Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida

This article provides a detailed analysis of the operation of the National Flood Insurance Program (NFIP) in Florida, which accounts for 40 percent of the NFIP portfolio. We study the demand for flood insurance with a data set of more than 7.5 million NFIP policies‐in‐force (the largest ever studied) for the years 2000–2005, as well as all NFIP claims filed in Florida. We answer four questions: What are the characteristics of the buyers of flood insurance? What types of contracts (deductibles and coverage levels) are purchased? What are the determinants of claims payments? How are prices determined and how much does NFIP insurance cost?     

Pricing catastrophe options with stochastic claim arrival intensity in claim time

We model claim arrival and loss uncertainties jointly in a doubly-binomial framework to price an Asian-style catastrophe (CAT) option with a non-traded underlying loss index using the no-arbitrage martingale pricing methodology. We span these uncertainties by benchmarking to the shadow price of a one-claim bond and the premium of a reinsurance contract. We implement a stochastic time change from calendar time to claim time to more efficiently price the CAT option as a random sum – a binomial sum of claim time binomial Asian option prices. This choice of the operational time dimension allows us to incorporate different patterns of catastrophe arrivals by adjusting the claim arrival probability. We demonstrate this versatility by incorporating a mean-reverting Ornstein-Uhlenbeck intensity arrival process. Simulation results verify our model predictions and demonstrate how the claim arrival probability varies with the expected claim arrival intensity.     

The Effects of Compensation Structures and Monetary Rewards on Managers’ Decisions to Blow the Whistle

Recent research indicates that compensation structure can be used by firms to discourage their employees from whistleblowing. We extend the ethics literature by examining how compensation structures and financial rewards work together to influence managers’ decisions to blow the whistle. Results from an experiment indicate that compensation with restricted stock, relative to stock payments that lack restrictions, can enhance the likelihood that managers will blow the whistle when large rewards are available. However, restricted stock can also threaten the effectiveness of whistleblowing systems without the presence of large financial rewards for whistleblowing. Thus, the large potential rewards for whistleblowing enacted by the Dodd–Frank Act appear timely as firms are moving toward compensation agreements that include greater proportions of restricted stock.     

Business values dimensions: A cross-culturally developed measure of workforce values

Using a stratified random sample drawn from 11,709 business professionals’ survey responses across 26 societies, we investigated and failed to find support for the construct validity of the Schwartz Values Survey’s (SVS) a priori 10-factor circumplex model of human values, originally developed from student and teacher responses. Subsequent exploratory factor analysis estimated an initial five-factor solution, the Business Value Dimensions (BVD) model. In turn, CFA supported the cross-cultural validity of this alternative configuration of values for business professionals. Internal consistency reliabilities for these five values factors are reported for the 26 societies plus an additional 25 societies that did not meet sample size criteria to be included in the analyses. As a result, findings are provided for a total of 51 societies (14,724 business professionals). We present the five-factor BVD model for use in future international research with business professional populations.     

Perceptions of the ethicality of favors at work in Asia: An 11-society assessment

We explore macro-level factors that shape perceptions of the ethicality of favors in Asian workplaces using the subordinate influence ethics (SIE) measure. We also expand and use the crossvergence model to examine the cross-level relationship between socio-cultural (i.e., traditional/secular; survival/self-expression; in-group favoritism) and business ideology influences (i.e., human development level, control of corruption) on perceptions of favor-seeking at work. This study examines the perceptions of a total of 4,325 managers and professionals in a diverse set of 11 Asian societies: China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Our investigation focuses on both the “softer” (image management) and “harder” (self-serving) sides of subordinate influence attempts to seek favors, as well as the degree of ethical differentiation across these societies. Key results based on hierarchical linear modeling (HLM) suggest that both the World Value Survey’s socio-cultural values as well as in-group favoritism contribute to our understanding of influence behaviors in Asia. Likewise, level of human development and control of corruption also appear to be promising predictors of influence ethics. In sum, our results suggest that widening the scope of the crossvergence conceptualization of socio-cultural and business ideology influences engender a better understanding of differences in attitudes toward subordinate use of favoritism across Asian societies.     

Joint Venture Formation and Internationalization: A Japanese MNEs' Perspective

This article examines relationships among top-management-team composition, group processes, and the effects of those processes on cohesion for international joint venture teams in Thailand. For culturally diverse teams, demographic elements (member age, length of team tenure, level of education, functional expertise) and cultural characteristics (country of education, nationality, affiliation with a parent organization, primary language spoken) define heterogeneity. Overall, demographic heterogeneity had a significant influence on openness among team members and on cohesion when mediated by openness. Cultural heterogeneity had a significant influence on openness and cohesion among team members, with loyalty and openness having a significant influence on cohesion.     

Latino families report lower child injury rates than white families

Latino children have lower visit rates to emergency departments and primary care physicians than white children in the USA. Using a nationally representative household survey, this study asked whether parental report of injury was also lower for Latino children, after adjusting for demographic, socioeconomic, health status and health care access factors. Data were obtained on injuries for which medical advice or treatment was received from the National Health Interview Survey (NHIS) from 1997 to 2003. Using the multistage probability design of NHIS, annual rates and adjusted odds of childhood injury report by race and ethnicity were calculated. Respondents reported lower rates of injury for Latino children (6.0 (95% CI 5.3-6.8)/100 person-years) than white children (13.4 (12.7-14.2)/100 person-years). Lower injury rates were mainly due to lower rates of sports injuries and accidental falls. Latino children had lower odds of reported injury than white children, even after adjusting for multiple factors (odds ratio 0.7; 95% CI 0.6-0.8). Lower odds of injury report among Latino children are independent of direct measures of demographic, socioeconomic, health status and health care access factors and indirect measures of acculturation including respondent language and country of origin. Potential explanations include lower exposure to risk, greater child supervision, reporting bias, differences in cultural attitudes toward seeking of health care and reduced health care access that cannot be explored in NHIS due to the form of the current questions. Further research is needed to investigate cultural differences in risk exposure, child supervision and seeking of injury care.