On the value relevance of customer satisfaction. Multiple drivers and multiple markets

Existing research implicitly assumes that all factors known to influence customer satisfaction are likewise important for investor behavior. However, if investors do not equally value activities targeting different satisfaction drivers, managers focusing on short-term stock returns might over- or under-emphasize certain satisfaction drivers to the detriment of the long-term success of the firm. Therefore, we extend prior research on the value relevance of customer satisfaction by assessing the relationship between the dynamics of key satisfaction drivers and contemporaneous risk-adjusted stock returns. Moreover, we compare three major markets using a dataset covering nearly the entire set of car brands sold between 2004 and 2008. Our results show that investors react to information related to perceived product quality, whereas, surprisingly, the cost of ownership and dealer service quality are unimportant despite the importance attributed to them in consumer research. Furthermore, we observe that information concerning the U.S. market dominates that of the UK and German markets.     

Empirical analysis of the integration of environmental risks into the credit risk management process of European banks

About 15 years ago, banks started to integrate environmental risks into their credit risk management procedures. In this article, a survey of the European banking sector focusing on the analysis of the integration of environmental risks into all phases of the credit risk management, rating, costing, pricing, monitoring and work‐out, is presented. The integration of environmental risks into the whole credit risk management process is important because only then is an adequate risk management guaranteed. The results show that banks integrate environmental risks especially into the rating phase, but not in all phases of the credit management process, though this is recommendable because these risks influence all phases of the credit management process. Furthermore, significant differences in integrating environmental risks between banks that are signatories of the UNEP statement by banks on the environment and sustainable development and banks that had not signed this agreement so far could be found. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Efficiency enhancing taxation in two-sided markets

This paper examines the efficient provision of goods in two-sided markets and characterizes optimal specific and ad-valorem taxes. We show that (i) a monopoly may have too high output compared to the social optimum; (ii) output may be reduced by imposing negative value-added taxes (subsidy) or positive specific taxes.     

Low cost country sourcing and its effects on the total cost of ownership structure for a medical devices manufacturer

In this paper, we describe a total cost of ownership (TCO) method as an activity-based costing (ABC) application along the value chain to measure and analyse the costs of international sourcing activities. We further describe the method's implementation for a manufacturer of high-tech medical devices. For this case study, we analyse the effects of shifting purchasing volume from traditional procurement market suppliers to low cost country suppliers on the cost structure of purchasing projects. We find that particularly costs at component and supplier level gain importance over traditionally dominating unit level costs. Furthermore, we identify low cost country sourcing as a decision with extensive impact on value chain entities other than purchasing. Finally, a considerable part of costs in low cost country sourcing accrue at the beginning of a purchasing project due to problems stemming from unsatisfactory initial quality, language barriers and intercultural communication.     

Recovery rates of commercial lending: Empirical evidence for German companies

There are very few studies concerning the recovery rate of bank loans. Prediction models of recovery rates are increasing in importance because of the Basel II-framework, the impact on credit risk management, and the calculation of loan rates. In this study, we focus the analyses on the distribution of recovery rates and the impact of the quota of collateral, the creditworthiness of the borrower, the size of the company and the intensity of the client relationship on the recovery rate. All our hypotheses can be confirmed. A higher quota of collateral leads to a higher recovery rate, whereas the risk premium of the borrower and the size of the company is negatively related to the recovery rate. Borrowers with an intense client relationship with the bank exhibit a higher recovery rate.     

The Impact of Direct Cash Payments on Whole Blood Supply

This paper investigates the impact of monetary incentives on whole blood donations. We take advantage of a quasi‐natural experiment in Germany, in which one blood donation site changes its payment scheme from remunerated to non‐remunerated. All other donation sites maintain their payment schemes. We show that donation volumes drop significantly after the pay drop and do not recuperate. At the same time, donation volumes increase at other paid donation sites, which is partly due to donor migration to these sites. We do not find any impact of the changed payment scheme on blood quality. Our results offer additional insight into the complex question whether it is efficient to ensure blood supply by paying donors a direct monetary compensation.     

Measuring moral judgment: The Moral Judgment Interview or the Defining Issues Test?

This paper compares and contrasts two distinct techniques for measuring moral judgment: The Moral Judgment Interview and the Defining Issues Test. The theoretical foundations, accompanying advantages and limitations, as well as appropriate usage of these methodologies are discussed. Adaptation and use of the instruments for business ethics research is given special attention.Dawn Elm is currently an Assistant Professor of Management at the University of St. Thomas in St. Paul, Minnesota. Dr. Elm has written and published articles on ethical decision-making, moral reasoning, defining and measuring honesty, and women's studies and ethics. She also has research interests in socialization to work, gender bias imagery in teaching business, and parental leave policies.James Weber is currently an Assistant Professor of Management at Marquette University. He has published articles focusing on managerial values and moral reasoning, teaching of ethics, and methodological issues in business ethics research inResearch in Corporate Social Performance and Policy, Human Relations, Business Ethics Quarterly, and Journal of Business Ethics.