The importance of financial incentives on retirement choices: New evidence for Italy

This study exploits a new dataset to quantify the effect of financial incentives on retirement choices. This dataset contains—for the first time for Italy—information on seniority. The effects of marginal incentives and social security wealth (SSW) on retirement go in the expected direction; when employees become eligible for pension benefits, the change in financial incentives they experience is so great that their retirement probability increases by 30 percentage points.We also find that the procedure used in previous Italian studies to impute seniority leads to a considerable overestimation of that variable and of SSW. We show that, due to these measurement errors, the estimate of the SSW coefficient takes the wrong sign. A comparison of retirement studies across countries (see Gruber and Wise [Gruber, J., and Wise, D., (2004). Social Security Programs and Retirement Around the World: Micro-Estimation, NBER. The University of Chicago Press, Chicago and London.]) provides prima facie evidence that a lack of good quality data often leads to wrongly signed estimates of the SSW coefficient.     

The effects of pension rights and retirement age on training participation: Evidence from a natural experiment

This paper uses a natural experiment approach to identify the effects of an exogenous change in future pension benefits on workers' training participation. We use unique matched survey and administrative data for male employees in the Dutch public sector who were born in 1949 or 1950. Only the latter were subjected to a major pension reform that diminished their pension rights. We find that this exogenous shock to pension rights postpones expected retirement and increases participation in training courses among older employees, although exclusively for those employed in large organizations.     

The effect of CEO incentives on deviations from institutional norms in foreign market expansion decisions: Behavioral agency and cross-border acquisitions

CEO incentives have been the subject of great interest for human resource scholars. We explore the institutional context within which the CEO makes sense of their incentives. Our theory suggests that CEO equity incentives interact with institutional norms to influence foreign market entry choices. Specifically, we argue that CEOs will weigh the risk bearing created by equity incentives, along with the consequences of legitimacy loss, when deciding whether to deviate from institutional norms when internationalizing. In doing so, we advance human resource literature by demonstrating that CEO responses to incentives are influenced by institutional norms and that CEOs' decisions to deviate from institutional norms are shaped by their incentives. We find support for our framework in the analysis of the stake taken by acquirers in 4,184 cross-border acquisitions.     

The effect of non-convertible preferred stock retirement on shareholder wealth

In this paper the authors examine the common stock price behavior of firms that call their non-convertible preferred stock. The findings for the entire sample of preferred stock calls are consistent with the Modigliani and Miller (MM) leverage hypothesis that preferred stock financing adds no value to the firm. However, for those firms whose preferred stock was completely eliminated from the capital structure, a significant, positive announcement effect is observed. This finding is consistent with an information signaling effect related to the earnings prospects and tax status of the calling firms and also is suggestive of a burdensome covenant effect. No evidence is found to support the free cash flow theory of common stock price reactions to preferred stock calls.     

The effect of cognitive load on economic decisions

In the current study, we examine how cognitive load affects economic decision‐making. We asked participants to bid for lottery tickets with and without an alternative income. We demonstrate that the tendency to ignore opportunity costs is stronger under a greater cognitive load. Furthermore, cognitive load causes participants to invest fewer cognitive efforts in choice tasks and take more risks.     

The economic principles of pension provision

To examine pensions Samuelson's overlapping-generations model is generally used: its basic workings are set out here for an open economy. Pay-as-you-go (PAYGO) pensions are attractive when the rate of population growth exceeds the real rate of interest; then all generations are better off for the existence of the pension. The only cost is the income tax distortion. Once the rate of growth falls below the real interest rate, only the cost is left and it is better for the state to'fund'its pensions. If the state borrows to finance the transition to a funded system, it substitutes explicit debt for unfunded liabilities, which leaves its balance sheet unchanged; this avoids the problem of the existing young generation'paying twice'for its pensions.     

The effect of match quality and specific experience on career decisions and wage growth

This paper constructs and estimates a career decision model where individuals search for both careers and firms that are a good match for their idiosyncratic skills using the NLSY79. It departs from previous papers in that career mobility decisions and participation decisions are explicitly modeled. I find substantial returns to career-specific experience. However, college graduates' wage grows little through career-match upgrading, which results in a lower incidence of career changes than high school graduates. The finding suggests that college graduates learn about their suitable careers before they enter a labor market.     

试论企业年金在我国企业薪酬管理中的作用

薪酬管理是企业人力资源管理的核心课题之一,是企业增强竞争力、吸引和留住人才的重要手段。探索企业年金在我国企业薪酬管理中所起的作用具有重要的理论与实践意义。文章简述了企业年金的概念及性质,介绍了薪酬管理的内容及我国企业薪酬管理现状,并对企业年金制度在我国企业薪酬管理中的作用加以分析。     

The effect of environmental information on investment allocation decisions – an experimental study

This paper focuses on the use of environmental information in investment decision making. The research approach employed is based on an experiment where three groups of final year finance students were asked to allocate investment funds between two companies based on financial accounts and information material from these companies in which environmental information was included in varying degrees. The overall conclusion is that the qualitative environmental information affects short term allocation decisions, hence indicating a risk reduction potential of environmental information comparable to the classic interpretation of financial information. The quantitative environmental information included in the experiment seems to mitigate rather than extend the directional effect of more environmental information. The evidence also seems to indicate that decision makers are not always aware which information categories affect their decision making. Hence, this has implications for how the potential value of environmental information is to be assessed. Finally, experimental studies as a methodology seem to be better suited to indicate actual effects of different types of information on decision making than attitude surveys. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Entry,financing, and bankruptcy decisions: The limited liability effect

A firm, which has a privileged right to undertake an irreversible investment project, simultaneously determines whether to exercise this project and also how many bonds to issue in the presence of demand uncertainty. The firm will not exercise the project until its net value from investing immediately equals its option value from delaying investment. The firm’s choice of debt levels balances the tax advantage of debt against a cost associated with the event of bankruptcy. The effects of uncertainty, asset specificity, and the costs to purchase capital later on a firm’s entry, financing, and bankruptcy decisions are examined and compared with those in the literature.     

The impact of reshoring decisions on shareholder wealth

Interest in reshoring, defined as the return of manufacturing and service operations from previously offshored locations to the U.S., has gained momentum recently. Yet, there is no academic evidence on the shareholder value implications of reshoring decisions. This paper analyzes the shareholder wealth effects of 37 reshoring decisions announced by U.S. firms during 2006–2015. Our results indicate that reshoring announcements result in positive abnormal stock returns. Mean (median) abnormal stock returns on reshoring announcements are 0.45% (0.29%), corresponding with a mean (median) market value change of $322.57 million ($31.60 million). Our findings imply that the benefits associated with the reshoring tend to outweigh the costs. This finding is relevant for firms faced with the decision of whether to move business activities from offshore to domestic locations. It is also of interest to policy makers who may seek to further stimulate the reshoring phenomenon.     

The simulation of planning decisions

An approach to the simulation of planning decisions is presented in which techniques based on control systems analysis are used. Planning decisions are defined to be those taken by officially instituted bodies subsequent to the adoption of an official plan and in order to implement it. These decisions are in response to applications for action from the public. These decisions are assumed to be adequately represented by the mean and standard deviations of the distribution of time delays involved. These two parameters are in turn posited to be influenced by feedback, feedforward and comparison with a standard plan effects. These influences are subsumed in a Monitoring functional block, which is modelled by a set of multiple linear regression equations. The decision-making or Regulation functional block is represented by Laplace functions which makes it convenient for computer simulation. Input functions are derived from the hypothesis to be tested or theoretical considerations. The advantages of the method appear to lie in its concise form and ease of manipulation even though the system simulated is an adaptive control system. Computer simulation models are notorious for their unwieldy size (number of equations) which in turn makes intervention and manipulation of parameters impractical. The proposed model attempts to alleviate this problem by simplifying the procedure involved.     

The effect of applicant race upon personnel selection decisions: A review with recommendations

The research literature addressed in this review concerns unfair racial discrimination in the personnel selection process. Because of methodological limitations and narrow research interests, the extant research fails to provide a clear framework from which to interpret the impact of racial discrimination on personnel selection, nor does it adequately account and control for the factors associated with unfair racial discrimination. Furthermore, this report shows that investigations concerning racial minorities other than blacks are virtually nonexistent. Following reviews of resume, in-basket, and interviewing studies, recommendations for future research are provided.     

Rationality in supplier selection decisions: The effect of the buyer's national task environment

Our study sheds light on two fundamental questions in supply management: First, does adherence to highly rational decision processes help buyers make better supplier selection decisions? Second, is the influence of procedural rationality on decision effectiveness moderated by buyers’ (differently dynamic) task environments? We empirically test these questions using a sample of 150 supplier selection decisions taken in China and 150 decisions taken in Germany, countries that expose buyers to dynamic decision environments and stable decision environments, respectively. Our findings suggest that the influence of decision process rationality is stable across decision makers’ task environments. Both in China and in Germany, such process rationality is positively related with higher decision quality, and no significant differences in relationship strengths emerge between the two country samples.     

The impact of public pension board of trustee composition on state bond ratings

The declining financial health of public pension systems is increasingly becoming a budgetary concern for many state and local governments. While the academic literature has identified several factors behind the growth in unfunded state and local public pension liabilities, there is mixed evidence on how the composition of a pension system’s board of trustees affects a pension’s financial health. This article contributes to this literature by measuring how public pension board composition affects fund financial health as measured by state bond ratings. With a panel dataset of state pensions between 2001 and 2014 our results indicate that elected board members are consistently associated with lower bond ratings (and thus higher borrowing costs) while appointed and ex-officio board members are associated with higher bond ratings. These results are robust to a number of specifications.     

股份回购的会计约束条件分析

股份回购在西方发达国家的资本市场上属于正常现象,是西方发达国家上市公司资本运营的一种方式,但我国对于股份回购实行的是“原则禁止,例外许可”的原则,尽管新颁布的《公司法》对例外的范围已经放宽,但是却未对股份回购制定具体的制度规范。基于股票回购的多种财务效应,本文拟从会计的视角,分析股份回购财务指标、股份回购核算方法以及对股份回购信息披露制度等方面的约束条件。     

The treatment of registered retirement savings plans at maturity

In recent years we have witnessed a dramatic rise in the popularity of tax-deductible registered retirement savings plans as an increasing number of Canadians have taken advantage of the tax saving associated with these do-it-yourself pension schemes. As a quid pro quo, the Income Tax Act restricts the manner in which the proceeds of an RRSP can be used to generate a retirement income. This note examines the annuity aspect of RRSPs and how the imposition of such a constraint on withdrawals affects the optimal control solution to the individual planholder's utility maximization problem.     

The impact of political risk on FDI exit decisions

Do political risks drive exit decisions by multinational companies (MNC)? What mechanisms can protect a multinational subsidiary in a host country that is characterized by weak institutions and high political risks? Using multinational plant-level data for Russia in the period 2000-2016 and applying the Cox proportional hazard model, we find significant effects from elevated host-country political risk when we compare the year of entry to the year of exit. MNCs are particularly sensitive to problems associated with law, order, and social conditions in Russia and the presence of the military in politics in the home country. Institutional similarity does not reduce the hazard of exits, and MNCs from high-risk countries exit less when home-country risk increases. Subsidiaries from countries that have imposed sanctions on Russia are less likely to exit, though sanctions interact with host-country risks, making them more severe. Being large and being part of a greenfield project help subsidiaries to build resistance against host-country political risks. These findings provide empirical evidence that support our conclusions regarding foreign direct investment volatility in countries with high risk.