The impact of B Corp certification on financial stability: Evidence from a multi-country sample

B Corps are firms certified by the non-profit B Lab for pursuing both economic and non-economic goals. Whether B Corps realize a higher financial performance has met mixed evidence. Drawing on the stability-change framework, we ask whether B Corp certification is associated with the level and volatility of financial performance. Also, expecting a greater focus on non-economic activities after certification, equity ratio may decline as shareholders may question the increased non-economic focus. Using nearest neighbor propensity score matched pair method, we draw on a multi-country sample of 355 B Corps and 623 non-B Corps. Our findings are not encouraging. B Corp certification does not provide financial gains nor financial stability, and equity ratio declines and becomes more volatile following certification. Our findings paint a gloomy picture of limited economic benefits and declining participation of equity holders following B Corp certification.     

Leading to Learn

“You don't see to draw, you draw to see.” And then Fred said, “It's just the same for leadership, you don't learn to lead, you lead to learn.” The arts can teach us to stay with our senses and not know and in that way to provide a balance to the dominance of the analytic approaches to our organizational worlds. There is an old saying that you can only manage what you can measure. The arts can help us to work with what we cannot measure and the way to do that is by leading to learn. The current article explores the qualitatively different way in which the arts teach us to apprehend the world and how that is central to leadership.     

Motivations and Use Context in Mobile Tourism Shopping: Applying Contingency and Task–Technology Fit Theories

Mobile tourism shopping is an emerging market, but there is little theoretically based research on the topic. This study investigates the impact of motivations (value, enjoyment, time saving and mobility) on consumer satisfaction by applying contingency and task–technology fit theories in the mobile tourism shopping context. The results show that value and enjoyment have significant effects on satisfaction. Use context is found to have a full mediating role between time saving and satisfaction as well as between mobility and satisfaction. This study offers theoretical and practical contributions to the tourism literature and mobile tourism industry. Copyright © 2013 John Wiley & Sons, Ltd.     

Auditing Goodwill in the Post‐Amortization Era: Challenges for Auditors

The elimination of goodwill amortization in 2001 brought about significant change in how companies are required to account for goodwill. This change in accounting also brought with it new challenges for auditors, namely evaluating the reasonableness of management's assumptions related to goodwill valuation. In addition to introducing technical challenges, this task is particularly difficult given the misalignment in incentives it creates between managers who likely prefer to avoid recording an impairment and auditors who seek to minimize the bias in management's impairment testing. This study focuses on the consequences of the misaligned incentives that auditors face under the current goodwill assessment process. We find that the decision to record a goodwill impairment is associated with an increase in the probability of auditor dismissal. Consistent with the presence of significant friction with clients, our results also indicate that the likelihood of auditor dismissals is negatively related to the favorability of the impairment decision. Furthermore, we find that companies impairing goodwill prior to dismissing auditors subsequently employ auditors that are, on average, more favorable to clients in their impairment decisions.     

Impact of Auditor Report Changes on Financial Reporting Quality and Audit Costs: Evidence from the United Kingdom

While substantial revisions to auditor reporting requirements are being implemented internationally, the impact of these reforms on financial reporting quality is unknown. We exploit the United Kingdom's recent auditor reporting changes and find that the United Kingdom's new reporting regime is associated with an improvement in financial reporting quality as proxied by significant decreases in absolute abnormal accruals and the propensity to just meet or beat analyst forecasts, and a significant increase in earnings response coefficients. As for audit costs, we do not find a significant change in audit fees or audit delay surrounding the implementation of the new reporting regime. Taken together, the results of this study suggest that new auditor reporting requirements are associated with a significant improvement in financial reporting quality without detecting a significant increase in audit costs.     

WIC Participation and Relative Quality of Household Food Purchases: Evidence from FoodAPS

We examine the effect of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) on the quality of household food purchases using the National Household Food Acquisition and Purchase Survey (FoodAPS) and propensity score matching. A healthy purchasing index (HPI) is used to measure nutritional quality of household food purchases. WIC foods explain the improvement in quality of food purchases, not self‐selection of more nutrition‐conscious households into the program. The improvement in purchase quality was driven entirely by WIC participating households who redeemed WIC foods during the interview week. There was no significant difference between WIC participants who did not redeem WIC foods and eligible nonparticipants. In this sample, there is no evidence that lack of access to clinics has adverse effects on participation nor is there evidence that HPI depends on supermarket access. A supervised machine learning process supports our main conclusion on the importance of WIC foods.     

Firm Heterogeneity and Export Pricing in India

We examine export pricing by Indian manufacturing firms in the early 2000s using a unique data set that matches firm characteristics with product and destination‐level trade data. We find that, in contrast to China and other countries, firm productivity is negatively associated with export prices, and export prices are negatively associated with distance while positively associated with remoteness. Our conjecture is that Indian innovation costs, which are higher than China's, drive down the scope for quality differentiation causing a negative association between productivity and prices. To the best of our knowledge, this is the first empirical evidence consistent with heterogenous goods and short quality ladders, a theoretical possibility noted in the study by Antoniades (2012), an outcome that arises here because of domestic Indian economic and regulatory features.     

Cocreating business's new social compact

Moving beyond decades of mutual distrust and animosity, corporations and nongovernmental organizations (NGOs) are learning to cooperate with each other. Realizing that their interests are converging, the two sides are working together to create innovative business models that are helping to grow new markets and accelerate the eradication of poverty. The path to convergence has proceeded in three stages. In the initial be-responsible stage, companies and NGOs, realizing that they had to coexist, started to look for ways to influence each other through joint social responsibility projects. This experience paved the way for the get-into-business stage, in which NGOs and companies sought to serve the poor by setting up successful businesses. In the process, NGOs learned business discipline from the private sector, while corporations gained an appreciation for the local knowledge, low-cost business models, and community-based marketing techniques that the NGOs have mastered. Increased success on both sides has laid the foundation for the cocreate-business stage, in which companies and NGOs become key parts of each other's capacity to deliver value. When BP sought to market a duel-fuel portable stove in India, it set up one such cocreation system with three Indian NGOs. The system allowed BP to bring the innovative stove to a geographically dispersed market through myriad local distributors without incurring distribution costs so high that the product would become unaffordable. The company sold its stoves profitably, the NGOs gained access to a lucrative revenue stream that could fund other projects, and consumers got more than the ability to sit down to a hot meal-they got the opportunity to earn incomes as the local distributors and thus to gain economic and social influence.     

The Incidence of Public Spending on Healthcare: Comparative Evidence from Asia

The article compares the incidence of public healthcare across11 Asian countries and provinces, testing the dominance of healthcareconcentration curves against an equal distribution and Lorenzcurves and across countries. The analysis reveals that the distributionof public healthcare is prorich in most developing countries.That distribution is avoidable, but a propoor incidence is easierto realize at higher national incomes. The experiences of Malaysia,Sri Lanka, and Thailand suggest that increasing the incidenceof propoor healthcare requires limiting the use of user fees,or protecting the poor effectively from them, and building awide network of health facilities. Economic growth may not onlyrelax the government budget constraint on propoor policies butalso increase propoor incidence indirectly by raising richerindividuals' demand for private sector alternatives.     

Are some Indian banks too large? An examination of size efficiency in Indian banking

In this paper we use data from the years 1997–2003 to evaluate the size efficiency, as distinct from scale efficiency, of Indian banks. Following Maindiratta [Maindiratta A (1990) J Econ 46:39–56] we consider a bank to be “too large” if breaking it up into a number of smaller units would result in a larger output bundle than what could be produced from the same input by a single bank. When this is the case, the bank is not size efficient. Our analysis shows that many of the banks are, indeed, too large in various years. We also find that often a bank is operating in the region of diminishing returns to scale but is not a candidate for break up.