We investigate this using order flow data from the London Stock Exchange for which we have membership identifiers. By formulating models for herding and order splitting, as well as models for brokerage choice, we are able to overcome the distortion introduced by brokerage. On timescales of less than a few hours the persistence of order flow is overwhelmingly due to splitting rather than herding. We also study the properties of brokerage order flow and show that it is remarkably consistent both cross-sectionally and longitudinally.     

TUC Organizing Academy 10 years on: what has been the impact on British unions?

The year 2008 saw the 10th anniversary of the establishment of the British Trades Union Congress (TUC) Organizing Academy which was designed to train a new cadre of union officials. The aim was to develop a culture of organizing that could help to transform the decline in trade union membership by bringing in new members who had been trained to be active within their unions. Through in-depth interviews and a survey of graduates of the Academy we look at the impact this project has had on individuals, their unions, and the wider union movement. We are particularly keen to give voice to the graduates as they have been charged with the difficult task of transforming the British trade union movement. We find evidence that trained organizers continue to be influential within their unions, but that many (although by no means all) get stuck in relatively junior positions because of the lack of a specialist career structure. This inevitably constrains their influence. The division between ‘servicing’ and ‘organizing’ functions is an almost inevitable consequence of the establishment of a separate, specialist organizing role and can also cause tensions and constrain the spread of organizing practices within unions. Despite this, there is evidence of widespread adoption of basic organizing practices, although more strategic organizing is still far less common. More widely, there is strong evidence of organizers developing new and influential networks between unions, and of individual unions implementing specialist organizing training. Despite this mixed evaluation, we argue that the creation of the Academy has had a considerable impact on British unions and has fostered important and innovative organizing approaches that would probably not have emerged otherwise.     

Why has China’s vertical specialization declined?

Vertical specialization (VS) is quantified by the VS share, which measures the average import content per dollar of exports. A characteristic of China’s export trade is its strong dependence on assembly and processing activities. To take proper account of this, China’s VS shares should explicitly distinguish processing export production from other production. We estimate China’s annual VS shares from 2000 to 2012—the latest year for which a special input–output table is available that makes such an explicit distinction. We find that VS shares increased from 2000 to 2004 and subsequently started to decrease. To explore why it has declined, we introduce a new structural decomposition approach. We find that the decrease of the VS share appears to have been driven mainly by the substitution of imported intermediates by domestic products. This occurred in particular in the production of exports, which implies an upgrading of China’s position in global value chains.     

Are public sector personnel managers the profession's poor relations?

This article is concerned with differences between personnel practitioners in the private and public sectors. Drawing on survey and interview data from practitioners in both sectors, the authors report that public sector practitioners are less well‐qualified and are paid less than their private sector counterparts. Very few practitioners move between the sectors, suggesting the existence of separate and self‐contained career structures. It is argued that this is not a separation of equals, and is maintained partly by the existence of a system of myths and stereotypes which have the effect of discouraging able professionals from entering the public sector. The article considers the reasons for the continuing differences and the separation, particularly in the light of public sector reforms which might have been expected to have diminished them. The implications for personnel management in the public sector and for the personnel profession in general are then discussed.     

Why are the Pentagon and the CIA in Hollywood?

The CIA and the U.S. Department of Defense are both engaged in programs to influence the content of movies produced by Hollywood studios. Although they claim their only purpose in these ventures is to guarantee the accuracy of how military and intelligence activities are conducted, it is clear that their agenda goes beyond that goal. Their true aims include ensuring that movies project a positive image of the relevant government agencies. However, the CIA and DoD differ in their understanding of what constitutes good publicity. Films scrutinized and supported by military agencies are primarily evaluated according to whether they provide a vehicle for showing the technical and organizational competence of the Pentagon. To that end, films based on comic book characters or extraterrestrial invaders are viewed positively because they show the war‐fighting capacity of the military without having to name any actual enemy. The CIA, by contrast, prefers to support films that enable citizens to develop a stronger sense of patriotism in a world of moral ambiguities. As a result, the CIA is much less fearful of revealing the dark side of its undertakings, as long as a given movie presents a story that shows the value of the CIA in protecting the security of the nation.     

Lowering the Marginal Corporate Tax Rate: Why the Debate?

In an effort to attract new investors and retain existing producers, governments use corporate tax rates as a policy tool for industrial recruitment, resulting in inter‐state tax competition. Foreign direct investment (FDI) growth and GDP growth are the two policy outcomes gauged in inter‐state tax competition. The assumption is that lower corporate taxes lead to increases in FDI, which results in capital formation that generates GDP growth. This 60‐nation panel study tests that assumption through examining economic indicators contingent on taxation, such as FDI and mergers and acquisitions among multinational corporations between 1999 and 2009. The results suggest that reduced corporate tax rates can increase FDI but decrease annual GDP growth. The main policy implication is that tax competition may attract investment, but may not promote overall economic growth, offering support for value‐extraction theories.     

Why do firms set environmental performance goals?: Some evidence from organizational theory

Organizational goal setting is considered a critical strategic first step for corporations as it provides the basis for developing a roadmap for organizational activity as well as guidance for establishing the metrics to measure progress. Yet despite significant research interest in the environmental performance of corporations, environmental goal setting has received little attention. For example, it is not known why firms set environmental goals. Understanding this goal setting behavior is necessary to develop mechanisms to improve organizations' environmental management and performance. This study uses organizational change models of institutionalism, stakeholder management, natural selection, strategic choice and organizational learning to examine why firms set environmental performance goals. First, propositions related to environmental goal setting are developed from the models. The goal setting propositions use the goals of the US EPA's 33/50 programme, a national voluntary pollution prevention effort which aimed for a 33% reduction in releases by 1993 and a 50% reduction by 1995, as a basis for comparison to individual company goal setting. Next, the toxic release reduction goals of the 118 US corporations who set goals are analysed to determine which organizational change model propositions they support. All five models of organizational change examined here–institutionalism, stakeholder management, natural selection, strategic choice and organizational learning–show some promise in explaining corporate environmental goal setting. The combination of these models leads to the following depiction of the motivation for toxic release reduction. Firms will set goals to reduce toxic releases in an effort to respond to regulators and other factors in the institutional and stakeholder environment. This goal setting is likely to be enhanced if it can be more directly tied to economic benefits such as cost savings or if it is chosen by natural selection. This in turn will promote organizational learning with the end result of better environmental and economic performance. These findings provide some empirical evidence on which to base strategies for improving corporate environmental management. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.     

Simply the best? A systematic literature review on the predictive validity of employee performance for leader performance

Meritocratic promotion—promoting the best performing employees—is a pervasive strategy to fill leader positions. However, the predictive validity of this strategy is unclear due to diverging theoretical predictions from different research disciplines and due to inconsistent empirical results. Further, the different disciplines rarely acknowledge and refer to each other, thereby impeding a cumulative understanding of meritocratic promotion. With our systematic review, we intend to initiate an interdisciplinary dialogue by (i) providing an overview of pertinent theoretical approaches including their deviating predictions, (ii) proposing mediators and moderators of the relationship of employee performance and leader performance to improve future research on meritocratic promotion, (iii) assessing the study quality, and (iv) summarizing and discussing empirical findings to advance the understanding of the predictive validity of meritocratic promotion. We conclude by presenting theoretical conclusions, point towards future research directions, and provide guidance for future research, including a checklist. We also discuss practical implications for human resource management.     

Why has China Grown So Fast? The Role of Physical and Human Capital Formation*

Cross‐province growth regressions for China are estimated for the reform period. Two research questions are asked. Can the regressions help us to understand why China as a whole has grown so fast? What types of investment matter for China's growth? We address the problem of model uncertainty by adopting two approaches to model selection to consider a wide range of candidate predictors of growth. Starting from the baseline equation, the growth impact of physical and human capital is examined using panel data techniques. Both forms of capital promote economic growth. ‘Investment in innovation’ and private investment are found to be particularly important. Secondary school enrolment contributes to growth, and higher education enrolment even more so.     

R&D: the missing link between corporate social performance and financial performance?

Management Review Quarterly - The relationship between corporate social performance (CSP) and financial performance (CFP) has been analyzed for decades. Despite these efforts, the results remain...     

Does confidence enhance performance? Causal evidence from the field

We analyze the effect of self‐confidence on performance using data from top‐level professional biathlon competitions. We exploit this dual nature of the sport by using snow conditions affecting performance on the skiing track as exogenous variation in confidence on the shooting range. Using round‐level data on 254 competitions between 2009 and 2013, we show that the less confident athletes are, the worse their performance is on the shooting range. Effects for women are estimated to be generally smaller and less robust. We show that our results are not driven by fatigue or exhaustion specific to the competitive setting we analyze.