Affectual trust in the workplace

While trust is increasingly recognized as central to the functioning of relationships in general and to business relationships in particular, there has been very little attention paid to the nature of the experience of trust – as distinct from its antecedents and outcomes. When the nature of trust is considered, it is most often presented as a rational calculus of cost and benefit. This ignores the emotional content of trust that, we argue, is central to the understanding of the phenomenon. An understanding of these emotions and the way they combine with the cognitive elements of trust allows a clearer view of why differing conditions lead to different manifestations of trust, and how these in turn lead to different relational benefits. This paper presents an affect-based framework for trust consisting of cognitive and emotional elements. This is used to consider in-depth interviews with service providers talking about their jobs and their employer. The affect-based framework allows us to understand the distancing that has occurred between employer and employee and to consider the reasons for this distance. Suggestions for the remedying of this situation are proposed.     

Subprime lending and the housing bubble: Tail wags dog?

The cause of the “housing bubble” associated with the sharp rise and then drop in home prices over the period 1998–2008 has been the focus of significant policy and research attention. The dramatic increase in subprime lending during this period has been broadly blamed for these market dynamics. In this paper we empirically investigate the validity of this hypothesis vs. several other alternative explanations. A model of house price dynamics over the period 1998–2006 is specified and estimated using a cross-sectional time-series data base across 20 metropolitan areas over the period 1998–2006. Results suggest that prior to early 2004, economic fundamentals provide the primary explanation for house price dynamics. Subprime credit activity does not seem to have had much impact on subsequent house price returns at any time during the observation period, although there is strong evidence of a price-boosting effect by investor loans. However, we do find strong evidence that a credit regime shift took place in late 2003, as the GSE’s were displaced in the market by private issuers of new mortgage products. Market fundamentals became insignificant in affecting house price returns, and the price-momentum conditions characteristic of a “bubble” were created. Thus, rather than causing the run-up in house prices, the subprime market may well have been a joint product, along with house price increases, (i.e., the “tail”) of the changing institutional, political, and regulatory environment characteristic of the period after late 2003 (the “dog”).     

The determinants of China's lending rates and interest rates pass-through: A cointegration analysis

Based on quarterly data between Q4, 2008–Q4, 2017, this study examines the interest rates pass-through from policy rate to lending rates, and more broadly, the determinants of lending rates in China. The results show that while there is a certain level of pass-through from money market rates to lending rates, and the interest rates pass-through has improved after the interest rate liberalization completion on October 2015, this pass-through is also negatively affected by the asset quality of commercial banks and shadow banking activities as well. This study also finds that the macroeconomic condition also affects the lending rates.     

What Moves Retail Property Returns at the Metropolitan Level?

In this article the determinants of metropolitan-level appraisal-based retail property returns are examined by estimating a six-equation model of retail construction starts, retail sales, stock-market returns, commercial mortgage rates, inflation, and the logarithm of stock-market volatility. Residuals from these equations are then used to explain actual movements in retail real estate returns. Our empirical procedure looks at both unadjusted and unsmoothed appraisal-based retail real estate returns. The general finding is that unsmoothed appraisal-based retail real estate returns lag significantly behind market conditions. Furthermore, the results suggest that very little of the variation in metropolitan-level appraisal-based retail real estate returns can be explained by macroeconomic news events.     

Liquidity,exchange listing,and common stock performance

The liquidity of securities—the relationship between volume of trading and changes in market price—has won increasing recognition as an element of investment strategy in recent years. Relatively high liquidity is deemed to be a desirable characteristic of a stock, especially for the institutional investor, who typically trades in large volume. Thus, firms can generally be expected to seek means of enhancing the liquidity of their shares. One of the supposed means of accomplishing this is by listing one's stock on a national securities exchange. This paper examines the relationship of common stock liquidity to both exchange listing and price behavior during major up and down movements in the market. Our conceptual and empirical analyses indicate that liquidity is linked to price behavior; and we suggest that the view held by at least some corporate officers—that exchange listing increases liquidity—may be erroneous. More specifically, it appears that when the amount of firm capitalization is taken into account, exchange listing does not result in greater stock liquidity.     

Will Competitive Bidding Decrease Medicare Prices?

Recent measures to reduce Medicare spending include the use of competitive bidding in determining reimbursement prices. Several competitive bidding experiments have been conducted by the Centers for Medicare and Medicaid Services (CMS) to determine reimbursement prices. This paper investigates the use of competitive bidding to set reimbursement prices for durable medical equipment, prosthetics, orthotics, and supplies. First, the competitive bidding process is examined on a theoretical level. It is shown that the CMS competitive bidding process (auction) is inefficient, leads to price increases, and may cause decreases in the quality of services. Next, data supporting the theoretical predictions are presented. Finally, we suggest that a descending variant of the Ausubel, Cramton, and Milgrom (2006) clock-proxy auction be used.     

Worse than enemies. The CEO's destructive confidant

The CEO is often the most isolated and protected employee in the organization. Few leaders, even veteran CEOs, can do the job without talking to someone about their experiences, which is why most develop a close relationship with a trusted colleague, a confidant to whom they can tell their thoughts and fears. In his work with leaders, the author has found that many CEO-confidant relationships function very well. The confidants keep their leaders' best interests at heart. They derive their gratification vicariously, through the help they provide rather than through any personal gain, and they are usually quite aware that a person in their position can potentially abuse access to the CEO's innermost secrets. Unfortunately, almost as many confidants will end up hurting, undermining, or otherwise exploiting CEOs when the executives are at their most vulnerable. These confidants rarely make the headlines, but behind the scenes they do enormous damage to the CEO and to the organization as a whole. What's more, the leader is often the last one to know when or how the confidant relationship became toxic. The author has identified three types of destructive confidants. The reflector mirrors the CEO, constantly reassuring him that he is the "fairest CEO of them all." The insulator buffers the CEO from the organization, preventing critical information from getting in or out. And the usurper cunningly ingratiates himself with the CEO in a desperate bid for power. This article explores how the CEO-confidant relationship plays out with each type of adviser and suggests ways CEOs can avoid these destructive relationships.     

Primary and secondary values of wetland ecosystems

Wetlands are continuously degraded in many parts of the world. One reason is the lack of the appropriate valuation of the multifunctionality of wetland. In an attempt to improve the understanding of the importance of this feature of wetlands an alternative classification of values is suggested; primary and secondary values. Primary value refers to the development and maintenance of ecosystems — their self-organizing capacity. Secondary values are defined as the outputs, life-support functions and services, generated by wetlands. Methods for measuring these values are discussed. Three case studies are presented which use different valuation methods and which to different degrees capture the primary and secondary values. It is concluded that only part of the total wetland value can be captured in monetary terms.