EM into SME won't go? Attitudes,awareness and practices in the London Borough of Croydon

This paper provides an account of a questionnaire-based survey of businesses (all except one being SMEs) in the London Borough of Croydon. The main findings reported are that (i) most managers profess a high level of environmental concern, but (ii) they have little knowledge of developments in the field of environmental management and (iii) they have not introduced formal practices to manage the environmental performance of their businesses. The research also indicates that market forces (as supply chain pressure) and intervention strategies (the provision of environmental management services) have, as yet, had little or no significant impact on SME behaviour. It is suggested that both of these potential ‘drivers’ are limited in the extent to which they are likely to influence future practice in SMEs. Following from this, it is also suggested that attempts to promote environmental management in SMEs are only likely to succeed if they are grounded in a thorough understanding of the heterogeneous natures of SMEs and the diverse socio-economic contexts within which they operate. Relating to this, a number of areas for further research are proposed. © 1998 John Wiley & Sons, Ltd and ERP Environment.     

Determinants of the Dollar Value of Default Risk: A Put Option Perspective

This study uses the option valuation framework to identify andinvestigate the factors affecting the cross-sectional difference inindividual corporate bonds' default risk. The dollar value of defaultrisk (DVDR) is measured by subtracting the observed trading price of arisky corporate bond from a Cox-Ingersoll-Ross model value of acorresponding pseudo-default-free bond. From an option pricingperspective, DVDR can be modeled as the value of a put option on thefirm's risky assets. The DVDR of an individual investment-grade corporatebond is hypothesized to be related to the bond rating, time to maturity ofthe bond, size of the issuing firm, volatility of firm value, and dividendyield of the issuing firm. In the case of the first four factors, theempirical results are consistent with the predictions from a put optionperspective. There is a mixed relationship between DVDR and dividendyield, however, which provides a weaker support for the prediction of theoption valuation model. Such a mixed relationship documents the importantrole that dividend payments play in signaling a firm's future earnings andreducing overall agency costs. ["In particular, the formula can be usedto derive the discount that should be applied to a corporate bond becauseof the possibility of default." (Black and Scholes (1973), Journal of Political Economy, Abstract, p. 637.)]     

Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature

Financial reporting fraud and other forms of financial reporting misconduct are a significant threat to the existence and efficiency of capital markets. This study reviews the literature on financial reporting misconduct from the perspectives of law, accounting, and finance. Our goals are to establish a common language for researchers interested in this line of research, describe the main findings and challenges in these literatures, and provide directions for future research. Although research on financial reporting misconduct faces challenges, those challenges provide significant opportunities to advance the literature, as the answers to many questions on financial reporting misconduct remain unsettled.     

Increase in Risk and its Effects on Welfare and Optimal Policies in a Dynamic Setting: The Case of Global Pollution

This paper studies the effects of an increase in risk on welfare and optimal policies in a stochastic dynamic model of global pollution. In a first step, we focus on the case of a single decision maker, and make use of an approach pioneered by Kimball (2014) for studying the impact of a marginal change in risk in optimal stochastic control models. Using a simple model with only one state variable and one control variable, we show how the optimal carbon tax responds to an increase in risk. It is found that the third derivative of the decay function of the stock of pollution may play a decisive role. In a second step, we investigate the extent to which Kimball’s approach may be extended to the case of stochastic dynamic games. We show how strategic interactions complicate the task of evaluating the effects of an increase in risk. Interestingly, in a dynamic model of the tragedy of the commons, we find that an increase in risk can increase welfare even though all agents are risk averse. The reason is that higher risk can cause agents to be more conservative, and this mitigates the tragedy of the commons.     

Future Inequality in CO2 Emissions and the Impact of Abatement Proposals

This paper analyzes future carbon emissions inequality using a group decomposition of the Gini index. Business-as-usual projections to the year 2100 for 135 countries show inequality in per capita emissions declines slowly. Next, the impact on emissions levels and inequality of the Kyoto Protocol and other abatement proposals for Annex II countries in 2010 are measured, with a focus on the gap-narrowing and reranking effects. Substantial reranking of per capita emissions between Annex II and non-Annex II countries will not occur unless the former reduce their emissions by at least 50% (versus 1990 levels) and the latter continue growing unabated.     

Targeting the poor using ROC curves

This paper compares the performance of targeting indicators to identify the poor. If the ROC curve of one indicator lies above that of another, the first indicator dominates the second for all social welfare functions based on the two types of errors involved in targeting. The method is applied to Bangladesh. Fifteen indicators are used, including location, land ownership, education, occupation, demographics, age, family structure, and housing. The analysis is applied at the national, urban, and rural levels with two poverty lines. Education dominates land ownership in urban areas. The ranking is reversed in most cases in rural areas.