How does quasi-indexer ownership affect corporate tax planning?

We study whether, and more importantly, through what mechanisms, quasi-indexers affect portfolio firms’ tax planning by employing the discontinuity in quasi-indexer ownership around the Russell 1000/2000 index cutoff. Using a regression discontinuity design, we find that higher quasi-indexer ownership leads to greater tax saving. With respect to the mechanisms, we find that the greater tax saving is a result of a focus on improved overall firm performance, not a specific focus on improved tax planning. We further find that the documented tax saving effect is partially due to quasi-indexers’ influences on executive equity incentives, corporate governance, and information environment.     

The impact of disability-assistance animals on the psychological health of workplaces: A systematic review

This study presents a systematic review of the impact of disability-assistance animals in the workplace. While the importance of establishing workplace diversity initiatives is widely established, there is little thought as to how organizations can support it beyond legal compliance with anti-discrimination laws. This paper adopts an innovative approach to analysing diversity, combining business, psychology and law literature to identify the positive and negative implications of disability assistance animals in the workplace. The literature review reveals three benefits to having assistance animals in the workplace: it positively affects disability support; it improves the productivity and psychological health of employees; and it increases workplace attractiveness. However, because these positive effects may be moderated by individual preferences, we acknowledge potential negative effects, such as allergies, phobias and disruptions when animals are introduced to a workplace. We conclude by presenting a framework to guide future research, and analysing the practical and theoretical implications of assistance animals in the workplace.     

Basel III liquidity rules: The implications for bank lending growth in Africa

This paper examines the possible loan growth effect of the Basel III NSFR and LCR requirements in Africa and seeks to determine whether the different regions of the continent are affected differently. The paper also offers what is possibly the first investigation of how the interaction between the performance of loan portfolios and the new Basel III liquidity requirements might shape bank loan growth rates. Using a dataset of 361 commercial banks across 38 African countries over the 2005–2015 period, our static and dynamic panel analyses show that both the NSFR and the LCR exert significant positive effects on bank loan growth rates. The results also reveal that the NSFR reduces the impact of the negative effect of poor performance of loan portfolios on bank loan growth rates. Compliance with the Basel III liquidity rules in Africa is therefore likely to have beneficial impacts on policies intended to increase bank lending in the continent.     

Supply chain finance: From traditional to supply chain credit rating

Traditional credit rating models, adopted by financial institutions to assess the credit risk of a company, adopt a purely financial perspective, and often fail to properly assess small and medium enterprises. On the other hand, buyers usually assess suppliers by means of comprehensive vendor ratings, considering a broad range of operational performance. This paper investigates whether financial and vendor ratings can be integrated into a supply chain credit rating model that jointly considers financial indicators of the supplier and its operational evaluation provided by buyers; the paper also investigates the benefits and the challenges of such a model for all the stakeholders involved (buyers, suppliers, financial institutions, and technology providers), adopting the lenses of the stakeholder theory. We adopted both multiple case studies and an iterative focus group, involving representatives from suppliers, buyers, financial institutions, and technology providers. The results confirm the potential value of such an integrated rating, mainly for strategic suppliers, showing the expected benefits for all stakeholders and highlighting the potential challenges to face.     

An optimisation strategy for concurrent Supply Chain Finance schemes

The uncertainty and financial instability that has plagued companies and industries in the last decade is one of the root causes behind the development of Supply Chain Finance (SCF), a set of schemes aiming to optimise the management of financial flows at the supply chain level. Recent years have seen a proliferation of different SCF schemes, with different impacts on working capital costs and requirements throughout the supply chain. The practicality of SCF usage indicates that the concurrent adoption of multiple schemes is not only possible, but even likely. However, literature on SCF still focuses on individual SCF schemes, while the concurrent adoption of multiple SCF schemes remains largely unaddressed. Thus, the objective of this paper is to assess the tangible benefits deriving from a multi-scheme SCF strategy. Based on the analytical formulation of the benefits of three relevant SCF schemes (Reverse Factoring, Inventory Financing and Dynamic Discounting), the paper formalises a model that investigates the benefits that a buyer can achieve by onboarding suppliers onto these three schemes. The results show how working capital requirements and the cost of finance represent the key parameters to assessing the benefits of the concurrent adoption of multiple SCF schemes. Moreover, the funding limits of the SCF schemes themselves strongly affect the relevance of such strategies; strict limits will increase the relevance of having ‘alternative’ schemes available to onboard suppliers. To highlight the managerial relevance of the model, the article provides a numerical example based on a real-world application.     

Portfolio performance manipulation in collateralized loan obligations

We examine the discretionary activities that CLO managers engage in to pass monthly overcollateralization (OC) tests. These tests require a CLO's loan portfolio value, scaled by the CLO notes’ principal balance, to be above a certain threshold. Using CLOs’ granular disclosures, we develop model-free estimates for discretionary loan fair valuation and transaction-based proxies for strategic loan trading. We find a positive association between these discretionary activities and the probability of avoiding an OC test violation. This association varies predictably with junior noteholders’ influence and CLO market conditions. Strategic trading—but not discretionary fair valuation—relates to worse future CLO performance.