Comovement in GDP trends and cycles among trading partners

It has long been recognized that business cycle comovement is greater between countries that trade more intensively with one another. However, nations face shocks to both the cyclical and trend components of their GDP series. Contrary to the result for cyclical fluctuations, we find comovement of shocks to the trend component of real GDP is weaker among countries that trade more intensively with one another. We simulate changes in ten-year output growth correlations corresponding to the estimated effects of trade and show that the impact of trade on trend comovement is quantitatively more important than its effect on cyclical comovement.     

To What Extent is Business Responding to Climate Change? Evidence from a Global Wine Producer

Most studies on climate change response have examined reductions in greenhouse gas (GHG) emissions. Yet these studies do not take into account ecosystem services constraints and biophysical disruptions wrought by climate change that may require broader types of response. By studying a firm in the wine industry and using a research approach not constrained by structured methodologies or biased toward GHG emissions, the findings suggest that both “inside out” and “outside in” actions are taken in response to climate change. While attempts are made by the firm to curtail and reverse climate change through management of carbon emissions, evidence suggests a clear pattern of actions designed to adjust to the adverse consequences of climate change as well. The results both confirm and extend previous findings and suggest that the level and breadth of response to climate change is shaped by situated attention, structural controls, and industry type.     

Ethnic Identity in Advertising: A Review and Meta-Analysis

The corpus of research on ethnic identity in advertising indicates that (1) ethnic identity influences commonly examined attitudinal and purchase-intention outcomes, and (2) attitudes toward both the actor(s)/model(s) and the ad moderate attitudes toward brands depicted in ethnically resonant ads. Individual studies often differ by measurement type (i.e., single-item measure versus multi-item scale), study design (i.e., experiment versus survey), and diversity of respondent sample. Seemingly, ethnic-identity effects are greater for studies that relied on single-item measures, experimental designs, and more diverse samples. Implications and future research directions are suggested.     

Regulatory incentives and financial reporting quality in public healthcare organisations

English National Health Service Foundation Trusts are subject to a regulatory regime in which the level of monitoring and intervention is determined by performance against two key performance metrics: a ‘financial risk rating’, based on a number of performance metrics, such as the reported surplus margin and return on assets, and a ‘prudential borrowing limit’. In this paper, we investigate the variation in financial reporting quality, proxied by discretionary accruals, with the incentives introduced by this regime. We find: first, that discretionary accruals are managed to report small surpluses; second, that, consistent with the avoidance of regulatory intervention in both the short and medium term, discretionary accruals are more positive when pre-managed performance is below intervention triggering thresholds and more negative when well above threshold; third, that, despite a move away from financial breakeven as the primary performance objective, there remains an aversion to small loss reporting. We further find that the level of discretionary accruals is driven by two metrics of strategic significance: the surplus margin (a measure of retained earnings) and the prudential borrowing limit (a measure of borrowing capacity).     

Policy implications

Abstract: In the European Union, the framework of financial services legislation at EU level has been aimed primarily at forming a single market for banks, insurers and other financial services firms. Substantial progress has been made towards this objective. Also, the EU initiatives have stimulated a reappraisal of national regulatory systems. Most of this EU legislation (with the exception of the consumer credit directives) has not had consumer protection as one of its main aims, although it has been assumed that consumers will eventually benefit from a wide choice of financial services providers and from price competition. However, partly in response to consumer pressure, the European Commission is developing a set of initiatives more closely geared to protecting consumers’ interests. Within the context of the EU’s approach, there remain considerable variations in the approach to protecting consumers’ interests in different member states as a result of legal and cultural differences.     

An Examination of Emotional Information Management in Gift Giving and Receipt

Gift giving is prominent in marketplace exchanges and has robust emotional implications for both the giver and recipient. For example, prior to and during the selection of a gift, the giver endures positive and negative emotions, as he/she grapples with selecting the perfect gift, and ponders if the recipient will actually cherish the purchased item. During this dynamic exchange process, emotional recognition, management of emotions, emotional empathy, and anticipated elation are oft experienced by both the giver and recipient. However, research examining such emotions quantitatively in a gifting context is scant and models of these faculties in the gift‐giving milieu are nonexistent. To help fill this research fissure, four studies are developed; they, in general, investigate determinants of feelings linked with the gestation, prestation, and reformulation stages of the gift‐giving event. Specifically, Study 1 (giver's perspective) and Study 2 (receiver's perspective) reveal a mediation void in the models tested. Heeding these results, Study 3 (gift given) and Study 4 (gift received) introduce anticipated elation as a key factor between the aforementioned emotive factors and the emotional responses inherent in the gift‐giving stages, among others. Managerial implications and future research directions are offered.     

Frontiers, Intersections and Engagements of Ethics and HRM

This essay, and the special issue it introduces, sets out to reignite ethical interrogations of the theory and practice of Human Resource Management (HRM). To cultivate greater levels of boundary-spanning debate about the ethics of HRM, we develop a framework of four tenors for scholarly work: the ethical-declarative, the ethical-subjunctive, the ethical-ethnographic, the ethical-systemic. Each of these tenors denotes particular grounds for ethical critique and encourages scholars to consider the subjects and objects of their enquiry, the disciplinary scope of their work and the limits to subsequent claims about ethics and HRM. We provisionally locate each of the papers comprising the special issue with regard to one, or more, of these tenors.     

Trading in derivatives when the underlying is scarce

Regulatory restrictions and market frictions can constrain the aggregate quantity of long and short positions in a security. When these constraints bind, we refer to the security as scarce, and its price becomes distorted relative to its value in a frictionless market. We show that an otherwise redundant derivative can reduce the price distortion of the underlying security by relaxing its scarcity. We also show that it is especially important to analyze the underlying and derivative markets jointly when evaluating the impact of regulation, such as short-sales bans and position limits in derivatives, that restricts trade.