Market power and reputational concerns in the ratings industry

This paper studies the incentives of rating agencies to reveal the information that they obtain about their client firms. In the model, rating agencies seek to maximize their reputation and protect their market power. They observe public information and obtain either precise or noisy private information about a firm. Reputational concerns dictate that a rating reflects private information when it is precise. However, when private information is noisy, two situations arise. In a monopoly, the rating agency may ignore private information and issue a rating that conforms to public information. Under some conditions, it may even become cautious and issue bad ratings ignoring both types of information. With competition, however, it has incentives to contradict public information as a way to pretend that it holds precise private information. Moreover, it may become more likely to issue good ratings in an attempt to protect market power.     

Corporate governance and impression management in annual results press releases

We study the association between corporate governance and impression management in annual results press releases (ARPRs). Press releases constitute a timely vehicle to communicate firm performance to third parties but they can be manipulated to distort readers’ perceptions of corporate achievements. We predict that governance mechanisms actively monitor managerial disclosures, improving firm transparency and thus reducing impression management in ARPRs. The results confirm that strong governance limits impression management, consistent with governance monitoring effectively reducing self-serving disclosures by management. Our evidence suggests that management disclosure practices respond, at least partly, to informative motivations. We also show that strong governance firms are more likely to release an ARPR.     

Customer interaction in environmental innovation: the case of cloth diaper laundering

The aim of this paper is to illustrate the capability of a customer of a service business to act as a co-manufacturer. Thus, the customer becomes a key element in simultaneously improving environmental performance and competitiveness, in both the environmental dimension as well as in other dimensions. To this end, we have analyzed the case of the Dydee Company. In order to address the root of the environmental issues, certain procedures were used to change the customers’ habits. This option turned out to be much more efficient and less risky than its alternatives. The challenge laid in getting the customers, once informed, to be willing to modify such a personal and delicate task. The exchange rate at the time of writing this case analysis (9 September 1999) was 166 pesetas to the dollar, that is, approximately the current value of 1 euro.     

Performance of interest rate rules under credit market imperfections

The stabilization effects of Taylor rules are analyzed in a limited participation framework with and without credit market imperfections in capital goods production. Financial frictions substantially amplify the impact of shocks, and also reinforce the stabilizing or destabilizing effects of interest rate rules on output. However, these effects are reversed relative to new Keynesian models: under limited participation, interest rate rules are stabilizing for productivity shocks, but imply an output-inflation tradeoff for demand shocks. Moreover, because financial frictions imply excessive fluctuation, stabilization via an interest rate rule can be a welfare-improving response to productivity shocks.     

Cultural policy and urban regeneration in Western European cities: lessons from experience, prospects for the future

This paper reviews the uses of cultural policy and planning as tools of urban regeneration in western European cities. Following a brief assessment of the evolution of European cultural policy in recent decades, the paper studies the origins and development of the European City/Capital of Culture programme and explores the experience of cities considered to have succeeded in re-imaging and regenerating themselves through cultural activity and special events. The paper ends with a reflection on the notion of cultural planning and its potential as an integrated alternative to urban cultural policy, and offers recommendations for further development within the UK context.     

Corrigendum to “Dynamic multidimensional assessment of sustainability at the macro level: The case of Austria” [Ecological Economics 68 (2009) 2560-2573]

This paper explores the issue of sustainability at the macro scale employing multi-criteria decision aid (MCDA) methods. The incommensurability of values and the essentially multi-dimensional and dynamic nature of sustainability challenge the use of composite measurement indices. This determined the choice of MCDA methods. Austria was chosen as a case study, due to the wide availability of data, especially on indicators of strong sustainability. The structure of the multi-criteria problem comprised the evolution of different sustainability dimensions over time. The process for selecting criteria included a critical assessment of institutional sustainability agendas (UN, EU and Austrian Government) and theoretical recommendations.After an assessment of MCDA methods, the NAIADE method demonstrated the most suitable properties for sustainability assessment. The application of this outranking approach was undertaken in two separate settings: long-term from 1960 to 2003 and medium-term, 1995-2003 with varying numbers of criteria. The response of results to the addition of evaluating criteria and periods was tested. The degree of credibility for accepting preference relations was also employed for sensitivity analysis.According to the results of the long-term assessment, especially in the weak sustainability setting, sustainable progress is taking place in Austria. In the medium term, in the stronger sustainability setting and, especially as the number of criteria increases, more incomparable periods appear and trends are less determined. Moreover, it is shown how results crucially depend on the methodological choices. This is one of the first applications of the multi-criteria tools to the dynamic analysis of sustainability at the macro scale.     

Aligning supply chain design for boosting resilience

Many researchers have analyzed the effect of disruptive events, such as natural disasters and economic and market forces, on global supply chains. However, there is a lack of consensus on delineating a universal collection of supply chain risk management practices that will help companies operate in a global market with large-scale disruptions. In this article, we present an analysis, in conjunction with a worldwide online survey, based on successful global brands and their supply chains. We propose a framework that deploys the dynamics of building supply chain resilience, first linking the design of the supply chain portfolio (local versus global scope, as well as strategic responsiveness versus cost reduction) with supply chain vulnerabilities (external versus internal). We describe the transition between different supply chain structures as a way of coping with disruptions and thus proactively developing resilience. In this article, we introduce both a supply chain risk management approach and the reactive-by-deployment mode, as illustrated by successful global company examples.     

The effect of knowledge complexity on the performance of franchise systems in the service industries: an empirical study

The literature of knowledge transfer studies complexity as a knowledge characteristic which influences organisations’ performance since it hinders this process. However, complex knowledge is richer and more complete and its influence on performance may be positive. So, the purpose of this study is to analyse the influence of knowledge complexity on the performance of franchise systems in the service industries. With this aim, a linear regression analysis is conducted on a sample of franchisee of different franchise chains of the several service industries operating in Spain. The findings seem to indicate that complexity has a positive impact on the performance of franchise systems.     

Sources of Comparative Advantages in Brazil

Based on the Heckscher-Ohlin-Vanek model, the authors investigate relative factor abundance in Brazil, as revealed by its international trade. They study two different time periods: one characterized by high trade barriers (1980–85) and the trade liberalization period (1990–95). Two alternative methodologies are used: the estimation of factor intensity regressions on net exports and the direct computation of factor content in net exports. In the factor intensity regression, the authors incorporate technological changes that might have occurred over time, and these turn out to be significant. Both methods yield the same results: the Brazilian international trade reveals relative abundance in capital, land, and unskilled labor, and scarcity in skilled labor, with qualitatively equivalent results for the two time periods studied.