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Labour Market Adjustments to Financing Conditions under Sectoral Rigidities in the Euro Area

This paper analyses empirically the response of labour market indicators to changing financing conditions in a panel of 15 euro area countries from 1999Q1 to 2015Q4. Using a local projections approach, we estimate impulse responses of three margins of sectoral labour market adjustment – employment, hours worked and real wages. Consistent with recent results in the literature, we find contractionary financing shocks to depress all three indicators of the labour market. Furthermore, responses are asymmetric depending on the sign of the shock, different in magnitude depending on the sectoral composition, and sensitive to labour market institutions such as employment protection legislation and union density. Finally, labour market institutions seem to mainly affect the relative strength of the adjustment margins and not so much the overall response of the wage bill.     

Hedging nontradable risks with transaction costs and price impact

A risk‐averse agent hedges her exposure to a nontradable risk factor U using a correlated traded asset S and accounts for the impact of her trades on both factors. The effect of the agent's trades on U is referred to as cross‐impact. By solving the agent's stochastic control problem, we obtain a closed‐form expression for the optimal strategy when the agent holds a linear position in U. When the exposure to the nontradable risk factor is nonlinear, we provide an approximation to the optimal strategy in closed‐form, and prove that the value function is correctly approximated by this strategy when cross‐impact and risk‐aversion are small. We further prove that when is nonlinear, the approximate optimal strategy can be written in terms of the optimal strategy for a linear exposure with the size of the position changing dynamically according to the exposure's “Delta” under a particular probability measure.     

Gender pay equity: Exploring the impact of formal,consistent and transparent human resource management practices and information

This article explores the extent to which formalised HR practices can reduce gender bias in pay setting or whether, following Acker (2006), gender bias may still be embedded within formalised HR practices. Detailed investigation of a critical case study of a Chilean finance organisation with a strong commitment to formalised, consistent and transparent pay practices based on individuated information, revealed only a small negative gender effect on pay and no identifiable gender effects in starting salaries, merit pay or promotion. These findings provide some support for the proposition that HR practices focused on job‐related performance (Reskin, 2000) and limiting managerial discretion may facilitate gender pay equity. However, the case also reveals the limits of these policies. Women scored equally well on performance but formalised scores on future potential were higher for men and mattered more. A significant gender effect emerged in promotion to more senior posts. These mixed outcomes suggest that Acker's (2006) proposition still holds.     

Racial harassment and job satisfaction in South Africa: the moderating effects of career orientations and managerial rank

Employee job satisfaction is a strong predictor of pivotal individual and organizational outcomes, e.g. commitment, productivity, retention. This study examines the mediating role of workplace racial harassment in the association of employee racioethnicity and job satisfaction in the South African context. Furthermore, this study investigates the moderating effects of career-related variables, i.e. career orientations and managerial rank. Results of a survey of 154 employees in South Africa indicate that black South Africans experience more workplace racial harassment than white employees and thus show lower job satisfaction. Moreover, the detrimental effects of workplace racial harassment on job satisfaction are more pronounced among highly career-oriented individuals and/or among employees with no or low managerial rank. The implications of these findings for theory and practice are discussed.     

THE IMPACT OF OWNERSHIP AND CAPITAL STRUCTURE ON MANAGERIAL MOTIVATION AND STRATEGY IN MANAGEMENT BUY-OUTS: A CULTURAL ANALYSIS

This study examines, from a cultural perspective, owner-managers’and other stakeholders’interpretations of the partial fusion of ownership and control through high leverage in eight UK management buy-outs (MBOs). Owner-control and debt-control are interpreted as having positive effects on managerial motivation, organizational decision-making processes and implementation of cost reduction strategies and negative ones on fundamental changes in strategy and acquisition. These interpretations accord broadly with agency theory propositions but show that owner-managers place less emphasis on wealth incentive effects and more emphasis on the enabling and facilitating roles of collective ownership and the freedom it gives from inappropriate corporate control.     

Are Private Vices Public Finance Virtues? An Empirical Investigation

The article investigates the impact of widely accepted private vices (smoking and alcohol and gasoline consumption) on public finance. Introducing the concept of “vice-related deficit,” which aggregates the positive effects on public finance on the revenue side (cash inflows) and the negative effects on the expenditures side (cash outflows), the article looks upon cigarette, alcohol, and gasoline consumption as determinants of vice-related deficit for a number of 68 countries for year 2012. We found that smoking had a negative effect on vice-related budget balance, while alcohol and gasoline consumption had a positive effect. As control variables, we used life expectancy and size of the economy, both having been found with negative effects. The results prove robust to different sample adjustments. We also found that the negative effect of private vices on public finance is stronger for Christian countries than for non-Christian countries. Policy recommendations were made accordingly.     

Consequences of the Treasury Single Account Policy on the Wealth of Nigerian Commercial Banks’ Shareholders

We examine the impact of the Nigerian government’s Treasury Single Account (TSA) policy to withdraw the funds of Ministries, Departments and Agencies from commercial banks. Following the economic policy uncertainty theory, we use an event study methodology to measure the impact of the TSA policy on the shareholders’ wealth. Our results reveal that the announcements and subsequent final implementation of the TSA policy caused negative abnormal returns and losses on the wealth of the commercial banks’ shareholders. This article contributes to the literature on stock market reaction to policy announcements and the unintended consequences government policy can have in an emerging economy.     

Elimination of systemic risk in financial networks by means of a systemic risk transaction tax

Financial markets are exposed to systemic risk (SR), the risk that a major fraction of the system ceases to function, and collapses. It has recently become possible to quantify SR in terms of underlying financial networks where nodes represent financial institutions, and links capture the size and maturity of assets (loans), liabilities and other obligations, such as derivatives. We demonstrate that it is possible to quantify the share of SR that individual liabilities within a financial network contribute to the overall SR. We use empirical data of nationwide interbank liabilities to show that the marginal contribution to overall SR of liabilities for a given size varies by a factor of a thousand. We propose a tax on individual transactions that is proportional to their marginal contribution to overall SR. If a transaction does not increase SR, it is tax-free. With an agent-based model (ABM) (CRISIS macro-financial model), we demonstrate that the proposed ‘Systemic Risk Tax’ (SRT) leads to a self-organized restructuring of financial networks that are practically free of SR. The SRT can be seen as an insurance for the public against costs arising from cascading failure. ABM predictions are shown to be in remarkable agreement with the empirical data and can be used to understand the relation of credit risk and SR.     

The Bridging Role of Expatriates and Inpatriates in Knowledge Transfer in Multinational Corporations

Drawing on the knowledge‐based view of the firm, this article provides the first empirical study that explicitly investigates the relationship between different categories of international assignees and knowledge transfer in multinational corporations (MNCs). Specifically, we examine (1) the extent to which expatriate presence in different functional areas is related to knowledge transfer from and to headquarters in these functions and (2) the extent to which different categories of international assignees (expatriates vs. inpatriates) contribute to knowledge transfer from and to headquarters. We base our investigation on a large‐scale survey, encompassing data from more than 800 subsidiaries of MNCs in 13 countries. By disaggregating the role of knowledge transfer across management functions, directions of knowledge transfer, and type of international assignees, we find that (1) expatriate presence generally increases function‐specific knowledge transfer from and, to a lesser extent, to headquarters; and that (2) the relevance of expatriates and former inpatriates varies for knowledge flows between headquarters and subsidiaries. Additionally, we discuss implications for research and practice, in particular regarding different management functions and different forms of international assignments, and provide suggestions for future research. © 2015 Wiley Periodicals, Inc.