The Financial Impact of ISO 14001 Certification: Top-Line, Bottom-Line, or Both?

It is not easy being green, but it does beg the question: Does being green pay off on the bottom-line? Unfortunately, that question of becoming ISO 14001 to reap financial benefit remains widely unanswered. In particular, corporate practice is interested in how environmental management impacts firms’ finance through top-line impact, bottom-line impact, or both—as this paves the way for an investment of environmental management. As current findings are mixed, our study tracks financial performance of publicly traded US firms between 1996 and 2005 to test whether ISO 14001 leads to improved financial performance. Employing a rigorous event-study approach, we compare certified firms to different control groups based on several matching criteria that include industry, size, and/or ROA. In the short run, ISO 14001 certification makes only a minor impact on the bottom-line, according to our results. However, these same results show a significant financial improvement over the long haul with ISO 14001 certification. Additionally, this long-term improvement also makes a significant improvement in top-line performance. Thus, we conclude that environmental management pays off along both dimensions.     

Corruption in public service delivery: An experimental analysis

To improve our understanding of corruption in service delivery, we use a newly designed game that allows us to investigate the effects of the institutional environment on the behavior of service providers and their monitors. We focus on the effect of four different factors: whether monitors are accountable to the service recipients, the degree of observability of service providers’ effort, the providers’ wages and the providers’ professional norms. In accordance with theory, we find that service providers perform better when monitors are elected by service recipients and when their effort is more easily observed. However, there is only weak evidence that service providers perform better when paid more. Monitors are more vigilant when elected and when service providers are paid more. Playing the game with Ethiopian nursing students, we also find that those with greater exposure to the Ethiopian public health sector perform less well, either as provider or as monitor, when the experiment is framed as a public health provision scenario, suggesting that experience and norms affect behavior.     

What is in it for Me? Middle Manager Behavioral Integrity and Performance

We propose that middle managers’ perceived organizational support enhances their performance through the sequential mediation of their behavioral integrity and follower organizational citizenship behaviors. We test our model with data collected from middle managers, their direct subordinates, and their direct superiors at 18 hotel properties in China. The current study’s findings contribute to the existing literature on perceived organizational support and behavioral integrity. They also add a practical self-interest argument for middle managers’ efforts to maintain their word-action alignment by demonstrating that middle manager behavioral integrity positively affects middle managers’ own task performance ratings, both directly and via its positive effect on subordinates’ organizational citizenship behaviors.     

Cost-effectiveness of 3-month paliperidone therapy for chronic schizophrenia in the Netherlands

Background: A new depot formulation of paliperidone has been developed that provides effective treatment for schizophrenia for 3 months (PP3M). It has been tested in phase-3 trials, but no data on its cost-effectiveness have been published.

Purpose: To determine the cost-effectiveness of PP3M compared with once-monthly paliperidone (PP1M), haloperidol long-acting therapy (HAL-LAT), risperidone microspheres (RIS-LAT), and oral olanzapine (oral-OLZ) for treating chronic schizophrenia in The Netherlands.

Methods: A previous 1-year decision tree was adapted, based on local inputs supplemented with data from published literature. The primary analysis used DRG costs in 2016 euros from the insurer perspective, as derived from official lists. A micro-costing analysis was also conducted. For the costing scenario, official list prices were used. Clinical outcomes included relapses (treated as outpatients, requiring hospitalization, total), and quality-adjusted life-years (QALYs). Rates and utility scores were derived from the literature. Economic outcomes were the incremental cost/QALY-gained or relapse-avoided. Model robustness was examined in scenario, 1-way, and probability sensitivity analyses.

Results: The expected cost was lowest with PP3M (8,781€), followed by PP1M (10,325€), HAL-LAT (11,278€), RIS-LAT (11,307€), and oral-OLZ (13,556€). PP3M had the fewest total relapses/patient (0.36, 0.94, 1.39, 1.21, and 1.70, respectively), hospitalizations (0.11, 0.46, 0.40, 0.56, and 0.57, respectively), emergency room visits (0.25, 0.48. 0.99, 0.65, and 1.14, respectively) and the most QALYs (0.847, 0.735, 0.709, 0.719, and 0.656, respectively). In both cost-effectiveness and cost-utility analyses, PP3M dominated all other drugs. Sensitivity analyses confirmed base case findings. In the costing analysis, total costs were, on average, 31.9% higher than DRGs.

Conclusions: PP3M dominated all commonly used drugs. It is cost-effective for treating chronic schizophrenia in the Netherlands. Results were robust over a wide range of sensitivity analyses. For patients requiring a depot medication, such as those with adherence problems, PP3M appears to be a good alternative anti-psychotic treatment.     

Generational accounts for Belgium: fiscal sustainability at a glance

This paper uses generational accounts to analyse the long term sustainability of Belgian public finances. We derive age-profiles of detailed tax and expenditure categories from micro data and microsimulation models, and plug them into a long run demographic projection. We assess fiscal long term sustainability under current fiscal and budgetary policy for the base year 2010, and perform simulations of counterfactuals to determine the relative contribution of the most important factors of the long run unsustainability. This update of the generational accounts for Belgium shows that, not unexpectedly, the budgetary situation in Belgium violates the intertemporal budget constraint and hence is unsustainable in the long run. The current level of explicit debt, however, only plays a minor role in explaining this sustainability problem. Ageing and the related increase in age related expenditures are the main drivers of the long run fiscal imbalance and the high level of implicit debt. We disentangle the Belgian generational accounts into their regional components and show that the major explanation for regional differences in generational accounts is not divergent demographic projections, but the wide differences in socio-economic situations, as revealed by the region specific age-profiles.     

Financial market reactions to the overthrow and annexation of the Hawaiian Kingdom: evidence from London, Honolulu and New York

This paper investigates how financial market participants reacted to the US annexation of Hawaii in 1898 as well as prior events like the overthrow of the monarchy in 1893 and US tariff moves affecting Hawaii's sugar industry. The empirical work covers the trading of the Kingdom of Hawaii's major 1886 loan in both London and Honolulu as well as sugar company stock price reactions to annexation. The economic implications of US tariff policy moves, and the unfettered US market access promised by annexation, may well explain the continued uptrend in debt prices after the overthrow.

LIFO-FIFO, ACCOUNTING RATIOS AND MARKET RISK: A RE-ASSESSMENT

This paper re-examines the effect of the inventory costing method on the association between accounting risk measures (ARMs) and market risk, and extends earlier research in several respects. The groups of FIFO and LIFO firms are matched on the basis of various financial characteristics to reduce selfselection bias, and the effect of inventory costing methods on the usefulness of ARMs in predicting market risk is investigated. The findings indicate that predictions based on FIFO show an improvement on market based predictions, but predictions based on LIFO fail to show such an improvement.     

Atheoretical macroeconometrics: A critique

The spurious nature of the restrictions used to identify many macroeconometric models has led some researchers to advocate a style of econometric inquiry that is less dependent on prior theoretical restrictions of the sort that were central to the approach of the Cowles Commission. This development, which we call atheoretical macroeconometrics, is summarized and evaluated in the current paper. It is contrasted with an updated version of the Cowles Commission approach. We conclude that while some of the exercises of atheoretical macroeconometrics are valid, those that have attracted the most attention and appear the most innovative-exogeneity testing, impulse response analysis and policy analysis using estimated vector autoregressions - are based on incorrect analysis.