The Board's missing link

If a dam springs several leaks, there are various ways to respond. One could assiduously plug the holes, for instance. Or one could correct the underlying weaknesses, a more sensible approach. When it comes to corporate governance, for too long we have relied on the first approach. But the causes of many governance problems lie well below the surface--specifically, in critical relationships that are not structured to support the players involved. In other words, the very foundation of the system is flawed. And unless we correct the structural problems, surface changes are unlikely to have a lasting impact. When shareholders, management, and the board of directors work together as a system, they provide a powerful set of checks and balances. But the relationship between shareholders and directors is fraught with weaknesses, undermining the entire system's equilibrium. As the authors explain, the exchange of information between these two players is poor. Directors, though elected by shareholders to serve as their agents, aren't individually accountable to the investors. And shareholders--for a variety of reasons--have failed to exert much influence over boards. In the end, directors are left with the Herculean task of faithfully representing shareholders whose preferences are unclear, and shareholders have little say about who represents them and few mechanisms through which to create change. The authors suggest several ways to improve the relationship between shareholders and directors: Increase board accountability by recording individual directors' votes on key corporate resolutions; separate the positions of chairman and CEO; reinvigorate shareholders; and give boards funding to pay for outside experts who can provide perspective on crucial issues.     

The Sensitivity of the General Price Level to Changes in the Price of Crude Oil

There are many direct and indirect effects of changing crude oil prices on the inflation rate, so it is not surprising that there are different views about the resulting effects on the general price level and also on other aspects of the general economy. This study, estimates the direct and indirect effects of oil price changes on the economy-wide rate of inflation, which then has effects on spending and producing decisions. However, in this forum, we do not try to estimate the full indirect effects on the level of economic activity, such as effects on real GDP. JEL Classification E310, E370     

Semi-quantitative risk assessment method for product management

The workshop presented a semi-quantitative risk assessment technique that can be used to judge the total risk on all undesired consequences/events for a product manufacturing operation. The technique requires an experienced team to judge risk utilizing a numerical rating system that, although arbitrarily chosen, is self consistent and provides a relative assessment of product manufacturing risk. Once calculated, the risk is compared to the product's net income for making risk management and product planning decisions. The workshop included an exercise where all participants could try the technique.     

Employment Protection and SME Capital Structure Decisions

This study examines the effect of employment protection (EP) on the capital structure of SMEs. We argue that EP is linked to both the level of leverage and leverage adjustments because of its impact on financial distress costs and a firm's operational leverage. Data on employment contract types allow us to compose company specific measures of exposure to EP using a panel data set of 14,858 Belgian SMEs between 2000 and 2012. Our results show that the leverage ratio of firms is higher and that firms are more likely to adjust leverage levels when they are subject to fewer EP obligations.     

The intersection of entrepreneurship and selling: An interdisciplinary review,framework, and future research agenda

Selling is integral to entrepreneurship, yet it has rarely been a focal topic of analysis for entrepreneurship scholars. To address this, we undertake a broad-ranging systematic literature review of research that in some way explores selling within entrepreneurial contexts. We inductively develop a framework that orders extant research into selling antecedents, activities, contexts, and outcomes. Then, drawing on these entrepreneurship-selling intersections, we suggest opportunity theory can be extended by integrating critical insights from selling literatures. In particular, we address ego-centric views of entrepreneurship which prioritize entrepreneurial agency, and advocate for the incorporation of customer agency into synchronized processes of opportunity identification, refinement, and exploitation. The article concludes that a promising avenue for future theory development resides in the study of situated sales interactions, which can serve as an empirical vista to the underexplored entrepreneur-customer nexus.     

Corrigendum to “When is efficiency separable from distribution in the provision of club goods?” [Journal of Economic Theory 90 (2000) 204-221]

This note corrects a slip in Fraser's (J. Econ. Theory 90 (2000) 204-221) treatment of the necessary condition for partial separation of efficiency from distribution in providing a club good. His corrected Theorem 1 shows that many families of utility function can generate partial (and total) separation, thereby considerably extending the scope of his analysis.     

House prices, non-fundamental components and interstate spillovers: The Australian experience

Using Australian capital city data from 1984Q3--2008Q2, this paper utilizes a dynamic present value model within a VAR framework to construct time series of house prices depicting what aggregate house prices should be given expectations of future real disposable income - the “fundamental price” - and continues by comparing capital city fundamental prices with actual prices. The extent to which revealed capital city “non-fundamental” components spillover from state to state, as well as their long-term impact is also investigated. Results provide evidence of periods of sustained deviations of house prices from values warranted by income for all state capitals with the greatest deviations arising in the NSW market and starting around 2000. In general NSW is relatively more susceptible to spillovers transmitted from other states while ACT and WA are most isolated from the rest of the country.     

Exploring VCR use as a leisure activity

On the basis of a uses‐and‐gratifications perspective, this exploratory study examined the TV viewing and VCR use of a sample of 119 households with VCRs. The instrument developed for use in this study consisted of a TV and VCR diary in which respondents recorded a variety of information related to each viewing (or recording) occasion for 1 week. The results suggest that although the ability to manipulate the broadcast schedule was a valued feature of the VCR, VCR use merely enhanced established patterns of TV viewing rather than significantly altered TV viewing or leisure behavior. The playback function of the VCR represented a primarily solitary activity pursued for entertainment and relaxation. Watching rented movies represented a primarily social activity pursued for entertainment, relaxation, and companionship. An equal number of television programs were viewed alone as were viewed with others.     

ON THE WEALTH EFFECTS OF THE SUPERVISORY GOODWILL CONTROVERSY

We provide evidence on the potential wealth effects of the 1996 U.S. Supreme Court decision that the U.S. government had violated contractual obligations when, in 1989, it passed legislation prohibiting savings and loan associations from counting “supervisory goodwill” as capital. The Supreme Court decision produced large wealth gains for the savings and loan plaintiffs, as did prior court decisions in favor of these savings and loans. However, little evidence exists to suggest negative market responses to important events surrounding the 1989 legislation.     

The politics,satisfaction, loyalty,and success of Ph.D. students in hospitality and tourism

The purpose of this study was to explore the roles of organizational politics in educational institutions with regard to graduate students’ satisfaction with supervision and loyalty toward advisors, and thereby success of students in the Ph.D. program, within the hospitality and tourism discipline. The findings demonstrate that satisfaction and loyalty play important roles in doctoral students’ experiences in graduate education. Several implications for students and faculty are discussed.