A reexamination of state fiscal health and amnesty enactment

We use event history analysis to separately model a state’s first and then repeated tax amnesties and test the revenue yield versus the fiscal stress hypotheses using a panel of annual data from all 50 states for the period 1982–2010. We also split our sample into two sub-periods, 1982–1988 and 1989–2010, to more easily compare our results to other studies and to see if there is a significant difference between early tax amnesties and more recent ones. We find that state fiscal stress is more important than the potential yield from an amnesty, particularly for more recent amnesties. Our findings contrast with the existing literature which found evidence that states are likely to enact tax amnesties due to a revenue yield motive rather than a fiscal stress motive.     

Working capital (mis)management – impact of executive age

Several recent studies have used the upper echelons theory to explain the impact of personal traits of top executives on various corporate policies. In this, first of its kind, study we find that older executives invest more in working capital; take longer to convert inventories to cash; and pay their suppliers sooner. These findings are consistent with the argument that risk aversion increases with executive age. Our findings indicate that executive age has significant bearing on working capital management policies. This study also initiates new avenues in research relating behavioral aspect of executives with short‐term financial management.     

Organizational and decision characteristics and personality as determinants of control actions: A laboratory experiment

This paper investigates how choice of control actions (or behaviours) is affected by the controller's personality and perceptions of organizational and decision characteristics. In a simulated work setting (n = 172) it was found that persons working in mechanistic organizations chose significantly different control tactics than those working in organic organizations. The present findings also suggest that controllers are more likely to choose extrinsically (rather than intrinsically) motivating controls when they are faced with important decision situations. The implications of the findings are discussed. Multivariate models of choice of control tactics in organizations are suggested as being more powerful.     

The Gods can help: exploring the effect of religiosity on youth risk‐taking behavior in Indonesia

• This study explores the impact of intrinsic versus extrinsic religiosity on youth risk‐taking behaviors in Indonesia. Our analysis on Indonesians aged 18–24 shows that intrinsic religiosity has a significant impact on individual's perception of risk‐taking. Understanding the significant role that intrinsic religiosity plays in the lives of youth and their risk‐taking behaviors offers new ways to promote responsibility and risk‐free behavior. We argue that, rather than distancing from religiosity, spirituality and faith, social marketers and public policy makers should be working closely with religious institutions to enact social change among the youth. Copyright © 2016 John Wiley & Sons, Ltd.

     

Consumers' perception of corporate social responsibility in a developing country

Corporate social responsibility (CSR) increasingly receives attention from managers and researchers, especially in the area of consumer perception and response of CSR. However, most of this research was conducted in the context of developed countries. It shows that research on consumer perception towards CSR in developing countries needs to be developed. This paper will examine consumer perception in the developing country of Indonesia. This research produced mixed results, suggesting that CSR is still a concept waiting to be applied in the developing country. Consumers are often unaware and unsupportive towards CSR. This is the opposite finding of consumer perception in developed countries, where most consumers are willing to support CSR launched by corporations. Nevertheless, there is an interesting finding: When consumers have to buy similar products with the same price and quality, CSR could be the determining factor. They would buy from the firm that has a socially responsible reputation.     

Factors Influencing Consumer Purchasing Decision Toward Malang Meatballs At East Java,Indonesia

The study examined factors influencing consumers' purchasing behaviour in relation to Malang meatballs as a representative ethnic food in East Java, Indonesia. Multistage area sampling was used to randomly select 400 households from the Malang area (200 urban and 200 rural) as consumer respondents. Respondents were interviewed using a structured questionnaire by the researcher and enumerators. Logistic regression analysis was used to analyse consumers' purchasing behaviour toward Malang meatballs. This study can contribute to a better understanding of consumers' preferences toward Malang meatballs, an animal protein-based food, that has a unique taste. Consumers preferred Malang meatballs compared to street foods (i.e., “soto,” “tahu campur,” and fried noodles). Younger consumers concerned about freshness and a “halal food” may select Malang meatballs. The availability of Malang meatballs can increase consumers' purchasing action toward this product. Also, surrounding cold air temperature influenced consumers in selecting this food.     

The power of control: the acquisition decisions of newly public dual-class firms

Many private firms that go public opt for a dual-class share structure which gives insiders stronger voting power, at the expense of shareholder democracy. We examine how the dual-class structure influences the merger decisions of newly public firms, which have a notable appetite for acquisitions. Specifically, we compare acquisition activity, method of payment choice, and the long-run value implications of acquisitions by newly public single-class and dual-class US companies. Our results show that dual-class IPO firms make relatively more acquisitions in innovative industries and are less likely to pay with stock as compared to single-class IPO firms. The reluctance of dual-class firms to pay with stock is positively related to the wedge between the insiders’ voting rights and cash-flow rights. We also find that newly-public dual-class acquirers perform better in the long-run than newly-public single-class acquirers, mainly due to dual-class acquisitions in innovative industries. Our multivariate analysis shows that these findings hold after controlling for relevant risk factors associated with industry, deal, and firm specific characteristics. These results suggest that the dual class structure may enable newly-public firms to make better M&A decisions after going public.     

Modularity in making: simplifying solution space for user innovation

An increasingly popular form of open innovation in the digital age is ‘making,’ where users innovate across multiple disciplines and make products that meet their needs, using mechanical, electronic, and digital components. These users have at their disposal, a wide solution space for innovation through various modular toolkits enabled by digital‐age technologies. This study explores and outlines how these users simplify this wide solution space to innovate and make tangible products. Following a modularity theory perspective, it draws on case studies of users and their innovations: (1) Users with initial prototype product designs based on the Internet of things (IoT) from a maker event and (2) users with established product designs from the online community platform Thingiverse. The studies found that users reused the design in the form of existing off‐the‐shelf products and utilized digital fabrication and low‐cost electronics hardware as a ‘glue’ to create physical and informational interfaces wherever needed, enabling bottom‐up modularity. They iteratively refined their innovations, gradually replacing re‐used designs with own integrated designs, reducing modularity, and reducing wastage. The study contributes to open innovation and modularity with implications on the design of products and toolkits enabled by the digital age.     

Smile and default: the role of stochastic volatility and interest rates in counterparty credit risk

In this research, we investigate the impact of stochastic volatility and interest rates on counterparty credit risk (CCR) for FX derivatives. To achieve this we analyse two real-life cases in which the market conditions are different, namely during the 2008 credit crisis where risks are high and a period after the crisis in 2014, where volatility levels are low. The Heston model is extended by adding two Hull–White components which are calibrated to fit the EURUSD volatility surfaces. We then present future exposure profiles and credit value adjustments (CVAs) for plain vanilla cross-currency swaps (CCYS), barrier and American options and compare the different results when Heston-Hull–White-Hull–White or Black–Scholes dynamics are assumed. It is observed that the stochastic volatility has a significant impact on all the derivatives. For CCYS, some of the impact can be reduced by allowing for time-dependent variance. We further confirmed that Barrier options exposure and CVA is highly sensitive to volatility dynamics and that American options’ risk dynamics are significantly affected by the uncertainty in the interest rates.     

Structural Breaks,Biased Estimations,and Forecast Errors in a GDP Series of Canada versus the United States

International Advances in Economic Research - A structural break was suspected for the Canadian gross domestic product (GDP) time series when the reporting system switched from the Standard...