Trust in the employer: the role of high-involvement work practices and procedural justice in European organizations

Despite the central role of trust in the organizational sciences, we know little about what makes people trust the organizations they work for. This paper examines the antecedents of employees' trust in their organizations drawing on survey data from over 600 European professional workers and managers. The results revealed direct as well as indirect relationships of both human resource (HR) practices and procedural justice with trust. The relationships of both HR practices and procedural justice with trust were partially mediated by perceptions of organizational trustworthiness (in terms of perceived ability and trustworthy intentions of the organization). Justice and HR practices were also found to interact such that justice forms a stronger predictor of trust in organizations when HR practices are less developed. In addition, employees' dispositional propensity to trust explained significant variance in employee trust in their organization, even when it was controlled in our analysis. The implications of these findings for research and practice are discussed.     

On the effect of obesity on employment in the presence of observed and unobserved confounding

The aim of this paper was to estimate the effect of obesity on the employment probability for Italian men and women accounting for both observed and unobserved confounding. We use microdata collected by the Italian National Statistical Office for the year 2009 during a multi‐scope survey of Italian households. The employment–obesity relationship is estimated after controlling for observed confounding by using probit regression and a propensity score weighting approach. To control for both observed and unobserved confounding (endogeneity), a semiparametric recursive bivariate probit model is employed instead. Our findings suggest that obesity has a significant negative effect on the employment probability and that endogeneity might not be an important issue.     

Hangovers

This paper analyzes a process by which a market boom brought on by a temporary increase in the flow of buyers, can subsequently lead to a collapse of liquidity (speed of sale), prices and production to levels lower than before the onset of the boom. I consider a general model of markets subject to search frictions in the matching of buyers and sellers, where the entry of buyers and sellers (through production) are subject to adjustment costs. The resulting co-movement between unemployment, inventories and sales with the production cycle matches the stylized facts.     

Travel as a Life Priority?

This paper adopts a different approach to understand non- or infrequent travel. Most research is grounded in constraints theory, and assumes that once constraints are removed, people will travel. Yet, in spite of efforts by the industry to remove obstacles to participation, travel propensity rarely exceeds three-quarters of the population of developed economies. This paper tests the idea that tourism may simply not be a high enough priority for some people to engender travel, while for others it may be seen as being more important. The study evaluated where travel ranks within a set of 13 other activities. People who rated travel as being important or very important to them, consistently rated it as being a higher priority than most of the activities studied. Those who rated travel as being unimportant or of little importance placed it as a lower priority activity. The findings challenge the traditional constraints theory.     

Complementarities between franchise contract duration and multi-unit propensity in franchise systems

This article explores the determinants of two crucial decisions in franchising relations: the contract length and the franchisers' propensity to allow franchisees to own several stores. The results show that franchisers alleviate franchisees' fears of hold-up by providing them with longer contract length. The findings also show that the lower the contracting experience of the franchisers and the higher the potential free-riding in a franchise system, the shorter the contract duration. Regarding multi-unit franchising, franchisers have a lower propensity to allow franchisees to own several outlets when the cost of monitoring outlet managers are high, and they have a greater propensity to offer multi-unit opportunities when free-riding appears to be a threat. The findings also show the existence of complementarities between the decisions studied, such that they constitute a system of interdependent elements.     

Comparing economic performance of organic and conventional U.S. beef farms using matching samples*

Economic performance measures of organic and transitioning‐to‐organic cow–calf farms are compared with those of non‐organic cow–calf farms. A method of matching samples is used for the comparison, estimating sample average treatment effects for the subpopulation of the treated. Each organic farm is matched with one non‐organic farm that is involved in the same beef industry segments and farm size classes, and in the same region. Furthermore, farmer demographic, farming system, and technology variables are used to identify matches. Bias is reduced by estimating separate weighted regression functions for the treated and untreated groups. Results suggest that higher cost of organic production is due primarily to higher capital recovery, taxes and insurance, and overhead costs. Evidence is found for differences in beef enterprise profitability by organic status.     

Workplace heterogeneity and wage inequality in Denmark

Wage inequality is on the rise in most developed economies, and this phenomenon has fostered a growing body of research on its potential drivers. Using German data over the period 1985–2009, Card et al. (The Quarterly Journal of Economics 2013, 128(3), 967-1015) argue that rising workplace heterogeneity has contributed substantially to the rise in wage inequality. I revisit their findings in two ways. First, because the generalization of their findings remains an open question, I apply their methodological approach to Danish register data and test whether rising workplace heterogeneity explains a significant share of the rise in wage inequality in Denmark. I find that, contrary to Germany, workplace heterogeneity remained practically stable over time, and this pattern contributed slightly negatively to the rise in wage inequality. Second, I complement Card et al.'s (2013) methods with the variance decomposition exercise proposed by Song et al. (2019) to identify more precisely the sources of the rise in wage inequality in Denmark. Although the rise in wage inequality is partly a between-establishment phenomenon, I show that the strengthening of assortative matching patterns and the rising heterogeneity of workers within establishments are the main drivers of growing inequality.     

The effects of risk‐taking tendency on risk choice and pre‐ and post‐decisional information selection

Ideally, people seek and select information about unfamiliar risks with which they are confronted, before they make a risk choice. This study investigated what happens when people do not have this opportunity. The main question was how risk‐taking tendency influences intuitive risk decisions and how this impacts subsequent information search and subsequent choices. In the present study, participants had to make a choice about an unfamiliar risk, either before or after they had had the opportunity to search for (risk‐promoting or risk‐averse) information. In the condition where they could only seek for information after they had made a choice, they had to reconsider their first choice and make a second risk choice. We expected that (1) risk‐taking tendency would impact people's risk choices, but only in the situation where they have little information. On the basis of cognitive dissonance theory, it was furthermore predicted that (2) risk‐taking tendency and (3) initial risk choice would affect risk information selection. Furthermore, we predicted that (4) the first risk choice and (5) the risk information selected would influence the subsequent risk choice. The results suggest that if people make a first, intuitive decision about an unknown risk, risk‐taking tendency has an effect on the choice, but that this does not happen when people can first select information. Risk‐taking tendency did not influence information selection, but initial choice did (although in another way than we expected). Furthermore, both the first risk choice and the risk information selected affected subsequent risk choices. These findings suggest that people often make initial intuitive decisions that are influenced by personality characteristics, and that are subsequently difficult to change.     

Paying informally for public health care in Albania: scarce resources or governance failure?

Informal payments for health care are common in most former communist countries. This article explores the demand side of these payments in Albania. Using tobit and Heckman selection models we control for individual determinants of informal payments in outpatient and inpatient health care. Propensity score matching (PSM) techniques are used to investigate the changes in the characteristics of people paying informally over the different years. Our findings suggest that vulnerable groups in society remain less protected against such payments and policy measures have not reached the most deprived regions of the country.     

Heterogeneous trade agreements,WTO membership and international trade: an analysis using matching econometrics

This article explores the heterogeneous effects of trade agreements (TAs) and World Trade Organization (WTO) membership on the volume of international trade. We extend Baier and Bergstrand’s (2009a) application of matching econometrics by distinguishing between different types of TAs and WTO participation and account for the endogenous nature of trade policy. For a panel data set covering 1960–2005 and 187 countries, we find that the treatment effect on international trade systematically varies with the type of TA and WTO membership.