Loans of the revolution: how Mexico borrowed as the state collapsed in 1912–13

This article assesses why the French and US banks Paribas and Speyers underwrote a series of loans to revolutionary Mexico in 1912 and 1913, when the state was in the process of collapsing. This is a case of a war debt that failed to prevent the borrowing government from suspending payments and subsequently falling. Based on unpublished primary documents, the article shows that the 1913 loan involved a conflict of interest. The credit delayed a default and sustained the price of Mexican securities while Paribas, its main underwriter, was liquidating its Mexican portfolio. Evidence also suggests the existence of asymmetry of information. Paribas accessed pessimistic but accurate first‐hand information on Mexico, while the public read over‐optimistic press reports. Paribas forced the government to sell the bonds on the primary market at a price that was low, controlling for publicly available data. It subsequently sold the bonds at a margin on the secondary market. An additional reason for the lending is the Nacional railway, a state‐owned company that used a share of the funds to pay its debt. More exposed to Mexico than Paribas, the small and internationalized Speyers held the bad bonds it had underwritten.     

Information,sell-side research,and market making

The interaction between an investment bank's research and market making arms may have important implications for the trading of a firm's stock. We investigate the impact that research has on the liquidity provided by the bank's market maker. Utilizing a large sample of Nasdaq firms, we show that market makers whose banks also provide research coverage provide more liquidity and contribute more to price discovery than do market makers without such research coverage. Finally, we show that such “affiliated” market makers are less affected by uncertainty following earnings announcements. Our results provide new evidence on the sources of liquidity improvements for Nasdaq firms, and suggest that the information produced by banks in the sell-side research process is beneficial to their market makers.     

The influence of remuneration on the behavior of hospital employees in Brazil

The study aimed to analyze the employee's perception of the remuneration systems in two major hospitals in Brazil, one managed by the government and the other by private investors. The sample considered 109 respondents, out of which 54 were from the private hospital and 55 from the public hospital. After data collection on the sample population, perception of remuneration was associated with occupation, gender, age and experience, as suggested by the Upper Echelons Theory. The results show that remuneration is viewed as an instrument of control and behavior or a learning-inducing mechanism; however, the perceptions of employees working in the health area and administrative area were different. These findings show that the influence of fixed pay is different not only for the employees of both areas, but also in relation to the public and private hospital management. It was found that gender is not a determinant factor of behavior and that there were no differences between younger and older employees as well as between more experienced and less experienced employees with respect to the effect of remuneration on behavior. There were no differences in relation to the type of hospital either. In general, the results emphasize the importance of remuneration as an instrument of control and management, either in the context of public or private organizations.     

The impact of abusive supervision and co-worker support on hospitality and tourism student employees’ turnover intentions in Ecuador

Ram (2015. Hostility or hospitality? A review on violence, bullying and sexual harassment in the tourism and hospitality industry. Current Issues in Tourism. doi:10.1080/13683500.2015.1064364) posits that violence and harassment are areas of concern within the hospitality industry, and scholarly interest in abusive supervision in the workplace has grown since the last decade. This study extends Ram's (2015. Hostility or hospitality? A review on violence, bullying and sexual harassment in the tourism and hospitality industry. Current Issues in Tourism. doi:10.1080/13683500.2015.1064364) assertion by examining the effect of abusive supervision experiences on student employees’ turnover intentions in a hospitality and tourism context in a high power distance culture, Ecuador. The results showed that abusive supervision was positively related to turnover intentions, and its effect was stronger than co-worker support, with the abusive supervision–turnover intentions relationship being fully mediated by perceived organizational support (POS). In addition, co-worker emotional support was found to attenuate the negative effects of abusive supervision on POS. All in all, the findings highlight the roles of POS in explaining the relation between abusive supervision and turnover intentions and co-worker emotional support in buffering the negative effect of abusive supervision. The important role of culture is discussed.     

The Relationship between Brand Attachment and Consumers' Emotional Well-Being

The purpose of the study was to examine the relationship between brand attachment and emotional well-being of consumers based on the need for personal image management and feelings of arrogant pride. A study of 107 consumers of the Calvin Klein brand was performed. Data were analyzed using the structural equations modeling technique. The results indicated a positive relationship between brand attachment and emotional well-being of consumers. A relationship was also identified between brand attachment, image management, and emotional well-being, and brand attachment and arrogant pride. No relationship was identified between arrogant pride and emotional well-being.     

Does the digital divide matter? The role of information and communication technology in cross-country level and growth estimates

The bulk of information and communication technology is made of weightless, implementable, and infinitely reproducible knowledge products (such as software and databases). These products are transferred by telephone lines, accessed through internet hosts, and processed through personal computers. In this work, the coefficient of the labour augmenting factor in the aggregate production function has been estimated using proxies of variables crucially affecting the diffusion of (non-rival and almost non-excludable) knowledge products. This specification provides interesting answers to some of the open issues in the existing growth literature. The most recent information, though available for a limited period, shows that telephone lines, personal computers, mobile phones, and internet hosts significantly affect levels and growth of income per worker across countries. The result is robust to changes in sample composition, econometric specification, and estimation approach.     

Life beyond the Washington Consensus: An Introduction to Pro-poor Macroeconomic Policies

Abstract

This paper develops a rationale for the recession-induced inflation hypothesis. Within a conflicting claims framework we present a model in which both price leaders and organized workers set their nominal prices on the basis of a desired profit rate and a real wage target respectively. We argue that an absolute cost advantage in concentrated industries (for instance in fixed costs) may provide oligopolistic leaders sufficient margin to raise prices and restore a desired level of profitability during a recession. The resultizng unstable income distribution will set off an inflationary spiral if the firm's advantage in selling its output imparts an upward bias to the flexibility of input prices (specifically wages). Taking into consideration different scenarios for workers' bargaining power we present a simple simulation experiment to analyze the inflation and real wage paths of the economy after a negative output shock. When we endogenize output, we show that for a high degree of the bargaining power, output is likely to converge to a higher steady-state value.     

Investor protection and value creation in cross‐border M&As by emerging economies

Previous research investigating cross‐border M&As (CBM&As) by emerging economies (EEs) provided contrasting evidence on the value enhancement role of investor protection rules. We conduct a new empirical study to address the issue with an accurate sample selection of bidders from more homogeneous developing countries and transactions on developed countries only. Our analysis over the 1997–2012 period on a sample of M&A deals by companies from Brazil, Russia, India, China, and South Africa (BRICS) does not provide evidence that better institutional standards in the destination country are rewarded by the local stock market. We find that foreign governance quality is not associated with positive excess stock returns around the announcement date. Rather, these returns are affected by firm‐specific and deal‐specific factors, such as the relative deal size, the listed status of the target company, and the acquirer size. Comparison with other studies on excess returns for emerging markets (including BRICs) suggests that the results could be driven at least partially by country choice.     

Making Information on CSR Scores Salient: A Randomized Field Experiment

We locate a giant ‘school report‐like’ scorecard poster with domain‐specific social and environmental responsibility scores of the ten leading world food companies, measured by the Oxfam ‘Behind the Brands’ world campaign, at the entrance of selected supermarkets. We test the impact of these scores on consumers’ choices by means of a randomized field experiment. Our findings show that the Oxfam ranking matters since the treatment has a positive and significant effect on the market share of the companies with the highest scores and a negative and significant effect on the companies placed at the lowest ranks. Invisibility matters too, with the largest non‐ranked companies selling in the store experiencing a slight fall in their market shares.