Connecting the Dots: Do Financial Analysts Help Corporate Boards Improve Corporate Social Responsibility?

This paper presents an examination of the joint impact of board structural elements at firm level and financial analysts as market-level corporate governance (CG) on corporate social responsibility (CSR) performance. Our study contributes to the CG–CSR literature by adopting the bundling approach, a perspective that has recently attracted researchers’ attention as an answer to any heterogeneity and fragmentation in existing findings. It is based on an extensive sample consisting of 7,739 firm-year observations of US firms for the 2006–2015 period. The findings suggest that financial analysts complement the corporate board with more independence, gender diversity and a specialized CSR committee to realize a certain level of CSR performance of a firm. The findings also indicate that analysts substitute for those internal governance factors that are associated with weaker boards – larger sizes and dual-role CEOs. We also draw implications for research and practice from our findings.     

Does Corporate Culture Affect Bank Risk‐Taking? Evidence from Loan‐Level Data

Using comprehensive corporate and retail loan data, we show that the corporate culture of banks explains their risk‐taking behaviour. Banks whose corporate culture leans towards aggressive competition are associated with riskier lending practices: higher approval rate, lower borrower quality, and fewer covenant requirements. Consequently, these banks incur larger loan losses and make greater contributions to systemic risk. The opposite behaviour is observed among banks whose culture emphasizes control and safety. Our findings cannot be explained by heterogeneity in a bank's business model, CEO compensation incentives or CEO characteristics. We use an exogenous shock to the US banking system during the 1998 Russian default crisis to support a causal inference.     

Does board gender diversity affect firm risk-taking? Evidence from the French stock market

Journal of Management and Governance - Drawing from a sample of French companies that made up the SBF 120 index over the period 2006–2010 (before the enactment of the...     

Does location influence executive compensation? Evidence from Canadian SMEs

We examine the impact of geographic location on the level and structure of executive compensation of small and medium enterprises (SMEs) in Canada, using a panel data sample between 2008 and 2011. Our results show that SMEs pay a higher price for talent by paying a large proportion (71%) of compensation as guaranteed cash pay to their executives. We also report a strong influence of location on compensation structure. Specifically, rural firms pay 13% more incentive based equity pay to their executives compared to their size matched urban counterparts. However, there is no difference between the total compensation for managers of rural and urban firms after controlling for the cost of living index. In cross-sectional tests, we observe that total compensation is positively related to CEO/Chair duality and family ownership but is not related to management quality. In addition, we find that rural firms display a higher pay-performance sensitivity.     

Does governance confer organisational resilience? Evidence from UK employee owned businesses

Current economic crisis has highlighted the importance of an organization’s ability to withstand economic shocks. This has rekindled interest in organization resilience on the one hand, and the relationship between alternative governance forms such as employee owned businesses (EOBs) on the other. We explore this relationship using performance data on 204 publicly traded non-employee owned businesses and 49 EOBs prior to the economic downturn (2004–2008), and during the economic downturn (2008–2009). This data is complemented with a survey of resilience related governance and organizational practices in 41 EOBs and 22 non-EOBs. Our results show that: (a) employee ownership that is combined with employee involvement in firm governance is associated with greater stability in business performance over a business cycle; (b) EOBs have longer investment payback horizon when compared to non-EOBs across a number of activities; (c) Top management in EOBs are more likely to seek employee input in strategic decision making; (d) EOBs are more likely to use employee involvement to achieve tighter coupling between feedback from operations and the setting of strategic direction for the firm. These results suggest that employee stock ownership programs alone are not sufficient to develop higher levels of organizational resilience. Managers must combine employee stock ownership with employee involvement in governance if they wish to build up resilience in advance of adverse economic conditions.     

Are We Adapting to Floods? Evidence from Global Flooding Fatalities

There has been a growing interest in understanding whether and how people adapt to extreme weather events in a changing climate. This article presents one of the first empirical analyses of adaptation to flooding on a global scale. Using a sample of 97 countries between 1985 and 2010, we investigate the extent and pattern of flood adaptation by estimating the effects of a country's climatological risk, recent flood experiences, and socioeconomic characteristics on its flood‐related fatalities. Our results provide mixed evidence on adaptation: countries facing greater long‐term climatological flooding risks do not necessarily adapt better and suffer fewer fatalities; however, after controlling for the cross‐country heterogeneity, we find that more recent flooding shocks have a significant and negative effect on fatalities from subsequent floods. These findings may suggest the short‐term learning dynamics of adaptation and potential inefficacy of earlier flood control measures, particularly those that promote increased exposure in floodplains. Our findings provide important implications for climate adaptation policy making and climate modeling.     

Of Journal Editors and Editorial Boards: Who Are the Trailblazers in Increasing Editorial Board Gender Equality?

Female academics continue to be under‐represented on the editorial boards of many, but not all, management journals. This variability is intriguing, because it is reasonable to assume that the size of the pool of female faculty available and willing to serve on editorial boards is similar for all management journals. This paper therefore focuses on the characteristics of the journal editors to explain this variability; journal editors or editors‐in‐chief are the most influential people in the selection of editorial board members. The authors draw on social identity and homosocial reproduction theories, and on the gender and careers literature to examine the relationship between an editor's academic performance, professional age and gender, and editorial board gender equality. Longitudinal data are collected at five points in time, using five‐year intervals, from 52 management journals. To account for the nested structure of the data, a three‐level multilevel model was estimated. Overall, it is found that the prospects of board membership improve for women when editors are high‐performing, professionally young or female. The authors discuss these findings and their implications for management journals with low, stagnant or declining representation of women in their boards.     

Does Religious Diversity in Health Team Composition Affect Efficiency? Evidence from Dubai

Team cultural diversity, the degree to which working team members differ in culture‐related factors, may affect healthcare teams’ outcomes. This paper focuses on one particular source of cultural diversity, namely religion, and examines its relation to the production efficiency of hospital wards. Building on the categorization‐elaboration model of organizational diversity, the authors test an empirical model positing that team religious diversity has non‐linear effects on efficiency, and considering the role of moderating variables of the relation diversity–efficiency. Empirically, the authors adopt a two‐step approach, whereby the first step applies data envelopment analysis to estimate efficiency scores for each team, and the second investigates the effect of diversity and of moderating variables. The model is tested on a sample of hospital wards from three large hospitals in Dubai. The results suggest an inverse U‐shaped relation between religious diversity and the wards’ efficiency. Evidence is provided that the relation is moderated by task complexity, task conflict, team leader tenure and diversity in nationality. This study advances research on the management of hospital team diversity by emphasizing the complexity of diversity effects and the importance of contextual factors.     

Gross Worker Flows: How Does the Spanish Evidence Fit the Stylized Facts?

This paper examines the Spanish gross worker flows. Unemployment inflows are counter-cyclical while outflows are acyclical. Changes introduced in the Spanish labour market have increased the magnitude and variability of both flows, in particular the inflows, without affecting the acyclical behaviour of the outflows. Engagements and flows into employment from non-employment are pro-cyclical. Separations are acyclical, while flows out of employment to non-employment are counter-cyclical. So, job-to-job movements have to be pro-cyclical. Engagements and separations have responded positively to a wider variety of contractual forms. The Spanish evidence seems to be reasonably explained by the existence of a dual labour market between workers under permanent and fixed-term job contracts.     

Does the market value corporate response to climate change?

Motivated by the controversial debate on mandatory reductions of greenhouse gases in the U.S., this study explores whether the market values corporate response to tackle carbon dioxide emissions. We measure corporate responses using the measure of media tone based on the positive and negative words in each news article. Our results show that the market reacts favorably to the negative media exposure of corporate response to climate change over the announcement period and the one-year period, which implies that the socially responsible action to tackle climate change is costly. We further find that the positive response is less pronounced for firms from polluting industries and firms with poor environmental performance.     

Does Knowledge Mediate the Effect of Context on Performance? Some Initial Evidence

This research examines the links among four firm context variables, knowledge, and financial performance. Adopting a knowledge‐based, contingency view of the firm and assuming that strategy's locus is knowledge creation and application, we hypothesize that knowledge completely mediates the effects of context on performance. The results from analyzing 208 manufacturers found a positive relationship between applied knowledge and financial performance, but none between knowledge creation and performance. As for context, production technology routineness and low demand unpredictability were positively related only to greater applied knowledge; high technological turbulence was positively related to both knowledge creation and knowledge application; and firm size had no effect on either knowledge construct. No direct context‐performance relationships were found (i.e., all effects were indirect): knowledge, in particular applied knowledge, completely mediated the impact of context on performance.     

Do We Need Computer Skills to Use a Computer? Evidence from Britain

Abstract. Using cross‐section data from the 1997 Skills Survey of the Employed British Workforce, we examine the labour‐market returns to self‐assessed computer skills in Britain. Many researchers, using information on computer technology use, have concluded that wage differentials between computer users and non‐users might, among others, be due to differences in the embodiment of computer skills. Using unique information on the importance, level of sophistication, and effectiveness of computer technology use, we show that computer skills do not yield significant labour‐market returns for most types of use. Examining the returns to computer skills at different levels of sophistication of use yields estimates suggesting returns to computer skills at the highest level of sophistication of use only.     

Does Cultural Difference Affect Investment–Cash Flow Sensitivity? Evidence from OECD Countries

We investigate the influence of national culture on corporate investment–cash flow sensitivity. We conjecture that national culture shapes managerial perceptions of information asymmetry and agency problems, thus impacting the investment–cash flow relationship. We document empirical evidence in support of our claim. By linking the investment–cash flow sensitivity to cultural differences, our findings show that, while collectivism has an attenuating influence, uncertainty avoidance, power distance and masculinity have a reinforcing effect on the relationship between cash flow and investment. Our results hold for a sample of 205,268 firm‐years across 24 OECD countries between 1990 and 2017, and are robust after accounting for alternative statistical approaches, sample compositions and measures of cultural dimensions, along with controls for institutional and governmental factors. In addition, by decomposing cash flow into uses and sources of funds in a dynamic multi‐equation model, where firms make financing and investment decisions jointly subject to the constraint that sources must equal uses of cash, we find that national culture shapes how firms react to changes in cash flow.     

Does Elicitation Method Matter? Behavioral and Neuroimaging Evidence from Capacity Allocation Game

To date, it has not been elucidated whether the strategy method and the direct‐response method lead to different behaviors in experiments of economic games. In this study, we investigate this issue under a multi‐round setting of the capacity allocation game with both of the elicitation methods. In the first experiment (regular behavioral experiment), subjects are paired to make decisions in a laboratory through a computer network platform. In the second experiment (neuroimaging experiment), the functional magnetic resonance imaging (fMRI) technique is applied to observe similarities and differences in brain activities between the two elicitation methods. The results show that no significant difference is observed in the ordering behaviors between the two methods. Meanwhile, the neuroimaging data reveal that the strategy method induces comparable activations in similar brain regions, as does the direct‐response method. Additionally, it is more likely that subjects adjust their decisions during the feedback phase, rather than during the decision phase. Our results indicate that, in multi‐round game experiments without features such as emotion, the effect of the elicitation method is not likely to be exhibited.     

Correction to: Why perceived organizational and supervisory family support is important for organizations? Evidence from the field

Review of Managerial Science - Under Table 1, the explanation regarding the dummy variables that represent gender is reverse coded.     

How Much Does Hiring and Firing Cost? Survey Evidence from a Sample of Italian Firms

We analyse the Italian labour market, which is typically considered to be highly regulated. We focus on the costs imposed on firms by the institutional environment in which they operate, and on the adjustment strategies that they pursue as a result. We have followed two complementary approaches: the analysis of the development of the laws relating to hiring and firing, together with a set of interviews of 61 manufacturing firms. This also allows us to quantify the extent of turnover costs on the total labour costs. Hiring costs, which include recruiting and training, range between 2.0 and 2.6 months of labour costs; firing costs range from less than half a monthly labour cost to 20 months of labour costs in cases of conflict.     

Does Future PC Use Determine Our Wages Today? — Evidence from German Panel Data

Abstract. Using 1985–99 data from the German Socio‐Economic Panel Study (GSOEP) we confirm the hypothesis that existing computer wage premiums are determined by ability or other unobserved individual characteristics rather than by productivity effects. In addition to the conventional longitudinal regression analysis, the two competing hypotheses were tested by employing future PC variables in the wage regressions in order to obtain a further control for worker heterogeneity. The finding that future PC variables have a statistically significant effect on current wages leads us to conclude that computer wage differentials can be attributed to worker heterogeneity rather than to computer‐induced productivity.