Corruption and privatization

This paper analyses the relation between corruption and privatization. In particular, we study how corruption affects the acquisition price and the post-privatization market structure. The model predicts that privatization in countries with highly corrupt government results in a higher degree of market concentration than in countries where governments are less corrupt. The acquisition price is also likely to be higher when a government is highly corrupt than when government officials are honest or moderately corrupt. Finally, and perhaps surprisingly, we demonstrate that a stronger propensity to embezzle state revenues may reduce government officials' benefits from corruption. The reason is that the more eager the government officials are to take bribes, the cheaper they are to buy.     

Collective relationship banking and private information monitoring in Korea1

This paper introduces the notion of collective relationship banking (CRB) as a mechanism for monitoring private information and characterizes the probability of such a banking relationship existing when the borrowing firms have heterogeneous vertical ownership structures. Using a Korean firm‐level panel dataset, the empirical results of the paper suggest that firms with smaller holding companies’ ownership stakes are more likely to choose CRB. This can be explained in terms of CRB as a means to overcome informational asymmetries as holding companies can provide indirect monitoring. The paper then addresses policy concerns associated with corporate restructuring which may create a more concentrated banking relationship with a few dominant banks.     

Psychological Pathways to Fraud: Understanding and Preventing Fraud in Organizations

In response to calls for more research on how to prevent or detect fraud (ACAP, Final Report of the Advisory Committee on the Auditing Profession, United States Department of the Treasury, Washington, DC, 2008; AICPA, SAS No. 99: Consideration of Fraud in a Financial Statement Audit, New York, NY, 2002; Carcello et al., Working Paper, University of Tennessee, Bentley University and Kennesaw State University, 2008; Wells, Journal of Accountancy, 2004), we develop a framework that identifies three psychological pathways to fraud, supported by multiple theories relating to moral intuition and disengagement, rationalization, and the role played by negative affect. The purpose of developing the framework is twofold: (1) to draw attention to important yet under-researched aspects of ethical decision-making, and (2) to increase our understanding of the psychology of committing fraud. Our framework builds on the existing fraud triangle (PCAOB, Consideration of fraud in a financial statement audit. AU Section 316, , 2005) which is used by auditors to assess fraud risk. The fraud triangle is composed of three factors that, together, predict the likelihood of fraud within an organization: opportunity, incentive/pressure, and attitude/rationalization. We find that, when faced with the opportunity and incentive/pressure, there are three psychological pathways to fraud nestled within attitude/rationalization: (1) lack of awareness, (2) intuition coupled with rationalization, and (3) reasoning. These distinctions are important for fraud prevention because each of these paths is driven by a different psychological mechanism. This framework is useful in a number of ways. First, it identifies certain insidious situational factors in which individuals commit fraud without recognizing it. Second, it extends our knowledge of rationalization by theorizing that individuals use rationalization to avoid or reduce the negative affect that accompanies performing an unethical behavior. Negative affect is important because individuals wish to avoid it. Third, it identifies several other methods fraudsters use to reduce negative affect, each of which could serve as potential “psychological red flags” and helps predict future fraudulent behavior. Finally, our framework can be used as a theoretical foundation to explore several interventions designed to prevent fraud.     

Producer‐Controlled Marketing Organizations,Self‐Regulation,and Economic Welfare: Minimum Quality Standards in Agricultural Markets

Many agricultural producer‐controlled marketing organizations (PCMOs) have direct or indirect control over the amount or quality distribution of production marketed by the industry. We analyze the decision of these organizations whether to impose a minimum quality standard (MQS), and the impact of such standards on producer, consumer, and total welfare. An MQS can enhance net welfare because it may correct for deficient production of high‐quality product by the industry in the absence of an MQS, even though an MQS causes the destruction or diversion of low‐quality products. However, any MQS imposed voluntarily by a profit‐maximizing PCMO decreases the welfare of all consumers of the product and is also highly likely to reduce net (producer plus consumer) welfare. De nombreux organismes de commercialisation contrôlés des producteurs agricoles exercent un contrôle direct ou indirect sur la quantité ou la qualité de la production commercialisée par l’industrie. Nous avons analysé l’idée de ces organismes d’imposer ou non une norme de qualité minimale ainsi que les répercussions éventuelles de ce genre de norme sur les producteurs, les consommateurs et le bien‐être total. L’imposition d’une norme de qualité minimale peut contribuer à accroître le bien‐être net puisqu’elle peut pallier la production insuffisante de produits de haute qualité par l’industrie en l’absence d’une norme de qualité minimale, bien qu’elle puisse entraîner la destruction ou le détournement de produits de qualité inférieure. Il n’en demeure pas moins que l’imposition volontaire d’une norme de qualité minimale par un organisme de commercialisation contrôlé des producteurs agricoles qui vise la maximisation des profits diminue le bien‐être de tous les consommateurs du produit et risque aussi de diminuer le bien‐être net (soit celui des producteurs et des consommateurs).     

Realistic Statistical Modelling of Financial Data

The aim of this paper is to present some of the stylized features of financial data which have received a lot of attention both from practitioners and those with more theoretical backgrounds. Some of the models resulting from these efforts are reviewed and discussed. To facilitate the discussion two data sets are used: one of these contains all US trades in IBM stocks in 1995 at NYSE.     

Repatriation and short-term assignments: an exploration into expectations,change and dilemmas

The aim of this research was to use in-depth interviews and discourse analysis to explore talk about repatriation expectations by 22 participants who were currently on, or had recently completed a short-term assignment within a single MNC. This study is one of the first to focus specifically on repatriation connected to short-term assignments and present findings that stem solely from the expatriates' perspective. Through discourse analysis, this paper outlines a framework with which to understand the relevance and meaning of individual change associated with career-based expectations of repatriation. For some of the participants, expectations of short-term assignment repatriation meant a desired change in work based on perceptions of themselves as changed as a result of their experience. For others, expectations of consistency as opposed to change between pre-and post-assignment work roles emerged through discourses of resistance. These findings raise a number of distinctively novel HR challenges.     

Dividends Behavior in State- Versus Family-Controlled Firms: Evidence from Hong Kong

This study comparatively examines the dividends behavior in state-controlled firms versus family-controlled firms. With the sample of large industrial firms listed on the Main Board of Hong Kong Stock Exchange, we investigate the dividends payment rates, stability of dividends payment, the effects of firm size, profitability and growth opportunity on likelihood to pay dividends, as well as the concentration of dividend in state-controlled versus family-controlled firms. Based on the findings, we derive some ethical implications of dividends policy regarding the differences in business ethical behavior, corporate social responsibility, corporate governance, business sustainability, and shareholder activism in state-controlled versus family-controlled firms, as well as the improvement in these respects through cross-listing in Hong Kong.