Rating or no rating? That is the question: an empirical examination of UK companies

The aim of this paper is to examine the main determinants of the rating likelihood of UK companies. We use a binary probit specification to model the main drivers of a firm's propensity to be rated. Using a sample of 245 non-financial UK companies over the period 1995–2006, representing up to 2872 firm years, the study establishes important differences in the financial profiles of rated and non-rated firms. The results of the rating likelihood models indicate that the decision to obtain a rating is driven by a company's financial risk, solvency, default risk, public debt issuance, R&D, and institutional ownership, thus identifying a wider range of determinants and extending the current literature. The study also finds that the rating decision can be modelled by means of a contemporaneous or predictive specification without any loss of efficiency or classification accuracy. This offers support to the argument that the rating process is fundamentally forward-looking.     

The effects of label design characteristics on perceptions of genetically modified food

Objective. To explore the effects on perceptions of labelling food for genetically modified content. Background: there is increasing public pressure for the compulsory labelling of genetically modified food content on all food products, and yet little is known about how the design and content of such food labels will influence product perceptions. The current research draws upon warning label research – a field in which the effect of label design manipulations on perceptions of, and responses to, potential or perceived risks is well documented. Method. Two experiments are reported that investigate how label design features influence the perception of genetically modified foods. The effects of label colour (red, blue and green), wording style (definitive vs. probabilistic and explicit vs. non-explicit) and information source (government agency, consumer group and manufacturer) on hazard perceptions and purchase intentions were measured. Results. Hazard perceptions and purchase intentions were both influenced by label design characteristics in predictable ways. Any reference to genetic modification, even if the label is stating that the product is free of genetically modified ingredients, increased hazard perception, and decreased purchase intentions, relative to a no-label condition. Conclusion. Label design effects generalise from warning label research to influence the perception of genetically modified foods in predictable ways. Application. The design of genetically modified food labels.     

Bags for Life: The Embedding of Ethical Consumerism

The aim of this paper is to understand why some ethical behaviours fail to embed, and importantly what can be done about it. We address this by looking at an example where ethical behaviour has not become the norm, i.e. the widespread, habitual, use of ‘bags for life’. This is an interesting case because whilst a consistent message of ‘saving the environment’ has been the basis of the promotion of ‘bags for life’ in the United Kingdom for many years, their uptake has only recently become more widespread and still remains at low levels. Through an exploratory study, we unpack some of the contextual barriers which may influence ethical consumerism. We do this by examining the attitudes which influenced people to start using ‘bags for life’, and how people persuade others to use ‘bags for life’. We use a case study analysis to try and understand why ethical behaviour change has stalled and not become sustained. We find that both individuals and institutions play a significant interaction role in encouraging a sustained behavioural change towards ethical consumerism.     

The Moderating Effect of Supervisor’s Behavioral Integrity on the Relationship between Regulatory Focus and Impression Management

The desire to control how others see us is a ubiquitous phenomenon. Decades of research have suggested that the results associated with how others see us are too great an influence to ignore. The tactics we use and behaviors we engage in to control how others see us is known as impression management. This study examines the relationship between regulatory focus and the use of exemplification or supplication impression management tactics. We use regulatory focus theory to examine this phenomenon. First, we investigate the main effects that occur between prevention-focused individuals and exemplification, and between promotion-focused individuals and exemplification and supplication. We then introduce supervisor behavioral integrity as a moderator between regulatory focus and impression management. Our findings suggest a positive relationship between prevention-focused and exemplification, and between promotion-focused and exemplification and supplication. We also find that behavioral integrity strengthens the relationship between prevention-focused and exemplification and promotion-focused and supplication, but not promotion-focused and exemplification. Implications and future research directions are discussed.     

Spectral density and spectral distribution inference for long memory time series via fixed-b asymptotics

This paper studies taper-based estimates of the spectral density utilizing a fixed bandwidth ratio asymptotic framework, and makes several theoretical contributions: (i) we treat multiple frequencies jointly, (ii) we allow for long-range dependence or anti-persistence at differing frequencies, (iii) we allow for tapers that are only piecewise smooth or discontinuous, including flat-top and truncation tapers, (iv) we study higher-order accuracy through the limit distribution’s Laplace Transform, (v) we develop a taper-based estimation theory for the spectral distribution, and show how confidence bands can be constructed. Simulation results produce quantiles and document the finite-sample size properties of the estimators, and a few empirical applications demonstrate the utility of the new methods.     

Analysing the Problem of America's Homeless

Why is there so much apparent poverty in America? William Tucker, New York correspondent of The American Spectator, argues that the increasing numbers of‘bag ladies’and 'street people’are the result of rent controls.     

Applying Industrial Design and Cost Engineering to New Product Development in Early‐Stage Firms

For early‐stage firms, successful commercialization of each new product is critically important, given the shortage of financial resources, the limited product portfolio, and small staffs typical of such firms. This paper investigates two key contributing factors for new product success in entrepreneurial firms: designing products that are appealing to target users in both form and function and designing products that can be manufactured at an attractive margin so that the new enterprise can generate much needed positive cash flow. These two practices—industrial design and cost engineering—are well studied in the context of larger, established corporations but have not been explored in the context of new ventures. This study focuses on the intensity of individual and combined adoption of design and cost engineering as measured by product development efficiency and effectiveness. The study was conducted on a homogeneous sample of early‐stage firms that develop physical, assembled products where design plays a role. The data collection focused only on the first product developed by each firm respectively. The results show that when implemented together, industrial design and cost engineering enhance both the effectiveness and efficiency of new product development in early‐stage firms, to greater effect than each does individually. Intensive individual adoption of practices had a negative impact on development efficiency measures such as development cost and duration. Only cost engineering individually had a beneficial impact on development effectiveness as measured by product margins. When combined, these two practices had a beneficial impact on both development duration and cost for the company's first commercial product, thereby reducing time‐to‐market and precious cash expenditures while maximizing project breakeven timing. The most successful firms in the study achieved a balance between creative innovation and cost discipline in the NPD process with third‐party design and manufacturing resources. It was found that integrating third‐party design firms into the development process can challenge, simplify, and add additional creative resources to the core entrepreneurial team, maximizing the ability to catalyze beneficial tension between creativity and cost discipline.     

Building participatory HIS networks: A case study from Kerala,India

This paper addresses the challenge of developing participatory networks to support the design, development and implementation of Health Information Systems (HIS) in the context of public health in Kerala, India. It is argued given the nature and complexity of HIS, there is the need to bring together our understanding of participation from two streams of development theory and IS design and development. While development theory provides interesting insights on how to enable participatory processes, they tend to not consider technology. Further, traditional participatory design in Information Systems research has its origins in Western workplaces, often quite divorced from the context of public health in developing countries. In trying to combine these two streams of learning, we propose and develop the concept of participatory networks. Drawing upon an ongoing empirical analysis of an action research effort to introduce, scale and sustain Health Information Systems in Kerala, this paper elaborates on the nature of participatory networks that come into play, and the various mechanisms and purposes of participation with the different network partners. In the discussion section, four areas of re-conceptualization of participation in the context of HIS in developing countries are identified: (1) creation of participatory networks; (2) increased context sensitivity; (3) focus on outputs of participation, not just inputs and techniques; and, (4) focus on structural aspects of participation, not just behavioral issues.     

FUTURES MARKETS AND BUBBLE FORMATION IN EXPERIMENTAL ASSET MARKETS*

Abstract. We construct asset markets of the type studied in Smith et al. (1988) , in which price bubbles and crashes are widely observed. In addition to a spot market, there are futures markets in operation, one maturing at the beginning of each period of the life of the asset. We find that when futures markets are present, bubbles do not occur in the spot markets. The futures markets seem to reduce the speculation and the decision errors that appear to give rise to price bubbles in experimental asset markets.     

Tax shelters and corporate debt policy

We gather a unique sample of 44 tax shelter cases to investigate the magnitude of tax shelter activity and whether participating in a shelter is related to corporate debt policy. The average annual deduction produced by the shelters in our sample is very large, equaling approximately nine percent of asset value. These deductions are more than three times as large as interest deductions for comparable companies. The firms in our sample use less debt when they engage in tax sheltering. Compared to companies with similar pre-shelter debt ratios, the debt ratios of firms engaged in tax shelters fall by about 8%. The tax shelter firms in our sample appear underlevered if shelters are ignored but do not appear underlevered once shelters are considered.