Climate change shocks and socially responsible investments

Climate change's impact on investor behavior is a scantly investigated area in finance. This paper examines the performance of socially responsible exchange trade funds (ETFs) concerning conventional ETFs, in response to climate change events. We proxy climate change signals with a list of natural disaster events that NASA scientists relate to climate change. We contribute to existing literature, by using a very extensive information set of ETF strategies, not influenced by rating agencies' subjective evaluation policies, and covering almost 90% of the universe of worldwide sustainability thematic-oriented ETFs. This sample allows us to identify the socially responsible investment behavior in response to unpredictable climate change shocks. Our identification strategy accounts for endogeneity concerns and relies on two-stage least square (2SLS) approach finding that responsible investors react to climate change events by purchasing socially responsible investments. The relationship between climate change signals and return of investment in themes linked to the development of sustainability is positive. Interestingly enough, the sign of this relationship is different, when we disentangle the empirical results according to the asset type, confirming that investors shift their investments from equity funds to bond funds when market sentiment worsens. Our results indicate that policymakers should increase the support of firms adopting environmentally conscious business practices, while managers should boost a sustainable business strategy.     

Striking a balance between ‘Sir’ and ‘Dude’

This postcard reflects on an issue common to many academics, whether they teach accounting, politics or—as in my case—commercial law to business and economics students. Creating an open and effective relationship with students is a balancing act undertaken by educators across the board—and no less by my accounting colleagues down the hall. In teaching commercial law to accounting students, I was recently reminded of the importance and occasional difficulty in maintaining a healthy ‘two-way’ relationship. I trust the following may connect with accounting educators and others who are also trying to achieve the right balance.     

Translating sustainable and smart city strategies into performance measurement systems

This paper shows how sustainable and smart strategies can be implemented in cities and how these strategies influence, and are influenced by, performance measurement systems. Drawing upon the Foucauldian notion of governmentality, the authors present the case of Gothenburg in Sweden, where they interviewed the key actors involved in a new sustainability strategy. Translating strategy into performance measurement systems requires collaboration across organizational boundaries and considerations of financial goals and social and human aspects.     

Setting consolidated reporting standards for local government

Under a corporatization trend, traditional financial reporting is generally considered unable to offer a complete view of the economic and financial activities of a group of public entities. Consequently, several reforms and standards have been introduced related to consolidated financial reports. Through interviews with key actors, the authors analysed the normativity process for issuing consolidated reporting standards for local governments in three European countries: Italy, Spain, and Sweden.     

Performance measurement in universities: ambiguities in the use of quality versus quantity in performance indicators

Performance measurement (PM) is now common in Western universities. This is also the case in Finland, where a new funding scheme was implemented to ensure that quality was included in universities’ PM. However, this paper shows that the quality indicators in use are, in practice, quantitative. The paper is based on a large survey and has implications for university PM systems in Finland and internationally.     

Finance, governments, and trade

We study how financial transactions may respond to exogenous variation in trade opportunities not only directly, but also through policy channels. In more open economies, governments may find it more difficult to fund and enforce public policies that substitute private financial transactions, and more appealing to deregulate financial markets. We propose a simple theoretical model of such policy-mediated relationships between trade and financial development. Empirically, we document in a country panel dataset that, before the 2007–2008 crisis, financial market volumes were robustly and negatively related to the share of government consumption in GDP in regressions that also include indicators of financial regulation and trade openness, and we seek support for a causal interpretation of this result in instrumental variable specifications.     

Trust,risk and time preferences: evidence from survey data

The paper shows that time preferences and risk preferences are key covariates of self-reported trust. They both predict negatively a measure of generalized trust; however, risk aversion is positively correlated with an index of particularized trusting behaviour (which refers to the circle of known people).     

Tax competition for foreign direct investments and the nature of the incumbent firm

We investigate tax/subsidy competition for foreign direct investments (FDI) between countries of different size when a domestic firm is the incumbent in the largest market and we study how the nature (public or private) of the incumbent firm affects policy competition. We show that, differently from the case of a private firm, the country hosting the incumbent always benefits from FDI if the domestic firm is a public welfare‐maximizing firm. We also show that the public firm acts as a disciplinary device for the foreign multinational that will always choose the efficient welfare‐maximizing location. An efficiency‐enhancing role of policy competition may then arise only when the domestic incumbent is a private firm, whereas tax competition is always wasteful in the presence of a public firm.     

Institutions and geography: Empirical test of spatial growth models for European regions

This article provides an empirical assessment of the growth experiences of European regions, during the period 1991–2004, by taking into account the spatial effects due to both institutions and geography. These effects have been modelled by means of specific controls and by using a non-conventional spatial weight matrix. Results favour a model dealing with substantive spatial externalities. Within this framework, the country-specific institutions are strongly and positively related to the regional productivity's growth rate. In addition, the geo-institutional proximity increases the spatial dependence of the regional output per worker and raises the speed of convergence. By contrast, the pure geographical metrics is underperforming, while underestimating the convergence dynamics.     

Outsourcing and structural change. Application to a set of OECD countries

The examination in this paper aims to bridge outsourcing and structural change analyses in order to obtain more accurate insights into the extent of outsourcing and to extract more reliable policy recommendations for dealing with its effects. We do this by applying a ‘battery’ of outsourcing measurements to a group of OECD countries from 1980 to the mid 1990s. Expected results (e.g. the idiosyncratic outsourcing patterns of the UK) are confirmed on a more systematic and comparable basis, while original results (e.g. the low integration of business services in manufacturing in the former socialist economies) are based on the exploitation of new data.