The 2007–2009 financial crisis,global imbalances and capital flows: Implications for reform

The paper discusses the currents that led to the 2007–2009 financial crisis. We discuss the crisis in a historical context and present evidence regarding the incidence and unit price of risk. Our results show that the unit price of risk prior to the subprime crisis is comparable to the price of risk prior to the great depression and similar to the price of risk at onset of the technology bubble. We then discuss global imbalances, the associated risks with regard to international optimal allocation of capital, and arrangements to minimize problems of global imbalances.     

Tail risk and investors’ concerns: Evidence from Brazil

I estimate tail risk for Brazil from January 2001 to July 2020 and investigate the origins of tail risk variation. The tail risk measure peaks at stock market crashes, financial crises, political shocks and disaster events such as the coronavirus pandemic. Moreover, I find that tail risk is countercyclical, has strong predictive power for market returns and negatively predicts real economic activity. In order to identify the investors’ concerns associated with tail risk, I extract daily news from the largest financial newspaper in Brazil. The co-movement between news and tail risk indicates that tail risk variation is mainly driven by disaster concerns, followed by economic and government uncertainty. While economic uncertainty explains the countercyclical property of tail risk, investors only require compensation for bearing tail risk implied by disaster concerns. Similarly, tail risk negatively impacts real outcomes because of the disaster concerns that it identifies. These findings support recent models explaining asset pricing puzzles with time-varying disaster risk.     

Learning from the world? Horizontal knowledge flows and geopolitics in international consulting firms

This paper examines the nature of the contemporary multinational corporation (MNC) through a study of the use of knowledge management systems (KMS) in four major international consulting firms. In particular, we explore whether and how such systems facilitate horizontal (inter-subsidiary) flows of knowledge, as described in the network view of the MNC. Our analysis reveals the presence of horizontal flows within the four firms, but flows that are contextually constrained and partly shaped by geopolitical power relations. Thus, our study gives some support to the image of the MNC as a network whilst highlighting the contextual limits of horizontal knowledge transfer and, importantly, the geopolitical conditions under which such knowledge transfer takes place. At the same time, it challenges the claim that consulting firms are model organizations in the area of knowledge management as well as the more negative view that questions the ability of KMS to facilitate knowledge transfer.     

The importance of ‘fitting in’: collaboration and social value creation in response to community norms and expectations

Abstract

This article explores the effects of embeddedness in communities upon entrepreneurial practices. Based on the lived experiences of 10 craft entrepreneurs, this study reveals that within certain contexts, such as craft communities, entrepreneurs are expected to exhibit high levels of camaraderie and generosity, which leads them to create social value by supporting their peers and freely sharing their resources. Entrepreneurs achieve ‘fitting in’ not only by learning accepted norms, but also by performing strategic actions which allow them to temporarily adapt their conduct to meet the expectations of community members. Thus, this study exposes a largely concealed element of social entrepreneurial practice. This article also reveals that embeddedness in communities can lead entrepreneurs to collaborate with potential competitors. Craft entrepreneurs share their economic, cultural, social and symbolic capital in order to support and help revitalise their communities, to perpetuate their respective industries and to sustain a genuine interest in hand-crafted products. They consider such supportive behaviour a social responsibility that is shared among community members and a task that is passed from one generation to the next. Thus, this article reveals that collaboration and social value creation can be embraced in response to community norms and expectations.     

How can investors build a better portfolio in small open economies? Evidence from Asia’s Four Little Dragons

This study investigates the role of hedging and portfolio design among stocks, exchange rates, and gold in small open economies (SOEs) from 4 January 2000 to 31 March 2020. We adopt the trivariate dynamic conditional correlation-fractionally integrated asymmetric power ARCH model and unconditional quantile regression model, and our findings show that the hedging role of the U.S. dollar (USD) and gold against stocks differs under regular and extreme market conditions. The USD can act as a powerful hedge asset for stocks in regular market periods. Moreover, during the global financial crisis and COVID-19 outbreak, the safe-haven effect of gold becomes stronger for almost all stocks, whereas the USD can serve as a strong safe haven against stock markets of Korea, Taiwan, and Singapore when stock returns are extremely low. In terms of portfolio designing, we find that adding the USD and gold to portfolios improves their hedging effectiveness, and the optimally weighted stock-USD-gold portfolio is the best portfolio strategy, irrespective of referring to return or risk.     

Syrian refugee women’s profile and their expectations in their host country: a case study in Turkey

Due to inner conflicts and national or international political instability in their regions, hundreds of thousands of civilians flee from their home countries to some neighboring and safer countries. Among this huge number of migrants women seem to be the most disadvantaged groups because of their social status, their cultural roles as well as their educational background. In this study, a questionnaire was developed and administered to 47 Syrian refugee women living in the Cappadocia region of Turkey. Their profile and their expectations such as the social inclusion were reported. For this purpose, the data were collected via a questionnaire and a detailed review of literature. The quantitative data were analysed using SPSS package program, and the qualitative data were pre-analysed and, subsequently, the code system was adapted. The result of the data analysis illustrated serious social/personal problems and expectations related with communication with the local or inclusion in the social life because of their status in the family, unemployment, or their expectations to go back to their home country.

     

Transmission of US financial and trade shocks to Asian economies: Implications for spillover of the 2007–2009 US financial crisis

This paper describes an investigation of the transmission of US shocks to Asian economies with consideration of financial linkages and trade linkages. Using the sign restriction vector autoregression (VAR) approach during 2000–2012, our empirical results can be summarized as follows. First, both US financial and trade linkages exert a significant impact on production in Asian economies. Second, through both financial and trade linkages, US spillover shocks account for around 50% of the production fluctuation in Asian economies. Third, during the episodes of 2007–2009 US financial crisis, the impact of financial shocks is greater than that of trade shocks. Results suggest that (i) Asian economies are not decoupled with US; and (ii) different from conventional findings, financial linkages between US and Asian economies are strong, especially for highly developed Asian economies. Therefore, investors and policymakers of Asian economies should take account of US financial conditions.     

Daily momentum profits with firm characteristics and investors’ optimism in the Taiwan market

In this paper, we examine two different investing attitudes, being conservative sentiment which mitigates the momentum effect and, alternatively, the optimistic sentiment which strengthens such an effect. Where the stock market index levels close near a previous peak level, the impact of the index on momentum profits can assist in identifying such sentiments. In this study, we investigate the price and price-size momentum strategies in Taiwan of short formation periods of less than a month. The results indicate that investors adopt optimistic attitudes towards the 5-day and 20-day highs in the market index, whereas a conservative attitude is adopted at the 52-week high. Using the quantile regression model, the results indicate that the momentum effect is mitigated when the stock index price is relatively high for higher momentum profits. On the other hand, the momentum effect is strengthened when the stock index price is relatively high for lower momentum profits. However, the high point of the stock index is not found to have any impact on the price-B/M momentum effect.     

Market conditions and the effect of diversification on mutual fund performance: should funds be more concentrative under crisis?

This paper investigates the non-monotonic and non-linear effect of diversification on mutual fund performance. We apply a frontier-based efficiency measure, the stochastic frontier approach, to estimate fund efficiency and the benefit of diversification. The empirical results indicate that concentration strategy may not be appropriate for fund managers, and the benefit of diversification disappears or negatively affects performance when a fund holds too large a number of different stocks. Moreover, this paper examines whether market conditions moderate the relation between diversification and fund performance. The result shows that the benefit of diversification increases within low market return, high market volatility, and financial crisis, implying that the number of stocks needed to achieve a well-diversified portfolio increases under such market conditions.     

Do IMF forecasts respect Okun’s law? Evidence for advanced and developing economies

This paper provides an assessment of the IMF’s unemployment forecasts, which have not received much scrutiny to date. The focus is on the internal consistency of the IMF’s growth and unemployment forecasts, and specifically on seeing whether the relationship between the two is consistent with the relationship in the data, i.e., with Okun’s Law. We find that the average performance is good, in the sense that the relationship between growth and unemployment forecasts is fairly comparable to that which prevails in the data: on average, the Okun coefficient in the forecasts mirrors the Okun coefficient in the data. Nevertheless, there is room for improvement, particularly in the year-ahead forecasts and for the group of middle-income countries. We show that a linear combination of Okun-based unemployment forecasts and WEO unemployment forecasts can deliver significant gains in forecast accuracy for developing economies.     

Workplace Bullying: Application of Novak’s (1998) Learning Theory and Implications for Training

This paper applies Novak’s (1998) theory of learning to the problem of workplace bullying. Novak’s theory offers an understanding of how actions of bullying and responses to bullying can be seen as deriving from individualized conceptualizations of workplace bullying by those involved. Further, Novak’s theory suggests that training involving Ausubel’s concept of meaningful learning (Ausubel Educational Theory 11(1): 15–25, 1961; Ausubel et al. 1978) which attends to learners’ pre-existing knowledge and allows for new meaning to be constructed regarding workplace bullying can lead to new actions related to workplace bullying. Ideally, these new actions can involve both a reduction in workplace bullying prevalence, and responses to workplace bullying which recognize and are informed by the negative consequences of this workplace dynamic.     

Insider perspectives on growth: Implications for a nondichotomous understanding of ‘sustainable’ and conventional entrepreneurship

The aim of this paper is to offer an alternative to a priori theorising in research on firm-level growth and environmental sustainability. We outline an approach that combines John Shotter's phenomenology with post-hoc application of the Bourdieusian concepts of habitus, practices and social capital. This is illustrated empirically through a study conducted with a small group of Finnish entrepreneurs, which examines their lived experience of growth alongside its practical application in their ventures. The entrepreneurs' responses reveal holistic perspectives on growth that extend beyond the economic to incorporate personal commitments to norms of collectivity and well-being for themselves and others. The paper offers an exploratory but empirically grounded approach, arguing that a combination of insiders' perspectives and attention to the social embedding of economic activity challenge the dichotomous distinctions between sustainable and conventional entrepreneurship and reveal a degree of commonality that would not be evident via conventional categorisations on the basis of features such as business model type.     

Corporate R&D and firm efficiency: evidence from Europe’s top R&D investors

The main objective of this study is to investigate the impact of corporate research and development (R&D) activities on firm performance, measured by labour productivity. To this end, the stochastic frontier technique is used on a unique unbalanced longitudinal dataset comprising top European R&D investors over the period 2000–2005. In this framework, this study quantifies technical inefficiency of individual firms. From a policy perspective, the results of this study suggest that if the aim is to leverage firms’ productivity, the emphasis should be put on supporting corporate R&D in high-tech sectors and, to some extent, in medium-tech sectors. On the other hand, corporate R&D in the low-tech sector is found to have a minor effect in explaining productivity. Instead, encouraging investment in fixed assets appears important for the productivity of low-tech industries. Hence, the allocation of support for corporate R&D seems to be as important as its overall increase and an ‘erga omnes’ approach across all sectors appears inappropriate. However, with regard to technical efficiency, R&D intensity is found to be a pivotal factor in explaining firm efficiency and this turns out to be true for all industries.     

Spatial and sectoral characteristics of China’s international and interregional virtual water flows – based on multi-regional input–output model

This paper provides a systematic analysis of spatial and sectoral characteristics and changes in virtual water flows associated with China’s interregional and international trade based on the China interregional input–output tables of 2002 and 2007. The results show significant improvement in water use efficiency between 2002 and 2007. However, the general spatial patterns and sectoral components of virtual water flows have more or less remained during the period. Almost all Chinese provinces are net exporters of virtual water in international trade. In interregional trade, the dominant direction of virtual water flow is from peripheral provinces to eastern coastal provinces. The agricultural sector plays an important role in shaping this direction and has significant impacts on water uses in exporting provinces, some of which are water scarce. The results of this study clarify some confusions concerning mismatches between regional water endowments and virtual water trade within China and with other countries.     

Mathematical programming for nominating exchange students for international universities: The impact of stakeholders’ objectives and fairness constraints on allocations

We consider the problem of nominating exchange students to attend international universities where places are limited. We take into account three objectives: The sending university aims to maximize the number of nominations, the students seek nomination for a highly preferred university and, finally, the receiving universities strive for excellent incoming students. Pairwise comparison of students should guarantee the following fairness: A student with higher academic achievements should be preferred over a student with lower academic achievements. We provide mathematical programming models of the nomination problem which maximize the overall objectives and guarantee different types of pairwise fairness. Several years of real data from a major school are employed to evaluate the models’ performance including a benchmark against the heuristic that is used by the school. We show analytically and experimentally that the heuristic approach fails to guarantee some pairwise fairness. Our results reveal the following four insights: First, compared to the current approach, up to 6.6% more students can be nominated with our optimization model while ensuring all pairwise fairness perspectives. Second, on average, students are nominated with better academic achievements. Third, the problem instances can be solved to optimality within a fraction of a second even for large-size instances comprising more than 500 students and about 150 schools offering nearly 450 exchange places. This is important for its use in practice. Last, up to 17.9% more students can be nominated when considering the overall objective to maximize nominations.     

A tale of two crises: Federal transfers and regional economies in Russia in 2009 and 2014–2015

We examine transfers from Russia’s federal government to the regions during the two recent economic crises. We show that while federal transfers in 2009 were large and targeted poorer regions, the 2014–2015 transfers were much smaller and not targeted. This policy shift was accompanied by a relatively greater decline in own revenues in the poorer regions and their worse economic performance overall. As a result, interregional budget expenditure inequality in Russia was significantly higher in 2014–2015 than it had been for years. This is important because regional budgets are responsible for a large share of investments, housing, education and healthcare.     

Board structures,liberal countries,and developed market economies. Do they matter in environmental reporting? An international outlook

Previous empirical evidence has shown the effect of most corporate governance mechanisms on corporate social responsibility and environmental disclosure. However, there is scant empirical evidence that examines the influence of liberal countries, developed market economies, and board structures on environmental disclosure. Thus, this research aims to explore how liberal and developed countries and board structures affect environmental reporting. We hypothesise a linear and positive association between companies located in countries with liberal and developed market economies and environmental reporting. Moreover, we hypothesise that one‐tier board structures negatively affect environmental disclosure. Focusing on 13,100 companies domiciled in 39 different countries from 2005 to 2015, it is established that those companies located in liberal and developed economies are more likely to disclose environmental information, whereas one‐tier boards have a negative effect.     

Leader–member exchange and follower creativity: the moderating roles of leader and follower expectations for creativity

We examined leader and follower expectations for creativity as moderators in the relationship between leader–member exchange (LMX) and follower creativity. The results of a survey among 193 leader–follower dyads from two high-tech companies in mainland China show that LMX positively relates to follower creativity, and that leader and follower expectations for creativity moderate this relationship. Specifically, the relationship between LMX and follower creativity is positive and significant when either leaders or followers, or both leaders and followers, set high rather than low expectations for creativity, with the highest level of follower creativity observed when leaders and followers congruently hold high creativity expectations. In contrast, the LMX–follower creativity relationship is blurred when leaders and followers congruently hold low expectations for creativity. We discuss the relevance of these results from theoretical and professional perspectives.     

Gender representation and organizational size: examining opportunities for members’ involvement in membership organizations

Members are the most important stakeholders in membership organizations; their involvement can enhance organizational effectiveness, accountability, and legitimacy. Previous literature, however, has primarily explored these concepts by focusing on staff involvement or client participation. This paper examines the determinants of members’ involvement in membership organizations using cross-sectional data from Lebanese membership organizations. Primary findings suggest that members’ involvement is affected by the gender of leadership, internal fiscal capacity, and the size of the organization; small organizations, those led by women, and organizations with greater internal fiscal capacity are more likely to have greater participation by members.     

Stress and turnover intents in international organizations: social support and work–life balance as resources

Abstract

This study investigates whether work opportunities have an impact on stress and the related turnover intentions of employees working in intergovernmental international organizations (IOs). It contextualizes the job resources and demands model within IOs’ specific work conditions. The empirical test is based on original data from a survey administered in four major organizations of the United Nations system. Results demonstrate that social work opportunities and work–life balance are organizational levers reducing stress and willingness to quit for employees who are facing red tape or the stresses of being an expatriate. In this context, the relationships between these work opportunities and turnover intention are partially mediated by stress. Contextualized HR management propositions are made to help organizations coping with these management challenges.