The Agency Relationship in Churches: An Empirical Analysis

Abstract . The agency relationship has been observed in a variety of settings. Churches, like other organizations, are plagued with the typical agency problems of moral hazard, observability, goal displacement, and risk aversion. How do churches cope with these issues in dealing with their most critical resource, clergy? This study analyzes the agency relationship between churches and their clergy. Using data from nine denominations, this study finds strong evidence that pastor compensation is not tied directly to performance, but rather indirectly through promotion tournaments. Successful pastors are rewarded by being called to larger, presumably wealthier and more prestigious, congregations. Since it is so difficult to observe and measure a pastor's performance in specific activities, churches differentiate good pastors from mediocre ones by considering their total performance, rather than any specific activities.     

An environmental policy of green intellectual capital: Green innovation strategy for performance sustainability

This study examines how green intellectual capital (GIC) affects economic and green performance through green innovation. We show ways in which a firm's performance is influenced by three dimensions of GIC, that is, green human capital (GHC), green relational capital (GRC), and green structural capital (GSC), and use the mediating role of green innovation to explain the relationships. The results of a survey conducted on 138 high-tech firms indicate that the three GIC constructs positively affect economic performance, green performance, and green innovation, respectively. Further analysis finds that green innovation fully mediates the linkage of GHC–economic performance and GSC–green performance and partially mediates the linkage of GRC–economic performance and GRC–green performance. We find that green innovation does not mediate the linkage of GSC–economic performance and GHC–green performance, and this contributes towards business strategy and implementation of green innovation practices.     

Do macroeconomic and financial governance matter? Evidence from Germany, 1950–2019

This study hypothesises that economic governance matters for economic performance; neglecting its role in creating positive synergies between macro- and microeconomic institutions has underlain significant coordination failures and costs. This study examines economic governance in the context of mutual feedback between macro-financial governance (FGV), macro-non-financial governance (NFGV), and micro-financial development (FND) in Germany in the period 1950–2019. The study uses an institutionalist approach, introducing two modes of economic governance based on institutional complementarities and tests its hypotheses using both an exhaustive structuralist analysis and a time-series quantitative technique based on the Autoregressive Distributed Lag cointegration model and the Vector Error Correction Mechanism. The study concludes that (i) the German model of economic governance based on the positive complementarities between FGV, NFGV and FND in the period 1950–1982 significantly enhanced real economic performance, that (ii) the fragmentation of the model became a key determinant of the country’s weak economic performance in the periods 1983–2019 and 1990–2019, and that (iii) the path-dependence of coordinational mechanisms and underlying institutional dynamics, though fragmented, prevented the genesis and embedding of an irrational exuberance in the country.

     

Updating Input–Output Tables with Benchmark Table Series

Numerous methods have been proposed to update input–output (I–O) tables. They rely on the assumption that the economic structure will not change significantly during the interpolation period. However, this assumption may not always hold, particularly for countries experiencing rapid development. This study attempts to combine forecasting with a matrix transformation technique (MTT) to provide a new perspective on updating I–O tables. Under the assumption that changes in the trend of an economic structure are statistically significant, the method extrapolates I–O tables by combining time series models with an MTT and proceeds with only the total value added during the target years. A simulation study and empirical analysis are conducted to compare the forecasting performance of the MTT to the Generalized RAS (GRAS) and Kuroda methods. The results show that the comprehensive performance of the MTT is better than the performance of the GRAS and Kuroda methods, as measured by the Standardized Total Percentage Error, Theil's U and Mean Absolute Percentage Error indices.     

The Performance Implications of Financial and Non‐Financial Rewards: An Asian Nordic Comparison

This study empirically investigated culture's consequences on employee perceptions of the performance implications of financial and non‐financial rewards. Using a sample (n = 568) drawn from the banking industry in Finland and Hong Kong, we found that although the effects and predictive capability of culture (i.e. masculinity–femininity, individualism–collectivism, uncertainty avoidance, and power distance) offered some important insights, a range of other contextual factors (i.e. organizational, institutional, economic) wielded influence over and shaped reward–performance values, preferences, and behaviours. The emergence of these new paradigms necessitates that the US centric economic and behavioural theories (e.g. exchange) that underpin reward–performance be revisited and extended if they are to be applicable in the international context. Understanding the influence of a range of contextual forces is therefore critical to multinational organizations attempting to implement effective reward strategies aimed at achieving a diverse set of performance priorities. In addition to these novel theoretical and practical contributions, this study also paves the way for future research in this promising area of management studies.     

How does the economic policy uncertainty affect the relationship between financial slack and firm performance in emerging countries?

This study investigates the moderating effect of economic policy uncertainty (EPU) on the relationship between slack resources and firm performance in emerging countries. By using 47,523 firm-year observations from seven emerging market economies through the period of 2010–2018, the results show an inverse U-shaped relationship between slack resources and firm performance. The findings also demonstrate that EPU acts as a negative moderator for the slack–performance relationship. In high EPU environments, the marginal benefit from one additional unit of slack is smaller relative to low EPU environments. This study contributes to the slack resources-firm performance literature by emphasizing the role of the broader external environment as a moderator.     

Social Return on Investment (SROI) and Performance Measurement

Abstract

Social enterprises are being promoted as responsive and innovative way to deliver public services. As part of this promotion, these organizations are being required to demonstrate the social and economic value they generate. Social return on investment (SROI) is a performance measurement tool currently being encouraged to capture this impact. This paper draws on survey and interview data to analyse how SROI is used and understood in health and social care settings. It indicates that despite being accepted as an internationally recognized measurement tool for social enterprise, SROI is underused and undervalued due to practical and ideological barriers.     

Understanding Russian regions’ economic performance during periods of decline and growth—An extreme bound analysis approach

This article uses “extreme-bound”-type analysis to revisit the determinants behind the widely differing economic growth in Russian regions prior to the recent global financial crisis. Using data of regional growth in 1995–2006 for 77 Russian regions, it examines the growth drivers for the phase of economic decline up to 1998 and for the period of strong growth afterwards separately. Looking at forty variables considered to be potentially related to growth, it determines, for each of the two periods, the ones robustly associated with Russian economic performance. Among the variables considered are proxies of politico-institutional features, indicators of economic reform, and measurements of both economic and non-economic initial conditions. The main findings are as follows: during the period of economic decline up to 1998, differences in Russian regional growth were almost entirely driven by initial conditions, with resource and human capital endowments, industrial structure, and geographical location playing the dominant roles. However, after the 1998 crisis, the importance of initial conditions declined and was basically reduced to fuel production, advantageous geographical location, and population structure. There is also some evidence that more reform-oriented policies and better regional leadership made a difference. These results could be seen as pointing to determinants of economic performance in periods of actual economic decline being different from those in normal times of economic growth.     

Appropriate assumption on cross-hauling national input–output table regionalization

Input–output tables are useful for regional economic analyses. Although scholars often regionalize national input–output tables, cost-related issues make surveying regional trade flow difficult; hence, non-survey approaches are implemented instead. While location quotient (LQ) approaches have been used widely, they ignore cross-hauling in interregional trade. Therefore, alternative non-survey approaches with different assumptions on cross-hauling are used, such as cross-hauling depends on regional size and cross-hauling is proportional to its potential determined by output or demand. This study concludes that the most appropriate assumption, as per the relative performance of non-survey approaches, is that cross-hauling is in proportion to trade volume.     

Private Debt and Timely Loss Recognition

Abstract

In this study, we investigate whether private debt contracting provides incentives for borrowers to recognize economic losses earlier in accounting earnings. Focusing on the window around firms' issuances of private loans, we document that timely loss recognition significantly increases following an issuance. This effect is significantly stronger for debt contracts that include performance covenants acting as trip-wires when firm performance deteriorates. We also find that timely loss recognition is particularly used when writing debt contracts is hampered by uncertainty about a firm's future development. These findings are consistent with timely loss recognition being used to increase contract efficiency by facilitating state-contingent control allocation based on a borrower's performance over the loan term.     

Sustainability performance analysis of small and medium sized enterprises: Criteria,methods and framework

Small and medium sized enterprises (SMEs) play an important role in any economy as they contribute to GDP and employment. However, sustainability (right combination of economic, environmental and social) of SMEs is a major concern as they prioritize economic performance over environmental and social to remain competitive. Majority of prior researches on SMEs' sustainability either look at the impact of a few limited enablers (e.g. lean, green, innovation etc.) on sustainability performance or the effect of pressures and barriers on the sustainability performance. There is a clear gap of a holistic and robust framework for sustainability performance analysis in order to measure and improve sustainability performance. This research bridges this knowledge gap by addressing two research questions – what practice and performance criteria are being considered for sustainability performance analysis in a broad environmental, economic and social context, how are they related, and what methods are being used to derive the relationship between sustainability practices and performance. These research questions are addressed through a systematic literature review of 58 papers, published between 2005 and 2018 in leading journals. First, an objective content analysis is undertaken in order to identify sustainability practices and performance criteria along with their frequency of usage in prior research. Second, the correlation among the variables is studied. Third, the methods for analyzing the relationships of the criteria are identified. Finally, a framework for analysing correlation of SMEs’ sustainability practices and performance in order to measure and improve performance using statistical modeling approach is proposed.     

Boosting environmental management: The mediating role of Industry 4.0 between environmental assets and economic and social firm performance

The adoption of new innovative ecosystems linked to Industry 4.0 (I4.0) in industrial firms has created new opportunities for performance. In this study, we investigate whether I4.0 can reinforce environmental asset management in achieving firm economic and social performance. We intend to contrast the existence of I4.0-based reward mechanisms for being green. Using a panel of 1028 Spanish industrial firms in 2009–2016 period and a partial least squares structural equation modelling econometric methodology, the research has obtained two main results. First, the management of environmental assets generates positive effects on the economic and social performance of the industrial firm. Second, research findings confirm the mediating role of I4.0, which ends up reinforcing the relationship between environmental assets and the economic and social firm performance. The results obtained highlight the importance of complementary relationships between digital and environmental transformation to promote firm performance. Implications for firm strategy and business models are also discussed.     

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.     

Modeling the Impacts of Corporate Commitment on Climate Change

The aim of this paper is to propose an integrative framework for understanding the determinants of business strategies to reduce greenhouse gas emissions and the impact of these determinants on performance. The proposed structural equation model is based on a survey of 319 Canadian manufacturing firms. The study calls into question the traditionally positive relationship between a firm's environmental commitment and its economic motivations. However, the results also show a win–win relationship between the commitment to reduce greenhouse gas emissions and financial performance. This study contributes to the understanding of the motivations underlying the efforts manufacturers make to tackle climate change and their economic benefits. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

The management of sustainable development: A longitudinal analysis of the effects of environmental performance on economic performance

The literature on sustainable development has largely focused on investigating the relationship between companies' environmental and economic performance. However, many aspects remain unexplored, and empirical studies are far from reaching a consensus due to the heterogeneity of the environmental and economic measures and methodologies used. This study contributes to the literature on sustainable development by considering a panel of 998 US companies observed over the period 2003–2017 using both traditional panel data methods and an unconditional quantile regression technique. The empirical evidence confirms that environmental performance, measured in terms of environmental orientation and environmental innovation, positively affects returns on assets and equity. It also demonstrates that these returns change across quantiles and depend on the capacity of green companies to generate the same streams of income as nongreen companies but with less capital. In other words, green firms tend to be more efficient in generating future wealth.     

Testing for Distortions in Performance Measures: An Application to Residual Income‐Based Measures like Economic Value Added

Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical test developed by Courty and Marschke (Review of Economics and Statistics, 90, 428–441) to detect whether the widely used class of residual income‐based performance measures—such as economic value added (EVA)—is distorted, leading to unintended agent behavior. The paper uses a difference‐in‐differences approach to account for changes in economic circumstances and the self‐selection of firms using EVA. Our findings indicate that EVA is a distorted performance measure that elicits the gaming response.     

The remuneration of CEOs and corporate financial performance in Norway

Economics and management literatures advocate that senior company executives should be remunerated on the basis of the financial performance of the firms they manage. This helps align the interests of management with those of stockholders. There are, however, problems in implementing pay for performance schemes and these, along with other factors, may lead to there being no empirical relationship between compensation and stockholder returns. This study set out to explore the determinants of chief executive compensation in Norwegian stock exchange listed firms. To date there have been very few studies on this topic using data from Norway; most previous research has employed American data. The results show a positive relationship between CEO pay and corporate size but there was no significant association between remuneration and corporate financial performance as measured by accounting profitability and as measured by stock returns. Estimates of the value added by companies were significantly related to chief executive pay. There was also a positive and significant relationship between a CEO's compensation and the average wage level of the company. This association may be due to the unique characteristics of Norway's social and economic structure.     

Some causes of interstate differences in community bank performance

This study assesses the relationship between the performance of community banks and conditions in their marketplaces over the 1994–2008 period. A panel model is used, in which the states serve as the panels, and focuses on banks termed community financial institutions (CFIs). Bank performance is measured by the return on assets (ROA). The ROAs are averaged for all CFIs in each state. Statewide ROAs are related to each state’s economic, demographic, and market structure characteristics. These state-level characteristics explain some of the variations in the performance of each state’s CFIs over time, and results are economically and financially reasonable. Fixed effects play a role, linking each state’s performance to unidentified factors unique to each state. The mild (but statistically significant) explanatory power of the economic/demographic variables suggests that CFI managers can effectively deal with economic/demographic changes in their marketplace, in contrast to the troubles of big banks.     

Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms

This paper investigates the relationship between the environmental orientation and economic performance of small firms. We conduct a quantitative analysis on a sample of 299 environmentally oriented and all other small (2–49 employees) Swedish firms. We estimate the effect of environmental orientation on profit margin to examine how environmentally oriented firms perform in relation to non‐environmentally oriented firms. To do this, we employ a quasi‐experimental design in which we create a control group of non‐environmentally oriented firms that are very similar to their environmentally oriented counterparts. We use two measures of environmental orientation: (i) a third‐party classification, and (ii) a self‐assessment of environmental differentiation. The findings show a negative effect of environmental orientation on economic performance. Our contribution to the literature is in using a novel and more rigorous way to measure the relationship between environmental orientation and economic performance and providing implicit support for the existence of a causal link from economic performance to environmental orientation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Content vs. Process in the HRM‐Performance Relationship: An Empirical Examination

This study investigates the impact of a human resource management (HRM) system, which integrates both content and process of human resource (HR) practices, on organizational performance, through collective employee reactions. The analysis is based on a sample of 1,250 Greek employees working in 133 public‐ and private‐sector organizations, which operate in the present context of severe financial and economic crises. The findings of the structural equation modeling suggest that content and process are two inseparable faces of an HRM system that help to reveal a comprehensive picture of the HRM–organizational performance relationship. Based on the findings that collective employee reactions mediate the HRM content (i.e., organizational performance relationship) and HRM process moderates the HRM content (i.e., employee reactions relationship), the study has several theoretical and practice implications. © 2014 Wiley Periodicals, Inc.