Consulting experts with vested interests: The power of benchmarking

A decisionmaker gets independent advice from two experts, who can be of two different types. Experts are risk-neutral and prefer certain policies irrespective of the state of nature, so to induce information-sharing the decisionmaker must reward truthful experts. I show that, in this environment, a heterogeneous committee has no informational advantage over a single expert: a decision rule that encourages one expert to be honest immediately makes honesty less attractive for the other. With a homogenous committee, the higher is the correlation between the experts’ signals, the more the decisionmaker is willing to pay to secure independent advice.Received: April 2004, Accepted: Accepted: January 2005, JEL Classification: D71, D82Lars Frisell: I thank David Austen-Smith, Tim Feddersen, Johan Lagerlöf, Jan Potters, Ken Shotts, Jonas Vlachos, Jörgen W. Weibull, an anonymous referee, and especially Karl Wärneryd for helpful comments. Financial support from the Jan Wallander and Tom Hedelius Foundation and the Sweden-America Foundation is gratefully acknowledged.     

The Effects of Purchases of Mortgages and Securitization by Government Sponsored Enterprises on Mortgage Yield Spreads and Volatility

In this paper, we investigate the effects of GSE (government sponsored enterprise) activities on mortgage yield spreads and volatility. Using various regression procedures (i.e., vector error correction (VEC) and GARCH models) and controlling for default and prepayment risk, we find that securitizations and purchases of mortgages by GSEs reduce mortgage yield spreads and volatility. In particular, we find that the yield spread between conforming and 10-year constant maturity treasury (CMT) rates decreases by 8.0 bp per $1billion increase in the level of GSE securitizations. Similarly, if GSEs increase mortgage purchases, the yield spread decreases 10.5 bp per $1billion increase of purchases. In addition, we hypothesize and find that GSE activities have a spillover effect to the non-conforming mortgage market; via investor substitutions, GSE purchases and securitizations of conforming loans reduce non-conforming loan rates. Thus, the measured influence of GSE activities is biased downward when measured using the spread of non-conforming loans over conforming loan rates. We also find that purchases of mortgages by GSEs significantly reduce mortgage yield volatility. In sum, our findings show that GSE activities reduce and stabilize mortgage market rates.     

Can foreign banks compete in China?

Foreign banks in China have faced strict regulatory requirements that were not imposed on domestic banks and as such they have performed poorly in profitability rankings. Recent changes in the Chinese regulatory requirements prompt us to consider whether foreign banks are now on an equal footing with the Chinese domestic banks. Using Cobb–Douglas stochastic frontier analysis with total income as the dependent variable, we find no significant performance difference between foreign and domestic banks. However, robustness testing using the individual components of total income as dependent variables reveals that foreign banks need to improve efficiency of their income generation.     

Recruitment of Seemingly Overeducated Personnel: Insider–Outsider Effects on Fair Employee Selection Practices

Fair employment policies constrain employee selection: specifically, applicants’ professional experience can be a substitute for formal education. However, reflecting firm-specific job requirements, this substitution rule applies less strictly to applicants from outside the firm. Further, setting low educational job requirements decreases the risk of disparate impact charges. Using data from a large US public employer, we show that successful outsider candidates exhibit higher levels of formal education than insiders. Also, this gap in educational attainments between outsiders and insiders widens with lower advertised degree requirements. More generally, we find strong insider–outsider effects on hiring decisions.     

On the job and co-worker commitment of Dutch agency workers and permanent employees

This article explores the relationship between employment status (agency workers vs. permanent employees) and affective and normative job and co-worker commitment. Our study was conducted on employees from four metal companies in the Netherlands. As HRM practices seem to influence employee commitment, we performed 89 interviews across all four companies and included blue-collar workers, their managers (direct supervisors, HR managers and production managers), as well as works council members. To test our hypotheses on commitment differences, we conducted quantitative research within the companies (permanent employees N = 167; agency workers N = 54), all blue-collar workers. Results show that permanent employees and agency workers express similar degrees of commitment to their job and to their co-workers, apart from affective commitment to co-workers, which is lower for agency workers than for permanent workers. We argue that national legislation, as well as managers' attempts to offer HR practices equal to those of permanent staff, play a prominent role in stimulating agency workers' commitment.     

民间借贷规范发展路径思辨分析

民间借贷作为一种资源丰富、操作便捷的融资手段,有助于缓解银行信贷资金不足的矛盾,促进经济发展。近年来,我国民间借贷规模快速膨胀,其随意性、风险性容易造成诸多社会问题。对此,应通过完善法律制度、金融机构配合和规范发展多元化的新型金融机构加以解决。     

Macro-level determinants of formal entrepreneurship versus informal entrepreneurship

Based on the eclectic theory of entrepreneurship, this article analyzes macro-level determinants of national rates of formal versus informal entrepreneurship. Our evaluation of the factors identified in this theory reveals a set of empirically-testable, higher-order determinants: economic opportunities, quality of governance, macro-level resources and abilities, performance-based culture and socially-supportive culture. The results of our analysis obtained through the PLS (partial least squares) approach to structural equation modeling contribute to the entrepreneurship literature by providing an empirically-supported model that shows how formal and informal entrepreneurship are driven differently. This model clarifies the conflicting findings in previous research about the effects of socioeconomic, institutional, and cultural factors on entrepreneurship rates across countries. Finally, by showing the effect of each determinant on formal and informal entrepreneurship, this study has important implications for policymakers as well as businesses.     

服务业结构对城市“虹吸”效应的影响

从生产过程的标准化程度出发,将服务业划分为可标准化和不可标准化服务业两个部门,讨论两个部门冰山成本的差异,进而建立理论模型,采用1978-2014年29个直辖市和省会城市的服务业分行业的数据对模型进行实证,分析服务业结构对我国城市的出现的“虹吸”现象的影响。结果表明,北京、上海、重庆、成都、兰州和乌鲁木齐出现了显著的“虹吸”现象。同时不可标准化服务业带来的“虹吸效应”要大于可标准化服务业带来的“虹吸效应”。城市规划要注意“虹吸”现象给经济增长带来的负面效应,通过调整不可标准化服务业可以更有效地缓解城市“虹吸”现象。     

Project management improvement efforts—creating project management value by uniqueness or mainstream thinking?

This paper presents a research study that is part of the large international Project Management Institute (PMI)–sponsored research project the “Value of Project Management.” Three case studies have been conducted on Norwegian enterprises. This article focuses on how enterprises improve project management and presents the improvement efforts and the stated reasons behind them. There are striking similarities as to the prioritized ways the enterprises have chosen to make improvements: use of a rather standardized model for project work and internal schooling activities. The enterprises all explain their efforts as internally driven, even if some consultancy assistance was used. This article discusses three drivers behind the improvement efforts: an economic perspective, a new institutionalism perspective, and an innovation perspective. This article identifies indicators pointing to all drivers and helps us understand why and how enterprises are improving project management. The importance of research on the practice of the most capable enterprises within the project management field is acknowledged.     

The Role of Ownership in Determining the Rural Economic Benefits of On‐shore Wind Farms

The development of the wind energy sector is often promoted as a means of supporting rural economies. This paper focuses on how the ownership structure of on‐shore wind power plants (external, farmer or community) affects the size and distribution of impacts within the rural part of a region. Empirical analysis is based on a regional computable general equilibrium model of North East Scotland with the results compared to those generated from a standard social accounting matrix multiplier analysis. With no local ownership, while rural GDP increases, there is almost no effect on household incomes due to the limited direct linkages of the on‐shore wind sector. Local ownership increases the household income benefits but there are still limited positive spill‐over effects on the wider economy unless factor income is re‐invested in local capital. With re‐investment, farm household ownership gives rise to the largest increase in total household income but community ownership gives rise to the largest increase in rural (non‐farm) household incomes and welfare. The results contribute to the on‐going debate about the opportunity cost of external asset ownership in rural areas.