The productivity effects of employee ownership within command economies: Evidence from Poland

The effects of employee ownership, broadly defined, are estimated for a sample of Polish producer co-operatives in three industries during 1976-8, i.e. when Poland was a centrally planned economy. The results indicate that, in general, increasing either worker participation in control and/or in economic returns provides positive effects on productivity. The pattern of the different effects of employee ownership varies significantly across sectors. This new evidence strongly suggests that workers within Soviet-type economies are responsive to economic incentives. Together with existing theoretical and empirical evidence for both Eastern and Western European firms, the findings suggest a larger role for employee ownership than typically either currently exists or that is under serious consideration in most restructuring economies.     

COMPARATIVE EFFICIENCY BETWEEN COOPERATIVE,SAVINGS AND COMMERCIAL BANKS IN EUROPE USING THE FRONTIER APPROACH

We test competing hypotheses concerning the comparative behavior of shareholder‐owned commercial banks and stakeholder‐orientated cooperative and savings banks in European banking. One hypothesis is that the risk culture and business models of stakeholder and shareholder‐owned banks have become more alike and so cost efficiency has converged between bank ownership structures. The alternative hypothesis suggests that institutional differences do matter and lead, amongst other things, to variation in network effects and monitoring mechanisms producing differing behaviors and efficiency outcomes. By using a novel panel data set of 521 European banks during 1994–2010, we find: (i) mean inefficiency scores vary by ownership type and are lower for cooperative banks than for commercial and savings banks; (ii) there is a large variation in inefficiency scores among banks within each ownership type but the lower variance for cooperative banks indicates that they are the most homogeneous group; (iii) the inefficiency distribution of savings and commercial banks appear to arise from the same distribution, but this does not hold for cooperative banks. As such our findings are more consistent with the alternative hypothesis. Our first two findings buttress those studies that found significant differences between European banks with differing ownership structures, while our third finding on the significance of the cycle to the distribution of inefficiency is novel.     

The Marketing of Employee Volunteerism

Employee volunteerism can be an effective strategy for increasing the effectiveness of corporate philanthropy. However, in order to be effective, volunteer initiatives should be directed by the firm to ensure a strategic fit and focus on the core competencies of the firm. Therefore, internal marketing strategies are needed to ensure managers receive employee support. Our research quantitatively extends research by Peloza and Hassay (Journal of Business Ethics 64(4), 357–379, 2006) who argued that employee volunteerism is motivated by egoistic, altruistic and organizational citizenship motives. Our findings suggest that volunteer opportunities that fulfill egoistic and organizational citizenship motives will be effective, but that the altruistic motive is not significant. We also find that formal policies concerning manager recognition or time off are not effective, providing more discretion for individual managers. Implications for managers seeking to increase the effectiveness (and therefore support the business case) of their corporate philanthropy are discussed.     

New Paradigms in Stock Market Indexing

Considerable recent interest has been shown in a new set of stock‐market indices that are weighted by fundamental factors such as sales, earnings, dividends or book values, rather than by capitalization. In this paper, we analyze the performance of Fundamental Indexing? (“FI”). First, we show that the source of FI's recent excellent performance is not from its ability to systematically arbitrage mispricing in a noisy market but from increasing the portfolio's exposure to stocks with low price‐to‐book values and with small capitalizations. We find that FI does not produce a positive alpha when its excess returns are explained by the Fama‐French three‐factor model of CAPM beta, the value premium and the size premium. Second, we show that it is possible to construct a portfolio of exchange‐traded funds with similar factor loadings that can replicate, and sometimes, even outperform FI. However, we caution investors not to expect consistent outperformance from portfolios tilted towards value and small‐cap stocks. Historical data shows evidence of mean reversion in the performance of such strategies.     

POST‐TRANSITION POVERTY TRENDS BASED ON AN ALTERNATIVE DATA SOURCE1

This paper analyses a previously unused source of data – the All Media and Product Survey (AMPS) – to arrive at alternative estimates of the post‐transition poverty path. The motivations for using this non‐official data source are twofold: concern over the comparability of the existing official post‐transition datasets – the Income and Expenditure Survey (IES) and Population Census – and a desire to extend analysis of poverty trends beyond 2001. While official data sources are generally preferred for purposes of poverty analysis, the IES and Census collect data at long (5 or 10 year) intervals, and additional years pass before these datasets become available to the public. In some cases there is also concern about data comparability between surveys. The expenditure data contained in the General Household Survey are available annually, although data are captured in a small number of categories that are not very conducive to analysis at the lower end of the income distribution. Analysis on AMPS data confirms the large decline in poverty implied by an increase of R18 billion (in 2000 Rand) in social grant payments between 2000 and 2004. The direction of this trend is consistent with recent research findings based on more frequently analysed data sources, including the work done by Agüero, Carter and May (2005), Seekings (2006 ) and Meth (2006 ).