Test power properties of within-firm estimators of ownership and board-related explanatory variables with low time variation

Review of Quantitative Finance and Accounting - After decades of fast growth, the Chinese housing market has become twice as large as the US housing market. In this paper, we examine the effect of...     

Beyond win–win: A syncretic theory on corporate stakeholder engagement in sustainable development

This article explores the concept of syncretism to articulate the construct of a novel theoretical approach that may help to accelerate progress in developing substantively more sustainable business activities. One reason why the integration of environmental and social responsibility in business has been so difficult to achieve in practice is that it is not just a battle of competing business logics but a battle of faiths. The concept of syncretism, with its roots in religious synthesis, may be far more relevant and useful than conventional approaches to combining the two, which rarely seem to rise above a “win–win” appeal to logic. The connectionist logic of syncretism may show us a way beyond paradigmatic conformity in business sustainability research so that scholars with diverse theoretical backgrounds might have a common ground for discussion, find constructive connections, and engage in potentially more insightful and creative interactions to develop our understanding of corporate sustainability.     

An international comparison of educational systems: a temporal analysis in presence of bad outputs

This study uses the global non-radial Malmquist index to measure performance change in the educational systems of 29 countries/economies participating in PISA 2003 and 2012 for students at age 15 in the disciplines of mathematics and reading. This methodology is particularly appropriate both for its desirable properties as well as its suitability for the educational context. Results indicate a positive evolution in educational systems’ performance during this period. This improvement is mainly due a positive efficiency change, which offsets the negative technological change observed. Nevertheless, a deeper scrutiny at the country level shows that results varied remarkably among them.     

A new method to decompose profit efficiency: an application to US commercial banks

We propose a new method to estimate profit efficiency which makes explicit how revenue and cost efficiencies contribute to overall profit efficiency. Using data from US commercial banks from 2001 to 2010, we find that losses due to profit inefficiency represent about 3.5% of banks’ equity of which 1% is due to revenue inefficiency and 2.4% to cost inefficiency. Revenue efficiency changes affect more overall profit efficiency than equivalent cost efficiency changes. In contrast to previous studies, but in line with economic intuition, we find that while revenue and cost efficiencies tend to be negatively correlated, both correlate positively with profit efficiency.     

Why Complementary HRM Practices Impact Performance: The Case of Rewards,Job Design,and Work Climate in a Knowledge‐Sharing Context

The strategic HRM literature suggests that HRM influences employees in combinations of practices that “fit” each other rather than as stand‐alone practices; however, it pays little attention to the underlying individual‐level mechanisms. In contrast, the HRM literature on knowledge sharing examines the influence of single practices on individual‐level knowledge sharing, but fails to include the influence of combinations of practices. We link the idea of fit between practices to employee motivation for knowledge sharing by arguing that rewards may be ambiguous and difficult to interpret, but that such ambiguity may be reduced if rewards are combined with other aligned HRM practices, notably job design and work climate. Thus, fit is established through the ambiguity‐reducing effect of combining specific HRM practices. Accordingly, we test for complementarities among rewards, job design, and work climate in the form of a three‐way interaction among these variables with respect to their impact on knowledge‐sharing motivation. Our analysis of 1,523 employees in five knowledge‐intensive firms shows that employees who are exposed to knowledge‐sharing rewards experience higher levels of autonomous motivation to share when they are simultaneously exposed to a noncontrolling job design and work climate that support knowledge sharing. © 2014 Wiley Periodicals, Inc.     

Economic (dis)integration in the presence of evolutionary learning

We use a two-factor, two-sector model to study the effects of economic integration and its reversal in the presence of input-generated external economies in one of the sectors. The equilibrium selection problem that arises is solved by applying a simple trial-and-error learning rule. Economic integration can take individual economies ridden with coordination failures to better equilibria, i.e., can solve the coordination problem. We show that integration (and disintegration) may generate cycles in wages, rentals and the sectoral allocation of factors.JEL Classification: F15, F16, F37 Corespondence to: Diego Méndez-Carbajo     

ENJOYING THE QUIET LIFE UNDER DEREGULATION? NOT QUITE

Most empirical studies in the banking literature assume that the alternative profit function is linearly homogeneous in input prices. We show that such an assumption is theoretically unwarranted and that its use may yield misleading results. We use Koetter et al. (Review of Economics and Statistics 2012; 94 (2): 462–480) as a benchmark to showcase how empirical results can be sensitive to the linear homogeneity assumption. Contrary to Koetter et al., we find a positive relation between market power and profit efficiency when this assumption is dropped. This relation is slightly weakened after the wave of intrastate and interstate deregulation but not enough to support the ‘quiet life’ hypothesis. Copyright © 2014 John Wiley & Sons, Ltd.     

The composition of capital inflows when emerging market firms face financing constraints

The composition of capital inflows to emerging market economies tends to follow a predictable dynamic pattern across the business cycle. In most emerging market economies, total inflows are pro-cyclical, with debt and portfolio equity flowing in first, followed later in the expansion by foreign direct investment (FDI). To understand the dynamic composition of these flows, we use a small open economy (SOE) framework to model the composition of capital inflows as the equilibrium outcome of emerging market firms' financing decisions. We show how costly external financing and FDI search costs generate a state contingent cost of financing such that the cheapest source of financing depends on the phase of the business cycle. In this manner, the financial frictions are able to explain the interaction between the types of flows and deliver a time-varying composition of flows, as well as other standard features of emerging market business cycles. If, as this work suggests, flows are an equilibrium outcome of firms' financing decisions, then volatility of capital inflows is not necessarily bad for an economy. Furthermore, using capital controls to shut down one type of flow and encourage another is certain to have both short- and long-run welfare implications.     

The bargaining set of a large economy with differential information

Summary. We study the Mas-Colell bargaining set of an exchange economy with differential information and a continuum of traders. We established the equivalence of the private bargaining set and the set of Radner competitive equilibrium allocations. As for the weak fine bargaining set, we show that it contains the set of competitive equilibrium allocations of an associated symmetric information economy in which each trader has the “joint information” of all the traders in the original economy, but unlike the weak fine core and the set of fine value allocations, it may also contain allocations which are not competitive in the associated economy. Received: February 15, 1999; revised version: August 9, 1999