Empirical analysis of the integration of environmental risks into the credit risk management process of European banks

About 15 years ago, banks started to integrate environmental risks into their credit risk management procedures. In this article, a survey of the European banking sector focusing on the analysis of the integration of environmental risks into all phases of the credit risk management, rating, costing, pricing, monitoring and work‐out, is presented. The integration of environmental risks into the whole credit risk management process is important because only then is an adequate risk management guaranteed. The results show that banks integrate environmental risks especially into the rating phase, but not in all phases of the credit management process, though this is recommendable because these risks influence all phases of the credit management process. Furthermore, significant differences in integrating environmental risks between banks that are signatories of the UNEP statement by banks on the environment and sustainable development and banks that had not signed this agreement so far could be found. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Ethical leadership across cultures: a comparative analysis of German and US perspectives

This paper examines beliefs about four aspects of ethical leadership –Character/Integrity, Altruism, Collective Motivation and Encouragement– in Germany and the United States using data from Project GLOBE (Global Leadership and Organizational Behavior Effectiveness) and a supplemental analysis. Within the context of a push toward convergence driven by the demands of globalization and the pull toward divergence underpinned by different cultural values and philosophies in the two countries, we focus on two questions: Do middle managers from the United States and Germany differ in their beliefs about ethical leadership? And, do individuals from these two countries attribute different characteristics to ethical leaders? Results provide evidence that while German and US middle managers, on average, differed in the degree of endorsement for each aspect, they each endorsed Character/Integrity, Collective Motivation and Encouragement as important for effective leadership and had a more neutral view of the importance of Altruism. The findings are reviewed within the social‐cultural context of each country.     

Payout policy in Brazil: Dividends versus interest on equity

We examine the impact of tax burden on cash distribution using a sample of Brazilian firms, which are allowed by law to distribute cash to shareholders in two forms: dividends and tax-advantaged interest on equity. The Brazilian institutional setting is superior to those used in prior studies that examine the choice between dividends and capital gains because, in some cases, dividends provide advantages that outweigh their negative tax consequences, leading firms to rationally choose payout policies that are not optimal when viewed only from the perspective of taxes. We find that taxes are a primary determinant of Brazilian firms’ payout policy decisions, as profitability and payout ratios (nonequity tax shields) are positively (negatively) related to the likelihood that a firm pays interest on equity. However, many firms continue to pay dividends despite the tax advantages of interest on equity payments. Abnormal returns around payout policy announcements suggest that these firms are, at least in part, catering to investor demand.     

UK local authority attitudes to Park and Ride

Although the high level of implementation activity within the UK would suggest that bus-based Park and Ride (P&R) is a favoured policy option, little evidence exists which tests this assumption empirically or explores it in detail. In addition, a growing body of evidence indicates that P&R may increase the vehicle miles travelled (VMT) of its users. This paper reports on a recent survey of UK local authorities, both with and without current P&R provision, to understand the reasons behind its popularity and the level of recognition of its effectiveness in reducing car use. Particular consideration is given to the relationship between P&R and conventional public transport (particularly bus) services, as the transfer of passengers from these can have a significant impact on the effectiveness of P&R. The potential future growth of P&R is also addressed. The results suggest a number of divergences with the empirical evidence, particularly with regards the traffic effects of P&R. P&R is predicted to grow but there is support for implementing P&R in ways that may increase its effectiveness.     

CUSTOMER LOYALTY IN LOGISTICS OUTSOURCING RELATIONSHIPS: AN EXAMINATION OF THE MODERATING EFFECTS OF CONFLICT FREQUENCY

This research examines the moderating effect of conflict frequency on the satisfaction‐loyalty linkage in logistics outsourcing relationships. The findings suggest service satisfaction to be the primary driver of loyalty in smoothly running relationships. However, relational satisfaction takes a leading role in high conflict relationships. As turbulence increases in these important logistics service relationships, the quality of the interaction becomes a critical consideration.     

Sustainable procurement: Past,present and future

Sustainable procurement is increasingly on the agenda for purchasing and supply managers seeking to demonstrate corporate social responsibility in their supply chains. In this paper, we identify trends in the literature and establish that this is a burgeoning field. We identify methodological challenges and research gaps to guide future research. We propose a sustainable procurement framework to help structure future research across supply chains. Finally, we introduce each of the papers in the special issue, and identify what makes them stand out as making a novel contribution to research in the field.     

Predicting corporate governance in emerging markets

This paper investigates what predicts corporate governance in emerging markets. Specifically, we examine what predicts governance changes and the level of governance itself. To conduct this study, we utilize a unique dataset from AllianceBernstein that consists of monthly firm-level corporate governance ratings for 24 emerging market countries for almost seven years. Since the AllianceBernstein ratings are time-series data, they allow us to determine the direction of change in a firm’s corporate governance, and the timing of these changes. Using these data, we find two main results. First, as firms grow they are more likely to improve their governance. Second, the level of political risk where the firm resides is negatively and significantly related to the level of firm governance but positively and significantly related to changes in firm governance. Hence, firm governance is better in countries with lower political risk but firms are more likely to improve their governance in countries with higher political risk.     

Economic sentiment shocks and fluctuations in economic activity in the euro area and the USA

Economic sentiment indicators can provide a wealth of information for macroeconomic policy formulation and analysis. Despite this, economic sentiment is often neglected by mainstream economics. This article assesses whether there is a potential role for economic sentiment to amplify business cycle fluctuations. This paper integrates the European Commission Economic Sentiment Indicator data into an econometric analysis of the euro area business cycle. The investigation of the euro area economy suggests that sentiment shocks do have an impact on important macroeconomic variables such as output, retail sales, and unemployment. There is furthermore significant evidence that economic conditions and shocks affect economic sentiment.