The Relevance of Non-financial Performance Measures for CEO Compensation: Evidence from the Airline Industry

This paper investigates the role of non-financial performance measures in executive compensation. Using a sample of airline firms we document that passenger load factor, an important non-financial measure for firms in this industry, is positively associated with CEO cash compensation. This association is significant after controlling for traditional accounting performance measures (return on assets) and financial performance measures (stock returns). This evidence is consistent with the hypothesis that non-financial measures provide incremental information about CEOs actions over financial measures and hence, receive a positive weight in compensation contracts. We also explore cross-sectional differences in the importance of non-financial performance measures. We find weak evidence that CEO power and the noise of financial performance measures impact the relationship between non-financial performance measures and cash compensation.JEL Classification: J33, L25, L93, M41, M52     

US oil companies’ earnings management in response to hurricanes Katrina and Rita

This study examines earnings management by US-based oil companies in the period immediately after the impact of hurricanes Katrina and Rita. We show that large petroleum refining firms – but not the smaller crude oil and natural gas production companies – recorded significant abnormal income-decreasing accruals in the fiscal quarter immediately after the impact of hurricanes Katrina and Rita (Q4 of 2005). In addition, we show that these results are driven by abnormal current accruals. Prior studies show that some firms respond to periods of heightened political scrutiny by recording abnormal income-decreasing accruals (e.g. [Cahan, S., 1992. The effect of antitrust investigation on discretionary accruals: a refined test of the political cost hypothesis. The Accounting Review 67 (1), 77–96; Han, J., Wang, S., 1998. Political costs and earnings management of oil companies during the 1990 Persian Gulf Crisis. The Accounting Review 73 (1), 103–118]). Our results add to this stream of research by examining a political cost-increasing event that occurred after the passage of the Sarbanes–Oxley Act (SOX) of 2002. The results suggest that in the post-SOX period managers continue to engage in income-decreasing earnings management during periods of heightened political cost sensitivity, at least in the case of large petroleum refining firms.     

Does food aid have disincentive effects on local production? A general equilibrium perspective on food aid in Ethiopia

This paper examined impacts of food aid on domestic food production employing a computable general equilibrium modelling technique and using data from Ethiopia. The simulation experiments have shown that food aid has unambiguous disincentive effects on domestic food production. The removal of food aid caused a modest increase in food prices but this stimulated food production. Employment and income generation effects of the latter outweighed the adverse effect of the former. Consequently, the removal of food aid led to improvements in aggregate household welfare. Contrary to some concerns in the food aid literature that any reduction in food aid would hurt the poor, the simulation experiments suggested that actually poor rural households and urban wage earners are the ones who benefit most in absence of food aid but entrepreneurs are more likely to encounter a marginal welfare decline. We have distinguished between in-kind food aid and cash equivalent transfers in order to isolate the disincentives that in-kind transfers would make to domestic production from those that are related to household purchasing power problem. The expansionary effect of removing food aid becomes significantly larger when it is accompanied by cash equivalent payments because the latter would provide demand side stimulus to agriculture while the removal of in-kind transfers would stimulate supply side, with the supply and demand side effects reinforcing each other. In our modelling framework, the only adverse effect would be a modest deterioration in the external current account, because the expansionary effects of food aid would cause imports to rise but exports to fall.     

CEO Involvement in Director Selection: Implications for REIT Dividend Policy

This paper examines the relationship between CEO entrenchment and dividend policy of real estate investment trusts (REITs). We develop an index for CEO entrenchment using CEO tenure and duality and find that this index has significant impact on dividend policy. We further separate our sample into two sub-groups: REITs with and without nomination committees. Our analyses show a strong positive relationship between CEO entrenchment level and dividend payout for REITs without a nomination committee. In REITs with nomination committees, CEO entrenchment has less influence on dividend policy. We conclude that dividend policy serves as a substitution for other governance mechanisms. Further, our results are consistent with the evidence for other US firms—CEO that are more entrenched pay higher dividends to avoid shareholder sanctions and the threat of takeover.

The Risk Reduction Role of Advertising

This study shows theoretically and empirically that exposure to advertising increases consumers tendency to purchase the promoted product because the informative content of advertising resolves some of the uncertainty that the risk averse consumers face and thus reduces the risk associated with the product. We call this effect the risk-reduction role of advertising. The risk-reduction model implies that advertising effectiveness depends on (a) the risk preference parameter, (b) the precision of the advertising message, (c) the familiarity of the consumer with the product, (d) the consumers sensitivity to products attributes (and thus, her involvement level with the product), and (e) the diversity of products offered by multiproduct firms. These findings suggest that ads spending should be higher (a) for new and relatively unknown products, (b) for high-involvement products, (c) when ads can be quite precise, and (d) when the firm offers a diverse product-line. It also implies that ads should target consumers (a) who are more sensitive to risk, (b) who are more involved, and (c) those who are not familiar with the promoted product.The model allows ads to affect choices also through a direct effect on the utility (i.e., the standard approach to formulate the effect of advertising). In our empirical example (where the products are television shows) the risk-reduction effect is significant and strong and the direct effect is negligible behaviorally. We discuss the welfare implications of these findings, and illustrate the quantitative differences in managerial implications between our model and the traditional one.     

Patient and Public Involvement in Healthcare Quality Improvement: How organizations can help patients and professionals to collaborate

Abstract

Citizens across the world are increasingly called upon to participate in healthcare improvement. It is often unclear how this can be made to work in practice. This 4-year ethnography of a UK healthcare improvement initiative showed that patients used elements of organizational culture as resources to help them collaborate with healthcare professionals. The four elements were: (1) organizational emphasis on non-hierarchical, multidisciplinary collaboration; (2) organizational staff ability to model desired behaviours of recognition and respect; (3) commitment to rapid action, including quick translation of research into practice; and (4) the constant data collection and reflection process facilitated by improvement methods.     

“污染避难所”假说的时效性分析

20世纪80年代以来，全球环境意识不断高涨，使得可持续发展思想的影响逐渐波及世界政治经济生活的方方面面。伴随着经济全球化的发展，发达国家将本国污染密集产业逐渐向发展中国家进行转移。在污染密集产业转移的相关问题的探讨中，各个学者从不同的角度和立场出发，提出了不同的观点。其中最有影响的理论之一是“污染避难所”假说。笔者在本文中分析了不同学者对于该理论提出的不同的观点，并从三个方面对该理论的时效性进行了分析。     

Wives' involvement in tourism decision processes

This study segments tourism decision-making tasks into 17 categories. Wives were asked to assign a score to their level of involvement in each task. A marginal involvement in tasks related to the “financing aspects” of the trip was observed whereas involvement was high in tasks such as “shopping”, “selecting restaurants”, “collecting information”, and “preparing luggage”. Two hypotheses were tested: the socioeconomic characteristics of wives and trip characteristics have a positive effect on the level of involvement in the tourism decisions; and levels of task involvement are consistent for the 17 tasks (stability in tasks involvement). Marketing implications and recommendations for future research were also discussed.

Résumé

La participation des épouses aux décisions de voyages. Cette étude segmente les décisions et taches des voyages en dix-sept catégories. On a demandé aux épouses d'attribuer une valeur numérique selon leur niveau de participation dans chaquetâche. On a observé peu de participation aux “aspects financiers” tandis que la participation était élevée pour le “shopping”, le “choix des restaurants”, la “collecte d'information”, et la “préparation des bagages”. On a vérifié deux hypothèses: que les caractéristiques socio-économiques des épouses ainsi que certaines caractéristiques du voyage ont un effet positif sur la participation des épouses aux décisions du tourisme, et que les niveaux de participation pour les dix-sept tâches sont stables. On discute aussi des implications de marketing et des recommandations pour la recherche future.     

Transparency of Corporate Social Responsibility in Dutch Breweries

According to the Dutch Ministry of Economic Affairs (2001), transparency by means of Sustainability Reporting should lead to better Corporate Social Responsibility (CSR) performance of companies. Sustainability Reporting should also give consumers the information they need to purchase the most sustainable products available (Dutch Ministry of Economic Affairs, 2004). This article analyses the driving factors influencing CSR and Sustainability Reporting at seven breweries in the Netherlands. It also gives a better understanding of organizational behaviour with reference to CSR and the reasons breweries have for Sustainability Reporting. The Dutch government has no intention of forcing organizations to publish a sustainability report, since it is trying to diminish the volume of legislation. Rather, the government prefers to rely on the willingness and initiatives of organizations to make CSR a success. In 2006, the Dutch Ministry of Economic Affairs will evaluate the effect of its CSR policy. But is it a success already? During our research, breweries appeared to find CSR more important than Sustainability Reporting. Sustainability reporting is, for most breweries, not the way to reach stakeholders. Most stakeholders have their own means for receiving information e.g. annual reports, meetings, public statements and press releases. Although small breweries think CSR is very important, they feel no pressure from outside to publish a sustainability report. For them it is very complex and expensive to publish a sustainability report. Large breweries feel pressure from many stakeholders to be transparent, but not on a regular basis. We conclude from this research that CSR does not stimulate Sustainability Reporting, but neither does Sustainability Reporting stimulate CSR.     

ECS创新产品开发中的知识共享问题探讨

随着当前以知识经济为基础的全球竞争变得更加激烈,许多跨国公司的供应商们越来越早地参与到创新产品的合作开发过程中。本文以一个欧洲的消费电器制造公司(ECS)为案例,调查和研究了在该公司新产品的开发过程中,供应链成员与其共享知识和相关技术的机制,并重点讨论了在此供应链中共享知识时所涉及到的主要问题以及未来的改进方向。