Macro to micro: Country exposures,firm fundamentals and stock returns

We outline a systematic approach to incorporate macroeconomic information into firm level forecasting from the perspective of an equity investor. Using a global sample of 198,315 firm-years over the 1998–2010 time period, we find that combining firm level exposures to countries (via geographic segment data) with forecasts of country level performance, is able to generate superior forecasts for firm fundamentals. This result is particularly evident for purely domestic firms. We further find that this forecasting benefit is associated with future excess stock returns. These relations are stronger after periods of higher dispersion in expected country level performance.     

Reinforcing competitive advantage through green organizational culture and green innovation

The purpose of this paper is to reveal the relationships among green organizational culture, green innovation and competitive advantage. These relationships were assessed using structural equation modeling. Data were gathered from full-time hotel employees (N: 293) and managers (N: 192) in the Antalya region of Turkey. The results indicate that green organizational culture has a positive effect on green innovation and competitive advantage. Accordingly, green organizational culture is an important determinant for green innovation and competitive advantage. In addition, green innovation acted as a full mediator of the effects of green organizational culture on competitive advantage. Specifically, green organizational culture predicted green innovation, which in turn predicted competitive advantage. Finally, considering that causal studies on green innovation in the hotel industry are limited, this study may contribute to understanding how green innovation affects competitive advantage in the hotel industry.     

Management forecast credibility and underreaction to news

In this paper, we first document evidence of underreaction to management forecast news. We then hypothesize that the credibility of the forecast influences the magnitude of this underreaction. Relying on evidence that more credible forecasts are associated with a larger reaction in the short window around the management forecasts and a smaller post-management forecast drift in returns, we show that the magnitude of the underreaction is smaller for firms that provide more credible forecasts. Our paper contributes to the literature by providing out-of-sample evidence of the drift in returns documented in the post-earnings-announcement drift literature, with the credibility of the news being one explanation for the phenomenon.     

Why Are Earnings Kinky? An Examination of the Earnings Management Explanation

Prior research has documented a kink in the earnings distribution: too few firms report small losses, too many firms report small profits. We investigate whether boosting of discretionary accruals to report a small profit is a reasonable explanation for this kink. Overall, we are unable to confirm that boosting of discretionary accruals is the key driver of the kink. We caution the use of the ratio of small profit firms to small loss firms as a measure of earnings management. We investigate and discuss a number of alternative explanations for the kink.     

Asset reliability and security prices: evidence from credit markets

We assess the relation between asset reliability and security prices. Concerns about asset reliability are increasing with the move to fair value accounting in general purpose financial reports. We provide pertinent evidence from credit markets. A key benefit of using credit market data to explore the capital market implications of asset reliability is the theoretical basis of Duffie and Lando (Econometrica 69(3):633–664, 2001). They show that asset reliability (measurement) concerns should be concentrated in short-term credit spreads. Thus a focus on credit term structure can facilitate a cleaner identification of the impact of asset reliability on security prices. We find that asset reliability issues, attributable to SFAS 157 disclosures of Level 2 and, especially, Level 3 financial assets for a set of US financial institutions over the period of August 2007 to March 2009, are a significant determinant of short-term credit spreads and the shape of the general credit term structure. Our findings are robust to a variety of control variables and research design choices.     

The prioritisation of service dimensions in logistics centres: a fuzzy quality function deployment methodology

This study takes a customer focus that prioritises the service-offering dimensions of logistics centres (LCs) by considering potential LC customer expectations. Applying a survey and a quality function deployment methodology to logistics service providers, the study explores, categorises and prioritises LC customer expectations and LC service characteristics. The results indicate that customer preferences mainly prioritise infrastructure, and warehouse and intermodal dimensions. However, when the cost dimension is included, higher utility values are delivered through soft service dimensions like value-added or standard services. LC investors or undertakers can use these results to guide their design of market offerings by using the same methodology to assess expectations in their target markets.     

Value investing in credit markets

We outline a parsimonious empirical model to assess the relative usefulness of accounting- and equity market-based information to explain corporate credit spreads. The primary determinant of corporate credit spreads is the physical default probability. We compare existing accounting-based and market-based models to forecast default. We then assess whether the credit market completely incorporates this default information into credit spreads. We find that credit spreads reflect information about forecasted default rates with a significant lag. This unique evidence suggests a role for value investing in credit markets.     

The effect of ethical leadership on service sabotage

ABSTRACT

This study aims at examining the impact of ethical leadership activities on service sabotage, and the mediating role of service climate and corporate ethical values (CEV) on this impact. The study was completed via 384 acceptable questionnaires in total. The research findings show that ethical leadership affects the service climate and the CEV in a positive way whereas it has a negative effect on the service sabotage. In addition, it is observed that the CEV have a positive effect on the service climate. In the light of the research findings, managers’ ethical personal and managerial characteristics affect the service climate in a positive way and play a significant role for the ethical values to become more common within the organization. Furthermore, the ethical leadership is effective for decreasing the service sabotage which is referred as the undesirable and harming behaviors within the organization.     

Law,Property and Ambiguity: The Uses and Abuses of Legal Ambiguity in Remaking Istanbul's Informal Settlements

What is the role of legal ambiguity in the creation and institutionalization of private property regimes? In what ways does the (ab)use of legal ambiguities affect market‐making processes? I address these questions through a detailed analysis of two large‐scale urban renewal projects in Istanbul that impose a formal private property regime on informal settlements. My research reveals that without the strategic utilization of legal ambiguities and administrative arbitrariness by public and private actors, private property cannot be easily created and hence capitalist markets cannot function efficiently. My findings challenge the assumptions of several social science traditions such as neoclassical and neoinstitutionalist economics, as well as most works within the law and economics tradition regarding the relationship between law, property and economic development. These approaches to economic development are underpinned by the legal certainty that private property entails as the most important element for an efficient economic order. However, in their unconditional support for private ownership, they fail to realize the degree of legal ambiguity and administrative arbitrariness needed to create the private property regime in the first place. As such their arguments remain theoretically and empirically incomplete. A more complete analysis of the relationship between law and economic dynamics must focus on how private property is constructed, and the extent to which legal ambiguities and loopholes are utilized in this process.     

Understanding the Recent Growth in Consumer Loans and Credit Cards in Emerging Markets: Evidence from Turkey

In recent years, the surge in household indebtedness to historical heights has become a significant concern for developed economies. A similar trend has been witnessed in emerging market countries including Turkey. Our objective is to help further understand the dynamics of the recent growth in consumer loans and credit cards (CLCC) in Turkey. For this purpose, we investigate the long-term equilibrating relationships and short-term deviations from the equilibrium, and explore the determinants, directions, and strengths of causality relationships between CLCC and the selected macroeconomic variables, and analyze the dynamic interactions among the variables in the post-sample period by analyzing how CLCC responds to the shocks given to other macroeconomic variables and the contribution of each variable on the forecast variability of CLCC. We use monthly data for the period of January 2004—December 2013 of seven macroeconomic variables of money supply, interest rate, income, consumer confidence, inflation, stock market, and consumer goods imports. On empirical findings, we make suggestions about which policy tools should be used to influence, and if necessary to manage, the growth in CLCC.