Does the WTO Increase Trade and Cause Convergence?

We study whether proximity to the nearest tax haven affects FDI and the number of American affiliates in a tax haven. Our results show that distance to the nearest tax haven is positively related to FDI inflows and the number of American affiliates in tax havens. These findings suggest that there is harmful competition between tax havens. We also find evidence of positive spillovers: the number of American affiliates in a tax haven is positively related to the number of affiliates in its closest neighboring tax haven. This suggests the presence of agglomeration benefits given there is an affiliate in a nearby tax haven.     

Identification and estimation of Gaussian affine term structure models

This paper develops new results for identification and estimation of Gaussian affine term structure models. We establish that three popular canonical representations are unidentified, and demonstrate how unidentified regions can complicate numerical optimization. A separate contribution of the paper is the proposal of minimum-chi-square estimation as an alternative to MLE. We show that, although it is asymptotically equivalent to MLE, it can be much easier to compute. In some cases, MCSE allows researchers to recognize with certainty whether a given estimate represents a global maximum of the likelihood function and makes feasible the computation of small-sample standard errors.     

Strategic human resource management and supply chain orientation

Most SHRM research has concentrated on single, focal organizations and on activities taking place within the firm. The purpose of this article is to lay a foundation for studying SHRM in the supply chain. We present a framework which identifies factors that influence whether adopting a supply chain orientation (SCO) is effective, and articulates the contingencies that shape SHRM practices needed to achieve and capitalize on SCO. We make several contributions to the strategic human resource management and supply chain literatures. First, we highlight this neglected area of research. Second, we expand the boundary conditions of strategic human resource management and HR systems from a primarily single firm, intra-organizational focus to one which includes both intra- and inter-organizational relationships. Third, we provide a framework for understanding the links between HR systems, SCO, and strategic outcomes. Fourth, we build upon previous theorizing in strategic human resource management and provide a framework for research in the supply chain context. And finally, we offer propositions for future research, along with a decision making model which has implications for both research and management practice.     

Top management team incentive heterogeneity,strategic investment behavior,and performance: A contingency theory of incentive alignment

Research summary : We develop and test a contingency theory of the influence of top management team (TMT) performance‐contingent incentives on manager–shareholder interest alignment. Our results support our theory by showing that although TMTs engage in significantly higher levels of acquisition investment when their average incentive levels increase, investors' responses to those large investments are generally negative. More importantly, however, we further find that within‐TMT incentive heterogeneity conditions that effect, such that investors evaluate TMTs' large acquisition investments more positively as the variance in those top managers' incentive values increases. Thus, within‐TMT incentive heterogeneity appears to increase manager–shareholder interest alignment, in the context of large acquisition investments. Managerial summary : We find that as the average value of TMTs' incentives increase, relative to their total pay, they invest more in acquisitions and investors' respond negatively to the announcement of those deals. However, we further show that investors respond more positively to acquisitions announced by TMTs whose members' incentive values vary (some TMT members hold higher incentives and others hold lower). Results imply that when TMT members hold differing incentives levels, they approach investments from divergent perspectives, scrutinize those investments more heavily, and make better decisions, relative to TMTs with similar incentives. They also suggest that boards seeking tighter manager–shareholder interest alignment may benefit from introducing variance into TMT members' incentive structures, as doing so appears to create divergent preferences that can improve team decision making. Copyright © 2016 John Wiley & Sons, Ltd.     

Corporate Social Responsibility Disclosures and Investor Judgments in Difficult Times: The Role of Ethical Culture and Assurance

Journal of Business Ethics - We conduct an experiment with 459 nonprofessional investors to examine whether they evaluate companies differently based on management’s stated purpose for...     

Brand and consumer engagement behaviors on Facebook brand pages: Let's have a (positive) conversation

This paper examines consumer-brand engagement on social media, focusing on the dynamic interplay between brands and consumers as well as among consumers themselves. In addition to liking and sharing behaviors, we look at what influences consumers to provide feedback to brands by commenting on brand posts, connect with other consumers by replying to their comments and agree with other consumers by liking their comments and replies. Drawing on a large longitudinal dataset from 2740 Facebook brand pages across 25 industries, a multilevel multivariate autoregressive zero-inflated negative binomial model is used to examine how brand post and response behaviors are related to specific consumer engagement behaviors. Results show that the amount of brand posts indirectly affects consumer comments through increased liking and sharing, but with diminishing returns. Liking is key as it increases positive and attenuates negative feedback, whereas sharing is associated with both positive and negative consumer-brand comments. Posting photos and videos encourages liking, with photos having increasing returns. Videos are the only format with a direct positive influence on consumer-brand comments, though with decreasing effect. Brand replies to consumer comments, even delayed ones, have little effect on negative conversations but prompt replies would be more beneficial as they bolster positive consumer comments. Moreover, our findings provide evidence for both a “positivity spiral” and “negativity spiral”, with the negativity spiral stronger than the positivity one. Taken together, these findings shed light on how marketers can stimulate positive conversations between brands and consumers on social media.     

Managing Critical Spare Parts within a Buyer–Supplier Dyad: Buyer Preferences for Ownership and Placement

Despite the criticality and expense of spare parts, many firms lack a coherent strategy for ensuring needed supply of spare parts. Moreover, scientific research regarding a comprehensive spare parts strategy is sparse in comparison with direct material. Our research identifies and tests three literature-based, theoretically anchored attributes that influence a buyer's preference for inventory ownership and inventory placement when managing the stock of a critical spare part. Our findings indicate that item specificity and item supply uncertainty are useful in predicting a buyer's preference for managing the inventory of a critical spare part. Furthermore, we find that buyers have (1) a strong preference for consignment-based inventory management approaches, (2) a bias against inventory speculation despite its use in practice and analytical models, and (3) a strong preference for inventory postponement when the level of supply uncertainty is low.     

Analysis of Brexit and its policy lessons for Asian integration

Galvanised by the devastation of the Second World War, European countries achieved a historically unprecedented and unparalleled level of regional economic integration in the post-war period. Intensive cooperation between the two biggest powers of continental Western Europe, France and Germany, lay at the core of Europe's seemingly relentless momentum towards integration, crystallised by the European Union (EU). The Franco-German alliance also provided strong eadership and sense of direction for the EU, which gained further traction with the admission of Central and Eastern European states after the fall of communism and the establishment of a monetary union among many of its members. However, more recently, the European integration process no longer seems unstoppable or inevitable. Most shockingly, the United Kingdom, a core EU member and the EU's third largest economy, has opted to leave the union, triggering the ‘Brexit’ process. Nor is Brexit the only sign of growing fractures within the EU. The current standoff between the EU and Italy over Italy's unwillingness to rein in its fiscal deficit is just one additional example of the loss of momentum. The central objective of the paper is to examine EU's past successes and current problems from the perspective of Asian countries, in particular ASEAN+3 countries that have achieved some measure of integration, although well below that of the EU. Both past successes and current problems hold valuable lessons for ASEAN+3 countries as they chart their own course towards regional integration. Given that the level of integration among ASEAN+3 is much lower than that of the EU, it would be unwise to draw lessons, positive or negative, without the proper context. Nevertheless, the European experience can provide valuable insights for Asia's integration process.     

The “I quit” syndrome

Managements, unions, and arbitrators have been plagued by a very simple but long-standing problem involving what might be termed a routine human resource action. The problem stated simply is: When is a quit a quit? Where employees are represented by a bargaining agent, the company cannot always be sure that a “quit is a quit.” It is clear that employers who do not understand the “I quit” syndrome are in an uncertain position with respect to handling such problems. The authors have also discovered that unions do not understand the “I quit” syndrome either and at times go to arbitration with all of its attendant costs when the employee has actually “quit.” The purposes of this article are to study how arbitrators have ruled, to establish the principles involved in this little-known area of union/management relations and to provide parties to such cases with information to guide them. Arbitrators have upheld grievances and reversed company actions often enough that there is a need to clarify what is a “quit” as well as a need to clarify what the rights are of both parties under the collective bargaining agreement. The authors found that many managements use the “I quit” syndrome as a substitute for disciplinary action. It is clear from arbitral decisions that it is best from the company point of view to allow the disciplinary system to handle problem employees. The authors also found that reasonable resignations by employees were upheld by arbitrators. If employers carefully handle and document employee resignations, the resignations will stand. Further, it is clear that employers must issue clear policy statements concerning resignations; this includes avoiding resignations under duress. Finally, parties to collective bargaining agreements need contract language defining a quit.     

Defending your life: When women complain about sexual harassment

Women who complain about sexual harassment in a union work environment may find that they are the focal point of the union’s defense of the alleged harasser. The defense the union uses can be broadly defined as one of four: deny the event, blame management, blame society, and blame the victim. This study investigates the frequency with which these defenses are used and their relative effectiveness. Deny the event and blame the victim were used in more than 80% of the cases. Their use was not significantly changed over time. There was no significant difference in the arbitrator’s decision based on the defense used by the union. It is suggested that unions consider using the blame management defense because it is equally effective but does not have the same negative effects on the victim as denying the event or blaming the victim.