Endogenous trading constraints with incomplete asset markets

This paper endogenizes the borrowing constraints on capital in a production economy with incomplete markets. We find that these limits get looser with income, a property that is consistent with US data on credit limits. The framework with endogenous limits is then used to study the effects of a revenue neutral tax reform that eliminates capital income taxes. Our results illustrate that it is very important to take into account the effects of tax policies on the limits. Throughout the transition, these effects can be big enough to change the overall conclusion about the desirability of a tax reform.     

Organisational Whistleblowing Policies: Making Employees Responsible or Liable?

This paper explores the possible impact of the recent legal developments on organizational whistleblowing on the autonomy and responsibility of whistleblowers. In the past thirty years numerous pieces of legislation have been passed to offer protection to whistleblowers from retaliation for disclosing organisational wrongdoing. An area that remains uncertain in relation to whistleblowing and its related policies in organisations, is whether these policies actually increase the individualisation of work, allowing employees to behave in accordance with their conscience and in line with societal expectations or whether they are another management tool to control employees and protect organisations from them. The assumptions of whistleblower protection with regard to moral autonomy are examined in order to clarify the purpose of whistleblower protection at work. The two extreme positions in the discourse of whistleblowing are that whistleblowing legislation and policies either aim to enable individual responsibility and moral autonomy at work, or they aim to protect organisations by allowing them to control employees and make them liable for ethics at work.     

Distortionary company car taxation: deadweight losses through increased car ownership

We analyse the effects of distortionary company car taxation through increased household car consumption for the Netherlands. We use several identification strategies and demonstrate that for about 20 % of households company car possession increases car ownership. The annual welfare loss of distortionary company taxation through increased car ownership is generally rather small, maximally €120 per company car, and much less than the welfare loss through increased expenditure on the company car. However, for policies that exempt households from paying tax on their company car, the annual deadweight loss is likely higher. Our first-best tax policy recommendation is to increase company car tax rates. However, our current results suggest that a second-best policy, which keeps average company car taxation constant but which reduces the marginal tax on cheaper cars and increases the marginal tax on expensive cars, would be welfare improving as overconsumption of company cars will be reduced.     

Aufsichtsrats- bzw. Diversitätsmerkmale und Profitabilität von deutschen und österreichischen Versicherungsunternehmen

This paper focuses on supervisory boards and investigates various board characteristics for the largest German and Austrian insurance companies. Furthermore, the study examines the link between diversity policies and financial performance.The study reveals some differences between the two aforementioned countries, which are mainly driven by size effects. In addition, the analysis shows that larger and stock listed insurance companies have better diversity management policies and a higher proportion of female directors. There is no significant correlation between gender diversity measures and profitability.     

Time for carbon neutrality and other emission reduction measures at European airports

Since 2009, one out of five European airports participate in carbon dioxide (CO₂) reduction programmes, although only 8% of them are certified as CO₂ neutral. This study aims to examine empirically internal as well as external factors of importance for airport participation in emission reduction programmes at different levels of involvement. Estimates of the Cox proportional hazard model based on almost 600 airports for the period 2009 to 2017 reveal that the likelihood and timing of participation increase with the size of the airport (number of passengers), independent of level of commitment. Performance (growth in number of passengers) and if the airport is part of a group are crucial for the advanced levels of the programme. Environmental progress at the country level is also a significant predictor, most distinctly represented by renewable electricity generation, whereas airports serving as hubs for low‐cost airlines are less likely to enter the carbon reduction programmes.     

Are Audit Firms' Compensation Policies Associated with Audit Quality?

We examine how compensation policies of audit firms are associated with audit quality. Specifically, we investigate the effects of the ratio of variable to fixed compensation and the size of the basis for profit sharing (i.e., whether partners share profits in a small or in a large profit pool). For our analyses, we use detailed mandatory disclosure of the compensation policies in German audit firms. We document that compensation policies vary considerably across audit firms. We find that profit sharing in a small profit pool and high variable compensation are two characteristics of auditor compensation associated with lower audit quality. We also find some evidence suggesting that audit quality may be most at risk in cases in which partners rely more heavily on variable compensation to divide a relatively small profit pool. In additional analyses, we find that these associations are more pronounced in medium-sized audit firms. We argue that this finding may result from these firms being too large for audit partners to directly monitor each other effectively, yet simultaneously too small to have sophisticated centralized monitoring systems in place. Finally, we find that integrating partner-specific, nonprofit-related performance metrics into the compensation structure mitigates the adverse effects of small profit pools and high variable compensation.     

The importance of flexible hazard functions in the analysis of organizational survival data -- experiences from a cohort of Swedish commercial banks

The survival pattern of Swedish commercial banks during the period 1830--1990 is studied by parametric and non-parametric event-history methods. In particular we study the sensitivity of the conclusions reached with respect to the model used. It is found that the hazard is inversely U-shaped, which means that models that cannot allow for this type of hazard run into difficulties. Thus two of the most popular approaches in the analysis of event history data, the Gompertz and the Weibull models produce misleading results regarding the development of the death risk of banks over time. As regards the effect of explanatory variables on survival, on the other hand, most models are found to be robust and even in cases of misspecified baseline hazards, the estimated effects of the explanatory variables do not seem to be seriously wrong.