On economics and business ethics

Economics has an impoverished view of virtuous human behaviour in general, and corporate social responsibility in particular. We claim that this is due to a particular, albeit currently dominant approach to economics. This approach focuses on the pursuit of wealth through efficient allocation of scarce resources by 'rational' utility-maximizing economic agents and institutions, such as markets, firms and states, in the exclusive pursuit of 'efficiency'. This results in an ethic-free and often inimical approach to virtuous behaviour. However, a different approach to economics, which focuses on sustainable global resource creation and allocation, asserts virtuous responsible behaviour to be part and parcel of economic analysis and performance.     

The Two Faces of Analyst Coverage

We find that positive excess (strong) analyst coverage is associated with overvaluation and low future returns. This finding is consistent with the view that excessive analyst coverage, driven by investment banking incentives and analyst self-interests, raises investor optimism causing share prices to trade above fundamental value. However, weak analyst coverage causes stocks to trade below fundamental values. This finding indicates that investors tend to believe that these firms are more likely to be plagued by information asymmetries and agency problems. The results remain robust after controlling for the possible endogenous nature of analyst coverage and analysts' self-selection bias.     

Consumer Trends and Attitudes to Functional Foods

Abstract

Consumers' needs have grown to such an extent that they are sought out of nutritious and pleasant organoleptic foods, as well as functional foods. This study explores consumer attitudes towards health nutrition products and particularly functional foods, using data from a survey to 325 consumers. The results designate that consumers recognize different kinds of functional foods, willing to pay a premium for their purchase. They perceive that functional foods may contribute to easily follow a healthy and balanced diet and reduce the risk of health problems but appeared anxious about the health benefits these foods communicate in their labelling.     

The effect of education on the minimum wage

This research shows for the first time that the level of education has a causal, negative effect on the minimum wage. I use 2SLS, with historical educational data as an instrument for the level of education in 2010, and I find that across the US states a one percentage point greater proportion of college graduates is associated with a real minimum wage that is lower by 1.5%–1.6%. Also, in order to control for state-level omitted variables, I regress the change in the minimum wage on the change in education and I find again a negative, and significantly at the 1% level, effect. Minimum wage is a policy that is chosen by governments according to voters’ preferences. The results of this research imply that when the level of education increases voters prefer a lower minimum wage.     

Military spending,economic growth and investment: a disaggregated analysis by income group

Empirical Economics - Employing a panel vector autoregression (PVAR) methodology, the paper addresses the nexus between military expenditures and two key macroeconomic variables, namely growth...     

Testing for Regime Changes in Greek Sovereign Debt Crisis

This paper examines whether the efficiency market hypothesis for the Greek sovereign debt holds. As in Blanco et al. (2005) we test the theoretical equivalence of credit default swap (CDS) and spreads that dictates a CI relationship between the two. The main innovation of the present analysis is the use of a threshold vector error-correction (TVECM) model, thus allowing thresholds within the sample covering the period 1990 to 2010. Moreover, by employing this methodology we are able to evaluate the degree and dynamics of transaction costs resulting from various events due to external market imperfections but also domestic factors. The main hypothesis we test is to what extent spreads and CDS are indeed integrated that may result in an efficient and integrated segniorage capital market. Our findings support the gradual integration hypothesis. We find that spreads and CDS are cointegrated, though threshold effects are also revealed in terms of events that have impacted on markets.     

Habit Formation in an Overlapping Generations Model with Borrowing Constraints

We introduce habit‐formation in the three‐period OLG borrowing‐constrained framework of Constantinides et al. (2002) by allowing the utility of the middle‐aged (old) to depend on consumption when young (middle‐aged). This specification enables us to separate the effect of the two habit parameters (middle‐aged and old) since each representative age‐group can face different levels of habit persistence. The two‐habit setup underlines some important issues with regards to savings and security returns which do not always conform to the standard findings in the literature. In addition, the model produces equity premium consistent with US data for relatively small levels of risk aversion.     

Short Sale Constraints and Dispersion of Opinion: Evidence from the Indian Equity Market

Short sale constraints can inflate market prices, as bearish investors cannot act on their market views. The paper uses data from the Indian equity market to test whether opinion dispersion leads to higher overpricing when short sales are prohibited. The Indian equity market provides a natural testing environment, as short sales were banned between 2001 and 2008. The empirical results offer supportive evidence of the relation between opinion dispersion and overpricing in a market with short sale constraints.     

Who Needs CSR? The Impact of Corporate Social Responsibility on National Competitiveness

The link between corporate social responsibility (CSR) and competitiveness has been examined mainly at the business level. The purpose of this paper is to improve conceptual understanding and provide empirical evidence on the link between CSR and competitiveness at the national level. We draw on an eclectic-synthetic framework of international economics, strategic management and CSR literatures to explore conceptually whether and how CSR can impact on the competitiveness of nations, and test our hypotheses empirically with a sample of 19 developed countries over a 6-year period. Our evidence suggests that CSR can make a significant positive contribution to national competitiveness, as measured by national living standards. We also find that countries with a relatively low innovation record can benefit more, as compared to highly innovative countries, by implementing nationwide CSR-based positioning strategies.     

Implementing corporate social responsibility through social partnerships

This paper examines how corporate social responsibility (CSR) is implemented through social partnerships. Drawing on previous literature and case study research, it presents a conceptual model of the process of implementation. An exploratory case study of the social responsibility partnership programme at the Union of European Football Associations (UEFA) has been conducted. The case study draws on interview data and documentary sources of evidence gathered from UEFA and the six partner organisations that comprise its CSR portfolio. The conceptual model identifies three stages of the implementation process (selection, design, management), with partnership evaluation being an ongoing process during all three. The latter consists of two elements, namely project and process evaluation. A key finding is the lack of process evaluation due to a high degree of inter‐personal trust. The conceptual model adds to the growing body of research on the implementation of social partnerships and CSR. This paper is also the first to empirically explore the process of CSR implementation through social partnerships in the football sector.