Finance and politics: the wealth effects of special interest group influence during the nationalisation and privatisation of Conrail

Conrail, nationalised in 1976 and privatised in 1987, was themost significant nationalisation and privatisation by the USgovernment in recent years. It was created from six bankruptrailroads under the pressure of interest groups, formed by customers,existing claimants, employees and related companies. We documentthe gains and losses to these special interest groups at keypoints in the nationalised and privatised time periods. Overthis period, the US government had outlays of $6.59 billion,and cash inflow of $6.15 billion, and internal return of –6.4%.The paper provides evidence that a state-owned firm with goodgovernance could deliver superior performance.     

A labor perspective on fair pay: High-performance work at Corning,Inc.

The Corning-American Flint Glass Workers Union (AFGWU) partnership agreement provides a test case for the possibility of a more egalitarian and productive workplace. However, a conflict over fair compensation for high-performance work could become a major barrier to the realization of that promise. A model of fair pay is suggested, proposing that a goal of minimizing the job and pay hierarchy and maximizing the return for employee contributions would facilitate “ethical partnership” and create incentives for high-performance work. Former Shop Steward, Executive Board member, President of AFGWU Local 1000, Corning, New York. (Organizational affiliation given for identification purposes only. The opinions expressed in this article are solely those of the authors and in no manner, whether written or implied, represent a view that is endorsed or sanctioned by the AFGWU.)     

The gender diversity–performance relationship in services and manufacturing organizations

Empirical findings on the link between gender diversity and performance have been inconsistent. This paper presents three competing predictions of the organizational gender diversity–performance relationship: a positive linear prediction derived from the resource-based view of the firm, a negative linear prediction derived from self-categorization and social identity theories, and an inverted U-shaped curvilinear prediction derived from the integration of the resource-based view of the firm with self-categorization and social identity theories. This paper also proposes a moderating effect of industry type (services vs. manufacturing) on the gender diversity–performance relationship. The predictions were tested in publicly listed Australian organizations using archival quantitative data with a longitudinal research design. The results show partial support for the positive linear and inverted U-shaped curvilinear predictions as well as for the proposed moderating effect of industry type. The curvilinear relationship indicates that different proportions of organizational gender diversity have different effects on organizational performance, which may be attributed to different dynamics as suggested by the resource-based view and self-categorization and social identity theories. The results help reconcile the inconsistent findings of past research that focused on the linear gender diversity–performance relationship. The findings also show that industry context can strengthen or weaken the effects of organizational gender diversity on performance.     

Then and Now: Disability Legislation and Employers' Practices in the UK

Using a longitudinal research design, this article considers employers' human resource management practices in respect of disability equality: in 1995 under the Disabled Persons (Employment) Act and in 2003 under the Disability Discrimination Act. The article analyses whether there has been a change to employers' practices and whether or not this change is associated with increased employment of disabled persons. The findings show that proactive HR measures to encourage disabled employment, including positive discrimination, had a significant impact on disabled employment in 1995, whereas HR measures centring on managerial responsibilities and making adaptations had a similar result in 2003. We argue that, for optimum effectiveness, HR departments should employ the full range of HR measures that are available, including positive discrimination, and that this approach should be underpinned by a range of enforcement measures.     

Extreme returns: The case of currencies

Financial market crashes can occur even in the absence of news. This paper highlights four properties of price-contingent trading that increase the frequency of such events. Price-contingent trading is common across financial market, since it includes algorithmic trading, technical trading, and dynamic option hedging. The four properties we consider are: (1) high kurtosis in the distribution of order sizes; (2) clustering of trades within the day; (3) clustering of trades at certain prices; and (4) feedback between trading and returns. The paper estimates the relative importance of these factors using data from the foreign exchange market. Calibrated simulations indicate that interactions among these factors are at least as important as any single one. Among individual factors, the orders’ size distribution and feedback effects have the strongest influence. Overall, price-contingent trading could account for half of realized excess kurtosis. The paper suggests that extreme returns unaccompanied by news are statistically inevitable in the presence of price-contingent trading.     

The Welfare Effect of Advertising Restrictions in the U.S. Cigarette Industry

The welfare effect of advertisingrestrictions in the U.S. cigarette industry dependsupon the impact of advertising on consumer and producer surplus, the transfer to consumers for being exposed to utility-reducing advertising, and smoking externalities. We estimate a demand equation and a supply relation simultaneously and use the parameter estimates to generate predictions of the impact of advertising restrictions on social welfare. Our results show that advertising restrictions benefit producers by limiting competition and generating higher industry profits, and such restrictions lower social welfare if the external cost of cigarette smoking is sufficiently low.