The value relevance of earnings in a transition economy: The case of Romania

We investigate the value relevance of earnings on the Bucharest Stock Exchange. We find that the association between accounting earnings and stock returns is comparable to the levels reported by studies conducted on more mature markets, and that it is higher for securities issued by small companies. Excluding losses from the analysis increases the value relevance of earnings, which confirms the transitory nature of negative earnings, already documented by prior studies. We also find that the regression coefficient of earnings changes is negative and we provide evidence consistent with the hypothesis that it is a consequence of the relative inefficiency of the market. Finally, the “prices lead earnings” hypothesis formulated for more mature markets is not supported by our results.     

Probabilistic causality

Necessity and Sufficiency are two of the most important concepts in science. Indeed, they are the basis for establishing causal relationships between factors, variables, etc.     

New Firm Survival: The Effects of Start-up Characteristics

This paper empirically examines the influence of operating activities and financial and investment decisions in the start-up year on post-entry survival, taking industry effects into account. Compared to traditional financial ratios, we find that funds flow measures are superior in identifying those start-up characteristics that are related to subsequent failure. In the first year, failed firms typically generate less cash flows, incur higher labour expenses, use more trade credit and financial debt, limit inventories and are cash constrained. Surprisingly, industry effects do not have a significant impact. From these results, we draw conclusions for public policy.     

What if they take it all? Heterogeneous impact of sickness absence reform

I investigate the effect of sickness absence reform in the Czech Republic, which reduced benefits paid during the first three days of sickness absence to zero. I find a substantial decrease in the incidence of sickness absence, which is about 15 percent of the pre‐reform mean. I find that workers in occupations with high flexibility and fewer routine tasks are more likely to reduce their sickness absences.     

In‐Group versus Out‐Group Trust: The Impact of Income Inequality

In this article, we adopt a variant of the trust game by Berg, Dickhaut, and McCabe (1995) and the dictator game by Cox (2004) to determine if income inequality can activate in‐group favoritism and, if so, whether such a bias is strong enough to survive the removal of income inequality. We find evidence of in‐group favoritism only on the part of rich first movers. Rich first movers trust their in‐group members significantly more in the presence of income inequality not only before but also after they gain enough experience. Poor first movers, in contrast, do not exhibit such in‐group bias. They do not discriminate between in‐group and out‐group at the very outset of the experiment, and once they become experienced, they behave with significantly more trust toward the rich than toward the poor. We also find that in‐group and out‐group favoritism established in the past can be alleviated, but not completely removed, by an equal income distribution.     

Tenant satisfaction assessment in social housing in England: How reliable? How meaningful?

Since the 1980s there has been a growing emphasis on consumerizing welfare services as a form of provider accountability and as part of the commercialization of public agencies, which has formed part of the New Public Management reforms. Associated with this, the structured measurement of tenant satisfaction is well established in England's social housing sector and has become increasingly important in informing official assessments of social landlord effectiveness. This paper investigates whether published tenant satisfaction scores are sufficiently reliable and robust to serve as a pre‐eminent and unambiguous service quality measure, examines the validity of comparing recorded satisfaction rates for social landlords operating in different social and demographic contexts, and looks into how raw survey results could be adjusted to take account of ‘context’ factors outside a landlord's direct control.     

Does structuring of human resource management processes enhance employee creativity? The mediating role of psychological availability

In this study, we develop a theoretical conceptualization and an operational definition of structuring of human resource management (HRM) processes and examine how this structuring enables employee creativity at work. Analyzing the data collected from employees and their managers in knowledge‐intensive workplace settings, we examine a mediation model that suggests that the relationship between structuring of HRM processes and employee creativity is best explained in terms of the intervening variables of perceived uncertainty, stress, and psychological availability. Results suggest that structuring of HRM processes is negatively associated with perceived uncertainty and stress. These perceptions produce a sense of psychological availability, which in turn enhances employee creativity. This study offers new insights about diagnosing the level of structuring of HRM processes and the ways managers and HR directors facilitate its implementation in their organization. © 2010 Wiley Periodicals, Inc.     

Forgive or buy back: an experimental study of debt relief

In recent years, debt relief has once again been pushed to the forefront of political and economic interest. The general consensus is that with less debt burden poor countries suffering from debt overhang will be able devote more resources towards investment thereby promoting their own growth and thus benefit their creditors in the long run. An open question is which mechanism is best to relieve debt burden. In this paper, we adopt experimental methods to study the effectiveness and efficiency of debt forgiveness and debt buyback. We find that creditors tend to reduce more debt under Forgiveness than Buyback. Debtors under Forgiveness are not significantly more reciprocal than under Buyback. After controlling for the amount of debt relief, creditors are significantly worse off under Forgiveness whereas debtors are indifferent between the two schemes. From the viewpoint of promoting debt relief, debt forgiveness appears to be a more effective tool to achieve this goal. Nevertheless, if one is to maximize the overall efficiency, debt buyback is superior to debt forgiveness in making best of each relief dollar.