WHOM YOU CONNECT WITH MATTERS: DIRECTOR NETWORKS AND FIRM LOCATION

We examine whether board members serve as a channel for remotely located firms to access the benefits from business‐dense areas due to economies of agglomeration. We find that geographically remote firms benefit from connections to firms in top metropolitan statistical areas (MSAs) for business density. After controlling for director compensation, we find connections to top MSA firms mitigate the negative effect of increased distance from business‐dense areas. We address concerns of endogeneity by exploring a sample of firms whose directors gain board seats at top MSA firms and find a similar positive impact of connections to top MSA firms.     

The Time-Series Properties of House Prices: A Case Study of the Southern California Market

We examine the time-series relationship between house prices in eight Southern California metropolitan statistical areas (MSAs). First, we perform cointegration tests of the house price indexes for the MSAs, finding seven cointegrating vectors. Thus, the evidence suggests that one common trend links the house prices in these eight MSAs, a purchasing power parity finding for the house prices in Southern California. Second, we perform temporal Granger causality tests. The Santa Anna MSA temporally causes house prices in six of the other seven MSAs, excluding only the San Luis Obispo MSA. The Oxnard MSA experiences the largest number of temporal effects from six of the seven MSAs, excluding only Los Angeles. The Santa Barbara MSA proves the most isolated. It temporally causes house prices in only two other MSAs (Los Angeles and Oxnard) and house prices in the Santa Anna MSA temporally cause prices in Santa Barbara. Third, we calculate out-of-sample forecasts in each MSA, using various vector autoregressive and vector error-correction models, as well as Bayesian, spatial, and causality versions of these models with various priors. Different specifications provide superior forecasts in the different MSAs. Finally, we consider how theses time-series models can predict out-of-sample peaks and declines in house prices after in 2005 and 2006. Recursive forecasts, where we update the sample each quarter, provide reasonably good forecasts of the peaks and declines of the house price indexes.     

Non-executive ownership and private loan pricing

This paper examines the link between non-executive employee ownership and the terms and pricing of corporate loans. We find that a one-standard-deviation increase in employee stock ownership is associated with 1.67% decrease in loan spreads and one fewer restrictive loan covenant. The negative effect of employee stock ownership on loan spreads remains significant when we use within-firm variation and perform an analysis with instrumental variables based on demographic characteristics to address the concerns of endogeneity. Further analysis reveals that employee stock ownership may affect loan spreads by improving corporate governance, curbing managerial risk-taking, reducing information asymmetry, and improving employee retention. In contrast, we find that employee ownership via stock options is associated with greater loan spreads, perhaps owing to their convex payoff structure. Overall, our results underscore the importance of the level and structure of employee ownership for pricing corporate loans.     

Employee contributions: a primer on their use, historical trends and overall fit within benefits strategy

This article focuses on the use of employee contributions as a strategic tool within employee health plans. While most employers require some form of employee contributions for health care, there is no clear "one-size-fits-all" solution. A myriad of strategies are in place, some active and some passive. This article reviews both common and emerging strategies and how they differ based on industry, employer size and region; discusses how employee contribution strategy fits within overall benefits strategy; and provides a strategic framework for approaching employee contributions in the future.     

Do companies compare employees’ salaries? Evidence from stated-owned enterprise group

The mechanism by which enterprises set salaries is vitally important to employees and is especially relevant to the reform of state-owned enterprises (SOEs). This paper investigates the effect of comparing employee compensation based on a sample of A-share SOE groups from 2008 to 2018. We find that when employee compensation at one company sharply increases, the employee compensation of other companies controlled by the same group will increase sharply in the following year. Further analysis shows that when employees’ sense of unfair compensation is stronger, when employees are less replaceable and when enterprises’ ability to pay is stronger, the effect of employee pay comparison is stronger. Increased employee salary does not improve enterprise performance, however, suggesting that such salary adjustment is ineffective. This paper expands the research on employee compensation and provides useful insights for optimizing the design of compensation contracts and promoting compensation reform in SOEs.     

Can Wages Buy Honesty? The Relationship Between Relative Wages and Employee Theft

In this study, we examine whether, for a sample of retail chains, high levels of employee compensation can deter employee theft, an increasingly common type of fraudulent behavior. Specifically, we examine the extent to which relative wages (i.e., employee wages relative to the wages paid to comparable employees in competing stores) affect employee theft as measured by inventory shrinkage and cash shortage. Using two store‐level data sets from the convenience store industry, we find that relative wages are negatively associated with employee theft after we control for each store's employee characteristics, monitoring environment, and socio‐economic environment. Moreover, we find that relatively higher wages also promote social norms such that coworkers are less (more) likely to collude to steal inventory from their company when relative wages are higher (lower). Our research contributes to an emerging literature in management control that explores the effect of efficiency wages on employee behavior and social norms.     

Institutional monitoring and litigation risk: Evidence from employee disputes

In this article, we investigate how institutional investors help mitigate business‐related risks in a corporate environment. Using a large sample of employment disputes, litigations, and court cases, we find that institutional investors play a significant role in reducing employment litigation. We observe that firms with larger shares of institutional ownership have a lower incidence of employment lawsuits and that long‐term institutional investors are more effective at decreasing employee mistreatment. Our results suggest that institutional investors can improve the employee work environment and help mitigate future employee litigation. The improvement in employee work conditions has been shown to increase a firm's value through increased employee output, reduced litigation, and direct and indirect costs. Our results shed light on the effectiveness of institutional monitoring on a firm's litigation risk.     

A stakeholder analysis of employee disclosures in annual reports

Little empirical research has identified what drives companies to voluntarily report employee‐related information. Ullmann's three‐dimensional stakeholder theory model is applied as a framework to analyse associations with corporate employee‐related disclosures. Measures are developed to estimate stakeholder power, strategic posture and economic performance associated with employee‐related disclosures. Results indicate that employee‐related disclosures increase with more employee share ownership, employee concentration, the quality of corporate governance, employee recognition in corporate mission statements, adverse publicity about employees and economic performance measured by profit per employee.     

创业导向有助于激发员工创新行为吗——创新意愿的中介作用

创新创业浪潮下,组织创业导向与员工创新问题已成为学术界探讨的前沿论题,是提升组织创新能力的关键环节.基于以往文献回顾,从社会认知视角,探讨组织创业导向对员工创新行为的作用机理,并分析个体创新意愿在作用过程中的调节效应.通过问卷调查获取湖南省9家企业264份有效问卷,采用SPSS21.0和 AMOS17.0对数据进行处理,验证假设.结果显示:创业导向与员工创新行为存在显著正向影响,与员工创新意愿具有正向关系;员工创新意愿与创新行为显著正相关;员工创新意愿在创业导向与创新行为关系间发挥中介作用.     

Employee relations and stock price crash risk: Evidence from employee lawsuits

In this paper, we examine the effect of firms' employee relations, measured by the number of employee lawsuits divided by the total number of employees, on stock price crash risk. Firms with higher employee lawsuit ratios tend to have higher stock price crash risk. Our results are robust after addressing possible endogeneity and using alternative measures of employee relations and stock price crash risk. We also find that the association between the employee lawsuit ratio and stock price crash risk is less prominent for state-owned enterprises, for firms with stringent external monitoring, and for firms with positive earnings news. Finally, earnings aggressiveness appears to be the channel through which the employee lawsuit ratio affects stock price crash risk. Collectively, our study is in line with the stakeholder theory, and highlights the importance of employee lawsuit for preventing crash of stock price.     

高绩效工作系统与企业创新绩效——人力资源柔性的中介作用

以612家企业为调查对象,采用新的视角——动态能力理论,探讨人力资源柔性(员工技能柔性、员工行为柔性、人力资源实践柔性)在其中的中介作用。研究结果表明：高绩效工作系统对企业创新绩效有正向影响作用;人力资源柔性其各维度员工技能柔性、员工行为柔性、人力资源实践柔性在二者关系间发挥并列中介作用。     

职工福利、剩余索取权分享与国有企业的社会成本问题

本文研究了我国特有的、具有社会保障性质的国有企业职工集体福利制度。从职工福利制度的变迁过程来看,我国社会保障制度改革与企业职工福利制度的变迁具有较为明显的同步性,但是,社会保障制度改革并非推动我国职工福利制度持续变迁的根本原因。本文通过深入分析我国职工福利制度的本质及其造成的外部性问题,指出我国职工福利制度实际上已演化为一种职工参与国有企业剩余索取权分享的机制,这项机制的实施会由于外部性问题的存在,增加社会成本从而降低宏观经济效率,而这正是推动我国职工集体福利制度持续变迁的动因,因此,对该制度的进一步改革必须注意这些问题。     

The impact of interactive and diagnostic levers of eco-control on eco-innovation: The mediating role of employee environmental citizenship behaviour

The study contributes to the management control system (MCS), environmental and behavioural reaction literature by examining the mediating role of employee environmental citizenship behaviour on the association between the interactive and diagnostic use of eco-control with eco-innovation. Based on an empirical analysis of 406 Australian organisations, the results indicate that employee environmental citizenship behaviour mediates the effect of both the interactive and diagnostic use of eco-control on eco-innovation (specifically, eco-product innovation). The findings highlight the importance of eco-controls and employee behaviour, specifically employee environmental citizenship behaviour, in influencing eco-innovation.     

Financial reporting for employee stock options: liabilities or equity?

This study seeks to determine whether employee stock options share key characteristics of liabilities or equity. Consistent with warrant pricing theory, we find that common equity risk and expected return are negatively associated with the extent to which a firm has outstanding employee stock options, which is opposite to the association for liabilities. We also find the following. (1) The association is positive for firms that reprice options and less negative for firms that have options with longer remaining terms to maturity, which indicates that some employee stock options have characteristics that make them more similar to liabilities. (2) Leverage measured based on treating options as equity has a stronger positive relation with common equity risk than leverage measured based on treating options as liabilities. (3) The sensitivity of employee stock option value to changes in asset value mirrors that of common equity value and is opposite to that of liability value. Also, we find that, unlike liabilities, employee stock options have substantially higher risk and expected return than common equity. Our findings are not consistent with classifying employee stock options as liabilities for financial reporting if classification were based on the directional association of a claim with common equity risk and expected return. Rather, our findings suggest the options act more like another type of equity.     

Employee stock ownership and the cost of capital

This paper investigates the relationship between employee stock ownership and the cost of capital, the main determinant of shareholder value creation computed through economic value added (EVA). By reducing agency conflicts within the firm, we hypothesize that employee share ownership reduces the firm’s cost of capital by affecting its two components, i.e. the cost of equity and the cost of debt. We test this hypothesis in France, a leading country in terms of employee ownership, based on a panel of the 120 largest listed companies for the 2000–2011 period. We find: (i) no significant relationship between employee stock ownership and the cost of equity; (ii) a negative curvilinear relationship between employee stock ownership and the cost of debt; (ii) a negative curvilinear relationship between employee stock ownership and the weighted average cost of capital. These results suggest debtholders regard ESO as positive as long it is moderate because it shifts risk from them to employees and that this effect is still perceptible in the weighted average cost of capital.     

An investigation of internal marketing and its effects on employees in the banking sector in Saudi Arabia

A survey of the impact of internal marketing on perceptions of organizational commitment to employees and employee identification with their employers was conducted among a convenience sample of Saudi Arabia banking employees. The results indicate that internal marketing impacts perceptions of organizational commitment to employees (PBCMT), and rewards, employee empowerment and PBCMT impact employee identification with the organization (EBID). In addition, PBCMT partially mediates the internal communications – EBID and employee empowerment–EBID relationships, and it fully mediates the training – EBID and rewards–EBID relationships. Research and managerial implications are discussed, as are limitations and suggestions for future research.     

Broad‐Based Employee Stock Ownership: Motives and Outcomes

Firms initiating broad‐based employee share ownership plans often claim employee stock ownership plans (ESOPs) increase productivity by improving employee incentives. Do they? Small ESOPs comprising less than 5% of shares, granted by firms with moderate employee size, increase the economic pie, benefiting both employees and shareholders. The effects are weaker when there are too many employees to mitigate free‐riding. Although some large ESOPs increase productivity and employee compensation, the average impacts are small because they are often implemented for nonincentive purposes such as conserving cash by substituting wages with employee shares or forming a worker‐management alliance to thwart takeover bids.     

Internal marketing and employee commitment: Evidence from the Ghanaian banking industry

Attracting the right mix of employees and getting them committed to the goals and objectives of the organization is a major issue facing service organizations. Scholars have recommended that internal marketing is positively associated with employee commitment but little empirical research exists that has examined the relationship between internal marketing and employee commitment especially in the financial services sector. The current study investigated four internal marketing practices – empowerment, rewards, training and development, and communication and their impact on employee commitment in the retail banking industry. Using data from 410 employees of banks in Ghana, the empirical results indicated that, with the exception of communication, the factors are positively associated with employee commitment. The study concludes that in order to influence employee behaviour in the banking industry in Ghana, bank management must implement measures that provide direct benefits to employees. The strategic implications of the findings are discussed in the article.     

The effects of nonfinancial and financial measures on employee motivation to participate in target setting

Recent interest in nonfinancial performance measures has raised questions on how such measures influence employee reactions and behaviour. Surprisingly, the question of whether and how nonfinancial measures motivate employees to participate in target setting has remained largely unexplored. Employees can be motivated intrinsically or extrinsically to participate in target setting. Intrinsic motivation to participate in target setting initiates from within the employee and is perceived as an end in itself with the employee as the main beneficiary. In contrast, controlled extrinsic motivation to participate in target setting is controlled by the organization and is perceived as a means to an end with the organization as the main beneficiary. This study investigates the relative importance of nonfinancial measures vis-à-vis financial measures in engendering employee intrinsic and controlled extrinsic motivation to participate and how these two forms of motivation to participate in target setting translate into improved employee job performance. Based on a sample of 149 employees, the Partial Least Squares results indicate that both financial measures and nonfinancial measures are associated with employee intrinsic motivation to participate in target setting. However, only nonfinancial measures are associated with controlled extrinsic motivation to participate in target setting and because this form of motivation to participate is controlled by the organization as a means to achieve better performance, it is only this form of motivation which has a significant impact on employee job performance. These results provide important insights into the intricacies by which performance measures influence employee motivation to participate in target setting and job performance.