Human Resource Management Policies and Productivity: New Evidence from An Econometric Case Study

First we distinguish various approaches used by economists toassess the impact of human resource management practices onproductivity and then we briefly review and illustrate studiesthat represent different approaches. In the main part of thepaper we illustrate the econometric case study method, by usingnew data to analyse a case from retail trade and by emulatingan approach used in an earlier study. Consistent with theorywe find that when employees have opportunities to participate,and to receive appropriate information and pertinent rewards,a one standard deviation increase of the first principal componentscore would increase productivity by 1 per cent. Our findingsimply that there are benefits to innovative work practices,even in settings where employees do simple tasks and employeesare relatively low-skilled. Since our findings are similar tothose contained in a previous study, our results also indicatethe value of replication studies. Footnotes ¹ E-mail addresses: djones{at}hamilton.edu; panu.kalmi{at}hse.fi; antti.kauhanen{at}hse.fi     

The Perils of Altering Incentive Plans: A Case Study

This paper studies a retail chain that introduced a sales incentive plan that rewarded for exceeding a sales target and subsequently cut the incentive intensity in addition to increasing the target. Utilizing monthly panel data for 54 months for all 53 units of the chain the paper shows that the introduction of the sales incentive plan increased sales and profitability, whereas the changes in the plan lead to a marked drop in sales and profitability. Thus, modifying the incentive plan proved costly for the firm. The results are consistent with the gift‐exchange model of labor contracts. Copyright © 2011 John Wiley & Sons, Ltd.     

The index premium and its hidden cost for index funds

This paper empirically investigates the index premium and its implications from 1990 to 2005. For additions to the S&P 500 and Russell 2000, we find that the price impact from announcement to effective day has averaged + 8.8% and + 4.7%, respectively, and −15.1% and −4.6% for deletions. The premia have been growing over time, peaking in 2000, and declining since then. The implied price elasticity of demand increases with firm size and decreases with idiosyncratic risk, supporting theoretical predictions. We also introduce a new concept that we label the index turnover cost, which represents a hidden cost borne by index funds (and the indexes themselves) due to the index premium. We illustrate this cost and estimate its lower bound as 21-28 bp annually for the S&P 500 and 38-77 bp annually for the Russell 2000.     

Old dogs learning new tricks? The effect of age and generation on shopping behaviour

ABSTRACT

Previous research has shown that both age and generational cohort membership affect shopping orientation and store choice criteria, although the results are mixed. This study applied a longitudinal research setting to investigate the choice orientations of six generational cohorts and seven age groups, respectively, in the context of non-grocery shopping trips. The study was based on data collected through four household surveys conducted in the Turku area, Finland, over 17 years. An exploratory factor analysis was used to identify six choice orientation dimensions that appeared as sufficiently similar in all four cross-sectional surveys. The results show that although both age and generation, if used as sole independents in a model, only explain 0.1 to 13 per cent of the variation between the categories (one-way ANOVA), in most cases, the differences are statistically significant. Age performed slightly better when the models were run for each year separately. However, in line with the underlying assumption of the generational theory, the relative importance attached to each of the choice orientation dimensions in early adulthood remained somewhat stable when the generational cohorts aged.     

Government payments,market profits and structural change in agriculture

I analyze the interaction of two institutions, markets and public policies, and their effect on structural change in agriculture. More specifically, I consider how subsidies affect functioning of input and output markets, and the selection of business strategies within them. The main hypothesis is that subsidies affect these markets differently, and that allows rent-seeking that hinders the overall productivity of the sector. I apply a replicator dynamics model for the task. I test my hypothesis with the EU’s 2003 CAP reform. The data is comprehensive microdata of Finnish grain and oilseed farms for years the 2004–2013. In order to examine distributional level shifts, I use quantile regression techniques. I find that the policy incentives have directed sectoral change more strongly than market incentives and have thus significantly affected production decisions. The subsidies have also attenuated the market signals and therefore increased sectoral inefficiency. The reform that aimed to improve market orientation has had little effect. The reform has affected structural change in input and output markets differently. While land use adjustment has become more rigid for all the farms, especially the more market oriented ones have been able to exploit increased output market flexibility. However, the negative effects are more prominent in total and the net effect of the reform was negative.     

Fragility of leisure ties between ethnic minority and majority youth – an empirical case from Finland

This paper explores social integration of ethnic minority youth in the context of micro-level leisure interaction in Finland. The aim of the study is to disentangle the types of ties that are formed between ethnic minority and majority youth. Moreover, the article will examine how these ties build bridges across group boundaries in the form of providing new leisure resources for ethnic minority youth. The qualitative data of the study consists of multi-sited ethnography conducted in the context of youth work and distinct interview data of ethnic minority youth (n = 38). Strong interethnic ties in the form of close friendships are rare in the data. Instead, many weak ties in the form of distant acquaintances are maintained. However, because of manifold micro-level elements, these weak ties are often too fragile to function as bridges accumulating the leisure resources of ethnic minority youth. Strong interethnic ties seem to have more bridging qualities. Thus, the conceptual distinction of weak/bridging and strong/bonding ties originally formulated in the framework of the labour market may not be applicable in the fields of youth leisure.     

Agri‐environmental auctions for phosphorus load reduction: experiences from a Finnish pilot

We examine environmental auctions on working agricultural lands. We organized a discriminatory auction where farmers were asked to make bids on spreading gypsum on their fields to reduce phosphorus loads to surface waters. The parcel‐specific bids were ranked based on their load reduction–compensation ratios. To assess load reductions, we built an environmental benefit index (EBI) based on three factors: P‐status of the soil (phosphorus available for crops), field slope and location with respect to waterways. As the per tonne price of gypsum delivery from the factory was higher for small quantities, the auction format allowed bundling of field parcels to reduce transportation costs. We evaluate auction's ability to target the environmental (or abatement) measures to field parcels with the highest load reduction potential and analyse the economic efficiency of the auction by comparing the pilot auction with simulated bidding behaviour and with hypothetical flat rate payment schemes. The pilot auction targeted the environmental measures effectively. It was also more efficient than a flat rate payment, even when the flat rate scheme was combined with an EBI eligibility criterion.     

Beliefs affecting additional investment intentions of mutual fund clients

In this article, we aim to examine mutual fund investors’ behaviour in decision-making situations and to analyse future investment decisions via a path model approach. Investors were divided into different groups based on the risk and distribution channel used, and the differences in their investment intentions were examined. The study used empirical survey data collected from the clients of a mutual fund company owned by a Finnish banking group. Loyalty to the common banking group dominated the explanation in the whole model. The safety of the investment was important for branch office investors, whereas obtaining a good return was important for internet investors. Ultimately, explanatory power was highest for the branch office investors and lowest for the internet investors with equity funds. Most investors intended to invest more, and thus there was little variance to be explained. The results indicate that branch office investors with money market funds require more information about the investment business, although it is difficult to see who would be responsible for providing that information. This study has implications for both the theory and management of financial services.