Location of Decision Rights in Catholic Religious Orders

Organizational incentives are an important part of applied economics. Do even organizations like religious orders make the same trade‐offs and substitutions as predicted by economics for firms? It is argued here that religious orders face the problem of controlling the actions of their branch offices to assure the continued value and uniqueness of their trademark. We use the distinction between specific and general knowledge to analyze the optimal colocation of decision rights within the specific knowledge framework of a religious order. Assuming that knowledge is valuable in decision making, then the colocation of the decision authority with the particular knowledge that is beneficial to those decisions is preferable. With a sample of 114 local communities of 20 religious orders of the Roman Catholic Church, we empirically test whether the ratio of search/experience goods, of credence goods and the monitoring costs of the headquarter can explain the colocation of decision rights and authority within an order. Our findings give support for the hypothesis that religious orders at present make the same trade‐offs and substitutions as predicted by economics. Copyright © 2012 John Wiley & Sons, Ltd.     

Industry concentration,excess returns and innovation in Australia

This paper examines market concentration and stock returns on the Australian Securities Exchange. We find that dominant companies operating in concentrated industries in Australia are able to generate significant risk‐adjusted excess stock returns. Our results for Australian data are opposite to that found by Hou and Robinson (2006) for United States market data. Hou and Robinson reason that United States firms which operate in concentrated industries are insulated from competitive pressures, have lower levels of innovation (Arrow, 1962) and therefore experience lower profitability and stock returns. By contrast, the Australian data show a significant and positive relationship between concentration and innovation expenditure. Therefore, the excess stock returns of dominant companies in Australia are consistent with previous research linking innovation expenditure with excess stock returns. We hypothesize that the apparent contradiction of our results compared with Hou and Robinson (2006) for the United States market is resolved by an examination of the differences in size and competition in United States and Australian industries and the consequent differential ability of dominant companies in the two countries to generate monopoly rents and invest in ‘Schumpeterian’ (Schumpeter, 1942) innovation.     

Best friend or broken tool? Exploring the co-existence of humans and artificial intelligence in the workplace ecosystem

Artificial intelligence (AI) has become an important topic in business literature and strategy talk. Yet, much of this literature is normative and conceptual in nature. How organizational members perceive AI and the job role changes that come with it is, so far, largely unknown territory for both HR scholars and practitioners. We sought to investigate the relationship between humans and AI and conducted an in-depth exploratory study into the co-existence of humans and two early-stage AI-solutions, one for “low-status” automation and another for “high-status”; augmentation. We suggest that different organizational groups may engage in distinctly different sensemaking processes regarding AI, an important insight for successful HRM strategies when AI is being introduced into the workplace. Moreover, contrary to recent conceptual work, our findings indicate that AI-enabled automation and augmentation solutions may not be detached from nor exist in tension with each other. They are deeply embedded in organizational processes and workflows for which people who co-exist with the technologies must take ownership. Our findings, in part, go against discussions on AI “taking over” jobs or deskilling humans. We describe a more nuanced version of reality fluctuating around the various ways different organizational groups encounter different AI-solutions in their daily work. Finally, our study warns against unconditional technological enthusiasm, managerial ignorance of the nature of work that employees undertake in different organizational groups, and a neglect of the time and effort required to successfully implement AI-solutions that affect not only the home organization but also members of the broader ecosystem.     

Macroeconomic News and Stock Returns in the United States and Germany

Abstract. Using daily data for the January 1997 to June 2002 period, we analyze similarities and differences in the impact of macroeconomic news on stock returns in the United States and Germany. We consider 27 different types of news for the United States and 12 different types of news for Germany. For the United States, we present evidence for asymmetric reactions of stock prices to news. In a boom (recession) period, bad (good) news on GDP growth and unemployment or lower (higher) than expected interest rates may be good news for stock prices. In the period under consideration there is little evidence for asymmetric effects in Germany. However, in the case of Germany, international news appears at least as important as domestic news. There is no evidence that US stock prices are influenced by German news. The analysis of bi-hourly data for Germany confirms these results.     

The Credibility of Hong Kong's Currency Board System: Looking Through the Prism of MS‐VAR Models with Time‐Varying Transition Probabilities

This paper employs a Markov regime‐switching VAR model to describe and analyse the time‐varying credibility of Hong Kong's currency board system. The endogenously estimated discrete regime shifts are made dependent on macroeconomic fundamentals. This enables us to determine which changes in macroeconomic variables can trigger switches between the low and high credibility regimes. We carry out extensive testing to search for the most appropriate specification of the Markov regime‐switching model. We find strong evidence of regime switching behaviour that portrays the time‐varying nature of credibility in the historical data.     

The European refugee crisis and the natural rate of output

The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labour as an important ingredient. This article shows how the recent huge migrants’ inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labour market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modelled adequately compared to results based on the unadjusted European Commission procedure.     

REPORTING GUIDELINES FOR META-ANALYSIS IN ECONOMICS

Meta-analysis has become the conventional approach to synthesizing the results of empirical economics research. To further improve the transparency and replicability of the reported results and to raise the quality of meta-analyses, the Meta-Analysis of Economics Research Network has updated the reporting guidelines that were published by this Journal in 2013. Future meta-analyses in economics will be expected to follow these updated guidelines or give valid reasons why a meta-analysis should deviate from them.