Tales of fiscal adjustment

This paper examines the evidence on fiscal adjustments in OECD countries from the early 1960s to today. The results shed light on the recently observed phenomenon of fiscal tightening that produces (non-Keynesian) expansionary effects. One interpretation is that a serious fiscal tightening increases demand. Wealth rises when future tax burdens decline, and when interest rates decline credibility is restored and inflation or default risks abate. Both consumption and investment rise. For this effect to produce an expansion, the tightening must be sizeable and occur after a period of stress when the budget is quickly deteriorating and public debt is building up. Another interpretation emphasizes the supply side. Typically, a fiscal consolidation based on tax increases is short-lived. To be long lasting, it must include cuts in public employment, transfers and government wages. To be politically possible, such a policy must be supported by trade unions. These measures result in more efficient labour markets and boost the supply side. Based both on statistical evidence and on a detailed analysis of ten cases of major fiscal adjustment, this article provides cautious support to the supply-side view, without denying a more limited role for the demand-side channel.     

Institutional and organizational trajectories in social economy enterprises: Resilience,transformation and regeneration

Social economy enterprises (SEEs) are arousing notable interest as promising alternatives where social innovation, business ownership and governance are concerned. In this context, a renewed debate about the internal changes and organizational trajectories experienced by these organizations has emerged in the scholarly literature. This special issue aims to contribute to ongoing debates in this field by advancing our understanding of the external pressures and internal dynamics that can trigger degeneration in SEEs, the conditions and factors that allow SEEs preserving their hallmark values and practices, and the resources and processes of organizational change that SEEs can deploy to overcome degeneration and regenerate. In this editorial introduction we introduce the topic of research, describe the content of the current special issue, and highlight some conclusions and possible directions for future research.     

Overcompliance and Voluntary Agreements

Voluntary agreements with industry offer many examplesof overcompliance with respect to environmentalstandards. Such phenomena seem to be irrational butappear less surprising considering firms' strategiesare aimed to internalise environmental quality. Wemodel the choice of the environmental quality ofproducts in a one-shot game between a monopolist andconsumers, to show the existence of inefficientequilibria where quality is low because of moralhazard. The firm can, however, change its' equilibriumstrategy in a repeated but finite game, in order tobuild an environmental reputation if we suppose thatconsumers' information is not only imperfect withregard to quality, but also incomplete with respect toany environmental constraint that may affect thebehaviour of firms (like the threat either of astricter regulation or of potential entry). In atwo-period model, we show the existence of a perfectBayesian equilibrium in mixed strategies where thefirm can revert to the production of green products inorder to influence consumers' beliefs and acquire anenvironmentally friendly reputation. Due to thepeculiarity of environmental information (greenproducts are credence goods), we claim that anexplicit agreement is also necessary in order toestablish monitoring and controlling procedures toverify the performance of firms. These procedures canexplain per se the diffusion of voluntary agreementsthat are nevertheless self-enforcing because of thereputation effect.     

Do Individual Preferences Affect the Environmental Decision‐Making Process in Teams? The Role of Participation

Literature on organizations and the natural environment has focused on the importance of individual managers and leaders. However, this literature has scarcely ever focused on individuals in the team context, even when teams have been considered to be key for a firms’ environmental progress. Although teams’ environmental decisions can be enriched by the different contributions of team members, it is necessary that team members actually participate and contribute their preferences during the decision‐making process. We used an adaptation of the legislative dilemma task with 84 students to contribute to environmental management literature by analyzing members’ participation during the team decision‐making process. The results of this paper show how those members with environmentally proactive preferences have a higher participation during the decision‐making process, and as a consequence they have a greater influence on the team decision. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Boards and Sustainability: the Contingent Influence of Director Interlocks on Corporate Environmental Performance

This paper highlights the importance of a firm's board with respect to sustainability issues by analysing the relationship between director interlocks, i.e. directors who simultaneously belong to the boards of directors of several companies, and a firm's environmental performance. The previous literature has focused on the influence of firm‐level resources on corporate environmental performance. This study utilizes insights from a resource‐based view and research on social capital to demonstrate that the environmental performance of a firm is also influenced by the difficult‐to‐imitate capabilities that are embedded in the network relationships of its directors. Our results support a contingency perspective of the social capital theory that finds that director interlocks are positively connected with the environmental performance of a firm in two specific situations: (1) when the firm is linked to a larger parent company and (2) in cases of low and high levels of interlock diversity. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Alcohol demand among young people in Spain: an addictive QUAIDS

This paper analyzes the demand for alcoholic beverages among young people in Spain. To that end, we develop a theoretical model which combines elements from the Theory of Two-Stage Budgeting and the Theory of Addiction, with this being empirically translated into a Quadratic Almost Ideal Demand System (QUAIDS) in which the particular characteristics of young people are introduced by Price Scaling (PS) techniques. We then estimate this specification by using data drawn from the Spanish National Survey on Drug Use in the School Population (2000) and the Spanish National Household Survey (2000). Given that wine, beer and spirits all have normal demands, our results suggest that a tax increase imposed with the intention of reducing alcohol consumption would appear to be efficient. This paper was partially written while Ana Isabel Gil was a Visiting Researcher at the London School of Economics and Political Science, to which she would like to express her gratitude for the hospitality and facilities provided. An earlier version of this paper has been presented at the Spanish Economic Analysis Meeting-2003 (Sevilla, Spain) with all the comments made by the participants being appreciated. Finally, the authors would like to express their thanks for the financial support provided by the Spanish Ministry of Education-CICYT and the European Commission (Project 2FD97-2057). The usual disclaimer applies.     

The determinants of pay settlements: the influence of the national context

This article studies the influence of national context and collective bargaining on the factors taken into account when adjusting wages. Using data from Spanish and British manufacturing establishments, we examine the relative importance of the cost of living, the ability to recruit or retain employees, the financial performance of the organisation and the industrial relations climate on wage adjustments of manual workers at the establishment level. Our findings show that there are significant differences on the importance given to these factors in both countries. In part, these are related to differences in the incidence of collective bargaining.     

Loan Supply Shocks and the Business Cycle

This paper provides empirical evidence on the role played by loan supply shocks over the business cycle in the euro area, the UK and the USA from 1980 to 2011 by estimating time‐varying parameter vector autoregression models with stochastic volatility and identifying these shocks with sign restrictions consistent with the recent macroeconomic literature. The evidence suggests that in all three economic areas loan supply shocks appear to have a significant effect, with clear signs of an increasing impact over the past few years. Moreover, the role of loan supply shocks is estimated to be particularly important during recessions. Copyright © 2016 John Wiley & Sons, Ltd.     

Exploring the moderating effect of gender in the relationship between individuals' aspirations and career success among engineers in Peru

Purpose: The aim of this paper is to analyse the relationship between career success and individual career aspirations for engineers, and to test whether this differs according to gender. The primary hypothesis in this research is that gender does make a significant difference.

Design/methodological/approach: The sample consists of 1011 engineers who graduated from a prestigious Peruvian college between 1998 and 2005. Female graduates constituted only 4% of the sample, which is similar to the national statistics for engineers in Peru during this period. The relationships were primarily tested using multiple regression and structural equation modelling analyses.

Findings: Findings show a positive relationship between individual career aspirations and career success for men, but not necessarily for women; this supports the hypothesis that gender moderates this relationship. Females seek more secure career orientation than their male counterparts. In addition, females have shown that their career success is more related to feminine themes such as achieving ‘work–family balance’. The findings are in line with previously published results in other countries in which female engineers have career orientations with a preference for a balance between work and family as well as work stability.

Research limitations/implications: The sample is limited to graduates from a single Peruvian college of engineering. Although the sample has similar demographic characteristic to a national population, a more heterogeneous sample is called for in a future research. Moreover, additional moderators should be incorporated, such as family background, residency (large urban cities vs. small villages) and perhaps other variables.

Practical implications: Results can help Human Resource Managers to design better career plans, which consider gender in defining policies for the attraction and retention of competent female engineers.