Causality Between Corporate Social Performance and Financial Performance: Evidence from Canadian Firms

This study assesses the causal relationship between corporate social performance (CSP) and financial performance (FP). We perform our empirical analyses on a sample of 179 publicly held Canadian firms and use the measures of CSP provided by Canadian Social Investment Database for the years 2004 and 2005. Using the “Granger causality” approach, we find no significant relationship between a composite measure of a firm’s CSP and FP, except for market returns. However, using individual measures of CSP, we find a robust significant negative impact of the environmental dimension of CSP and three measures of FP, namely return on assets, return on equity, and market returns. This latter finding is consistent, at least in the short run, with the trade-off hypothesis and, in part, with the negative synergy hypothesis which states that socially responsible firms experience lower profits and reduced shareholder wealth, which in turn limits the socially responsible investments.     

The Intertemporal Relationship Between the Currency Spot Market and the Currency Option Market

This study examines the lead/lag relationship between currency option and currency spot markets for the Deutsche mark and the Japanese yen. Using intraday currency option transactions data for the year 1989 and applying a European type currency option pricing model, pair data series of the implied and the observed exchange rates are compiled. Causality tests are then employed to test the causal relation between the observed and the implied exchange rate changes. The results indicate that the currency spot market leads the currency option market by about ninety minutes.     

Finiteness property with vertical and horizontal differentiation: does it really matter?

The paper proves the consistency of vertical and horizontal differentiation models regarding the finiteness property. In the case of constant returns, it turns out that the attitude of consumers towards products sold at marginal costs is crucial for the finiteness property to hold or not. We first prove concerning the finiteness property results with horizontal preferences consistent with results already obtained with vertical preferences. Second we prove with vertical and horizontal preferences, a new type of result relative to the existing literature: the existence of an indifferent consumer and a population unanimous w.r.t. their most preferred variant when all variants are sold at marginal cost, is sufficient to allow to an unbounded number of firms to be active. In the case of non-constant returns, it is the cost structure in a neighborhood of the zero output that drives the market structure. Results consistent with results already proved with vertical preferences, are proved with horizontal preferences. Finally, existence results with horizontal preferences are provided to show that the demonstrated properties have cases of application.     

Natural Oligopolies: A Vertical Differentiation Model

This article contains a more complete characterization of conditions under which vertically differentiated markets are or are not natural oligopolies than has been found previously in the literature. Specifically, previous results on markets in which firms have cost functions with constant returns are incomplete; these results are expanded. Moreover, results are provided for markets with firms having increasing or decreasing marginal cost functions.     

Scheduling Shipbuilding Using a Constraint Directed Graph Search: DAS-ERECT

To build a scheduling system for shipbuilding, we have adopted a hierarchical architecture and developed a constraint directed graph search technique for erection scheduling at the dock. First, in the hierarchical architecture, detailed schedules for the lower-level assembly plants are delegated to the individual plant's schedulers as long as the requirements from the higher-level scheduler are satisfied. However, if lower-level scheduling is impossible, the higher-level scheduler attempts to adjust the original requirements. Second, in the constraint directed graph search, the concepts of graph expansion and constraint directed pruning are amalgamated into an algorithm. The approaches are implemented in the DAS-ERECT system which is a sub-system of the DAS project undertaken for the Daewoo Shipbuilding Company.     

Economic Effects of the Consumer‐oriented Genetically Modified Products in Markets with a Labelling Regime

This paper builds on the literature on the economic effects of the second‐generation, consumer‐oriented genetically modified products (GMPs). It analyses the market and welfare impacts of the introduction of these new products in markets, like the EU, that mandate the segregation and labelling of the first‐generation, producer‐oriented GMPs. Developing an empirically relevant model of heterogeneous consumers and producers, the study determines the effects of the consumer‐oriented GMPs on the markets of conventional, GM and organic products, and the welfare of consumers and agricultural producers. Analytical results indicate that the market effects of the new GMPs are case specific and depend on: (i) the consumer valuation of the quality‐enhancing attribute of the new GMP; (ii) the level of consumer aversion to GMOs; (iii) the strength of consumer preference for organic products; and (iv) the production costs and marketing margins in the different supply channels. The policy on the labelling of the first‐generation GMPs does not affect the impacts of the second‐generation GMPs on the quantities and market shares of the different products. However, it does affect their price effects and welfare implications. The introduction of consumer‐oriented GMPs under a mandatory labelling regime can result in losses for some GM consumers and all producers of the conventional product.     

Spillover analysis across FinTech,ESG, and renewable energy indices before and during the Russia–Ukraine war: International evidence

This study is epicentral to analyze the impact of the Russia–Ukraine war on the financial markets, specifically focusing on the connectedness and spillover dynamics of FinTech, Environmental, Social, and Governance (ESG), renewable energy, gold, and Morgan Stanley Capital International (MSCI) indices in developed and emerging countries. Data are collected from Thomson Reuters, ranging from May 8, 2020, to May 11, 2022, and a time-varying parameter vector autoregression (TVP-VAR) and the dynamic conditional correlation (DCC) generalized autoregressive conditional heteroskedasticity (GARCH) t-Copula (DCC-GARCH t-Copula) are used to analyze the data. The results show that FinTech, ESG, and MSCI are net transmitters in developed countries, whereas gold and renewable energy are net receivers pre- and during war periods. ESG and MSCI are net transmitters in emerging countries, while FinTech, renewable energy, and gold become net receivers in both periods. The hedging ratio sheds light on the costs and weights of efficient pair investments that might change in the context of each region and under the combined scenario. The study has important implications for merchant bankers, policymakers, investors, hedgers, and risk managers.     

More competition to alleviate poverty? A general equilibrium model and an empirical study

In this paper, we theoretically and empirically analyze the impact of competition on poverty. We consider a general equilibrium framework with vertical preferences and compare poverty in a Monopoly setting versus a Duopoly setting considering explicitly the ownership structure. Poverty is measured by the size of the population living below an absolute poverty line. Theoretical results show that the impact of competition on poverty is contingent to the ownership structure, the poverty line and the relative dispersion of the individuals with respect to their intensity of preference for quality and sensitivity to effort: competition can improve or worsen poverty depending on the model's parameters. Empirical findings for the three existing poverty lines ($1.9, $3.2, and $5.5) are consistent to a large extent with our theoretical results.     

Ethics,Diversity Management,and Financial Reporting Quality

This article proposes and empirically tests a theoretical framework incorporating Reidenbach and Robin’s (J Bus Ethics 10(4):273–284, 1991) conceptual model of corporate moral development. The framework is used to examine the relation between governance and business ethics, as proxied by diversity management (DM), and financial reporting quality, as proxied by the magnitude of earnings management (EM). The level of DM and governance quality are measured in accordance with the ratings of Jantzi Research (JR), a leading provider of social and governance research for institutional investors. This DM score is part of an index developed by JR that investment managers use to integrate DM criteria into their investment decisions. As expected, a negative relation between corporate DM development and financial reporting quality is found while controlling for other factors known in the literatures on governance and accounting choices to affect earnings quality. Despite some caveats presented in conclusion, this study contributes to the ethics, governance, and financial reporting literatures by studying the dynamics between governance and ethics in the prevention of EM.     

Evolution of Corporate Social Responsibility: A Content Analysis of United States Magazine Advertising, 1980–2009

There has been widespread and growing interest in corporate social responsibility (CSR). This study examines how CSR practices have changed, corresponding to the changes in social issues by tracking back to the prevalence of CSR advertising in print magazines from 1980 to 2009 when CSR had thrived. Our findings from content analyses of print CSR advertising with Time Magazine and Better Home and Garden suggest that there are significant relationships between social issues and CSR practices by year, target audiences, and industry types. With recent increasing needs for CSR practices in society, this study lays the theoretical and practical groundwork for strategic CSR communication by documenting historical data on CSR advertising.