Unobserved heterogeneity in hazard rate models: a test and an illustration from a study of career mobility

This paper proposes a test for neglected heterogeneity in continuous-time hazard rate models that can be done easily using generally available program packages. It is a score test appropriate for cases in which the variance of the heterogeneity is small and it can be applied quite generally, provided that the generalized residuals can be calculated. The test is demonstrated using data on the career trajectories of German males from the German Life History Study.     

Black banks: A survey and analysis of the literature

The analysis of the role of black banks in black economic development began in the early 1970s. At that time the focus was on the profitability of these institutions. Since then both the number of black banks and the research on their performance have increased significantly. This article reviews the recent literature on black banks in order to provide a conceptual framework for policies that will promote their growth and prosperity. The authors conclude that there is a clear need for future research in every area relating to black banks.     

Keen competition in East-West trade

Parallel to the economic growth and the increase of the living standards in the Eastern bloc the import requirements of its member countries are rising, too. For this reason all Western industrial nations make increasing efforts to establish themselves in these markets with good future prospects or to maintain and extend traditional positions. However, trade between the East and the West is more difficult than among Western industrial States. The differing control of the economies causes a multitude of difficulties in opening new business connections and for transactions. These impediments are still increased by differing conceptions of the world. INTERECONOMICS interviewed Herr Alfree E. Schulz, Member of the Board of Directors of DEMAG Aktiengesellschaft, on the present situation of the West Germon Eastern trade.     

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On Optimal Monetary Policy Rules and the Construction of MCIs in the Open Economy

This paper presents a simple open-economy forward-looking model to underscore the important role of the real exchange rate channel in the conduct of optimal monetary policy. As opposed to the closed economy, optimal monetary policy in the open economy depends on both demand-side and supply-side parameters.The paper also highlights the importance of the exchange rate channel for the design and implementation of a Monetary Conditions Index in the conduct of monetary policy. The model gives rise to an alternative MCI where the weight on the real exchange rate depends on all parameters of the model and the policymakers preferences.     

10 ways to create shareholder value

Executives have developed tunnel vision in their pursuit of shareholder value, focusing on short-term performance at the expense of investing in long-term growth. It's time to broaden that perspective and begin shaping business strategies in light of the competitive landscape, not the shareholder list. In this article, Alfred Rappaport offers ten basic principles to help executives create lasting shareholder value. For starters, companies should not manage earnings or provide earnings guidance; those that fail to embrace this first principle of shareholder value will almost certainly be unable to follow the rest. Additionally, leaders should make strategic decisions and acquisitions and carry assets that maximize expected value, even if near-term earnings are negatively affected as a result. During times when there are no credible value-creating opportunities to invest in the business, companies should avoid using excess cash to make investments that look good on the surface but might end up destroying value, such as ill-advised, overpriced acquisitions. It would be better to return the cash to shareholders in the form of dividends and buybacks. Rappaport also offers guidelines for establishing effective pay incentives at every level of management; emphasizes that senior executives need to lay their wealth on the line just as shareholders do; and urges companies to embrace full disclosure, an antidote to short-term earnings obsession that serves to lessen investor uncertainty, which could reduce the cost of capital and increase the share price. The author notes that a few types of companies--high-tech start-ups, for example, and severely capital-constrained organizations--cannot afford to ignore market pressures for short-term performance. Most companies with a sound, well-executed business model, however, could better realize their potential for creating shareholder value by adopting the ten principles.     

How do changes in human resource management practices influence employee engagement? A longitudinal study in a hotel chain in the Philippines

ABSTRACT

Drawing from social exchange theory, this study investigates how changes in human resource management practices influence and affect employee engagement in a hotel chain. Changes in human resource management practices were identified, and corresponding changes in the level of employee engagement were observed. One hundred forty-five employees from a hotel chain in the Philippines participated in a longitudinal study. Results show that improvements in human resource management practices, particularly in the areas of reward management and training and development, yielded positive and significant change in the level of employee engagement. Implications for human resource management, particularly in the hospitality and tourism context, are discussed.