Do unfair perceived own pay and top managers’ pay erode satisfaction with democracy?

Many people are relatively unsatisfied with the democratic system as it currently exists. In this empirical research note, the authors present evidence that German workers, who perceive their own pay or top managers’ pay as unfair, are on average significantly less happy with the democracy in Germany. Thus, fairness perceptions in the labour market and of income inequality seem to have spillover effects on the overall satisfaction with the democratic system.     

Exploring Value‐Based Management Sophistication: The Role of Potential Economic Benefits and Institutional Influence

The complexity of value‐based management (VBM) is often not captured in empirical research. In particular, potential differences in the extent of VBM implementation are not considered. Firms are predominantly classified dichotomously into either VBM “adopters” or “non‐adopters.” In this study, we aim to fill this gap by introducing a framework to assess differences in the extent of VBM implementation (VBM‐sophistication) based on publicly available data. This approach enables us to study determinants of VBM‐sophistication based on a hand‐collected data set comprising 2,683 firm‐year observations from 16 European countries between 2005 and 2014. Specifically, we investigate (i) whether potential economic benefits associated with VBM implementation lead to a higher level of VBM‐sophistication, and (ii) if this relation is influenced by extra‐organizational institutions (e.g., industry norms). Our results indicate that companies exhibit higher VBM‐sophistication if certain firm characteristics that increase the potential economic benefits of VBM are present. Moreover, our study provides evidence that this effect is enhanced by extra‐organizational institutions that pressure and support firms in realizing the potential benefits of higher VBM‐sophistication.     

Supporting the Collaborative Construction of a Shared Understanding About Work with a Guided Conceptual Modeling Technique

The existence of a shared understanding about a collaborative work process among all involved actors is one prerequisite for its successful implementation. The development of a shared understanding is facilitated when the actors make explicit their individual views and create externalizations that can be used as subjects of discourse. Instruments supporting externalization and discourse about collaborative work need to provide adequate forms of representation and guide actors in implementing these reflection and alignment processes. Appropriate guidance can facilitate the construction of a shared understanding for actors not accustomed to such processes. This paper introduces a methodology that offers structural and procedural guidance by adopting diagrammatical conceptual modeling techniques. This methodology has been evaluated extensively in a multiple case study. A combination of interaction analysis of the modeling process and ex-post assessment of the actors’ perceptions has been used to evaluate the adequacy of the proposed methodology with respect to the pursued objectives. The results confirm that the modeling methodology and the proposed guidance measures appropriately support the process of constructing a shared understanding about collaborative work processes.     

Home sweet host: A cross‐country perspective on prudential and monetary policy spillovers through global banks

Prudential regulation of banks is multi‐layered: policy changes by home‐country authorities affect banks’ global operations across many jurisdictions; policy changes by host‐country authorities shape banks’ operations in the host jurisdiction regardless of the nationality of the parent bank. Do these policies create (unintended) cross‐border spillovers? Similarly, monetary policy actions by major central banks may also have effects on the behaviour of banks in other countries. This paper examines the effect that changes in home‐ and host‐country prudential measures have on cross‐border dollar credit provision, and how these interact with US monetary policy. We first run panel regressions with both layers of regulation, to examine which has a greater effect on cross‐border lending. We then use a novel approach to decompose growth in cross‐border bank lending into separate home, host and common components, and then match each with the corresponding home or host policies. Our results suggest that prudential policies can have spillover effects, which depend on the instrument used and on whether a bank's home or host country implemented them. Home policies tend to have larger spillovers on cross‐border US dollar lending than host policies. We also find that a tightening of US monetary policy can compound the spillovers of some prudential measures.     

The Importance of Tax Adjustments When Evaluating Wage Expectations*

Using elicited expectations of future gross salaries, we evaluate characteristics causing German students to make larger or smaller estimation errors. While students seem to underestimate actual salaries by 18 percent, we show that these errors are highly attributable to misconceptions of the progressive income tax. Developing a suitable adjustment procedure, we correct students’ estimates and find that errors decline by 12 percentage points. Conducting regression analyses, we reveal strong connections with students’ age, gender, work experience, secondary school track, and knowledge about student loans. These results change notably if not controlling for students’ misconceptions of the tax system.     

Fetal Iodine Deficiency and Schooling: A Replication of Field,Robles, and Torero (2009)*

Scholars have theorized that congenital health endowment is an important determinant of economic outcomes later in a person's life. Field, Robles, and Torero (2009, American Economic Journal: Applied Economics 1, 140–169) find large increases in educational attainment caused by a reduction of fetal iodine deficiency following a set of iodine supplementation programs in Tanzania. We revisit the Tanzanian iodine programs with a narrow and wide replication of the study by Field et al. We are able to exactly replicate the original results. We find, however, that the findings are sensitive to alternative specification choices and sample restrictions. We try to address some of these concerns in the wide replication; we increase the sample size fourfold, and we improve the precision of the treatment variable by incorporating new institutional and medical insights. Despite the improvements, no effect is found. We conclude that the available data do not provide sufficient power to detect a possible effect, as treatment assignment cannot be measured with sufficient precision.     

Debating liberalism: Walter Eucken,F. A. Hayek and the early history of the Mont Pèlerin Society

The Review of Austrian Economics - Walter Eucken is mostly known for his impact on establishing the Social Market Economy in post-war Germany. In this paper we identify how Eucken was highly...     

Linking sustainable business models and supply chains — Toward an integrated value creation framework

Extant literature on sustainable business models highlights that value creation stems from resources exchanged in relationships between a focal firm and its stakeholders. In this context, the literature has, so far, focused on direct relationships. However, despite the acknowledged relevance of sustainability issues in supply chains, this relational view of the focal company and its direct stakeholders has not been extended toward value creation for and with indirect stakeholders, such as stakeholders of suppliers. Addressing this gap, this conceptual article integrates a relational view of sustainable supply chain management into the management of sustainable business models. It extends the scope of sustainable business models from relationships between the focal firm and its direct stakeholders to indirect relationships with stakeholders of suppliers. A framework is developed that supports analysis and management of value-creating relationships between the focal firm, suppliers, and stakeholders of suppliers. By extending the conceptualization of sustainable business models to consider relationship chains beyond direct relationships, this article proposes that a focal firm has to actively manage interactions both with suppliers and with suppliers' stakeholders.     

Rentenpaket: die Bundesregierung auf Irrwegen

In the summer of 2014 Germany will witness the most substantial expansion of pension expenditures since the 1950s. Yet, while this reform package was motivated mainly by the dismal prospect of rising old age poverty rates, it does little to alleviate this problem. On the contrary, its two central elements, an expansion of the pension claims of mothers whose children were born before 1992, and access to early retirement at age 63 for workers with a long insurance history, tend to benefit rather privileged groups of the insured. These measures endanger the sustainability of the German pension system and will necessitate future generations to work even longer than would have been the case otherwise.