How Does a Covenantal Approach to Developing Organizational Leadership Affect Innovation?

As organizations grow, they become more hierarchical and less adaptive; thus, innovation and intrapreneurship suffer. A covenantal approach to organizational behavior and leadership can facilitate organizational flexibility and adaptability to foster further innovation by engendering empowerment and deeper, more meaningful engagement among leadership and followers. A covenant is a morally informed agreement among two or more parties who commit to care for one another and protect one another's rights. Noncentralization, participative decision making, active dialog and big picture thinking are all encouraged by a covenantal approach, which in turn helps to foster innovation.     

Do High‐Frequency Data Improve High‐Dimensional Portfolio Allocations?

This paper addresses the debate about the usefulness of high‐frequency (HF) data in large‐scale portfolio allocation. We construct global minimum variance portfolios based on the constituents of the S&P 500. HF‐based covariance matrix predictions are obtained by applying a blocked realized kernel estimator, different smoothing windows, various regularization methods and two forecasting models. We show that HF‐based predictions yield a significantly lower portfolio volatility than methods employing daily returns. Particularly during the 2008 financial crisis, these performance gains hold over longer horizons than previous studies have shown, translating into substantial utility gains for an investor with pronounced risk aversion. Copyright © 2013 John Wiley & Sons, Ltd.     

Rallying the Troops or Beating the Horses? How Project‐Related Demands Can Lead to Either High‐Performance or Abusive Supervision

In today's high‐pressure work environment, project managers are often forced to “do more with less.” We argue that this imperative can lead project managers to engage in either high‐performance or abusive supervision behaviors. To understand this process, we develop a model and associated propositions linking a project manager's cognitive appraisal of project‐related demands to high‐performance work practices versus abusive supervision behaviors—both of which impact three project outcomes: stakeholder relationships, people‐related project success factors, and employee well‐being. We propose that the choice between high‐performance work practices and abusive supervision behaviors is moderated by a project manager's personal resources (psychological capital, emotional intelligence, and dark triad personality).     

How would Eurozone equities respond to a bond sell‐off?

• We have developed a new model to measure the impact on Eurozone equities of a global bond sell‐off as the Fed starts to tighten its monetary stance later this year. We show that the most affected countries would be Greece, Finland and Portugal: the cumulated equity loss compared to the baseline ranges from between 35% to more than 50% in the case of Greece at the end of 2017. Under this scenario, Belgium, Ireland and Austria are less impacted by the global re‐pricing of risk.
• In light of global risk being skewed to the downside (China, Greece, risk‐off), it is essential to have a framework that is able to generate consistent responses of Eurozone stock indices to global macro shocks in stress test scenarios. The approach assesses first the co‐movements of Eurozone stock indices and aims to explain them with macro variables such as the US S&P index, the oil price, the euro/dollar exchange rate and short‐ and long‐term interest rate differentials between the Eurozone and the US.
• We find a high degree of co‐movement in Eurozone equity returns. This matters from an asset management perspective, as it reveals limited potential for diversification benefits of an equity portfolio invested across Eurozone countries.

     

What Does Objective Mean in a Dirichlet‐multinomial Process?

The Dirichlet‐multinomial process can be seen as the generalisation of the binomial model with beta prior distribution when the number of categories is larger than two. In such a scenario, setting informative prior distributions when the number of categories is great becomes difficult, so the need for an objective approach arises. However, what does objective mean in the Dirichlet‐multinomial process? To deal with this question, we study the sensitivity of the posterior distribution to the choice of an objective Dirichlet prior from those presented in the available literature. We illustrate the impact of the selection of the prior distribution in several scenarios and discuss the most sensible ones.     

‘Post‐Third‐World City' or Neoliberal ‘City of Exception'? Rio de Janeiro in the Olympic Era

This article considers processes of urban development within the context of mega‐event preparations in Rio de Janeiro. We begin with a brief overview of these development processes, highlighting their connections to political and economic change in recent years. Proponents of these mega‐event‐led initiatives argue that Rio is undergoing a period of inclusive growth and integration: a perspective we call here a ‘post‐Third‐World city' narrative of urban renewal. Critics, however, contend that urban officials are harnessing mega‐events (e.g. the 2014 World Cup and the 2016 Olympic Games) to push forward a neoliberal agenda of socially unjust policies benefiting the interests of capital and marginalizing the city's poor and especially its favelas (i.e. the ‘city‐of‐exception' thesis). In this article we explore the insights of these two perspectives and consider why they have grown popular in recent years. Though we side generally with the city‐of‐exception thesis, we argue that important geographic and historical particularities must also be accounted for. Without carefully situating analytical perspectives empirically—in particular, cases in which theoretical models are drawn from European and North American contexts—urban researchers risk concealing more than they reveal in analyses of rapidly developing countries like Brazil.     

The Relation Between Leadership and Perceived Well‐Being: What Role Does Occupational Self‐Efficacy Play?

Current research confirms the link between leadership behavior and subordinates’ health. However, only a few longitudinal surveys have been carried out. The present longitudinal study examined whether occupational self‐efficacy moderates the impact of transformational leadership on perceived negative well‐being. The sample consisted of 339 employees working in the health‐care sector. The correlations between transformational leadership at the first time of measurement (Time 1) and emotional exhaustion and perceived strain at the second time of measurement (Time 2) were negative and significant, but the correlation with depersonalization was not significant. Regression analyses revealed that the effect of transformational leadership behavior on perceived negative well‐being was not moderated by the level of occupational self‐efficacy. Implications for future research are discussed.     

Can central banks run out of ammunition? The role of the money‐equities‐interaction channel in monetary policy

Many authorities claim that central banks ‘have run out of ammunition’, either because the central bank rate has dropped close to the zero lower bound or because of Keynes's liquidity trap. I argue first, that indefinitely large increases in the quantity of money remain possible even with the central bank rate close to zero, and, second, that increases in the quantity of money raise all asset prices, including the prices of quoted equities, not just bond prices. Bonds are an unimportant asset class in modern capitalist economies, relative to corporate equity and real estate. Meanwhile increases in equity prices always boost aggregate demand and output.     

Can green behaviors really be increased for all employees? Trade‐offs for “deep greens” in a goal‐oriented green human resource management intervention

This study explores the complex interaction between psychological and goal‐relevant boundary conditions that influence levels of individual engagement in a green human resource management (HRM) intervention designed to encourage employee green behavior (EGB). Data were collected from 1,112 employees in an automobile manufacturing plant. Consistent with goal‐setting theory, the level of feedback received predicts EGB. However, a three‐way interaction demonstrates how employees with high levels of autonomous motivation do not gain the expected benefits of high feedback and high goal commitment in the enactment of EGB. Instead, only those with weak autonomous motivation are affected by these goal‐related constructs. Findings suggest that both goal‐setting and self‐determination theories are relevant to green HRM interventions. Managers should consider that interventions that are effective for employees who do not have strong autonomous motivation towards the environment may not be effective for those who do.     

Does the Macroeconomy Predict UK Asset Returns in a Nonlinear Fashion? Comprehensive Out‐of‐Sample Evidence

We perform a comprehensive examination of the recursive, comparative predictive performance of linear and nonlinear models for UK stock and bond returns. We estimate Markov switching, threshold autoregressive (TAR) and smooth transition autoregressive (STR) regime switching models and a range of linear specifications including models with GARCH type specifications. Results demonstrate UK asset returns require nonlinear dynamics to be modelled with strong evidence in favour of Markov switching frameworks. Our results appear robust to the choice of sample period, changes in loss functions and to the methodology employed to test for equal predictive accuracy. The key findings extend to a similar sample of US data.     

Product Differentiation through Exclusivity: Is there a One‐Market‐Power‐Rent Theorem?

In systems industries, combinations of components are consumed together to generate user benefits. Arrangements among component providers sometimes limit consumers’ ability to mix‐and‐match components, and such exclusive arrangements have been highly controversial. We examine the competitive and welfare effects of exclusive arrangements among system components in a model of relatively differentiated applications that run on relatively undifferentiated platforms. We show that there is no “One‐Market‐Power‐Rent Theorem.” Specifically, exclusive deals with providers of differentiated applications can raise platforms’ margins without reducing applications’ margins, so that overall industry profits rise. Hence, for a given set of components and prices, exclusive arrangements can reduce consumer welfare by limiting consumer choice and raising equilibrium prices. In some cases, however, exclusivity can raise consumer welfare by increasing the equilibrium number of platforms, which leads to lower prices relative to the monopoly outcome that would prevail absent exclusivity.     

How Did Finance Capital Infiltrate the World of the Urban Poor? Homeownership and Social Fragmentation in a Spanish Neighborhood

When working‐class localities in developed countries are in question, social fragmentation is often analyzed along ethnic lines. Instead, this article claims that it is more critically fruitful to explore fragmentation in terms of people's relations with the state and different forms of capital. It does this by considering housing in Spain as a key resource that connects state policies both with the forms of reproduction and (dis)organization of the disadvantaged, and with the development of real estate and finance capital. First, it unfolds the historical formation of the Spanish ‘homeownership culture’ and the construction–finance complex. Second, starting from an in‐depth ethnography of a peripheral neighborhood in Barcelona, it emphasizes the embeddedness of recent financialization in the livelihood strategies of poor households. Finally, it shows how the process led to a commodification and erosion of those social relations on which it partially depended, thereby exposing problems for class reproduction and fracture lines among the urban poor.     

How Far Can BIM Reduce Information Asymmetry in the Australian Construction Context?

Building Information Modeling (BIM) systems are increasingly used in construction projects. Theoretically, these systems provide greater transparency and access to construction project information and, in doing so, should reduce the information asymmetry that commonly arises in construction contracting relationships. This typically occurs when suppliers of products and services opportunistically take advantage of the client due to the imbalance in information. The article therefore explores whether or not the high level of information content offered by BIM and the potential for sharing that information among contracting parties means that the information asymmetry can be alleviated using BIM. In order to investigate this, evidence was collected through three purposively sampled case studies of large principal organizations undertaking projects in Australia—each representing a different type of customer in the supply chain on construction projects. Our findings suggest a gap between the theoretical potential and practical application of BIM to reduce information asymmetry. The study found that, although BIM has the capability to reduce information asymmetry, it has not reached a mature enough stage in the Australian construction industry to clearly confirm that it actually reduces the problem. There is even a degree of evidence that, under certain circumstances, a reverse asymmetry may exist in which a client has the technical knowledge to more successfully analyze the BIM model (relative to the organizations they contract with) and then use the resulting information to their own opportunistic advantage.     

Euro‐insurance‐bonds: a long‐term solution for the European sovereign debt problem?

This article proposes that all new Euro area sovereign borrowing be in the form of jointly underwritten ‘Euro‐insurance‐bonds’ trading at the same price for outside investors. To avoid classic moral hazard problems and to insure the guarantors against default, each country would pay a risk premium conditional on economic fundamentals to a joint debt management agency…     

Can We Still be Friends? The Role of Exit Conversations in Facilitating Post‐Exit Relationships

Organizations might benefit from maintaining relationships with former employees, who could be rehired later or encouraged to refer job applicants and customers. We integrate the management literature on voluntary resignations and the communication literature on relationship dissolution to explore how conversations between an exiting employee and his or her manager facilitate (or constrain) post‐exit relationships. Employees who had recently resigned from full‐time jobs described their exit experiences in semistructured interviews with the research team. The results suggest two dominant patterns. When employees exited for external reasons (e.g., to pursue a program of study), they engaged in very direct communication strategies, elicited positive responses from their managers, and left with high interest in a post‐exit relationship. But when employees exited for internal reasons (problems within the employment relationship), they engaged in multiple exit cycles and moved from indirect communication strategies toward increasingly direct ones. Managerial responses to these strategies failed to capitalize on opportunities to nurture post‐exit relationships and sometimes generated a “vendetta effect” among exiting employees. The results suggest that managers might benefit from training in how to conduct effective exit conversations, particularly with employees who are leaving for internal reasons. © 2014 Wiley Periodicals, Inc.