Certification of corporate social responsibility activities in oligopolistic markets

Abstract We investigate the impact of alternative certifying institutions on firms’ incentives to engage in costly Corporate Social Responsibility (CSR) activities as well as their relative market and societal implications. We find that the CSR certification standard is the lowest under for‐profit private certifiers and the highest under a Non Governmental Organization (NGO), with the standard of a welfare‐maximizing public certifier lying in between. Yet, regarding industry output, this ranking is reversed. Certification of CSR activities is welfare enhancing for consumers and firms and should be encouraged. Finally, the market and societal outcomes of CSR certification depend crucially on whether certification takes place before or after firms’ CSR activities.     

Asymmetric Information in the Subprime Mortgage Market

Because of impersonal securitization in the secondary market, the ultimate investors in a mortgage have only a limited amount of information about the borrower??s characteristics. This creates an asymmetric information problem because of hidden knowledge on the part of the primary lenders, who naturally have much better access to this information. This is aggravated by the free rider problem when there are multiple investors. We discuss to what extent the secondary market then seeks to sort the loans to ameliorate this problem and what role reputations play. More importantly, however, the actions of the primary lender in terms of which kinds of loans they choose to approve are partly hidden, and this typical principal-agent situation importantly aggravates the incentive problem. To judge the nature and magnitude of this moral hazard dilemma, we use data to compare how well investors in the secondary mortgage market can predict default given the information they typically have access to as compared to the ability of primary lenders to similarly predict default given the larger set of information they typically will have access to. Finally, the implications of these results are indicated, particularly in light of the recent mortgage crisis.     

Research Subsidies, Population Control Policies, and Growth

Several R&D‐based growth models without scale effects claim that subsidies to R&D are not conductive for economic growth while a faster growing population is. Yet, in an effort to maintain high growth rates, most OECD countries continue to subsidize R&D, while several developing countries are trying to control the size of their population. Are these countries misguided? This study introduces an R&D‐based growth model that is characterized by complementarities between technology and human capital. The model is free of scale effects and consistent with the above‐mentioned policies. By applying the model to US data the study uncovers a possible explanation for the productivity slowdown.     

A model of inflation and expectations in Latin America

This paper attempts to overcome certain shortcomings in the existing tests of various theories of inflation and cyclical income growth. It does so by appending a simple model of expectations formation to a simple macroeconomic simultaneous equation model of aggregate supply and demand. Some of the theoretical building blocs are reformulated so as to be more realistic for developing countries. Simultaneous equation estimation techniques are applied to a pooled sample of time series data for 16 Latin American countries. The authors provide empirical evidence supporting the revised hypotheses and offering new insights into the relationships among the actual and expected rates of inflation, the rate of income growth, and the growth rate of the money supply.     

Global capitalism: A perspective of convergence

The role of government in the capitalist system is reviewed; the instrumentality of competition in the growth of an economy and its effects on the social system is discussed. Also, the phenomenon of inflation in the advanced economies as well as the industrial countries' high consumption and the social effects thereof are examined. The incidence of unemployment is discussed and comparison is made between capitalist and socialist countries. On the issue of income distribution and political power the interplay of political strife on redistributional policies and the penetrability of such political expediencies on future socioeconomic stability is examined. Also, an attempt is made to focus upon critical and polemic issues such as self-interest, social interest, wealth and power and their impact upon the socioeconomic and political structure of the society. Finally, the globalization of economics and the likelihood of new trends is discussed. Opinions and thoughts on the political growth of capitalism are expressed. Although this article does not claim to present final solutions, it does intend to electrify existing thought and hopefully generate new thinking on most politically controversial economic issues so that capitalism can gain ground against other systems in the new era of geopoliticosocioeconomic strife.     

Negative income taxes,inequality and poverty

We use a neoclassical growth model with heterogeneous agents to analyze the redistributive effects of a negative income tax system, which combines a flat rate tax with a fully refundable credit (“demogrant”). We show that changing the demogrant‐to‐output ratio causes significant changes in the distribution of income. Specifically, we find that increasing the demogrant‐to‐output ratio sharply reduces the level of inequality as well as both relative and absolute poverty (all measured in terms of post‐tax total income). However, these reductions in inequality and poverty come at the expense of a significant reduction in output.     

The role of climate: implications for service employee engagement and customer service performance

This research attempts to challenge the resource–engagement and engagement–performance linkage of the job demands–resources model by testing these links under the moderating role of two climates: performance-focused and service failure recovery. Two studies test a model on the boundary conditions of the linkages across four service industries. The results suggest that whether a resource (i.e., self-efficacy and job autonomy) positively or negatively affects engagement depends on whether (1) a climate is appraised as a challenge or hindrance demand and (2) a climate is deemed a complementary or compensatory resource. Using multi-respondent data from customer service employees and their supervisors in the health care industry, Study 1 conceptualizes climate as organizational climate and finds that performance-focused climate strengthens (weakens) the positive effect of self-efficacy (job autonomy) on engagement while service failure recovery climate weakens the positive impact of self-efficacy on engagement. Study 2 generalizes the findings from Study 1 and provides broad support by testing the model using psychological climate in the financial services, tourism and hospitality, and retailing industries. This study closes with a configuration approach to climate research by discussing when multiple climates can co-exist under different types of resources.     

Exporting problems: The relevance of export development

Following a review of the export marketing literature, and in light of certain important gaps observed in this area, the focus of this study is an investigation of problems facing the ongoing exporting activities of indigenous manufadurers in a small European country An attempt is made specifically to examine the existence of potentially significant differences in perceptions of exporting problems between two distina exporter categories in terms of export development The findings suggest that the most important export problems experienced by those firms were associated with the intensity of competition in export markets and the lack of effective national export policies The study also reveals several significant differences in perceived export problems between the two exporter classes Avenues for future research are discussed along with the limitations of the study, and managerial and public policy implications of the findings highlighted     

A model of green bank marketing

In the light of current market conditions, the financial services industry has been reshaped, requiring new marketing knowledge to provide guidelines for successful practice. To that end, corporate social responsibility, green marketing and a green brand image (GBI) have attracted considerable interest in the banking sector, although no framework has yet been established relating these constructs to one another. In this article, the authors present exploratory research as a basis for developing a model of green bank marketing. The model was tested to confirm the dimensions of green bank marketing and investigate its impact on a GBI, thus providing statistical evidence of the relationship between the two variables.