Credit allocation and the financial crisis: evidence from Spanish companies

The worldwide financial crisis of 2007–2008 raised serious concerns about the soundness of banks’ activities and about the extent to which banking regulation should supervise banks’ investment decisions. We contribute to this topic by examining the Spanish case, which has been emblematic of the bubble and burst dynamics in the credit market. In particular, we study the allocation of bank credit among Spanish companies from 1999 to 2014, showing that larger companies accumulated greater amounts of bank loans per unit of total assets, thus leading to a notable concentration. We also find that, during the Spanish boom period, bank loans shifted from the manufacturing to the construction industry, and in particular to the largest companies of the latter sector. This happened in spite of the high leverage of large construction firms, which was increasing also due to their growing debt. We argue that the higher operating benefits, reflecting the increase of the housing price during the boom period, overvalued construction firms as potential borrowers. The bankruptcy of several large construction companies during the Spanish crisis supports the need for monitoring and regulation, to avoid an excessive concentration of bank credit to a few large companies, especially if they belong to a specific sector.

     

Fostering the Industrial Component of the European Green Deal: Key Principles and Policy Options

Intereconomics - The necessity to meet climate and environmental targets, while at the same time ensuring economic and social sustainability,requires a transformation that will generate enough...     

Enhancing environmental information transparency through corporate social responsibility reporting regulation

This research aims to contribute to the scientific debate about the lack of interlinkages between mandatory non-financial reporting and sustainable business models. For our purposes, a counter-accounting analysis was conducted on the non-financial reports of a sample of 145 Italian firms interested by the Directive 2014/95/EU effects. Specifically, the study adopts an empirical approach to evaluate environmental information transparency, which represents one of the main critical issues concerning the non-financial declarations prepared by European Italian Public Interest Entities (PIEs) to comply with Directive 2014/95/EU. The results highlight that corporate governance and report characteristics affect environmental transparency. Furthermore, the results confirm the overall attitude to avoid the disclosure of unfavourable or unavailable environmental information through impression management strategies. Finally, the analysis underlines the opportunities for policymakers to rethink mandatory non-financial reporting to sustain the ecological transition of European PIEs.     

Firms and wage inequality in Central and Eastern Europe

We use large linked employer-employee data to analyze wage inequality patterns in Central and Eastern European (CEE) countries between 2002 and 2014. We show that, unlike in many other advanced economies, wage inequality levels have decreased in almost all CEE countries. These reductions in wage inequality resulted from disproportionately large increases in wages at the bottom of the wage distribution, and from decreases in between-firm wage inequality. We further find that the declines in wage inequality were driven by large wage structure effects that compensated for changes in the composition of workers.     

Proposition of a structural model for business value creation based on circular business models,innovation, and resource recovery in the pet industry

Based on the assumptions of circular economy, resource recovery, and innovation, the aim of this research is to analyze the relationship between innovation constructs, resource recovery practices, Circular Economy Business Models (CEBMs), and value creation in a fast-growing emerging economy. A set of empirical data from 443 companies in the pet industry were used. In terms of methodology, the study was processed using the SPSS software, using Structural Equation Modeling, with manipulation of primary data. CEBMs demand greater engagement, internalization of initiatives, and synergy with the operating ecosystem of the pet industry. Innovation is present but has the potential for expansion through adherence to the innovation ecosystem and its technological package, partnerships, and relationships so that companies can scale up and create value with the support of resource recovery practices. The results of this study can be useful for companies in the pet industry, as it allows the identification of areas and practices that require their attention to improve organizational performance and create value for the business based on initiatives supported by the assumptions of circular economy and sustainability.     

Don't call us,we'll call you: Considering cognitive and physical effort in designing effective response systems to manage extended in-process wait

People must often wait for days or weeks to receive test results, price quotes, products, etc. Service providers may manage user experience during such in-process waits using notification systems that inform users when a response is available or inquiry systems that require users to inquire about response availability, thereby imposing prospective memory requirements on users. Based on the prospective memory and wait time literature, we make predictions regarding how response system (notification vs. inquiry) moderates the effects of waits that are shorter or longer than the provider promised on user evaluation of the wait. We find that users of a notification system evaluate a wait more positively and are less sensitive to deviations of actual from promised wait time than are users of an inquiry system. This advantage was more pronounced for a wait that was longer (vs. shorter) than promised. These effects of system and expectation on evaluation were fully mediated by their impact on the cognitive and physical effort of navigating the system. Finally, a week after having experienced a wait, users of an inquiry system who had waited longer (vs. shorter) than promised cooperated less on a follow-up task, highlighting another downside of using an inquiry system.     

The Role of Social Capital for Organizational Identification: Implications for Strategic Communication

Scholars in the fields of organization and strategic communication have long been interested in organizational identification as a phenomenon favoring employees’ alignment with corporate values and consequently achievement of the organizational mission. To date, most studies on the subject have relied on social identity theory, which focuses on cognitive categorization processes but overlooks the role of employees’ relationships within their organization. In this research, we introduce a social capital perspective into organizational identification models. We propose and test a model looking at the influence of an individual’s social capital, a variable deriving from different dimensions of an individual’s communication network (i.e., prestige, resourceful others, friendship), on organizational identification, mediated by the attractiveness of perceived organizational identity. The results from a survey conducted in a business organization suggest that a person’s social capital influences organizational identification, both directly and through the attractiveness of perceived organizational identity. Our organizational identification model contributes to extend knowledge on the complementarity of the cognitive and relational perspectives of strategic communication and on the role of relationship building and networks in strategic communication management.     

The Euro-area Financial System: Structure, Integration, and Policy Initiatives

Four years after the introduction of the euro, this paper providesan overview of the current structure and integration of theeuro-area financial systems and related policy initiatives.We first compare the euro-area financial structure with thoseof the United States and Japan. Using new and comprehensivefinancial account data, we also describe how the euro-area financialstructure has evolved since 1995. We document the progress towardsintegration of the major euro-area financial segments, namelymoney markets, bond markets, equity markets, and banking. Finally,we discuss recent policy initiatives aimed at further improvingEuropean financial integration.     

What can be learned from China’s success?

Since 1978, China has experienced the most rapid economic growth of any country in world history, and the most rapid growth in living standards of any major economy. Following the latest international financial crisis, China outperformed any other major economy – from the second quarter of 2007 to the second quarter of 2014, China’s economy grew by 78% and the USA by 8%. In a single generation, China has gone from a ‘low income economy’ to the verge of achieving ‘high income’ status by World Bank criteria. Achieving this would double the population living in ‘high income’ economies globally. This extremely rapid development is sometimes explained in terms of unique ‘Chinese characteristics’, but research over the last 30 years suggests it is rooted in universal economic processes. While the combination of global forces producing economic growth is unique in China and produces unique ‘Chinese characteristics’, they can operate throughout the world economy. If other developing economies could achieve the scale of China’s economic success, global problems of poverty and its consequences would be solved. China’s policy response to the international financial crisis was far more effective than that of other major economies. This paper examines the chief strategic lessons to be drawn from China’s success.