Trade Union Influence on Human Resource Management Practices

This paper examines the influence of unions on 37 human resource management practices, ranging from hiring policies to promotion practices. The logistic regression results show that unionization is positively associated with a more formal approach to human resource management. There is, however, a shift from performance-based payment systems and performance appraisal (P.A.) functions in unionized settings. The results also indicate that union firms are more selective of new hires by adopting a formal probationary period for new employees. Last, the estimates suggest that the impact of unions on training programs varies with the nature of the programs.     

Pensions and Deferred Befefits as Strategic Compensation

This paper examines labor-oriented aspects of pensions and deferred benefits. Recent work has embedded pensions in the framework of optimal compensation schemes that induce workers to behave in certain ways. Most pension formaulas present workers with securities that look like optioons the tendency for turnover rates to fall as vesting approaches, even though there has been no change in the naive valuation of pension accrual. The paper also discusses the use of pensions as severance pay and notes that the various pension formaulas have different incentive effects.     

NASH BARGAINING AND CO-OPERATIVES

This paper develops the generalised Nash bargaining solution for a bargaining co-operative selling its output to a single buyer. Three assumptions for co-operative members' behaviour are examined: profit maximisation, co-operative surplus maximisation and maximising members' price. Solutions are compared and comparative statics presented for these alternative assumptions and the bargaining over price and quantity transacted. The most striking feature of the results is that pursuing the objective of maximising members' price does not necessarily lead to the highest members' price     

THE IMPACT OF WIFE'S EMPLOYMENT AND EARNINGS ON FAMILY NET WORTH ACCUMULATION

The major focus of this research was the relationship between wife's earnings and employment and family net worth accumulation. Multiple regression analysis of data from the National Longitudinal Surveys found that, for the total sample, family income had a much greater impact than wife's earnings on change in net worth during the 1967–1972 period. Wife's employment was not related to the dependent variable once the effects of other factors were taken into account When the sample was segmented into four groups on the basis of 1967 net worth, independent variables had differential impacts on net worth change. For each group the multiple regression model explained a much greater proportion of total variance than it did for the sample as a whole. Among the two groups in the mid ranges of 1967 net worth, wife's employment was positively related to net worth change even after taking wife's earnings and other factors into account.     

Regulatory Arbitrage in Cross‐Border Banking Mergers within the EU

Expanding the cross‐country footprint of an organization's profit‐making activities changes the geographic pattern of its exposure to loss in ways that are hard for regulators and supervisors to observe. This paper tests and confirms the hypothesis that differences in the size and character of safety‐net benefits available to banks in individual EU countries help to account for cross‐border merger activity. Our results suggest that central bankers need to develop statistical procedures for assessing the consequences of differences in supervisory strength and weakness in partner countries. We believe that the methods used here can help in this task.     

Information Risk and Fair Values: An Examination of Equity Betas

Using a sample of U.S. financial institutions, we exploit recent mandatory disclosures of financial instruments designated as fair value level 1, 2, and 3 to test whether greater information risk in financial instrument fair values leads to higher cost of capital. We derive an empirical model allowing asset‐specific estimates of implied betas, and find evidence that firms with greater exposure to level 3 financial assets exhibit higher betas relative to those designated as level 1 or level 2. We further find that this difference in implied betas across fair value designations is more pronounced for firms with ex ante lower‐quality information environments: firms with lower analyst following, lower market capitalization, higher analyst forecast errors, or higher analyst forecast dispersion. Overall, the results are consistent with a higher cost of capital for more opaque financial assets, but also suggest that differences in firms' information environments can mitigate information risk across the fair value designations.     

Default Premiums in Commodity Markets: Theory and Evidence

We model the effect of nonperformance risk on forward and futures pricing and look for evidence of nonperformance risk in precious metals futures prices from the “Hunt Brothers”episode. Changes in default premiums are measured and related to the sequence of events in the metals markets during this period. Results suggest first that ex ante costs of nonperformance can be a significant, priced factor in commodity markets and second that the arrival of new information is often associated with changes in these costs. The evidence has implications for both theoretical and empirical research on commodity markets.