Regulatory Rules and Estimating Economic Growth: Two Perspectives on Expensing Employee Stock Options

Business Economics - Government economic statistics generally diverge from statistics based on private sector or regulatory agency data, and they are subject to being updated over time as more tax...     

Longitudinal effects of job insecurity on employee outcomes: The moderating role of emotional intelligence and the leader-member exchange

The longitudinal study reported herein examines the buffering effects of individual and social resources (emotional intelligence and the leader-member exchange relationship) on the relationships between job insecurity and employee reactions (somatic complaints and organizational commitment) and the relationships between employee reactions over time. The results of this study, which was based on data drawn from 157 nurses employed by three hospitals in China, indicate that emotional intelligence moderates the relationship between job insecurity and somatic complaints at both Time 1 (T1) and Time 2 (T2) and that the leader-member exchange relationship (LMX) buffers the effects of somatic complaints at T1 on organizational commitment at T2. Overall, the findings reveal that the ability of employees to deal with their emotions and their relationships with their supervisors is an important resource that serves to protect employee outcomes when job security is uncertain.     

Nudging the financial market? A review of the nudge theory

A systematic review of the nudge literature and an examination of its applications across different domains reveals that: (i) a nudge, in the sense of using choice architecture to push people to choose desired results, works well; and (ii) a nudge, in the sense of pushing people to choose desired results so that people will be better off, remains questionable. In financial markets, regulators and financial intermediaries currently use nudge theory to: (i) adjust how investment choices are presented to investors; and (ii) provide information in a selective way. Besides nudging investors, it is also possible for regulators to nudge financial intermediaries towards making more ethical decisions.     

The Constraints Experienced and Negotiation Strategies Attempted by Nonparticipants of a Festival Event

The leisure constraints and negotiation model was used to examine nonparticipation in a large festival event. A purposive sampling survey was conducted with 502 event nonparticipants. The results indicated that the hierarchical leisure constraints model is a useful framework for understanding the constraints to attendance at special events. Consistent with previous research on constraints to participation, structural constraints were the greatest category of constraint, followed by interpersonal and intrapersonal constraints. Further, nonparticipants who experienced intrapersonal constraints were least likely to attempt negotiations relative to time, partners, or finances. Additionally, this study compared the constraints of nonparticipants who were interested and disinterested in attending the event and found disinterested nonparticipants perceived greater intrapersonal, interpersonal, and structural constraints than those interested in attending, suggesting that constraints create amotivation. Disinterested event nonparticipants were also less likely to negotiate constraints to participation, especially barriers related to lack of time and partners with whom to participate. Finally, interested nonparticipants who experienced intrapersonal constraints were less likely to attempt to negotiate constraints. This study broadens the scope of the constraints and negotiation discussion to include the context of a community festival event, as well as differences in constraints and negotiation between interested and disinterested event nonparticipants.     

Managing the Risks of Corporate Political Donations: A Utilitarian Perspective

This paper applies a utilitarian analysis to corporate political donations. Unlike the more common rights-based analyses, it is argued that the optimal policy is the one that best satisfies society’s rational preferences concerning donor influence, adequate financing, donor pressure and the cost of maintaining and enforcing the democratic system. This analysis suggests that a ban is best if it would be generally observed and sufficient financing from other sources is available, otherwise a donation cap is a better option. Further, lobbyists should be banned from donating small gifts and drafting bills for candidates. The impact of disclosure and other risk management mechanisms are also considered.     

Adjustments in performance measures: Distributive and procedural justice effects on outcome satisfaction

Adjustments for task difficulty occur regularly in performance evaluations, but their effects on satisfaction with the evaluation process has not been studied. This article reports an experiment examining the procedural and distributive justice effects of making adjustments for task difficulty in performance evaluation. Participants examined territory difficulty and sales‐volume data for a set of salespeople and rated a focal salesperson's performance. Subjects also rated their satisfaction with their performance rating and the fairness of the process. Results show that adjusting for territory (task) difficulty influences satisfaction through an intrapersonal referent effect and through procedural fairness judgments. Results also show that an intrapersonal referent effect occurs even when social‐comparison information is available; the two referents appear to have additive rather than interactive effects. Consistent with the work of van den Bos, Lind, Vermunt, and Wilkie (1997), the procedural justice effect of adjusting for territory difficulty occurs only in the absence of social‐comparison information. © 2001 John Wiley & Sons, Inc.     

The Impact of the European Union Insurance Directives on Insurance Company Stocks

This article examines the impact of the passage of the Second and Third Life and Non‐Life European Insurance Directives on insurance firms located in 14 European Union countries, Norway, and Switzerland. The third directives have a wealth effect on the European insurance market, while the second directives do not. The Third Life Directive resulted in a wealth increase for the European insurance market, while the Third Non‐Life Directive had a modest negative wealth effect. The wealth effects differ at both the country and firm level. The directives have differential impacts on firms depending on the firms’ characteristics and those of the market they operated in prior to the directives. Regression results indicate that the second directives have impacted firms in protected markets negatively, especially those with higher debt and higher returns on assets. At the time of the third directives, insurance firms benefited, even those in previously protected markets, indicating that firms may have positioned themselves in preparation for the liberalization of the laws.     

Capital flows and financial crises: Theory versus realityCapital flows and financial crises Edited by Miles Kahler Cornell University Press, 1998, 268 pp.

The bookCapital Flows and Financial Crises contains nine scholarly essays written by authors such as Barry Eichengreen, Albert Fishlow, Carrmen M. Reinhart, Vincent Raymond Reinhart, and Jeffrey D. Sachs. The essays are grounded in reality and include a detailed review of capital control usage in emerging countries. Four of the essays are case studies that explain how different conditions and levels of development may lead to different policies with varying degrees of success.Capital Flows and Financial Crises encourages economists to consider the particulars of a developing country before applying an economic cure, reexamines accepted economic theory in light of recent financial crises, and suggests a more moderate approach to financial liberalization given the inefficiencies and lack of regulation in emerging markets.     

The effect of tax rates and uncertainty on contributory crowding out

This uncertain dictator experiment found support for partial crowding out. Ninety-seven percent of private contributions were crowded out when tax rates were increased from 0 to 10 percent of income. Subjects who were uncertain whether they would be the donor or charity recipient pledged larger contributions and had lower levels of crowding out. Crowding out appeared asymmetric in that decreases in government contributions did not stimulate equivalent increases in private contributions. In the case of certainty, donors actually decreased contributions when government contributions decreased. The donor's gender did not influence contributory behavior.Funding for this experiment was provided by the Dean of the School of Business and Public Affairs.     

Same as it ever was: the search for evidence of increasing hypercompetition

Some strategy scholars and practitioners contend that markets have become increasingly hypercompetitive in recent years. We examine this contention by analyzing industry and business performance patterns in a broad sample of firms drawn from the Compustat Industry Segment database for the 1978–97 period. We find little support for the argument that markets have become more hypercompetitive. From the late 1970s to the late‐1980s we observe decreased performance and market stability, consistent with increasing hypercompetition contentions. From the late 1980s to the mid‐1990s, however, trends reverse and performance and market stability increase. For strategy research, our results suggest that hypercompetitive perspectives are important but no more so now than they were in recent years. For practice, our results suggest that managers today face markets no more dynamic and opportunities to gain and sustain competitive advantage no more challenging than in the past. Accordingly, they should continue developing a portfolio of skills to manage businesses whether conditions are increasingly stable or unstable. Copyright © 2002 John Wiley & Sons, Ltd.