Extracting Legitimacy: An Analysis of Corporate Responses to Accusations of Human Rights Abuses

Journal of Business Ethics - We ask what type of neutralization techniques corporations apply to allegations of human rights abuses. We proceed by undertaking a Qualitative Content Analysis (QCA)...     

How does the flow of remittances affect the trade balance of the Middle East and North Africa?

ABSTRACT

The Middle Eastern and North African (MENA) economies have one of the highest degrees of dependency on received remittances worldwide. In this study, we have examined the role of remittances in the trade balance of 11 labour abundant MENA countries. Our panel regression analysis showed that the inflow of remittances has fostered the trade deficit. We also found that the final effect of remittances depends on the level of domestic capital formation. The results are robust after controlling for other drivers of trade deficit such as income, inflation, exchange rate and institutions as well as country and year fixed effects.     

Performance and persistence of Commodity Trading Advisors: Further evidence

We re‐examine the performance of Commodity Trading Advisors (CTAs) over the January 1995 to October 2008 period. We compare abnormal performance based on a number of alternative existing models, as well as a category‐specific model introducing asset‐, option‐, and moments‐based factors. Taking more factors into account significantly raises the explanatory power, and 9 out of 12 CTA categories significantly outperform the market. We find that numerous CTAs show persistence over a horizon of at least three months and they are also more likely to be persistent over a longer period. Yet, most of the persistence fades away upon the “acid test” of considering only the top and bottom quartiles of CTAs. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:725–752, 2010     

Operational hedging against adverse circumstances

This paper investigates operational hedging against severe disruptions to normal operations. It offers a new method to evaluate the extent that operations policy serves as a hedge against adverse circumstances. We apply the proposed method to explore how supply chain characteristics affect the responses of airlines to the acute demand fall off after the September 11 terrorist attacks. Results indicate that operational hedging vehicles (fleet standardization, high-fleet utilization, an aircraft ownership policy rather than leasing, and international operations) are more powerful in protecting firms than using financial instruments. The study contributes in guiding managers as to how operations policy can serve as an imperative factor in mitigating exposures to low-end performance levels.     

Earnings Predictability,Bond Ratings,and Bond Yields

We examine the role that earnings predictability plays in establishing a firm’s cost of debt capital by measuring its influence on establishing a new issue’s bond rating. In addition, we also examine the effects of earnings predictability on the initial pricing of the firm’s debt. Using new corporate bond issues from the period 1990–2000, our results indicate that the degree of predictability of a firm’s earnings is positively associated with a firm’s bond rating. Moreover, earnings predictability is also documented to be negatively associated with the offering yield. Importantly, bond rating classification accuracy is improved when specific measures of a firm’s earnings predictability are added to a robust model.JEL Classification:     

Modeling the Effects of an International Crisis on Brand Equity

ABSTRACT

This research provides an analysis of the impact of an international crisis on brand equity. More specifically, the author tests a comprehensive model that examines the joint impact of animosity as well as the social pressure to avoid brands that originate from a controversial country. He explores the impact of what came to be known as the Mohammed controversy, which involved the Danish press publishing a series of cartoons depicting the prophet Mohammed on a Danish brand. Data were collected using a survey from 307 consumers in Kuwait. The findings show that animosity is not related to overall brand equity but is related to brand quality; moreover, subjective norms are negatively associated with overall brand equity. These results highlight the importance of subjective norms in influencing overall brand equity in times of international crises between nations.     

Bank Holding Company Risk from 1976–1989 with a Two-Factor Model

This paper employs a two-factor model of security returns to investigate the intertemporal risk of bank holding company stock returns over the 1976–1989 period. Uniquely, the two-factor model is estimated in separate regressions for each of the fourteen years between 1976 and 1989, thus exposing intertemporal changes in the model coefficients. The results show that bank holding companies have increased in risk over the sample period and also reveal that much of the controversy over the two-index model stems from the transitory nature of the interest rate coefficient through time, making long time series groupings of data misspecified. The above holds for both short-term and long-term interest rates. Interest rates have little impact on bank returns.     

CEO bonus compensation: the effects of missing analysts’ revenue forecasts

We investigate the incremental contract relevance of analysts’ revenue forecasts while controlling for earnings forecasts and find CEOs receive smaller bonuses when missing analysts’ annual and quarterly revenue expectations. Our results support the link between the value relevance of the revenue performance measure and the contract relevance of that measure. Further, we find revenue forecasts to be more contract relevant for CEOs of firms with high growth expectations, consistent with Rees and Sivaramakrishnan’s Contemp Acc Res 24(1):259–290, (2007) findings that growth firms receive a larger market penalty for missing revenue targets. Overall, our findings provide empirical support for the conjecture that compensation committees rely on information consistent with that conveyed in analysts’ revenue forecasts when contracting with management.     

The Perceived Threats from Migrants and their Effects on Government Service Equality

ABSTRACT

Governments market policies like “products,” hoping that they will receive public support. With the increasing opposition to migrants in many countries, governments face more pressure to enact laws that favor citizens over migrants, assuming that citizens desire preferential treatment. We challenge that assumption by investigating antecedents of Government Service Equality (GSE), which captures the extent to which citizens believe that migrants are entitled to the same level of quality when using government services. Utilizing the justification-suppression model of prejudice and acculturation theory as theoretical underpinning, the article highlights the role of perceived threat in legitimizing discrimination against migrants. The conceptual model distinguishes between two types of threats: symbolic and realistic. Furthermore, the article investigates the role of cosmopolitanism and tradition in driving both types of threats. Results obtained through SEM using 428 surveys collected from host country citizens indicate that both realistic threat (e.g., economy) and symbolic threat (e.g., culture) influence equality perceptions negatively. However, our results reveal that citizens could be divided into two segments: cosmopolitans and traditionalists. Traditionalists, unlike cosmopolitans, do perceive migrants as threatening. In addition, cosmopolitanism has a direct positive influence on GSE. We conclude with a discussion and agenda for future research.     

Methodology for increasing the adoption of R & D project selection models

Although some studies and experiences have shown that R & D project selection models can be potentially useful decision aids, their adoption and routine use is not widespread. This lack of usage may be a consequence of the lack of attention which model builders have traditionally given to the prevailing adoption attitudes of R & D managers. A design methodology centering around the measurement of adoption attitudes has been developed and used by the authors. The methodology consists of procedures for analyzing the organizational climate relative to project selection model usage, developing an acceptable model form relative to the organizational climate, and inducing the adoption of this model form within the climate. Three case applications of the methodology are described in which negative-to-positive shifts in adoption attitudes occurred and project selection models were adopted for long-term use. These results indicate that the use of this general methodology may lead to increased formal adoption and widespread usage of project selection model forms in R & D.