Dirty Hands Make Dirty Leaders?! The Effects of Touching Dirty Objects on Rewarding Unethical Subordinates as a Function of a Leader’s Self-Interest

We studied the role of social dynamics in moral decision-making and behavior by investigating how physical sensations of dirtiness versus cleanliness influence moral behavior in leader–subordinate relationships, and whether a leader’s self-interest functions as a boundary condition to this effect. A pilot study (N = 78) revealed that when participants imagined rewarding (vs. punishing) unethical behavior of a subordinate, they felt more dirty. Our main experiment (N = 96) showed that directly manipulating dirtiness by allowing leaders to touch a dirty object (fake poop) led to more positive evaluations of, and higher bonuses for, unethical subordinates than touching a clean object (hygienic hand wipe). This effect, however, only emerged when the subordinate’s unethical behavior did not serve the leader’s own interest. Hence, subtle cues such as bodily sensations can shape moral decision-making and behavior in leader–subordinate relationships, but self-interest, as a core characteristic of interdependence, can override the influence of such cues on the leader’s moral behavior.     

Treatment Value of Residual Functional Capacity Improvement among Disabled Workers: Accounting for Hedonic Psychological Biases

We propose to use the theoretical Mincer-Ofek (1982) model of career interruptions for the evaluation of a health producing treatment that improves residual functional capacity of workers with peripheral nerve injuries who developed chronic pain (Reflex Sympathetic Dystrophy). The revalued potential to – partially – continue to accumulate productive human capital is linked to increased lifetime earnings capacity restoring – missed out – accumulated productivity. We assume that a worker's psychological well-being directly influences earnings, but also affects the cognitive mechanism to experience pain. Randomized clinical trial data and individual medical records from impaired workers are compared with a control group of randomly selected healthy workers. The estimate of the treatment's average net present value is 49.500 euros per person (in 1995 Dutch guilders constant terms).     

Evolving geographical concentration of European manufacturing industries

Evolving Geographical Concentration of European Manufacturing Industries. — This paper analyzes the geographical concentration of 32 manufacturing sectors over the 1972–1996 period for 13 European countries. Concentration has increased continuously over the sample period in employment terms, while remaining roughly unchanged in export terms. On average, increases in concentration were stronger prior to the launch of the Single Market than afterwards. The sectors most sensitive to the Single Market however, showed an acceleration in concentration after 1986. There is also evidence that low-tech industries are the most strongly concentrated, and that center-periphery gradients across countries are losing importance for industrial location in the EU.     

A note on capital asset pricing and heterogeneous taxes

In this paper, we present a stylized model where we show how asset prices, i.e., required expected rates of returns, may be characterized in a world with heterogeneous asset taxes. Within a simple CAPM-like framework, we derive an after-tax beta equal to the pre-tax beta multiplied by a (non-obvious) asset specific tax adjustment. We further show in what sense the Security Market Line here can be replaced by a Security Market Fan. Well-known CAPM relations are obtained as special cases, and policy implications are analyzed.     

Credit booms and busts in emerging markets

We investigate to what extent corporate governance and risk management mitigate the involvement of banks in credit boom and bust cycles. We study a unique, hand‐collected dataset covering 156 banks from Central and Eastern Europe during 2005–2012. We document that stronger risk management is associated with more moderate pre‐crisis credit growth but not with fewer credit losses in the crisis. With respect to bank governance, we find that a higher share of foreign members on the supervisory board is associated with less rapid credit growth in the pre‐crisis period and a lower level of credit losses during the crisis period.     

Sectoral Patterns of Interactive Learning: An Empirical Exploration of a Case in a Dutch Region

This paper pursues the development of a theoretical framework that explains interactive learning between innovator firms and external actors in both the knowledge infrastructure and the production chain. The research question is: What kinds of factors explain the interactive learning of innovator firms with distinct external actors? Our theoretical framework extends the resource-based perspective, which is predominant in network theory, with both an activity-based and a structural account of interactive learning. We contend basically that higher technological dynamics induce more complex innovative activities. But, more complex innovative activities increase the probability of internal resource deficits/shortages in the innovator firms. The lower the alignment of the innovative activities with the quality of the internal resource base, the higher the resource deficits/shortages and the more likely the search for complementary resources externally, which increases the likeliness of external relationships. In order to test the generality of our theoretical claims we analyse our models in four sectors with distinct technological dynamics as distinguished by Pavitt. For each sector we explore five models of the level of interactive learning of innovator firms with: (1) the public knowledge infrastructure (difficult to access, demands high internal competencies to utilize scientific knowledge), (2) the production chain (easy to access), (3) their users, (4) their suppliers, (5) their competitors. These analyses allow for a comparison between interactive learning with different external actors and give deeper insights into the differentiated interaction patterns involving innovation. Our findings show that patterns of interactive learning between sectors differ. Some are more resource based and others are more affected by the complexity of innovative activities. Particularly the patterns of interactive learning between, on the one hand, firms and the knowledge infrastructure, and on the other hand of firms with the production chain show important differences.     

Business as a Pivotal Actor in the Politics of Training Reform: Insights from the Case of Germany

Often admired by international observers, the German dual training system has come under pressure in recent years because of a persistent lack in training slots for young people. The article addresses the question of how policy makers have reacted to the problems in the training market. Particular attention is paid to the formation of politico‐economic coalitions between state actors, business representatives and unions. On the basis of three case studies of recent reforms (or reform attempts), we identify two types of cross‐class coalitions: a conservative coalition that aims at maintaining the status quo of the firm‐based training regime and a segmentalist coalition promoting the gradual transformation of the system towards a less collective and more firm‐centred variety. In both kinds of politico‐economic coalitions, business actors play a pivotal role. The reason for the privileged position of business in the politics of training reform is, I argue, a politically constructed dependency of the state and unions on the continued co‐operation of business in the provision of training slots. In the conclusion, I discuss the implications of my findings for the debate on the dualization of co‐ordinated market economies.     

To pay or not to pay — the role of monetary incentives in an optimal blood donation service bundle

• This study derives four attributes that make up the typical blood donation service bundle. It focuses on the role of monetary incentives in such bundles, but also discusses three other attributes, namely the offering organization, the distance to donation location, and the donation time. Each attribute is discussed in the context of a blood donation marketing mix. In an empirical conjoint study, 529 potential blood donors evaluate different designs of blood donation service bundles. Monetary incentives are found to be the most important factor when donors compare different blood donation service bundles. It is found that the distance to the donation location is almost as important as monetary incentives. Blood donation organizations aiming to collect all blood donations from unremunerated blood donors should therefore shape their service bundles to be attractive for potential blood donors. It is concluded that nonpaying blood donation organizations have to offer superior convenience to their donors to be able to compensate for not offering monetary incentives. Operating with mobile donation teams is one of the concrete suggestions for blood donation marketing that are given in this study.

Copyright © 2013 John Wiley & Sons, Ltd.     

Backdating executive stock options—An ex ante valuation

When backdating executive stock options (ESOs), the exercise price is set in favor of the recipient executive. Relative to a non-backdated benchmark, we find an (ex ante) upper bound for the cost of backdating to shrink from 10% to about 3.7%, as a consequence of the regime change represented by the Sarbanes-Oxley act (SOX).We frame the backdating behavior as a (compound) exotic option, considering both simple and extended models of the underlying ESO—in the latter case we draw on the analytical ESO models of Sircar and Xiong (2007). Post-SOX, we use a Longstaff-Schwartz inspired least squares Monte Carlo approach.