Measuring Corporate Citizenship in Two Countries: The Case of the United States and France

Based on an extensive review of the literature and field surveys, the paper proposes a conceptualization and operationalization of corporate citizenship meaningful in two countries: the United States and France. A survey of 210 American and 120 French managers provides support for the proposed definition of corporate citizenship as a construct including the four correlated factors of economic, legal, ethical, and discretionary citizenship. The managerial implications of the research and directions for future research are discussed.     

PORTFOLIO OPTIMIZATION UNDER TRACKING ERROR AND WEIGHTS CONSTRAINTS

The performance of active portfolio managers who must comply with a weights constraint is often assessed against a benchmark. The weights constraint is common as the funds are committed by their own prospectus to a minimum (or maximum) portfolio concentration. We characterize the optimal asset allocation and analyze the implications of the weights constraint on the manager's performance and on the relevance of the information ratio. We obtain that because of the weights constraint, at the optimum, the information ratio often decreases when the manager is free to deviate more from the benchmark.     

The role of credit officers in the performance of micro loans

This paper proposes a structural model explicitly considering the role played by credit officers in loan performance. The credit officer's ability is decomposed into the screening and the audit stage. This model is estimated using a rich database from VivaCred – a Brazilian NGO. Results suggest that: (i) there is substantial heterogeneity among credit officers in the sample; (ii) their ability affects more the screening than the audit stage; and (iii) their estimated ability is correlated with their experience at VivaCred but not with their experience before joining the organization. Evidence suggests that a reduction in staff turnover would be beneficial to the institution.     

Corporate social responsibility and firm financial risk reduction: On the moderating role of the legal environment

Approaching the institutional environment through its regulative component, we distinguish between shareholder‐oriented and stakeholder‐oriented countries. Identifying first this classification with the distinction between common law versus civil law countries and using a large sample of 5,716 firm‐year observations that represents 1,169 individual firms in 25 countries between 2001 and 2011, we show that Corporate Social Responsibility (CSR) significantly reduces firms’ idiosyncratic risk in civil law countries but not in common law countries. Using then a more direct classification based on shareholder and employee protection scores, our findings suggest that CSR negatively affects firms’ idiosyncratic and systematic risks only in less shareholder‐oriented and more stakeholder‐oriented countries, respectively. These findings are similar in the different components of CSR with two notable exceptions: a high score in corporate governance reduces firm risk only in common law countries, and community involvement increases idiosyncratic risk in more shareholder‐oriented and less stakeholder‐oriented countries, respectively. Taken together, our results strongly support the view that the relationship between CSR and financial risk is moderated by the institutional context of the firm.     

Design principles for corporate venture transition processes in established technology firms

Corporate venturing has become a well‐known approach toward new business development and strategic renewal for established technology firms. However, without an effectively designed process for aligning and integrating a corporate venture in the established business, the firm increases the risk of venture failure. This paper provides a process perspective on corporate venture transition. Based on the results of an empirical study of six corporate venture transition processes, we present suitable actions for each of the different phases of the venture transition process. In addition, we indicate the proper timing for venture transition, which is one of the long‐standing difficulties in this area. Finally, we integrate the results of the empirical study with knowledge from extant literature in a set of design principles. These design principles provide practical guidelines to improve corporate venture transition processes.     

Deleveraging crises and deep recessions: a behavioural approach

Macroeconomic dynamics are characterized by alternating patterns of periods of relative stability and large swings. Standard microfounded macroeconomic models account for these patterns through exogenous and persistent shocks. In this article, we develop a fully decentralized and microfounded macroeconomic agent-based model, augmented with an opinion model, which produces endogenous waves of pessimism and optimism that feed back into firms’ leverage and households’ precautionary saving behaviour. A major emergent property of our model is precisely the complex successions of stable and unstable macroeconomic regimes. The model is further able to account for a wide spectrum of macro and micro empirical regularities. Within this framework, we analyse a series of macroeconomic phenomena of key relevance in the current macroeconomic debate, especially the occurrence of deleveraging crises and Fisherian debt-deflation recessions. Our analysis suggests that the relative dynamics of prices and wages and the resulting income distribution along a deflationary path are critical determinants of the severity of the recession and the chances of recovery.     

On the identification of the procurement model

Under multiplicative separability of the cost function, this paper investigates the identification of the procurement model. Moreover, we characterize the model restrictions on observables and show its observational equivalence to one where the function of private information is the identity.     

Disability,social inclusion and the marketing of tourist attractions

The participation of persons with a disability (PWDs) in tourism has received growing academic interest in recent years. This paper contributes to a reflection on how accessible tourism relates to the sustainable development paradigm. To investigate this relationship, it goes beyond the question of PWDs’ access to tourism services, and adopts an inclusiveness perspective. Inclusion is examined in terms of legislation, marketing and imagery, and representations of PWDs as consumers embedded within social units – and families in particular. These dimensions are explored empirically in a study of visitor attractions in Cornwall (England) based on a quantitative and qualitative content analysis of brochures and websites. The study shows that the marketing materials of Cornish visitor attractions mainly focus on access, and the imagery used largely projects quasi invisibility or provides ambiguous messages. Communication with PWDs rarely addresses the family unit, making the family tourism experience intangible in the pre-trip phase. These results point at weaker implementation of inclusiveness, which corroborates previous findings of watered down definitions of rights to tourism under neo-liberal ideologies and economic crises. The paper discusses implications for social inclusion and highlights avenues for future research.     

The association between management earnings forecasts, earnings management, and stock market valuation: Evidence from French IPOs

This study investigates managers' motivations to engage in earnings management through purposeful interventions in the setting of discretionary accruals, in the context of initial public offerings (IPOs) in France. Firms issuing forecasts in their prospectuses are expected to differ from nonforecasters in the level of earnings management during the year following the public offering. Within the context of contracting theory, four research questions are addressed. First, are IPO firms issuing forecasts more inclined to manage earnings 1 year after an IPO compared to nonforecasting firms? Second, is a forecasting firm's level of earnings management conditioned by earnings-forecast deviation? Third, is earnings management by IPO forecasting firms affected by contractual and governance environments? Fourth, how do investors see through earnings management following IPO earnings forecasts, i.e., how do stock market participants value earnings components (i.e., nondiscretionary and discretionary accruals)? Our findings document that in the year following an IPO, the magnitude of earnings management is much higher for forecasters than for nonforecasters. Results also show that a firm's accrual behavior is affected by earnings-forecast deviation, but the relationship is moderated by contractual and governance constraints. Finally, it would appear that French investors do not adequately readjust the relationship between reported earnings and a firm's market value for the year in which earnings are subject to manipulations.