Do analysts add value when they most can? Evidence from corporate spin‐offs

This article investigates how securities analysts help investors understand the value of diversification. By studying the research that analysts produce about companies that have announced corporate spin‐offs, we gain unique insights into how analysts portray diversified firms to the investment community. We find that while analysts' research about these companies is associated with improved forecast accuracy, the value of their research about the spun‐off subsidiaries is more limited. For both diversified firms and their spun‐off subsidiaries, analysts' research is more valuable when information asymmetry between the management of these entities and investors is higher. These findings contribute to the corporate strategy literature by shedding light on the roots of the diversification discount and by showing how analysts' research enables investors to overcome asymmetric information. Copyright © 2013 John Wiley & Sons, Ltd.     

Smuggling, non‐fundamental uncertainty, and parallel market exchange rate volatility

Abstract.  We explore a model where smuggling and a parallel currency market arise, owing to government restrictions that prevent agents from legally holding foreign exchange. Despite such restrictions, agents are able to diversify their savings, holding both domestic and parallel foreign cash, basing their portfolio allocation on current and prospective parallel exchange rates. We attribute movements in parallel rates to non‐fundamental uncertainty. The model generates equilibria with both positive and negative parallel premia and correlations between illegal trade and the premium. The model has the novel implication that currency speculation drives smuggling, affecting real activities in all sectors of the economy. JEL classification: F31     

International hotel chains and environmental protection: an analysis of Hilton's we care! programme (Europe, 2006–2008)

Using the case study method, this paper evaluates and analyses Hilton's we care! programme for improving the environmental performance of the 70 Hilton Worldwide hotels in operation in Continental Europe in 2006–2008. It explores the practical dimension of “greening” hotel operations in the context of corporate social responsibility (CSR), and demonstrates the close links between CSR and human resource management (HRM) in hotels. It deepens the understanding of corporate environmentalism and seeks to disseminate best practice among hospitality managers. The programme's distinctive and innovative character as well as its weaknesses and strengths are highlighted. Barriers to behavioural change in hotel operation are discussed. The programme involved over 16,000 employees, created hotel-specific action teams linking all employee levels and reduced energy use per square metre by 15%, water use and CO₂ emissions per guest night by 8% each over three years. Avoided utility costs totalled US$16 million, of which US$9.6 million can be attributed to changes in human behaviour. The paper makes a case for a holistic approach that combines the introduction of IT-based measurement and performance-assessing tools with genuine employee empowerment and green awareness raising. The study concludes with future managerial policy recommendations that simultaneously bear upon corporate environmentalism and HRM.     

The future of the uplands

Upland areas provide UK society with many important functions, goods and services, but have experienced a number of disturbing trends and face an uncertain future. This paper outlines historic, current and future drivers of environmental, economic, socio-cultural and policy change in UK uplands, and assesses how these have affected or are likely to affect ways in which land is used and the provision of ecosystem services. Information is synthesised into scenarios summarising a range of possible futures anticipated for UK uplands to 2060 and beyond. Finally, innovations in science, technology, governance and policy are evaluated that could enable uplands to continue providing key ecosystem services under a range of scenarios. The paper concludes that many upland areas will need to be prepared for significant reductions in grazing and prescribed burning. Conversely, other areas could experience agricultural intensification, for example significant increases in grazing or an expansion of arable or bioenergy crops into upland valleys, due to anticipated increases in global demand for food and energy. These scenarios will take place in the context of climate change. Many may take place together and may interact with each other, with complex and unpredictable implications for the upland environment, economy and society. In this context, a number of advances are needed in science, technology and policy to maintain viable upland communities and the future provision of ecosystem services. These may include funding for ecological and hydrological restoration via carbon offsetting or other means. It may also involve advances in ecosystem service modelling, mapping and valuation, which through stakeholder participation could facilitate more integrated rural planning. New forms of environmental governance need to be explored that can empower those interested in developing upland economies to maintain thriving upland communities, while managing the ecosystem services they provide as efficiently as possible.