Do Investors Value a Firm’s Commitment to Social Activities?

Previous empirical research has found mixed results for the impact of corporate social responsibility (CSR) investments on corporate financial performance (CFP). This paper contributes to the literature by exploring in a two stage investor decision-making model the relationship between a firm’s innovation effort, CSR, and financial performance. We simultaneously examine the impact of CSR on both accounting-based (financial health) and market-based (Tobin’s Q) financial performance measures. From a sample of top corporate citizens, we find that: (1) a firm’s social responsibility commitment (CSR) contributes to its financial performance; (2) after controlling for investment in innovation activities, CSR continues to have a positive impact on a firm’s financial performance; (3) the customer dimension of CSR has a positive effect on both CFP measures, whereas the employee dimension indicates a significant impact only on financial heath; and (4) the community relation dimension of CSR only affects the market-based CFP measure of firms with high innovation intensity.     

Computer-assisted analysis of public discourse: a case study of the precautionary principle in the US and UK press

Content analysis of newspaper publications has become a major scientific method of the analysis of public discourse. Within the framework of content analysis, we suggest a computer-assisted method to extract the most important topics of this discourse in an objective, quantifiable manner. The method combines frequency and proximity analysis of the text population, selection of the key words, text modification based on a key word dictionary, factor analysis of the modified text population, and factor interpretation. We illustrate the concept by applying the method to study the major topics discussed in the US and UK prestige press that relate to the precautionary principle. Precautionary principle is a concept of preventing environmental damage under scientific uncertainty. The analysis demonstrates the difference between the major topics of the precautionary principle discussion in the US and UK press. In the US, it revolves around an emphasis on the action on global warming, international trade on genetically modified food, environment pollution, the risks of new technologies, and cost-benefit analysis (CBA). In the UK, the major discussion topics include threats to agriculture and farmers, climate change economics, national and EU regulations, and commercial fishing. Other discussion topics, such as health and pollution, water safety regulations, meat safety and trade, and GMO regulations are shared between the countries. The US sample demonstrates more negative views towards the precautionary principle, which is presented as a threat to the US economic interests.     

Occupational Segregation and the Gender Wage Gap in a Dynamic East Asian Economy

Labor markets in the East Asian “miracle” economies have undergone profound changes in recent decades as their comparative advantage in low-wage labor diminished and jobs shifted toward higher-skill manufacturing and services. This study uses an occupational decomposition technique to examine how such shifts in East Asia's occupational structures have affected trends in their gender wage gaps. The wage gap is decomposed into across-occupation and within-occupation factors that are each further separated into wage and employment components. Results based on a comprehensive labor force data set for Taiwan show that within-occupation pay discrepancies account for the bulk of gender wage inequity.     

A trait-based model of the potential demand for a genetically engineered food crop in a developing economy

We predict the potential demand of smallholder farmers for genetically transformed varieties of a food crop, the cooking banana of the East African highlands. Farmer demand for planting material is derived in an agricultural household model that accounts for variety traits and missing markets. The demand for candidate host varieties is predicted using a Zero‐Inflated Poisson (ZIP) regression system. The fitted model is used to illustrate the sensitivity of farmer demand for improved planting material to (a) investments in research and development, represented by the effectiveness of gene insertion and expression, and (b) other public investments in education, extension, and market infrastructure that support diffusion. By comparing the characteristics of agricultural households we demonstrate that the choice of host variety can have social consequences, favoring one rural population compared with another. Clients for transgenic banana planting material are likely to be poorer, subsistence‐oriented farmers in areas greatly affected by biotic constraints. A model of this type might be useful in assessing the investments needed to support the systematic dissemination of improved planting material. The approach can be generalized to other crop biotechnologies for smallholder farming systems, particularly in developing economies.     

The moderating effect of on‐line experience on the antecedents and consequences of on‐line satisfaction

The purpose of the present study is to test the moderating effect of on‐line experience on antecedents to on‐line satisfaction and on the relationship between on‐line satisfaction and loyalty. A survey (n = 836) was conducted to test the differences between high and low online experience respondents. The relationship between on‐line satisfaction and on‐line loyalty is stronger for consumers with more online experience than for consumers with less on‐line experience. Another key finding is that antecedents to on‐line satisfaction also differ between high and low on‐line experience consumers. Implications indicate that organizations may develop and provide differentiated services to high‐ and low‐experience consumers. © 2005 Wiley Periodicals, Inc.     

Integrating Credit Models Using Accounting Information With Loan Officers' Decision Processes

This paper focuses on loan officers' cognitive processes of problem detection and problem-hypothesis formulation, which are incorporated into a credit model when they are confronted with loan decisions. Prior credit models in banking have not directly addressed loan officers' internal processes in a loan situation. The integration of both loan officers' cognitive processes and information used in a credit model can better help explain their decision-making biases. The results presented in this paper showed that information derived from a credit model influences loan officers' problem detection and problem-hypothesis formulation, and these processes are important factors in their loan approval. To identify loan officers' decision-making processes, the approach used in this paper integrates principles from financial management, economics, and cognitive psychology with methodological developments from psychometrics and econometrics.     

On the choice of measures of reliability and validity in the content-analysis of texts

The paper discusses several reliability measures: Scott’s pi, Krippendorff’s alpha, free marginal adjustment (Bennett, Alpert and Goldstein’s \(S\) ), Cohen’s kappa, and Perreault and Leigh’s \(I\) and the assumptions on which they are based. It is suggested that correlation coefficients between, on one hand, the distribution of qualitative codes and, on the other hand, word co-occurrences and the distribution of the categories identified with the help of the dictionary based on substitution complement the other reliability measures. The paper shows that the choice of the reliability measure depends on the format of the text (stylistic versus rhetorical) and the type of reading (comprehension versus interpretation). Namely, Cohen’s kappa and Bennett, Alpert and Goldstein’s \(S\) emerge as reliability measures particularly suited for perspectival reading of rhetorical texts. Outcomes of the content analysis of 57 texts performed by four coders with the help of computer program QDA Miner inform the analysis.     

Stochastic convergence in per capita energy consumption and its catch-up rate: evidence from 26 African countries

Using annual data from 1971 to 2014, we examine stochastic conditional convergence in per capita energy consumption for 26 low income, lower middle-income and upper-middle-income African countries. To do so, we use panel unit root tests that allow for cross-sectional dependence and structural breaks as well as the recently developed univariate Residual Augmented Least Squares-Lagrange multiplier (RALS-LM) unit root test with structural breaks. Although for most countries our evidence suggests stochastic conditional convergence, we find divergence for four countries including DR Congo, Senegal, Egypt and Botswana. Consistent with the neoclassical growth models we also examine the catch-up rate between energy consumption levels of African economies and that one of China and investigate its convergence properties. As African economies continue to grow, regional energy consumption disparity narrows, African energy consumption levels will catch up to the ones in China.     

CEO network centrality and corporate cash holdings

Review of Quantitative Finance and Accounting - The social network centrality of Chief Executive Officers (CEOs) has received tremendous attention in recent research. This study examines how CEO...