Dual-Class Firms: Evidence from IPOs of Chinese Firms Cross-Listed on US Exchanges

We compare Chinese single with dual-class firms cross-listed on US exchanges. We find that dual-class firms are larger in terms of assets and sales, possess ownership concentration, and have higher institutional ownership. Chinese firms in IT industry are especially likely to use dual-class structure. We find that, contrary to the literature, dual-class firms underprice 30.42% more and firm underprices less when governance practices are adequate. Insiders need to bear underpricing cost for retaining control. Interestingly, we find that dual-class firms hire more independent directors to show commitment toward shareholder’s rights but control them through CEO Chairman Duality and superior voting rights.     

On the Natural and Economic Difficulties to Fulfilling the Human Right to Water Within a Neoclassical Economics Framework

We present a neoclassical economic model of the human right to water using a nonrenewable resource model inclusive of a backstop technology. The right is interpreted as a minimum consumption requirement the government is obligated to fulfill in the event that any one household cannot do so independently. Differing by income levels, households maximize utility by purchasing a composite consumption good and water from two distinct, government-owned sources. Facing physical and financial constraints, the government uses fiscal policy to address potential human rights violations. Reducing the analysis to two periods, we develop a novel approach to compare total welfare levels from a joint human rights and neoclassical economics perspective. We define a human rights welfare standard and discuss cases in which traditional social welfare measures would exceed, violate, or meet this standard. We thus offer a unique way to merge economic analysis with human rights research.     

Organizational Legitimacy and the Strategic Bridging Ability of Green Alliances

Alliances with environmental non‐governmental organizations may benefit multinational corporations (MNCs) operating in developing countries where uncertain socio‐cultural and institutional conditions present higher investment risks. Such ‘green alliances’ can provide strategic bridging services by interceding between MNCs and distant, yet important, stakeholders. From an institutional perspective, strategic bridging success may depend on stakeholder perceptions of alliance legitimacy. In this study the relationship between alliance legitimacy and strategic bridging ability is explored through the case of the Turtle Village Trust in Trinidad and Tobago. Findings suggest that bridging success occurs when organizational legitimacy peaks; that new alliance partners temporarily weaken legitimacy; and bridging with every new targeted stakeholder requires continued acquisition of legitimacy based on their respective values. MNC decisions to form alliances that bridge targeted stakeholders on their behalf should therefore consider the potential of the alliance to acquire and accumulate organizational legitimacy without which strategic bridging efforts may be futile. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Willingness to Pay for Pesticide Free Fruits: Evidence from Pakistan

ABSTRACT

This paper analyzes factors influencing consumption decision of pesticide free fruits (PFF) and estimates the willingness to pay (WTP) price premium for PFF in Pakistan. A contingent valuation survey of 200 households was conducted using face to face interview and payment card method. Results suggested that 93.5% respondents were WTP higher prices for PFF. Remarkably, around 35% respondents were WTP 16–20% higher prices and 24% respondents were WTP 6–10% higher prices for PFF than the existed conventional price. In addition, our ordered logit regression suggests that demographic and socio-economic variables such as age, education, income, household’s size and perception about health benefits are significantly associated with higher WTP for PFF.     

Why is Assortment Planning so Difficult for Retailers? A Framework and Research Agenda

When retailers conduct product assortment planning (PAP), they determine (1) The variety of merchandise, (2) The depth of merchandise, and (3) Service level or the amount of inventory to allocate to each stock-keeping unit (SKU). Despite longstanding recognition of its importance, no dominant PAP solution exists, and theoretical and decision support models address only some of the factors that complicate assortment planning. This article simultaneously addresses the variety, depth, and service level aspects of PAP to provide a more thorough understanding. A review of current academic literature and best trade practices identifies open questions and directions for further research and applications.     

Optimal combination of pollution prevention and abatement policies: The case of agricultural drainage

The adoption of pollution prevention and abatement practices is examined in the context of a model of exhaustible resource use with a backstop technology. For the sake of concreteness, the paper focuses on the problem of water-logging caused by the subsurface accumulation of agricultural drainwater. In modelling this problem, a region's underground capacity to store drainwater is considered an exhaustible resource, while the installation of subsurface drainage is viewed as the corresponding backstop technology (or abatement practice). The exhaustible resource is typically over-exploited due to common access problems, which forces a suboptimally fast adoption of the abatement practice. Conservationist irrigation technologies, such as drip and sprinkler systems, tend to reduce drainwater generation, and their adoption could increase social welfare by delaying the abatement stage. Public policies are suggested to increase the adoption of such conservationist technologies. Data from California is used to illustrate the results and to demonstrate the efficacy of the model for policy purposes. While the setting used for the analysis in this paper is quite specific (i.e., water-logging), the same general modelling ideas may be applied to many other problems of environmental degradation.     

The size of the lifetime excess burden of a tax

We consider a consumer intertemporal choice problem in which it is possible for the consumer to be constrained by debt limits at some time during life. By using simulation methods, we then compare the excess burden that results as debt limits become weaker until, in the limit, they do not bind. The principal finding is that the size of the excess burden is significantly affected by the presence of effective debt limits. In fact, even with a high interest rate and a high tax rate, the excess burden is insignificant if the debt limits bind in a stringent manner.     

Performance of Cross Listed Dual-Class Firms: Evidence from Chinese Firms Cross Listed on US Exchanges

We compare operating and market performance of Chinese single- and dual-class firms cross listed on US exchanges. We find evidence in line with researchers who argue that a dual-class structure allows insiders to invest in long-term value-enhancing projects. We find that dual-class firms underperform prior to their initial public offering (IPO) and then improve and have better operating performance than single-class firms in the second year after IPO. We find that dual-class firms also have better market performance than single-class firms beginning in the initial year, which is contrary to the finding in most other studies. The reason for this might be that firms that list on US exchanges show a credible commitment to shareholder rights.     

Corporate reporting implication in migrating from defined benefit to defined contribution pension schemes: A focus on the UK

Pensions are intricately linked to employees’ well-being in the latter part of their life and during their working life in that they provide a sense of financial security in retirement. Since the 1980s, pension schemes have changed both in concept and detail with significant consequences for beneficiaries. This paper explores one of the major changes: the migration from defined benefit (DB) to defined contribution (DC) pension schemes focusing on this change's interface with accounting. In exploring this shift from DB to DC schemes, the paper uses a critical perspective to reflect on this interface including how the change is accounted for in corporate reporting narrative. The key focus is on issues of political economy: it is found in this respect that while wealth is effectively distributed from pension holders efforts are made to legitimise or displace attention from pension changes. An analysis of narratives of corporate annual reports is undertaken to critically explore corporate communication to stakeholders vis-à-vis pension scheme changes. Findings suggest limited and problematic engagement with employees as per the corporate annual report narrative. We also point to a lack of appetite on the part of existing employees to engage employers on these changes. The change is framed to give workers an impression that they are taking responsibility for their future whilst an alternative view is that in actuality the organisation is decoupling from pension responsibility and devolving associated risks to employees for greater profitability. Counter accounting may be a way forward.