ESG Disclosure and Idiosyncratic Risk in Initial Public Offerings

Journal of Business Ethics - Although legitimacy theory provides strong arguments that environmental, social and governance (ESG) disclosure and performance can help mitigate firm-specific...     

Children’s Snacks,their Ads and Consumer Sovereignty

Abstract

The concept of sovereign consumer preferences is challenged from three sides: child consumers, unhealthy food and advertising. The two theoretical concepts of merit goods and libertarian paternalism are implemented in order to classify situations in which full consumer sovereignty does not apply. An empirical analysis of ads for children’s snacks reveals the libertarian paternalist perspective as helpful for understanding the demand for and justification of ‘soft’ governmental intervention in the case of the advertised snacks, whilst the ads for these snacks may well be demerit goods. The banning or heavy taxation of these ads is therefore advocated.     

Aktuelle Reformvorschläge zum Einkommensteuertarif

Wirtschaftsdienst - Der aktuelle Einkommensteuertarif belastet Mittelschichten und Besserverdienende relativ stark durch den schnellen Anstieg der Progression. Entlastungen durch eine Anhebung des...     

Keeping it real or keeping it simple? Ownership concentration measures compared

We analyze the distributional properties of ownership concentration measures and find that measures come from different underlying statistical distributions. Consistent with theory, some measures that are classified to represent a monitoring dimension have a positive influence on firm performance; other measures that are interpreted to represent a shareholder conflict dimension are negatively related to firm performance. However, other measures deviate from this pattern, and therefore, we cannot conclude that simple measures can replace complicated measures. Some measures are more suitable for analyzing the relationship between management and owners, whereas other measures are more suitable for analyzing the relationships among owners.     

Corporate Carbon and Financial Performance: The Role of Emission Reductions

This article uses econometric techniques to examine the effect of corporate carbon performance on corporate financial performance. I extend the existing literature in this research field by differentiating between two measurement perspectives: carbon performance expressed as annually reported carbon dioxide (CO₂) emission equivalents and improvements in carbon performance over time. Thereby, the article re‐addresses the research question ‘when and how does it pay to be green?’ in the context of carbon emissions and climate change mitigation. Using a nonlinear modeling technique, the findings indicate that it pays to be green for companies with superior carbon performance but not for companies with inferior carbon performance. The results also show that carbon emission mitigation is linearly and significantly positive related to return on sales (ROS) but negatively related to Tobin's q . These contradictory findings help us to understand why – in spite of growing regulatory pressure – companies have been slow to respond with effective action to tackle climate change beyond marginal efficiency improvements that correspond to ‘low‐hanging fruits’. The empirical analysis is based on an unbalanced sample of 7625 firm‐year observations covering carbon emission data (Scope 1 and Scope 2) for 1640 international firms from 2003 to 2015. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Investors' carbon risk exposure and their potential for shareholder engagement

This article examines the exposure to and management of carbon risks of different investor types. Considering the dual role as portfolio manager and partial owner, we analyze carbon risk for investors both in terms of exposure to portfolio values and in terms of responsibility as shareholder of carbon-intensive firms. We show that among various investor types, the preference for holding carbon-intensive stocks differs substantially, even when considering traditional investment decision parameters. In particular, it is governments whose portfolio values are most threatened by a carbon risk exposure of 49%, but at the same time, they prefer larger ownership shares in polluting firms. In contrast, individual investors, investment advisors, and mutual funds avoid holding stakes in these firms, while revealing only a moderate exposure of their assets to carbon risk. In view of the Paris Agreement, which includes the consistent steering of financial flows towards a low carbon transformation of the economy, our study provides policymakers with important implications regarding the coverage and effects of respective regulations. By identifying the ownership structures of carbon-intensive firms and respective owners' portfolio compositions, we also offer implications for further research on portfolio decarbonization and shareholders' influence of corporate carbon management.     

Counter-arguing as barriers to environmentally motivated consumption reduction: A multi-country study

This research extends previous literature on environmentally motivated consumption reduction (EMCR) with a cross-cultural investigation across 28 European countries. The paper elucidates how European consumers' knowledge and perceived seriousness of climate change inhibit the activation of counter-arguments, with implications for EMCR. More specifically, counter-arguing is a critical barrier to reduce EMCR. The developed model is based on the novel premise that the contingency variables, which qualify the impeding role of this barrier, are anchored at different levels. To account for individual and societal aspects simultaneously, multi-level analysis combines large-scale data from a Eurobarometer (n = 16,095) with secondary data at the societal level (n = 28). The results confirm that counter-arguments as barriers for EMCR and their attenuation through knowledge and perceived seriousness substantially varies across societies. Our results reveal that the collectivism/individualism dimension is most relevant in qualifying the impact of counter-arguments on EMCR. Building on our findings, impact-level-maps of counter-arguments and country clusters aid international marketers of environmentally friendly products to flexibly tailor their marketing campaigns. For policy-makers, our results further highlight that rather than raising knowledge with educative campaigns, perceptions of seriousness should be targeted to foster EMCR and inhibit counter-arguing.     

Application of Multivariate Statistical Analysis for Valuation of Copyrights in the Hotel Industry

The aim of this work was to identify comparable markets for the hotel industry in Europe and to compare the fees incurred by hotels for using copyrighted and indirect rights for copyright management organizations. The study covers 21 European countries. Using multivariate statistical analysis methods, these countries were grouped, taking into account gross domestic product per capita and the average daily rate for a hotel room. A detailed comparison of the fees that hotels pay for using music and audiovisual works was conducted for the Central and Eastern European countries characterized by the lowest income and hotel prices. The analysis identified wide variation in the methods for calculating fees, fee amounts, and the relationship to hotel revenues among the various countries.

     

Optimal internal control regulation: Standards,penalties, and leniency in enforcement

To protect investors, regulators increasingly rely on regulating firms’ internal controls over financial reporting, but they punish noncompliance only if an internal control weakness enabled accounting manipulation. In other words, enforcement is manipulation-contingent. We develop an economic model with a manager who sequentially chooses internal control quality and manipulative effort, and a welfare-maximizing regulator who determines an internal control standard, the penalty size for internal control weaknesses, and when to invoke such a penalty. Internal control regulation under manipulation-contingent enforcement not only provides incentives to invest in internal controls, but also improves manipulation deterrence when there are internal control weaknesses. The optimal regulation takes advantage of this additional deterrence effect by using a very strict internal control standard and an intermediate penalty that is only levied in the event of accounting manipulation. Overall, we rationalize why the commitment to lenient enforcement of internal control regulation is optimal.     

Advertising a product to face a competitor entry: a differential game approach

We analyze a market in which advertising is the dominant marketing tool to create market share. We assume that an incumbent firm dominates the market during an initial stage, and that a new competitor is going to enter the market. In particular, we analyze the different advertising policies that the incumbent firm can adopt, before and after the entry of the rival. We explore three possible behaviours. In the first scenario the firm knows that the competitor will arrive at a given instant. In the second one we assume the original firm to be surprised, in the sense that it does not anticipate the entry of the opponent either because it does not expect the competitor to arrive, or it is not prepared to react before the entry takes place. Finally, in the third scenario, the original firm knows that the competitor will enter at a constant rate. We characterize a differential game model and compare the firms’ behaviours in a strategic perspective.