Determinants of absenteeism in a large Danish bank

An empirical study of the determinants of absenteeism in a large Danish bank is performed. The study is based on information from approx. 7,000 employees in 500 different units. Based on a review of the absence literature a model combining the psychological and economic approaches to absence studies is constructed. The model is based on hedonic theory and uses the frequency metric when measuring absence. The results of the empirical study show that there is indeed a significant negative relationship between job satisfaction and absence. Furthermore, the study shows that demographic variables for both employees and employers play an important role for the frequency of absence. One very interesting result is that the absenteeism for employees is very clearly related to observed absence by the unit manager.     

Associations between perceived employability,employee well-being,and its contribution to organizational success: a matter of psychological contracts?

We investigated interactions between perceived employability and employees' perceptions about psychological contract obligations made by the employer in relation to life and job satisfaction, self-rated performance, and turnover intention. We hypothesized that perceived employability relates positively to job satisfaction, life satisfaction, and self-rated performance and negatively to turnover intention under the condition of many promises. Conversely, perceived employability relates negatively to job satisfaction, life satisfaction, and self-rated performance and positively to turnover intention under the condition of few promises. Analyses using a sample of 463 workers from seven Belgian organizations showed that perceived employability was positively related to all outcomes except job satisfaction. The number of promises was positively related to job and life satisfaction, and to self-rated performance, and negatively to turnover intention. Contradictory to our expectations, with the exception of turnover intention, the relationships between perceived employability and the outcomes were relatively stronger and positive under the condition of few promises compared with many promises.     

Starting Wages Respond to Employer's Risk

Firms hiring new graduates face uncertainty on the future productivity of workers. Theory suggests that starting wages reflect this, with lower pay for greater uncertainty. We use the dispersion of exam grades within a field of education as an indicator of the unobserved heterogeneity that employers face. We find solid evidence that starting wages are lower if the variance of exam grades is higher and higher if the skew is higher: employers shift the cost of productivity risk to new hires, but pay for the opportunity to catch a really good worker. Estimating the extent of risk cost sharing between firm and worker shows that shifting to workers is larger in the market sector than in the public sector and diminishes with experience.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

Search engine advertisements: The impact of advertising statements on click-through and conversion rates

Search engine advertising has emerged as the predominant form of advertising on the Internet. Despite its increasing importance academic research on this topic is scarce. Several authors have called for more research on how the content of the ad influences its evaluation. This exploratory study builds on this call for more research and examines the impact of evidence type on click-through and conversion rates in a search engine advertising setting. We find that click-through rates are higher for advertisements involving expert evidence and statistical evidence than for advertisements involving causal evidence. On the contrary, we find that causal evidence results in higher conversion rates than other types of evidence. These findings help marketers to fine-tune their advertising in search engines. In particular, if their aim is to attract people to the website, expert evidence and statistical evidence should be used, while causal evidence works best if the main objective is to generate conversions.     

Using extreme value theory to estimate the likelihood of banking sector failure

Abstract

The growing interest in management of credit risk and estimation of default probabilities has given rise to a range of more or less elaborate credit risk models. While these models work well for non-financial firms they are usually not very successful in capturing the financial strength of banks. As an answer to this, Hall and Miles suggest a simple approach of estimating bank failure probabilities based solely on their stock prices. This paper suggests an extension to the Hall and Miles model using extreme value theory and applies the extended model to the Swedish banking sector around the banking crisis of the early 1990s. The extended model captures very well the increased likelihood of a systemic banking sector failure around the peak of the crisis and it produces default probabilities that are more stable, more realistic and more consistent with Moody’s and Fitch rating implied default rates than probabilities from the original Hall and Miles model.     

Optimal Dividends In An Ornstein-Uhlenbeck Type Model With Credit And Debit Interest

Abstract

In the absence of investment and dividend payments, the surplus is modeled by a Brownian motion. But now assume that the surplus earns investment income at a constant rate of credit interest. Dividends are paid to the shareholders according to a barrier strategy. It is shown how the expected discounted value of the dividends and the optimal dividend barrier can be calculated; Kummer’s confluent hypergeometric differential equation plays a key role in this context. An alternative assumption is that business can go on after ruin, as long as it is profitable. When the surplus is negative, a higher rate of debit interest is applied. Several numerical examples document the influence of the parameters on the optimal dividend strategy.     

Inequality amongst the wealthiest and its link with economic growth

In this article, we correlate the key features of the distribution of wealth of the 500 wealthiest individuals in the Netherlands with economic growth and stock market returns for the period 1998 to 2009. We show that each year the distribution obeys a power law and that the key parameter measures the degree of inequality. Our main finding is that more inequality amongst the wealthiest is associated with higher economic growth.     

Do commercial real estate prices have predictive content for GDP?

Using a uniquely compiled database concerning rental prices of commercial real estates, which are property of the largest broker in the Netherlands, we examine whether these prices have predictive value for quarterly economic growth. In contrast to related studies, we document that the mean price contains no relevant information, whereas other properties of the price distributions have. We show that these distributions can be described by mixtures of two distributions, reflecting low-end and high-end price segments. Our main findings are that higher economic growth is predictable from more new buildings being rented, more variation in the price levels and a larger size of the low-price segment, while lower economic growth emerges when the differences in prices between high-end and low-end segments increase and when the average price level in the low-price segment increases.     

Positive Feedback and Path Dependence Using the Law of Large Numbers

Economists have become interested in the behavior of random processes with positive feedback but have sometimes found it difficult to introduce students to this research. Simulation of the law of large numbers with increasing amounts of feedback provides a convenient framework for such discussion and facilitates a nontechnical introduction to recent work on path dependence.