Predicting bankruptcy in the Texas nursing facility industry

Approximately 50% of nursing facilities in Texas petitioned for bankruptcy during the 1998–2004 period. Using a logit regression model tested for robustness, we find nursing facilities that are profit-seekers, chain members, pay higher than average wage rates, accept more intensive-care residents and obtain a larger than average portion of their funding from public sources are highly vulnerable to negative changes in regulatory policy decisions on Medicare and Medicaid reimbursement. Larger facilities having higher than average occupancy rates and quality of care are less susceptible to adverse decisions. The model correctly classifies a facility as either bankrupt or solvent in about 75% of cases. We also examine the duration of bankruptcy using accelerated failure-time models. It appears that the duration of bankruptcy depends on location, out-of-state ownership, length of ownership, volume of resident days supplied, total cost and proportion of revenues from Medicaid.     

Paradigm Shifts in Economic Theory and Policy

In most countries, mainstream economic policy has not yet undergone any significant change, and there is little consensus on what, if anything, ought to replace it. However, there are some signs of an emerging transition, at several levels.     

Social responsibility in youth service organizations: Hong Kong evidence

The paper attempts to investigate the key factors affecting the social responsibility development in social welfare organizations. The study also measures how social welfare organizations are performing towards the social responsibility objectives. This paper focuses on a study undertaken among a number of youth service organizations in Hong Kong. The results showed that youth service organizations perceive they have supportive organizational culture and the management has been showing strong willingness in promoting social responsibility. The people from a senior level see that the motivating factors are more important than the junior people, but they perceive the ‘social pressure’ is less important than the junior people. The big contrast implies that the management people do not take ‘social pressure’ into serious consideration. The study reveals a significant influence from the management on the adoption and implementation of social responsibility activities. This further confirms the importance on promoting social responsibility at the operational level, with the top management providing clear strategic direction, and supportive resources and environment.     

Does “skin in the game” reduce risk taking? Leverage,liability and the long-run consequences of new deal banking reforms

This essay examines how the Banking Acts of the 1933 and 1935 and related New Deal legislation influenced risk taking in the financial sector of the U.S. economy. The analysis focuses on contingent liability of bank owners for losses incurred by their firms and how the elimination of this liability influenced leverage and lending by commercial banks. Using a new panel data set, we find contingent liability reduced risk taking. In states with contingent liability, banks used less leverage and converted each dollar of capital into fewer loans, and thus could survive larger loan losses (as a fraction of their portfolio) than banks in limited liability states. In states with limited liability, banks took on more leverage and risk, particularly in states that required banks with limited liability to join the Federal Deposit Insurance Corporation. In the long run, the New Deal replaced a regime of contingent liability with deposit insurance, stricter balance sheet regulation, and increased capital requirements, shifting the onus of risk management from bankers to state and federal regulators.     

Correlation dynamics and international diversification benefits

Forecasting the evolution of security co-movements is critical for asset pricing and portfolio allocation. Hence, we investigate patterns and trends in correlations over time using weekly returns for developed markets (DMs) and emerging markets (EMs) over the period 1973–2012. We show that it is possible to model co-movements for many countries simultaneously using BEKK, DCC, and DECO models. Empirically, we find that correlations have trended upward significantly for both DMs and EMs. Based on a time-varying measure of diversification benefits, we find that it is not possible to circumvent the increasing correlations in a long-only portfolio by adjusting the portfolio weights over time. However, we do find some evidence that adding EMs to a DM-only portfolio increases diversification benefits.     

Ethical Considerations and Change Recipients’ Reactions: ‘It’s Not All About Me’

An implicit assumption in most works on change recipient reactions is that employees are self-centred and driven by a utilitarian perspective. According to large parts of the organizational change literature, employees’ reactions to organizational change are mainly driven by observations around the question ‘what will happen to me?’ We analysed change recipients’ reactions to 26 large-scale planned change projects in a policing context on the basis of 23 in-depth interviews. Our data show that change recipients drew on observations with three foci (me, colleagues and organization) to assess change, making sense of change as multidimensional and mostly ambivalent in nature. In their assessment of organizational change, recipients care not only about their own personal outcomes, but go beyond self-interested concerns to show a genuine interest in the impact of change on their colleagues and organization. Meaningful engagement of employees in organizational change processes requires recognizing that reactions are not simply ‘all about me’. We add to the organizational change literature by introducing a behavioural ethics perspective on change recipients’ reactions highlighting an ethical orientation where moral motives that trigger change reactions get more attention than is common in the change management literature. Beyond the specifics of our study, we argue that the genuine concern of change recipients for the wellbeing of others, and the impact of the organizations’ activities on internal and external stakeholders, needs to be considered more systematically in research on organizational change.     

Special issue: Australian Accounting Standards Board Research Forum

The Australian Accounting Standards Board (AASB) engages with academics and encourages them to make practical recommendations for the standard‐setter across three sectors: for‐profit, public and other not‐for‐profit sectors. In doing so, the AASB organised Research Forums in 2016 and 2017 that were of great value to researchers, practitioners and the standard‐setters. Four papers from the Forums in 2016 and 2017 were submitted and accepted for publication in this special issue. This paper provides an overview of the Forum, discusses the impact of conducting research and how the findings of the researchers informed the AASB’s standard‐setting process.     

Reorienting the Economy to the Rhythms of Nature: Learning to Live with Intermittent Energy Supply

In much current thinking about the necessary and rapid transition to a carbon-emissions-free energy system, there is implicit acceptance of the high-tech, high-energy nature of the current economy. But by asking deeper questions about this economy, we reveal new opportunities as well as new challenges. First, throughout most of history, both production and consumption were dramatically influenced by the weather, and activities were undertaken or curtailed according to varying availability of energy. In the future, if we again adjust energy demand to such intermittent supplies wherever and whenever possible, we can nevertheless benefit from many scientific and technological advantages that our ancestors did not have centuries ago. Second, in the pursuit of highly energy-efficient machines that might become new sources of highly concentrated energy, we have begun to rely on “clean energy” machinery made in significant part from non-recyclable materials. With our current generation of wind turbines, for example, we have sacrificed sustainability in the pursuit of a supposedly renewable-energy system. By contrast, if we reduce our need for always-on energy sources by adjusting energy demand to intermittent energy supply, we can greatly reduce the overall energy infrastructure needed, and we will face less pressure to sacrifice sustainability.     

Clusters, industrial policy and firm strategy

Increasingly, govemments and firms take clusters of related business as a starting point to formulate policies and strategies, which aim at enhancing innovation. There appear, however, to be quite some different conceptions of what clusters are, In the first part of this paper and attempt is made to clarify the cluster concept by defining the relevant dimensions of clusters. In the second part, each of these dimensions is related to possible industrial policies and firm strategies. Practical illustrations will be given from different European countries and firms. The dimensions and related policies and strategies form a menu of possibilities from which actors can choose those elements that are most relevant for their specific situation. Thus, tailor-made policies and strategies can be devised and implemented.