Monitoring Intensity and Stakeholders’ Orientation: How Does Governance Affect Social and Environmental Disclosure?

The aim of the paper is to investigate the effects of the corporate governance model on social and environmental disclosure (SED). We analyze the disclosures of the 100 U.S. Best Corporate Citizens in the period 2005–2007, and we posit a series of simultaneous relationships between different attributes of the governance system and a multidimensional construct of corporate social performance (CSP). We consider both the extent and the quality of SED, with the purpose of identifying increasing levels of corporate commitment to stakeholders and shedding some light on whether SED is used as a signal or rather as a legitimacy tool. Our empirical evidence shows that the stakeholders’ orientation of corporate governance is positively associated with CSP and SED. On the other hand, we do not find support for the monitoring intensity of corporate governance being negatively associated with social performance. We also find that CSP in the “product” dimension is positively associated with the extent and quality of SED whilst CSP in the “people” dimension is negatively associated with the extent and quality of SED. At a time when shareholders and stakeholders share more common aspects in their relationships with firms, this is a significant area to explore and this research fills an important lacuna in this respect.     

Falling Wage Shares in Europe and the United States: How Important is Aggregation Bias?

This paper sheds light on the importance of aggregation bias in the analysis of wage shares developments over time and across countries. We focus on five European countries and the United States and show that the trend decline in the aggregate wage share observed in these countries over much of the 1980s and 1990s partly reflects changes in the sectoral composition of the economy. The application of a fixed-weight aggregation method changes the profile of the observed wage share in a significant way: in particular there is no longer sign of an overshooting of the wage share levels of the early-1970s. Error-correction wage equations based on the adjusted wage shares generally have a better regression fit and show long-run elasticities of real wages to unemployment that vary less across countries and are substantially lower than those obtained with observed shares.     

Adolescents' perceptions of the costs and benefits of food additives and their presence in different foods

A questionnaire concerning the use of additives in foods was completed by 572 high school students aged 12-15 years. Participants recorded how often they ate each of 16 common foods, and rated the relative levels of colourings, flavourings, preservatives and traces of pesticides that each of these foods contained. They also rated the relative importance of eight reasons (e.g. taste, health) in their own food choices, and provided comparative evaluations of the concepts 'food with additives' and 'food without additives' in terms of these same eight attributes. Participants discriminated between the 16 foods in terms of the chemicals they believed they contained, but these estimates were unaffected by age or sex. When these estimates were weighted by participants' own reports of consumption, girls scored lower than boys on a measure of the assumed additive content of their own diet. Own additive consumption was significantly associated with ratings of reasons for food choice and comparisons of food with/without additives. However, the form of this association did not support standard expectancy-value formulations of attitude-behaviour relationships. Food with additives was seen overall as preferable in terms of ease of preparation and duration of freshness, but more problematic in terms of health and safety.     

A Survey of Ten Money and Banking Textbooks

This note formalizes an argument in Freeman's Labor Economics, integrating diagrammatically the individual's labor supply and time-intensity of consumption decisions.     

Are Information Attributes Priced?

A seminal model in finance links cost of equity capital to information precision, composition and dissemination. Using realized returns to proxy for cost of equity capital and the probability of an informed trade (PIN) to proxy for composition, prior research documents results consistent with the model's prediction regarding composition. Nonetheless, prior research that examines the construct validity cautions against the use of future realized returns to proxy for cost of equity capital and recommend r_{DIV_PREM} or r_{PEG_PREM} instead. The authors speculate but do not demonstrate how the results in existing research might be incorrect due to their use of realized returns. This paper provides such evidence. We find that the authors inference regarding PIN is dependent on their choice of realized returns to proxy for cost of equity capital. We also estimate a more complete specification of the model that includes precision and dissemination, and we decompose PIN into its component parts to isolate that portion of PIN that varies with dissemination. These refinements allow for new insights regarding the veracity of the model's predictions. We conclude that cost of equity capital is increasing in composition, and decreasing in dissemination, and find some, albeit not conclusive support, for the prediction that cost of equity capital is decreasing in precision.