Bankruptcy reform in the Middle East and North Africa: Analyzing the new bankruptcy Laws in the UAE,Saudi Arabia,Morocco, Egypt,and Bahrain

For years, countries in the Middle East and North Africa (MENA) region have been trying to increase entrepreneurship rates and attract foreign investment, however, their bankruptcy statutes remained antiquated and punitive in nature. Potential start‐ups and foreign investors have been deterred from these markets due to a lack of alternative solutions to liquidation and a fear of punishment for business failure. At least seven countries in the region have now taken steps to modernize their bankruptcy laws to provide restructuring mechanisms and other measures designed to incentivize risk‐taking rather than to deter it. With this year's crash in oil prices, an unprecedented global pandemic and an imminent recession, an effective bankruptcy system has become even more critical to avoid catastrophic results for the employment rates and economic value of the companies in the region. However, despite these recent reforms, significant improvements are still needed to maximize the value and benefits of bankruptcy procedures in the face of these growing economic threats.     

Consumption,asset wealth,equity premium,term spread,and flight to quality

We link transitory deviations of consumption from its equilibrium relationship with aggregate wealth and labor income to equity returns on the one hand, and to two characteristics of bond investors—the premium demanded to hold long‐term assets, and “flight to quality” behavior—on the other hand. Using a panel of 10 euro area countries over the period 1984Q1–2017Q4, we show that a rise in the consumption–wealth ratio predicts both higher equity returns and the future term spread, while a fall in the consumption–wealth ratio explains a large fraction of the rise in the spread between the “risky” and the “safe‐haven” bond.     

Banning information in hiring decisions

Journal of Regulatory Economics - Over the past decade, federal, state and local governments have restricted the types and uses of information in hiring and promotion decisions. Examples include...     

Partisan and bipartisan gerrymandering

This paper analyzes the optimal partisan and bipartisan gerrymandering policies in a model with electoral competitions in policy positions and transfer promises. Party leaders have both office‐ and policy‐motivations. With complete freedom in redistricting, partisan gerrymandering policy generates the most one‐sidedly biased district profile, while bipartisan gerrymandering generates the most polarized district profile. In contrast, with limited freedom in gerrymandering, both partisan and bipartisan gerrymandering tend to prescribe the same policy.     

Auditors' Responses to Workload Imbalance and the Impact on Audit Quality*

Using detailed data for fieldwork hours and audit hours by rank from audit engagements in Korea, we examine whether audits conducted under workload imbalance, proxied by busy‐season audits, impair audit quality, and how auditors adjust staff assignments for busy‐season audits. We generally find that busy‐season audits are associated with lower audit quality, and that audit firms reduce the involvement of senior auditors during busy‐season audits. In addition, the greater the involvement of senior auditors and junior auditors, the lesser the deterioration in audit quality. Finally, although there is no increase in interim audits in response to workload imbalance during busy seasons, increasing interim audits can mitigate the negative impact of busy‐season audits on audit quality. Our results are relevant to auditors and regulators, who have expressed concerns about the adverse effects of workload imbalance on audit quality.     

Attitudes about EU expansion and zero‐sum thinking

EU expansion can be seen as a positive‐sum process benefiting all countries by creating larger markets that stimulate more productive economies through increased specialization and economies of scale, implying that the general public in all countries should favour expansion. Contrarily, expansion can be perceived as zero‐sum. Capital and production relocate from higher to lower wage regions while labour does the opposite, possibly raising unemployment and reducing wages in the higher wage regions. The general public in these countries may come to oppose EU expansion attributing any deterioration in their work situation to the gains of new citizens of the European Union. Analysis of changes in Irish attitudes towards EU expansion in 2002, 2007 and 2009 finds no evidence of a link from lowered economic conditions to increased opposition to EU expansion. The only evidence for zero‐sum thinking is that diminished economic circumstances are associated with increased opposition to immigration, but this is not associated with increased opposition to further EU expansion.     

Financial globalisation and the labour share in developing countries: The type of capital matters

In this paper, we investigate how de facto financial globalisation has influenced the labour share in developing countries. Our main argument is the need to distinguish between different types of capital in this context as they differ in their effect on the host countries' production process and vary concerning their bargaining power vis-à-vis labour. Our econometric analysis of the impact of foreign direct versus portfolio investment in a sample of about 40 developing and transition countries after 1992 supports this claim. Using different panel data techniques to address potential endogeneity problems, we find that foreign direct investment has a positive effect on the labour share in developing countries, while the impact of portfolio investment is significantly smaller and potentially negative. Our results also highlight that de facto foreign investment cannot explain the decline of the labour share in developing countries over the investigated period.     

The power of the pen: Handwritten fonts promote haptic engagement

Consumers are increasingly bombarded with merchandise and offers, making clear the need for visually distinctive and sensorially engaging product packaging design. The current research demonstrates that the use of handwritten fonts on product packaging elicits an approach tendency and enhances haptic engagement, which influences product evaluation and choice likelihood. A pilot study quantifies the use of handwritten fonts in four grocery product categories to establish that the study of handwritten fonts as a packaging design element is a worthy one with managerial significance. Four experiments are then presented. Studies 1 and 2 use real products to show that a product label with a handwritten (vs. typewritten) font elicits haptic engagement and, enhanced product evaluations (Study 2). Study 3 identifies a boundary condition such that the focal effect is observed only for benign (safe and enjoyable) product categories, but not for risky (unsafe and dangerous) ones. Study 4 relies on a simulated store setup with actual products to illustrate the differential preference for products with a handwritten (vs. typewritten) font when choosing between brands in a benign (vs. risky) product category.