Effect of Secondary School Fees on Educational Attainment*

In this study, the heterogeneity of the fee abolition process in West German secondary schools is used to identify the effect of school fees on educational attainment and to obtain an estimate of the price elasticity of upper secondary education. The analysis is based on representative individual‐level data from three annual surveys of the German Mikrozensus. While coefficients cannot be estimated precisely, the results suggest that, on average, upper secondary school attainment increased by at least 8 percent in response to the fee abolition. The educational attainment of females appears to be more price sensitive than that of males.     

Education and its intergenerational transmission: country of origin-specific evidence for natives and immigrants from Switzerland

This study compares the intergenerational transmission of educational attainment across immigrant groups using the Swiss Census 2000. Determinants of educational outcome and educational mobility are examined. A child’s educational opportunity depends on its parental background. Not only the effect of parental human capital but also other determinants of child educational attainment vary depending on the child’s nationality. Overall educational upward mobility is more pronounced among second generation immigrants than among natives. Children of Turkish, Portuguese and former Yugoslavian origin appear to be most disadvantaged in the process of human capital formation.

The Asymptotic Optimality of Residual Income Maximization

Residual income subtracts from operating income an interest charge for invested capital. Residual income can be calculated each period from current accounting information, unlike discounted cash flow (DCF), which requires the knowledge of future cash flows. This paper provides a normative justification for residual-income maximization by showing that if investment decisions are made myopically each period to maximize residual income, the resulting path asymptotically maximizes discounted cash flow. Thus, under the assumptions of the model, residual-income maximization is a heuristic that leads to the long-run DCF-optimum.     

Key institutions in business and management education research

The authors investigate institutional productivity in business and management education (BME) research based on the analysis of 4,464 articles published by 7,210 authors across 17 BME journals over a 10-year period, involving approximately 1,900 schools worldwide. Departing from traditional disciplinary silos, they examine the BME research field as a whole by including all traditional business disciplinary areas and producing two top 100 rankings, one based on raw number of author publications and the other based on weighted scores reflecting journal quality and coauthorship.     

Informations- und Beratungspflichten des Versicherers nach der VVG-Reform

The insurer’s duty to enable the customer to come to an appropriate decision, providing advice and information, is a central topic of the reform of the German insurance contract law. The obligations of intermediaries given by the Directive 2002/92/EC on insurance mediation are transferred to insurers and thereby enlarged in some aspects. The duty to give advice in §6 I 1 VVG depends on the objective circumstances of each individual case depending upon either the complexity of the insurance contract and problems in understanding its terms, or the characteristics and situation of the customer. Therewith, the regulation both refers to former jurisdiction and exceeds it by implementing a duty for the insurer to ask for the demands and the needs of the customer. Without reason in the special case the customer has to disclose his need for advice to obtain it. During the term of the contract the insurer is only obliged to give advice if he knows or — acting diligently — could know the needs of the policy-holder. On a European level further duties to inform and advise could help to achieve an effective internal insurance market.     

Legitimizing Negative Aspects in GRI-Oriented Sustainability Reporting: A Qualitative Analysis of Corporate Disclosure Strategies

Corporate sustainability reports are supposed to provide a complete and balanced picture of corporate sustainability performance. They are, however, usually voluntary and thus prone to interpretation and even greenwashing tendencies. To overcome this problem, the Global Reporting Initiative (GRI) provides standardized reporting guidelines challenging companies to report positive and negative aspects of an organization’s sustainability performance. However, the reporting of “negative aspects” in particular can endanger corporate legitimacy if perceived by the stakeholders as not being in line with societal norms and values. Starting from the theoretical lenses of economics-based disclosure theories and socio-political theories of disclosure, the focus of this study therefore was to analyze the communicative legitimation strategies companies use to report “negative aspects,” i.e., negative ecological and social impact caused by corporate activity. Using qualitative content analysis of GRI-oriented sustainability reports from companies listed on the US Dow Jones Industrial Average Index and on the German DAX Index, we identified six legitimation strategies. We discuss these strategies regarding to symbolic and substantial management of legitimacy. We show that symbolic legitimation strategies aiming at modifying the perception of legitimizing stakeholders dominate in the reports at hand. Such persuasion, however, does not meet the requirement of impartiality as postulated by the GRI guidelines. Building upon this conclusion we propose a concise characterization of “negative aspects” and develop a GRI-compliant schema of reporting about them. In doing so, we offer a way to improve the overall “balance” of sustainability reporting contributing to a true and fair view in sustainability disclosure.     

Corporate financial distress: The case of publicly listed firms in an emerging market economy

Occurrences of financial distress (FD) are not readily obvious yet can span several periods. This paper examines episodes of FD using industry‐relative (IR) firm‐/ accounting‐, market‐ and macro‐level information. Mixed logit regressions reveal that firm‐ and market‐based measures, as well as macro‐level variables explain the likelihood of FD in 263 publicly listed non‐banking firms in the Philippines during the period 1995 to 2018. Rates of identification of firms in financial distressed states of close to 69 percent are obtained at a cutoff probability of 0.30 in the model with time‐varying intercept and slope. This study shows the importance of recognizing heterogeneous firm behavior. The ability to more accurately predict the probability of FD and to determine the financial health of firms can help financial institutions in allocating funds and policy makers in predicting crises episodes.     

Media Coverage and the Stock Market Valuation of TARP Participating Banks‡

We examine the impact of media coverage of the Capital Purchase Program (CPP) under the Troubled Assets Relief Program on the equity market valuation of participating bank holding companies (CPP banks). We document substantial negative coverage of the CPP and its participants over the five quarters following the program's initiation. We find that the extent of negative media coverage about the CPP exerted substantial downward pressure on the stock returns of CPP banks, decreasing their valuation relative to bank holding companies not participating in the program. We show that our findings cannot be explained by differences in the banks’ financial viability at the CPP's initiation, new information about their performance being released to the market after the CPP's initiation or preceding stock returns causing the negative media coverage. Our findings highlight the importance of investor sentiment, as reflected by the tone of media coverage, in banks’ valuation during a period of high uncertainty in financial markets.