Myopic Corporate Behaviour with Optimal Management Incentives

Existing models in which stock markets lead to corporate 'short-termism' rely on an exogenously imposed objective for top managers. This paper endogenizes both managers' concern for short-term stock prices and the resulting distortions. We show that when the manager can trade on her own account on the stock market in a way that is observable to market participants but which is not verifiable in court, shareholders will choose an incentive contract which induces a bias towards short-term returns. Consistent with recent evidence, the short-term bias is greater when the optimal contract provides low-powered management incentives.     

Tourism demand constraints: A skiing participation

This article provides a critique of the existing literature on leisure constraints. Alternative models are discussed, including the new “negotiation of constraints” model. This study operationalized the new model in order to examine the limiting factors for participants and nonparticipants of skiing. Qualitative analysis revealed that nonskiers faced a number of intrapersonal obstacles, whereas skiers were constrained by time, family, or economic factors. Analysis of questionnaires indicated that economic factors were the major limitations for both groups. When the groups were compared, t-tests indicated that their differences were significantly greater for intrapersonal constraints, supporting the findings from the qualitative research. However, the results did not fully support the new hierarchical model of constraints.     

Challenging Local Authority Accounts—A Process in Need of Reform?

This article examines the challenges made by local electors to local authority and parish accounts in England and Wales, and the role of the District Auditor in this process. This matter has recently received some attention from the Nolan Committee. The different sorts of challenges that electors can make are explained and auditors' responses to challenges and the opportunities for abuse of the process by electors are examined. Finally, the authors look at the strength of the case for the reform of the system.     

Salesperson learning,organizational learning,and retail store performance

Salesperson learning has the potential to contribute to the competitive advantage of the firm by increasing its capacity for organizational learning. The relationship between employee and organizational learning is often taken-for-granted, yet the relationship between the two is complicated. The transfer of individual learning to the organizational level can not always be assumed. The authors examine this relationship, focusing on the facilitating role of organizational climate for learning and information dissemination efficiency in translating salesperson learning to organizational learning. The model, tested using a sample of 422 respondents from 113 retail stores in a national chain, is partly supported. Individual learning was found to be postitively associated with organizational learning and organizational climate for learning had a positive moderating effect on this relationship. The hypothesized moderating effect of information dissemination efficiency was insignificant. Implications for theory and management are discussed.     

An Evaluation of the Impact and Effectiveness of Environmental Legislation in Small and Medium‐Sized Enterprises: Experiences from the UK

With small‐ and medium‐sized enterprises (SMEs) accounting for 99.7% of the 4.7 million UK businesses, they can have a huge collective impact on the environment, which in turn is being increasingly regulated. This study investigated the impact and effectiveness of environmental legislation on UK SMEs as well as determining if ‘compliance’ results in improved environmental protection. Interviews were conducted with SME management, site staff, regulators, policy officials and support organisations. Forty‐four SMEs from the north‐west of England participated in the study, and overall a total of 99 individuals were interviewed. The study clearly indicates that the impact of environmental legislation on SMEs is overstated and impact increased commensurate with effort to comply and enforcement action. Only one of the SMEs studied had been prosecuted and only two had been inspected. Compliance issues identified in those SMEs subject to direct regulation did not correlate with previous compliance audits conducted. In general, SMEs had poor awareness of compliance issues; non‐compliance was only really recognised and acknowledged if identified by a regulator and only regarded as serious if prosecuted. Regulation of the environment is clearly only effective if complied with; understanding compliance levels can help measure the link between legislation and environmental protection. The effectiveness of environmental legislation can only be understood if SMEs are subject to regular regulatory contact. Recommendations to improve SME compliance control systems are provided. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Markov switching in disaggregate unemployment rates

We develop a dynamic factor model with Markov switching to examine secular and business cycle fluctuations in the U.S. unemployment rates. We extract the common dynamics amongst unemployment rates disaggregated for 7 age groups. The framework allows analysis of the contribution of demographic factors to secular changes in unemployment rates. In addition, it allows examination of the separate contribution of changes due to asymmetric business cycle fluctuations. We find strong evidence in favor of the common factor and of the switching between high and low unemployment rate regimes. We also find that demographic adjustments can account for a great deal of secular changes in the unemployment rates, particularly the abrupt increase in the 1970s and 1980s and the subsequent decrease in the last 18 years. First Version Received: December 2000/Final Version Received: June 2001     

Training and worker effort: a signalling perspective

Abstract This paper analyzes the interaction between firms’ investment in general skills training and workers’ incentives. It shows that when a firm has an informational advantage over its workers, its provision of free general skills training can serve as a signal that there will be a long‐term relationship between the firm and its workers. This signal induces the workers to exert more effort in learning firm‐specific skills, which enhances the firm's profits. In contrast with most of the existing literature, the model implies that firms may provide free general skills training even if there is no labour market friction.