Reshoring: Does home country matter?

The role of the country, either home or host, in firms' internationalization has been widely analysed in the International Business field. A large number of studies have shown that home country shapes many aspects of firms' internationalization processes such as investment decisions, location selections, and entry modes. However, these studies mainly focus on the firms' foreign expansion. Little is known about the relations between firms’ home country and reshoring processes. This paper aims to analyse whether and how reshoring projects are different across countries, thereby further exploring the underlying home country-related factors contributing to reshoring peculiarities. By using a dataset including 529 cross-industry reshoring projects developed by companies headquartered in five countries (i.e., US, Germany, UK, France, and Italy), the study shows that these projects differ in terms of industry, entry mode, firm size and motivations. Thus, reshoring turns out to be a phenomenon where each country has its own peculiarities. The research further sheds light on the possible institutional, cultural/cognitive and industry/resource-related factors underlying these specificities.This study contributes to both reshoring and international business literature by highlighting how reshoring differs across countries. It also provides policy and managerial implications, at a time when several governments are considering the economic and employment potential of this phenomenon.     

Efficiency in public schools: Does competition matter?

The focus of many recent school reforms has been on changing the incentives faced by school administrators, mainly through increased competition. In this study, we assess whether competition amongst public schools influences the efficiency in which these schools operate, using a two-stage estimation procedure and data from the state of Illinois from 1997–1998. We find some evidence that public school districts become more efficient as neighboring districts become more efficient. However, such spillovers only occur if districts operate within a financially flexible environment.     

Adaptive expectations and cobweb phenomena: Does heterogeneity matter?

This paper studies a cobweb-type commodity market characterized by a strictly monotone demand and supply, in which n types of firms operate. Types differ in a key parameter governing price expectations which are supposed to be adaptive. The unique steady state of the resulting economic dynamics is characterized in terms of stability and the impact of the number of firms types is studied: to this end the notions of structural and behavioural degree of instability, which are introduced in the paper, prove to be crucial in determining whether stability or instability prevail. The case of market integration is also considered and conditions to have stability (or instability) in terms of the original markets' parameters are given. The baseline structure is extended in two directions. The first extension assumes the point of view of an authority who is uncertain about the firms types. In this case the structural degree of instability determines how heterogeneity affects the probability of ending up with a stable outcome. The second extension consists in endogenizing the choice of predictors through a discrete choice-based evolutionary mechanism. In both cases the amount of the heterogeneity and its possible variations play a critical role in shaping the range of possible long-run outcomes of the model.     

Revisiting the roles of gold: Does gold ETF matter?

This study investigates whether the role of gold changes due to the introduction of gold exchange-traded funds (ETFs) using sample data of seven countries in which physically-backed gold ETFs have been issued. The results show that the traditional roles of gold do change after the introduction of gold ETFs, particularly in the corresponding stock markets. The functions of hedge and safe haven provided by gold wear off during the post-ETF period in stock markets. In currency markets, however, gold still serves as a hedge and safe haven asset, and such effects become stronger during the post-ETF period. Moreover, gold ETFs play a role of relative strong safe haven than the physical gold does while the leading (lagged) stock returns extremely decline. Like the purposes of using physical gold assets, gold ETFs also provide hedge and safe haven effects to the exchange rate risks. Therefore, we might confirm that physical gold could be largely replaced by gold ETFs and investors could utilize gold ETFs to avoid potential risks in financial markets.     

Organizing collective action: Does information and communication technology matter?

In recent years, there have been significant changes in the fields of collective action and political activism. The increasing use of ICTs in social interactions has facilitated informal ways of organizing and affected the participation, emergence, and organizing of conflictual and consensual collective actions. In this study we seek to understand how the integrated use of multiple ICTs, that is the ICT ensemble, affects the organizing of consensual collective action. We investigated the ICT ensembles used by two civic movements that successfully organized large-scale consensual collective action events in two European countries. In our results, we reveal how ICT ensembles constrained and facilitated the organizing functions and requirements of collective action. The findings show that ICTs allow organizers to operate purposefully in order to organize collective action, but the extent to which they succeed in the actual concretization of collective action actually depends on their capacities and intents. Therefore, we argue that human factors (that is, their resourcefulness and agency) are greatly implicated in the success of collective action supported by ICTs. This study extends the research on impact of technology-enabled collective action by looking at the combined use of multiple ICTs and examining the rare and overlooked phenomenon of consensual collective action.     

Political environment and bank performance: Does bank size matter?

In this study, we investigate the relationship between the political environment and bank performance and whether this relationship is contingent on bank size. We use a sample comprising more than 1600 banks in 58 countries and a set of multidimensional measures collected by the Economist Intelligence Unit to proxy for the political environment. Overall, our findings indicate that political uncertainty is associated with a significant decrease in bank performance. A deeper analysis shows that bank size matters when analyzing the relationship between political risk and bank performance. Precisely, large banks are less vulnerable and more resilient under political distress than other banks. Our findings shed light on the importance of bank size as a determinant of bank performance in countries with high political risk, particularly for investment decision makers. The results are robust to a variety of alternative measurements, and different estimation techniques to deal with endogeneity.     

Environmental,Social and Governance investing: Does rating matter?

In the last decade, the demand for sustainable and social investments has improved. The mutual funds industry has responded to market needs by offering a number of investment products focused on Environmental, Social and Governance (ESG) companies. The aim of this article is to understand if an ESG score can actually be considered a valid criterion that portfolio managers could adopt, along with traditional risk–return optimisation, in selecting asset portfolios. The paper analyses the link between the performance and the ESG score of different sectoral portfolios (one for each sector of the Global Industry Classification Standard), entirely composed of ESG assets, in the search for a clear and strong positive correlation that could suggest an overall advantage to focus on an ex ante choice of assets with high ESG scores.     

Explaining Total Factor Productivity at Firm Level in Italy: Does Location Matter?

Abstract

This study analyses how firms' internal variables and regional factors affect total factor productivity (TFP) of Italian manufacturing firms. Due to the hierarchical structure of our data, we employ a multilevel model that allows for a clear distinction between firm and region-specific effects. Results refer to 2004–2006 and show, as expected, the importance of firm-specific determinants of TFP. At the same time, they indicate that location matters in the sense that the context where firms operate plays a crucial role in determining the level of TFP. In more detail, we find that the regional endowment of infrastructure, the efficiency of local administration and the investments in R&D exert a positive effect on firms' performance.     

Does revamping Japan's dual labor market matter?

This paper argues that Japan's excessive labor market duality can reduce Total Factor Productivity (TFP) due to a negative impact on non-regular workers’ effort and on firms’ incentives to train them. The paper then empirically studies the determinants of labor market duality. The main result of the paper is that the level of employment protection affects duality. In particular, a higher level of employment protection of regular workers increases duality, while a higher level of protection of temporary workers reduces it. On the basis of this result, the paper also discusses some reform options to address Japan's labor market duality.     

Slow recoveries: Any role for corporate leverage?

This paper examines whether financial conditions of the non-financial corporate sector can explain why the recovery from recessions in the United States is slower since the mid-1980s. Leverage by the corporate sector has increased significantly since the financial deregulation of the mid-1980s. Empirical evidence shows that slow recoveries are associated with a significant drop in the growth rates of investment and bank loans, and with a surge in the growth rates of corporate bonds. In an estimated dynamic stochastic general equilibrium model with a financial accelerator, counterfactual experiments based on estimates of two samples – 1965–1983 and 1984–2007 – show that the non-financial corporate indebtedness affects only marginally the speed of the recovery in the two samples.     

Does CEO gender matter for bank risk?

This paper addresses the relation between CEO gender and bank risk. We exploit a unique dataset of 365 Polish cooperative banks, 42% of which are run by female CEOs. We find that banks headed by female CEOs are less risky: they report higher capital adequacy and equity to assets ratios. Credit risk in female-led banks is not different from male-led banks, and therefore higher capital adequacy does not stem from lower asset quality and is likely to be linked to higher risk aversion of female CEOs. Our evidence supports the view that women are more risk averse bank CEOs than men. Our findings suggest that gender quotas in bank boards can contribute to reduce risk-taking behavior.     

Does gender diversity matter for green innovation?

This study empirically investigated the relationship between board gender diversity and firm's green innovation, using panel data of public companies of China's manufacturing. Green product innovation was assessed by “green” patents and green process innovation assessed by environmental management certification. The endogeneity problem that resulted from self‐selection of gender diversity was addressed by means of extended probit regressions with an instrumental variable, and the instrumental variable was elaborately constructed based on changes in directorships. The findings show that occurrence of green innovation at the firm‐level is systematically related to female board representation. Specifically, women can exert a sizable and positive effect on green innovation, once they enjoy at least two seats on the boards; a further increase in representation of women on the boards can increase the likelihood of green product innovation rather than the likelihood of green process innovation. These results were robust to various regression specifications and alternative samples. The study provides empirical evidence that women at the top management can play a positive role in developing firm's active environmental strategies, and the conclusions are of practical implications for improving corporate governance along the environmental dimension.     

Public service motivation- individual performance relationship: Does user orientation matter?

Many studies find positive associations between Public Service Motivation (PSM) and individual performance, but we know little about potential mediators and moderators.In this study, we test the mediating role of User Orientation (UO) - the motivation to benefit individual recipients of public services - and the moderating role of individual and work-related characteristics by collecting data from 618 teachers and 156 school principals working in all grades of state schools in southern Italy. After applying structural equation modeling and group comparisons, results show that individuals with a strong orientation to do good for others and for society (PSM) are also better oriented towards helping specific public service users, the students in our case. In turn, the desire to benefit students and satisfy their needs leads individuals to enhance their self-reported performance at work. Eventually, the implications of our findings and possible areas of future research are discussed.     

Mortgage lending on Native American reservations: Does a guarantee matter?

The Section 184 Indian Home Loan Guarantee Program provides lenders with a 100 percent guarantee for mortgage loans to Native Americans residing on reservations belonging to tribes that have chosen to participate in the program. We find that Native Americans residing on trust land whose tribes have adopted Section 184 have a marginally statistically significantly higher loan approval rate than Native Americans residing on trust land whose tribes have not adopted Section 184. However, the statistical significance disappears once tribe fixed effects are included in the analysis, suggesting that underlying tribe characteristics correlated with the adoption of Section 184 are more important determinants of access to credit than is Section 184 per se.     

Informational externalities of initial public offerings: Does venture capital backing matter?

We examine the role of venture capital backing on informational externalities generated by IPO firms. Theoretical models predict that going public firms generate positive externalities creating a spillover effect for other firms to go public. In this paper, we posit that venture backed IPOs convey positive information about industry and this information is transferred to rival firms. We also hypothesize that intra-industry information transfer varies with rivals’ characteristics and IPO price revisions generate additional information that affects rivals’ valuation. The results show that rivals have positive valuation effects in response to venture backed IPOs and no significant reaction in response to non-venture backed IPOs. We find evidence that the effect on rival firms is stronger if they operate in less concentrated industries and have high growth opportunities. The larger the IPO proceeds, the higher the magnitude of rivals ‘valuation effects. Positive (negative) information revealed in the form of upward (downward) price revisions significantly impacts rivals’ reaction in response to venture backed IPOs.     

Determinants of bank interest margins in Russia: Does bank ownership matter?

This paper analyzes interest margin determinants in the Russian banking sector with a particular emphasis on the bank ownership structure. Using unique bank-level data covering Russia's entire banking sector for the 1999–2007 period, we find that the impact of a number of commonly used determinants such as market structure, credit risk, liquidity risk and size of operations differs across state-controlled, domestic-private and foreign-owned banks. At the same time, the influence of operational costs and risk aversion is homogeneous across ownership groups. The results overall suggest that the form of bank ownership needs to be considered when analyzing interest margin determinants.     

Investor sentiment and country exchange traded funds: Does economic freedom matter?

Using unbalanced panel data of 27 iShares MSCI country-specific exchange traded funds (ETFs) over the period 1996–2014, this paper applies quantile regression to examine the impacts of global, foreign, and U.S. investor sentiments on the returns of the ETFs traded in the U.S. markets. We further investigate whether a country’s economic freedom affects the relationship between investor sentiments and ETF returns. We find that ETF returns are strongly determined by investor sentiments and the ETF expense ratio. The quantile regression approach reveals that high-return ETFs are positively sensitive to changes in global sentiment (measured by market turnover, VIX, U.S. federal funds rate), foreign sentiment (measured by current account balance, inflation, market turnover, public debt), U.S. sentiment, currency exchange ratio, and expense ratio, while negatively influenced by economic freedom and Asian proxy. The effects of VIX and foreign inflation are a reversal; that is, returns from lower (higher) quantiles have a negative (positive) relation with VIX and foreign inflation. Not all components of economic freedom affect returns equally.     

Assessing Ricardian equivalence for the New Member States: Does debt-neutrality matter?

Using a structural model based on dynamic optimizing agents, we empirically test the Ricardian equivalence proposition (REP) for 11 New EU-Member States (NMS). We extend the basic model by including the government budget constraint, thus being able to evaluate whether individuals take the evolution of public debt into account. In the basic setting we cannot reject the validity of the REP for four NMS, in the extended model the relevance of the REP changes for six countries, implying that the development of government debt and long-term sustainability of public finances matters with regard to the validity of the REP.     

Student performance in business and economics statistics: Does exam structure matter?

We investigate whether exam structure really matters in an economics and business statistics course by (1) determining how well performance on multiple choice questions alone expalins overall performance on exams composed of both multiple choice questions and problems, and (2) discovering whether various student characteristics have significantly different impacts on student performance on multiple choice questions versus problems. Our findings suggest that student scores on multiple-choice portions of exams do not adequately determine overall student performance, and that some students are predisposed to do better on multiple choice or problems depending on the characteristics they possess.(JEl A22, A29)     

Does bank capitalization matter for bank stock returns?

We examine US bank capitalization and its association with bank stock returns, and find that the book- and market-based capital ratios show different patterns. Fama-MacBeth regressions and portfolio analyses suggest that banks’ market-based capital ratios are negatively associated with banks’ stock returns during the (tranquil) 1994–2007 period while book-based capital ratios are positively associated with banks’ stock returns during the (turbulent) 2008–2014 period. These results suggest that the effect of bank capitalization on bank stock returns depends on the capital measure used and the period considered.