Codes of Conduct in Subcontracting Networks: A Labour Law Perspective

In the past ten years, many European companies organised into subcontracting networks have decided to adopt codes of conduct to regulate labour relations and to ensure the respect of fundamental social rights. This paper first determines the context and the issues to be addressed by codes of conduct within networks of companies, and second analyses the terms under which they can be implemented. The paper argues that codes of conduct can complement the standards developed by States, the European Union or the social partners, but that steps should be taken in order to avoid that these texts replace the existing labour law.     

Service Quality,Competition, and Regulatory Policies in the Postal Sector

This paper presents a simple model which illustrates the possible policy- and welfare-implications of endogenous product selection in the postal sector. The cost of a unit of mail depends on its "quality" (e.g., speed of delivery) and on the type and location of the addressee (firms, urban households, and rural households). Senders have inelastic demands and differ in their willingness to pay for quality. Addressees are passive but their utility may affect social welfare. Two operators play a two-stage game, first choosing qualities and then prices. We first show that the equilibrium with two private (profit maximizing) operators results in an inefficient provision of quality. Then, we consider the mixed (Nash) equilibrium with one private and one (welfare maximizing) public operator. If the budget constraint of the public firm is not binding, this equilibrium is shown to be first-best efficient even if social welfare accounts for the utility of addressees. If the budget constraint is binding, the mixed equilibrium is not efficient but yields a higher level of welfare than the private equilibrium. Finally, we study the impact of minimum quality standards within our setting.     

An international study of internal audit function quality

We investigate organisational and environmental factors that influence firms’ incentives to develop high-quality internal audit functions (IAFs) by using a unique international sample formed by matching proprietary data from a global internal auditor survey with public data obtained from Worldscope. Concerning organisational factors, we find that a positive relationship exists between IAF quality and firm complexity and confirm that complex firms have a higher demand for monitoring and advising and, therefore, a greater need for formal controls. In addition, IAF quality is positively related to board monitoring and audit committee diligence but negatively associated with CEO power, which suggests that IAF quality is influenced by other key players in corporate governance. Regarding environmental factors, we document that IAF quality is positively associated with industry competition, which implies that a firm’s incentive for a high-quality IAF is enhanced when confronted with greater environmental uncertainty. Furthermore, IAF quality has a significantly positive relationship with our self-constructed index of IAF requirements included in national corporate governance codes, which indicates that strong home-country corporate governance codes play a role in fostering IAF development.     

Overcrowding,a disease of social growth

Overcrowding satisfies the physician's criteria for a disease—of society, caused by the lack of a doctrine for the future. This article is a clinical examination of the disease, its symptoms, pathogenesis, diagnosis and treatment.     

Efficiency tests with overlapping data: an application to the currency options market

This paper presents the results of an empirical study into the efficiency of the currency options market. The methodology derives from a simple model often applied to the spot and forward markets for foreign exchange. It relates the historic volatility of the underlying asset to the implied volatility of an option on the underlying at a specified prior time and then proceeds to test obvious hypotheses about the values of the coefficients. The study uses panel regression to address the problem of overlapping data which leads to dependence between observations. It also uses volatility data directly quoted on the market in order to avoid the biases which may occur when ‘backing out’ volatility from specific option pricing models. In general, the evidence rejects the hypothesis that the currency option market is efficient. This suggests that implied volatility is not the best predictor of future exchange rate volatility and should not be used without modification: the models presented in this paper could be a way of producing revised forecasts.     

From Caring Entrepreneur to Caring Enterprise: Addressing the Ethical Challenges of Scaling up Social Enterprises

This paper advances the conception of social entrepreneurs as caring entrepreneurs. We argue that the care ethics of social entrepreneurs, implying the pursuit of caring goals through caring processes, can be challenged when they engage in the process of scaling up their ventures. We propose that social entrepreneurs can sustain their care ethics as the essential dimension of their venture only if they are able to build a caring enterprise. Organizational care designates the set of organizing principles that facilitate the embedding of care ethics at an organizational level, beyond the imprinting induced by social entrepreneurs’ personal ethics.     

Driving under the influence of alcohol in Cali,Colombia: prevalence and consumption patterns, 2013

This study's goal was to establish the prevalence of driving under the influence of alcohol (DUI) and alcohol consumption patterns among drivers in Cali, Colombia, in 2013. A cross-sectional study based on a roadside survey using a stratified and multi-stage sampling design was developed. Thirty-two sites were chosen randomly for the selection of drivers who were then tested for blood alcohol concentration (BAC) and asked to participate in the survey. The prevalence of DUI was 0.88% (95% confidence intervals [95% CI] 0.26%–1.49%) with a lower prevalence when BAC was increasing. In addition, a higher prevalence was found during non-typical checkpoint hours (1.28, 95% CI ?0.001%–0.03%). The overall prevalence is considered high, given the low alcohol consumption and vehicles per capita. Prevention measures are needed to reduce DUI during non-typical checkpoints and ongoing studies are required to monitor the trends and enable the assessment of interventions.     

The Return Performance of Cubic Market Model: An Application to Emerging Markets

This article studies the performance of the high-order moment capital asset pricing model (CAPM) market models in emerging markets. We apply the cubic market model (4-moment CAPM) to 16 emerging market stock indices ranging from January 2010 to September 2015. Performance of the model is evaluated through the Fama and MacBeth’s two-step regression and through different corrections proposed in the literature, as well as generalized method of moments (GMM) estimation. According to Fama–MacBeth’s procedure, CAPM, the quadratic and cubic market models seem to be insignificant for the analyzed sample; however, the GMM estimation shows that quadratic model is valid for Indian, Polish, and Thai country indices, whereas cubic market model is accurate for Indian country index.     

Examining the Patterns of Goodwill Impairments in Europe and the US

We examine the patterns of goodwill impairments in Europe and in the US over the period from 2006 to 2015, for a sample of more than 35,000 firm-year observations. We define the timeliness of goodwill impairments as the frequency of accounting impairments conditional to indications of economic impairments. We measure indications of economic impairment with three metrics: equity market value minus equity book value less than goodwill, market-to-book smaller than one and negative earnings before interest, tax, depreciation and amortisation (EBITDA). Our research strategy leads us to draw very different conclusions than those in the recent EFRAG (2016) study. While median levels of goodwill on the books between US and European firms are relatively similar, we find several indications that US firms recognise timelier impairments, at least during 2008 and 2009, that is, the early years of the financial crisis. We further document that US impairers write down a much greater percentage of their beginning balance of goodwill than European impairers. During the financial crisis, the median level of impairment by US firms was 63% of opening goodwill in 2008 and 40% in 2009, whereas median European write-downs were only 6% and 7% of opening goodwill, respectively. Even though European firms are more likely to impair over multiple years, the cumulative impairments never come close to the level of US firms, be it in a single year or cumulative over multiple years. We also find that the frequency of accounting impairment is small compared to the number of firms presenting evidence of economic impairment: only 20–25% of firms recognise impairments depending on the measure of economic impairment. This has often been interpreted by academics as a sign of untimely write-offs. Accounting differences between US Generally Accepted Accounting Principles and International Financial Reporting Standards are unlikely to explain our results. One caveat of our analysis is that it does not allow us to draw conclusions on whether the observed differences between US and European firms are driven by differences in conditional conservatism and/or big bath accounting practices.