The Ethics of Advising on Regulatory Compliance: Autonomy or Interdependence?

Many companies are now implementing ethics and regulatory compliance programs. The growth of employment of both lawyers and specialist "compliance professionals" to advise on and facilitate implementation of these programs has expanded concomitantly. This paper examines the ethical role that should be played by these advisors. Traditional ways of conceptualising corporate lawyers' ethics are shown to be inadequate because they see the legal advisor as an autonomous adversarial advocate or an independent and aloof counsellor. Instead interviews with compliance practitioners are used to show that a superior conceptualisation of the compliance advisor's role is emerging. Compliance practitioners identify explicitly with business and, at the same time, identify with a broader ethical community of other compliance professionals, regulators and stakeholders in order to play a transformative role within the organisation. This conception recognises the interdependence between compliance advisor and corporate client.     

The Economic Contribution of High-Growth Firms: Do Policy Implications Depend on the Choice of Growth Indicator?

Prior studies have defined high-growth firms (HGFs) in terms of growth in firm employment or firm sales, and primarily analyzed their contribution to overall employment growth. In this paper we define HGFs using the commonly applied growth indicators (employment and sales), but also add definitions based on growth in value added and productivity. Our results indicate that HGFs in terms of employment are not the same firms as HGFs in terms of productivity, and that their economic contributions differ significantly. Economic policy promoting fast growth in employment may therefore come at the cost of reduced productivity growth. Although HGFs of different definitions may not be the same firms, young firms are more likely to be HGFs irrespective of definition. This suggests that economic policy should focus on the conditions for new firm formation and early growth of firms, rather than target a particular type of HGFs.     

The Rise of Fund Managers in Foreign Exchange:Will Fundamentals Ultimately Dominate?

This paper analyses the behaviour and motivation of fund managers in foreign exchange markets reflected in questionnaire evidence. We find that fund managers and FX dealers differ significantly. Fund managers rely more on fundamentals, basically due to their longer forecasting horizons, and reject non‐fundamental influences on exchange rates more than FX dealers. However, neither can fund managers be considered as pure fundamentalists. Non‐fundamentalist positions markedly influence short‐term decision‐making. They inspire ambivalent views about market imperfections and these views seem to become stronger over time. This latter change counterbalances the strengthening fundamental influences resulting from the rise of fund managers.     

Policy takers or policy makers? The lobbying of global banking regulators

Do financial sector groups act as passive policy takers, or do they ‘shape’ the policies to which they are subject? This article responds to this question with three arguments pertaining to the policy shaping power of the financial industry when it comes to international financial standards. First, industry groups confront a number of additional challenges when it comes to lobbying international regulatory bodies, which tend to be more opaque in their decision making and more difficult to hold accountable when they make unpopular decisions. Second, while these groups are sometimes able to shape financial regulatory policy, the extent of this influence is more partial and contingent than most depictions suggest. The third argument advanced is that since the global financial crisis, business groups have had many of their traditional lobbying tools adversely affected, making lobbying a more uphill battle than before. Financial industry groups are able to influence the governance of their own activities and act as ‘policy shapers’ some of the time, but are less strongly positioned in this role than many existing depictions seem to suggest.     

Exploitation or Choice? Exploring the Relative Attractiveness of Employment in the Maquiladoras

This study investigates the relative attractiveness of production level jobs provided by multinational firms in Mexico's maquiladora industry. We take the position that workers themselves are an important and often overlooked source of information relevant to the controversy focusing on the responsibilities of multinational companies to their employees in the developing world. We conducted interviews with 59 maquila production level workers in the Mexican cities of Cd. Juárez and Chihuahua. Using a relative attractiveness framework that compared maquila jobs to other employment available in the local economy, maquila line and technical workers responded to questions addressing why they were working at a maquila, their work history, the attractiveness of maquila jobs compared to both their prior jobs and the jobs held by friends and family, and whether they planned to continue working in the maquilas. While the responses from maquila workers are diverse, they suggest that maquila jobs provide attractive employment for the economically disadvantaged in Northern Mexico.     

The geography of public services employment in Europe: concentration or dispersion?

It is widely known that the location of public services generates, directly and indirectly, important economic effects. The objective of this article is to examine the spatial distribution of employment in public services in 124 European regions in order to detect the existence of some pattern of spatial location. To do so we employ various exploratory spatial analysis techniques, such as the calculation of the Moran's I and the Geary's C statistics. The results obtained highlight the existence of remarkable differences among the European regions, and more concretely between the Scandinavian and the Mediterranean regions, differences that deserve further study.     

The Roles of HRM in CSR: Strategic Partnership or Operational Support?

As the implementation of corporate social responsibility (CSR) strategy requires promoting employee participation and initiating meaningful changes in organisational culture, the involvement of the human resource management (HRM) function in policy formulation and implementation is highly desirable. The relationship between the HRM and CSR functions is, however, under-investigated than other areas. Hence, there is a lack of clarity concerning HRM roles and the conditions under which they may be strategic or operational in nature. By drawing on data from interviews with 29 CSR and HRM professionals of large organisations in New Zealand, this paper argues that the role and contribution of the HR function in CSR is contingent on organisational variables such as the CSR structure, the scope and application of CSR and the nature of the HR functions. It concludes that in such contexts HRM is more likely to offer operational support in executing CSR rather than strategic input.     

The cross-section of returns in frontier equity markets: Integrated or segmented pricing?

Is asset pricing segmented or integrated in frontier equity markets? To answer this question, we examine the returns on more than 4500 stocks from 22 frontier countries for the years 1997–2018. We evaluate the performance of a few major asset pricing models. We document strong value and momentum effects but find no consistent evidence regarding size, investment, and profitability premia. The recent six-factor model of Fama and French (2018) outperforms other models and best explains the cross-sectional and time-series variation in returns. Our results point to low integration of frontier equities, even after the global financial crisis. Local risk factors explain the behavior of prices much better than their global counterparts do. The low correlation of these risk factors allows augmenting the efficient frontier of an international investor.     

The Dynamics of Online Purchase Visits: Inertia or Switching?

This paper studies the dynamics of online purchase patterns, focusing on the impact of the channel used on conversion probability, as well as the transition of channel use over time. A novel data set from a major Chinese online travel agency is used for analysis, consisting of four months of data with 24,337 store visits through three types of channels: direct visit, search advertising and referral. Results of a Bayesian multinomial logit model show that the search channel significantly affects consumers’ conversion probability, and show a high degree of inertia in channel use. This finding contrasts sharply with suggestions of previous research that most future purchases will converge to the direct-visit channel.     

The real estate code of ethics: Viable or vaporous?

Several recent articles in the field of ethics and business have raised questions concerning the viability of professional ethical codes. Are such codes serious, effective tools for promoting and enforcing an ethical standard of behavior? Or do the codes more closely resemble clever, elaborate public-relation ploys? The purpose of this paper is to analyze the content, role and efficacy of one such ethical code, namely, The Code of Ethics of the National Association of Realtors. The paper examines the ethical principles embodied, implicitly or explicitly, in this Code; it tests these principles for coherence, comprehensiveness, clarity and enforce-ability. Furthermore, it seeks to determine whether this Code articulates standards of ethical conduct that are higher than those already required by law and whether the Code successfully translates a general ethical vision down to concrete, everyday real estate practice.     

Normative Self-Interest or Moral Hypocrisy?: The Importance of Context

We re-examine the construct of Moral Hypocrisy from the perspective of normative self-interest. Arguing that some degree of self-interest is culturally acceptable and indeed expected, we postulate that a pattern of behavior is more indicative of moral hypocrisy than a single action. Contrary to previous findings, our results indicate that a significant majority of subjects (N = 136) exhibited fair behavior, and that ideals of caring and fairness, when measured in context of the scenario, were predictive of those behaviors. Moreover, measures of Individualism/Collectivism appear more predictive of self-interested behavior than out-of-context responses to moral ideals. Implications for research and practice are discussed. George W. Watson received his Ph.D. from Virginia Tech, his M.B.A. from California State at Fullerton, an M.S. in Systems Management from the Naval Postgraduate School in Monterey, an a B.A. in Business Administration from the University of Washington, Seattle. His teaching focus is on corporate social responsibility and ethics. Dr.Watson’s current research interests include moral psychology,ethical decision making, and ideology. He has published in Business Ethics Quarterly, Business and Society, and the Journal of Business Ethics. Farooq Sheikh received his BS in Physics from Indiana University of Pennsylvania, and his Ph.D. from Smeal College of Business, Penn State University. He is currently Assistant Professor of Operations Management, School of Business at the State University of New York at Geneseo. Dr. Sheik’s research interests include rational and behavioral models in business operations, bounded-rational behavioral models in population games, social norms, game theory and cross-disciplinary research involving behavioral models.     

The Moderating Effect of Supervisor’s Behavioral Integrity on the Relationship between Regulatory Focus and Impression Management

The desire to control how others see us is a ubiquitous phenomenon. Decades of research have suggested that the results associated with how others see us are too great an influence to ignore. The tactics we use and behaviors we engage in to control how others see us is known as impression management. This study examines the relationship between regulatory focus and the use of exemplification or supplication impression management tactics. We use regulatory focus theory to examine this phenomenon. First, we investigate the main effects that occur between prevention-focused individuals and exemplification, and between promotion-focused individuals and exemplification and supplication. We then introduce supervisor behavioral integrity as a moderator between regulatory focus and impression management. Our findings suggest a positive relationship between prevention-focused and exemplification, and between promotion-focused and exemplification and supplication. We also find that behavioral integrity strengthens the relationship between prevention-focused and exemplification and promotion-focused and supplication, but not promotion-focused and exemplification. Implications and future research directions are discussed.     

I Won't Invest in China's Real Estate——Can Behavioral Economics Save the Capital Bubble?

I cannot see clearly when the real estate bubble in China will burst.However, there is certainty that housing prices willswiftly fall, and China can learn the lesson from the 1980s' real estate market in Japan said Professor Robert.J.Shiller, I don't want to put my judgment as a foreigner on the Chinese people,however, the housing price is obviously too high in some big cities.     

Argentina's Currency Board Collapse: Weak Policy or Bad Luck?

Two basic views can be discerned in post‐mortems of Argentina's currency board: (1) that weak fiscal policy was fundamentally to blame, and (2) that the peso had become too severely overvalued for the peg to survive. This paper evaluates the evidence for these rival interpretations. The real effective exchange rate index did not indicate massive overvaluation, but this index does not capture the effects on the equilibrium rate of the ‘sudden stop’ in capital flows to emerging markets after 1998. It also understates the amount of adjustment required for Argentina to reach the equilibrium rate, because neighbour countries’ dollar exchange rates were held up by Argentina's overvaluation, as is indicated by their depreciation in 2002. Argentina was particularly vulnerable to the sudden stop because of the extreme volatility of its portfolio inflows. Fiscal policy simulations suggest that, even with a substantially improved primary balance from 1994 onwards, loss of investor confidence would still have triggered unsustainable debt dynamics once the recession began to bite after 1998. The stagnation of output and prices in Argentina created a yawning gap between the interest rate on debt and the rate of growth of nominal GDP. Had the currency been floated in, say, 1995, the real devaluation of the peso would still have pushed up the debt/GDP ratio, but higher output would have left greater scope for addressing this by running a sizeable primary surplus. Moreover, the more gradual depreciation under floating might have allowed the economy to adjust to higher debt service payments without resort to default. The IMF has criticised itself for not pressing for tighter fiscal policy in the 1990s. A more fundamental criticism would be that it was seduced by the bipolar model into complacency about adjustment to real shocks and forgetting the teachings of optimum currency area theory.