ambition versus conscience does corporate social responsibility pay off the application of matching methods in this article we examine the effect of corporate social responsibility csr on firms financial performance csr effect two competing hypotheses social impact hypothesis and shift of focus hypothesis are proposed to investigate this issue where the former suggests that csr has a positive relation with performance and the latter are opposite in order to ensure the csr effect is not contaminated by other factors or samples are randomly drawn we employ four matching methods nearest caliper mahala and mahala caliper to match the samples of csr csr firms and without csr noncsr firms with similar characteristics although four methods yield slightly different results firms engaging in csr activities tend to obtain significantly higher values on pretax income to net sales and profit margin and adopting csr at the very least not deteriorate the performance of firms making our conclusion favors the social impact hypothesis and against shift of focus hypothesis in taiwan thus ambition and conscience are not conflicting with each other

the american business cycle continuity and change in recent decades the american economy has experienced the worst peace time inflation in its history and the highest unemployment rate since the great depression these circumstances have prompted renewed interest in the concept of business cycles which joseph schumpeter suggested are like the beat of the heart of the essence of the organism that displays them in the american business cycle some of the most prominent macroeconomics in the united states focuses on the questions to what extent are business cycles propelled by external shocks how have post 1946 cycles differed from earlier cycles and what are the major factors that contribute to business cycles they extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations seven papers address specific aspects of economic activity consumption investment inventory change fiscal policy monetary behavior open economy and the labor market five papers focus on aggregate economic activity in a number of cases the papers present findings that challenge widely accepted models and assumptions in addition to its substantive findings the american business cycle includes an appendix containing both the first published history of the nber business cycle dating chronology and many previously unpublished historical data series

environmental and ecological economics in the 21st century an age adjusted citation analysis of the influential articles journals authors and institutions we investigate the influence of articles authors journals and institutions in the field of environmental and ecological economics we depart from studies that investigated the literature until 2001 and include a time period that has witnessed an enormous increase of importance in the field we adjust for the age effect given the huge impact of the year of an article s publication on its influence and we show that this adjustment does make a substantial difference especially for disaggregated units of analysis with diverse age characteristics such as articles or authors we analyse 6597 studies on environmental and ecological economics published between 2000 and 2009 we provide rankings of the influential articles authors journals and institutions and find that ecological economics energy economics and the journal of environmental economics and management have the most influential articles they publish very influential authors and their articles are cited most the university of maryland resources for the future the university of east anglia and the world bank appear to be the most influential institutions in the field of environmental and ecological economics

microfinance literature a sustainability level perspective survey abstract since the early microcredit programs up to the present microfinance has grown exponentially as it has the academic interest on it as a research subject considering that this sector has impact in terms of sustainability any research in the field requires an analysis with wide criteria which should include the economic environmental social and governance dimensions eesg as well as their interrelationships the objectives of this survey are to investigate the contributions of microfinance sectoral scholarly research to sustainability through a systematic literature review using content analysis method contextualizing the scientific production and studying its terminology according to the eesg criteria and under global reporting initiative framework and finally to identify research gaps and to propose future research paths

money supply announcements and interest rates another view in this paper i use a new approach to analyze the impact of money supply announcements on the bond market before 1980 the only available work on this subject consisted of a few unpublished papers by conrad 1978 sivesind 1978 and urich 1979 1 more recently published papers by grossman 1981 and urich and wachtel 1981 have appeared roley 1982 extends the grossman study to incorporate data after the federal reserve policy statement of october 6 1979 both grossman and urich and wachtel are primarily concerned with the question of money market efficiency using survey data made available by money market services of san francisco and data on treasury bill yields each finds that the market responds quickly to unanticipated changes in the money supply but that anticipated changes have no effect on interest rates in addition grossman finds that when he adds other variables such as past changes in the money

the cyclical behavior of prices abstract the procyclical behavior of prices has been a staple of business cycle lore since the work of the early nber business cycle researchers this paper reexamines that empirical fact the aggregate data do not support procyclical price movements as a stable feature of the business cycle the only episode where it is a robust feature of the data is the period between the two world wars particularly the period of the great depression

the role of corporate sustainability performance for economic performance a firm level analysis of moderation effects abstract this paper analyses the link between sustainability management and economic performance its main research question concerns the association of social responsibility and environmental management with economic performance determinants of the latter and possible moderation effects based on data collected from financial databases and kinder lydenberg domini for the period 1992 to 2003 the paper analyses the link of corporate sustainability performance with economic performance using panel estimation techniques the analysis shows that advertising intensity moderates the association of corporate sustainability performance and economic performance as measured by tobin s q for research and development efforts relative to firm size no moderating role on the link between corporate sustainability and economic performance is identified a sensitivity analysis using separate measures for social and environmental performance reveals that the latter only has a direct effect and the former only a fully moderated effect on economic performance policy and management implications of these findings are discussed

finance as a driver of corporate social responsibility finance is grease to the economy therefore we assume that it may affect corporate social responsibility csr and the sustainability of economic development too this paper discusses the transmission mechanisms between finance and sustainability we find that there is no simple one to one relationship between financial development and sustainable development but there are various often indirect linkages it appears that most of the literature concentrates on the role of public shareholders when it comes to changing corporate policy and performance in a more sustainable direction however this focus neglects the potential impact of the credit channel and private equity on a firm s non financial policies and performance these very powerful mechanisms can govern business policies and practices therefore there appears to be much more scope for finance to promote socially and environmentally desirable activities and to discourage detrimental activities than has been acknowledged in the academic literature so far

abatement investments and green goodwill this paper develops and estimates a dynamic model that links profits to green goodwill assuming that abatement investments generate green goodwill and using data from the swedish pulp industry we are able to test the effects of green goodwill on firm level output price and profits the results suggests that swedish pulp plant output prices and profits may be positively related to changes in green goodwill furthermore no evidence is found to support the existence of adjustment costs due to abatement investments

corporate social responsibility in the international banking industry this article aims at providing a framework to assess corporate social responsibility with international banks currently it is mainly rating institutions like eiris and kld that provide information about firms social conduct and performance however this is costly information and it is not clear how the rating institutions arrive at their conclusion we develop a framework to assess the social responsibility of internationally operating banks we apply this framework to more than 30 institutions and find significant differences among individual banks countries and regions furthermore it appears that social responsibility of these banks has significantly improved between 2000 and 2005

retailing public goods the economics of corporate social responsibility abstract this paper explores the feasibility and desirability of corporate social responsibility csr we identify csr with creation of public goods or curtailment of public bads using a model with profit maximizing firms the paper shows that there is a direct parallel between csr and traditional models of private provision of public goods indeed firms that use csr will produce public goods at exactly the same level as predicted by the standard voluntary contribution equilibrium for public goods we compare csr with government provision and charitable provision discussing when csr by private for profit firms could have a comparative advantage in dealing with public goods provision

institutional ownership of stock and dimensions of corporate social performance an empirical examination collectively institutions own an increasing proportion of outstanding corporate equities as an emergent force in shaping corporate america the linkages between institutional ownership and corporate social performance csp require empirical examination not only do corporate policy makers need to know those areas where social performance may lure or inhibit capital infusions lawmakers also need a better understanding of the social forces guiding corporate policy as anticipated this study found a positive relationship between the amount of institutional ownership of corporate stock and a company s social responsiveness as measured by the representation of women on its board of directors however no statistically significant relationship with social responsibility as measured by charitable giving was found the exemplar of social issues management compliance with the sullivan principles showed an unexpected negative relationship with the level of institutional ownership

same financial development yet different economic growth why we re study the relationship between financial development and real gdp per capita growth in 48 countries what we find is an interesting evidence that only stock market development has positive effects on growth and that banking development has an unfavorable if not negative effect on growth we examine whether or not these impacts are a product of various financial and economic conditional variables our conditional variables consist of financial liberalization two sets of country development dummies crises in banking and currency dummies the creditor protection index as well as the anti director and corruption indices our results clearly show that the conditional variables of financial liberalization high income level and good shareholder protection mitigate the negative impacts of banking development on growth in contrast the conditional variables of middle income level regional latin american sub saharan african and east asian dummies banking and currency crises good creditor protection and higher corruption strengthen the negative impacts of banking development on growth next the conditional variables of middle income level latin american sub saharan african and east asian dummies strengthen the positive impacts of stock market development on growth whereas the conditional variables of financial liberalization mitigate the positive impacts of stock market development on growth last we find that the relationship between growth and bank development is better described as a weak inverse ushape this inverse u shape becomes stronger when additional stock market variables are squared thus financial development and growth may in fact be in a nonlinear form

why do manufacturing facilities introduce environmental management systems improving and or signaling performance abstract in this paper we explore the motivation for the introduction of environmental management systems and their certification a distinction is drawn between their role in bringing about better compliance or improved performance and as external indicators of good environmental practices to both other market participants and regulatory authorities drawing upon a database of approximately 4000 facilities in seven oecd countries empirical evidence is found for the role that both factors play in encouraging the adoption and certification of ems s but that the relative importance of different factors varies according to facility size

a real options approach to abatement investments and green goodwill in this paper we adopt the green goodwill argument as to why firms voluntarily invest in abatement capital we investigate the effects on the abatement investment decision of changes in uncertainty about future green goodwill competitor abatement investments regulations etc using a real options framework our results indicate that increased uncertainty about consumers willingness to pay for green products in the future discourage voluntary abatement investments the model also suggests that voluntary abatement investments are promoted by an increased threat of regulation and competitor abatement investments furthermore the benefit cost ratio of the abatement investment project at the point where it is optimal to invest is independent of what regulatory regime stringent or lenient the firm operates in we also conclude that despite the fact that voluntary abatement investment exists there may still be room for environmental policy

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

why there are organized futures markets i shall present an explanation of the existence of organized futures markets with more predictive power than the two prevailing rival views my explanation briefly is this an organized futures market facilitates trade among strangers one of the rival prevailing views is a defense of futures trading it asserts that an organized futures market furnishes legitimate businessmen with a means of hedging so that they can obtain insurance against price risk the other prevailing view is an attack on organized futures markets it asserts that such markets enable speculators to manipulate prices to the detriment of outsiders who are less well informed and to the detriment of legitimate businessmen such as farmers the attack on organized futures markets likens them to gambling casinos the defense sees them as a form of insurance neither the attack nor the defense is valid the correct explanation is closely related to why we conduct trade using money instead of by barter

the link between output growth and volatility evidence from a garch model with panel data abstract estimation results from a dynamic panel garch model for g7 countries over the 1965 2007 period support that higher output growth is associated with higher volatility of the innovations to growth but higher growth does not lead to more economic uncertainty

foreign investors and corporate social responsibility evidence from the career advancement of women in japan i examine whether foreign investors invest in firms that encourage the career advancement of women by using data from a sample of japanese firms during the period 2008 2011 first i find that corporate governance reform and work life balance practices facilitate the promotion of women to higher positions in firms furthermore i find that foreign investors hold more shares of firms that encourage the career advancement of women overall these results indicate that the career advancement of women as a part of corporate social responsible activities benefits foreign investors

identity and the economics of organizations on plebes first day at west point called r day they strip down to their underwear their hair is cut off they are put in uniform they then must address an older cadet with the proper salute and with the statement sir new cadet doe reports to the cadet in the red sash for the first time as ordered plebes must stand and salute and repeat and stand and salute and repeat until they get it exactly right all the while being reprimanded for every tiny mistake in the summary of david lipsky 2003 pp 145 154 who spent four years tracking a company of cadets at west point on r day you surrender your old self in stages but r day is just the beginning of the training and personal re engineering that is to come so that west point graduates emerge four years later as loyal officers in the u s army lipsky shows that despite some failure this tough program is remarkably successful in creating officers with the will to lead in battle economists current picture of organizations and work incentives has no place for the west point program and the motivations it seeks to inculcate in recruits in a standard economic model an individual s preferences are fixed and utility depends only on pecuniary variables the army s aim at west point is to change cadets preferences they wish to inculcate non economic motives in the cadets so that they have the same goals as the u s army alternatively stated the goal of west point is to change the identity of the cadets so they will think of themselves above all else as officers in the u s army they will feel bad about themselves they will lose utility if they fall short of the ideals of such an officer this change in identity

quality leadership when regulatory standards are forthcoming in many markets governments set minimum quality standards while some sellers compete on the basis of quality by exceeding them such quality leadership strategies often win public acclaim especially when they involve environmental attributes using a duopoly model of vertical product differentiation we show that if the high quality firm can commit to a quality level before regulations are promulgated it induces the regulator to weaken standards and welfare falls our results raise doubts about the social benefits of corporate self regulation and highlight the dangers of lengthy delays between legislative mandates for new regulations and their implementation

the persistence of social strategies under increasing competitive pressure abstract in this paper we study the long run outcome if firms are repeatedly matched to play a n firm cournot oligopoly game and can select their type of business objective firms can either be profit maximizing or socially concerned also pursuing consumer welfare we use an indirect evolutionary approach to distinguish between the endogenous profit maximizing choice of the firms business objectives and their corresponding market behavior our main result is that the prospects of long run survival of firms pursuing social strategies strongly depends on the number of firms in the industry if a social strategy entails higher marginal production costs it is best suited if the number of firms in the industry is not too large in particular we demonstrate that the relation between long survival and the level of competitiveness of the industry is inverse u shaped we confirm this result by using the concept of coalition stability and further show that if a high number of firms adopt a social strategy welfare might be lower than with just profit maximizing firms

foreign equity investment restrictions capital flight and shareholder wealth maximization theory and evidence this article provides a theory of foreign equity investment restrictions we consider a model where the demand function for domestic shares differs between domestic and foreign investors because of deadweight costs in holding domestic and foreign securities that depend on the country of residence of investors we show that domestic entrepreneurs maximize firm value by discriminating between domestic and foreign investors the model implies that countries benefitting from capital flight have binding ownership restrictions such that foreign investors pay a higher price for shares than domestic investors the empirical implications of this theory are supported by evidence from switzerland article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

how do exchange rates co move a study on the currencies of five inflation targeting countries abstract this paper does three things first it explores the type of asymmetry in exchange rate correlation for five inflation targeting countries we show their currencies co move more closely with the currencies of some influential foreign countries during joint appreciations than joint depreciations against a world currency second it establishes empirically the linkage between interest rate differentials and exchange rate correlation we find evidence that both widening and narrowing interest rate differentials will reduce the correlation third it proposes a new version of the asymmetric dynamic conditional correlation model the model proves to be capable of providing great insight into the two issues investigated

on the determinants of corporate social responsibility international evidence on the financial industry this article sets out to undertake a thorough point by point examination of the theory postulated by campbell 2007 in which an attempt is made to specify the conditions under which corporations may or may not act in socially responsible ways in order to ensure the overall reliability of our study and to attempt to provide a new understanding of and greater insights into whether corporate social responsibility csr is affected by financial and institutional variables we empirically investigate a total of 520 financial firms in 34 countries between the years 2003 and 2005 our empirical findings are i firms with larger size are more csr minded and the financial performance and csr are not related ii firms would actually act in more socially responsible ways to enhance their competitive advantages when the market competitiveness is more intense iii financial firms in countries with stronger levels of legal enforcement tend to engage in more csr activities however interestingly and rather strikingly those firms in countries with stronger shareholder rights tend to engage in less csr activities and iv self regulation within the financial industry has a significantly positive effect on csr with firms being found to act in more socially responsible ways in those countries which have more cooperative employer employee relations higher quality management schools and a better macroeconomic environment

international evidence on the historical properties of business cycles we contrast properties of real quantities with those of price levels and stocks of money for ten countries over the last century although the magnitude of output fluctuations has varied across countries and periods relations among real quantities have been remarkably uniform properties of price levels however exhibit striking differences between periods inflation rates are more persistent after world war ii than before and price level fluctuations are typically procyclical before world war ii and countercyclical afterward fluctuations in money are less highly correlated with output in the postwar period but are no more persistent than in earlier periods jel e32 e31

the economics of corporate social responsibility a firm level perspective survey this paper analyzes the economics of corporate social responsibility csr as a private response to market imperfections in order to satisfy social preferences depending on whether they affect regulation competition or contracts market imperfections driving csr decisions are classified in three categories public goods and bads and altruism imperfect competition and incomplete contracts we successively present these drivers of csr decisions and highlight the nature of incentives external or internal at work and the testable and tested hypotheses in the reviewed studies we finally review the link between csr and financial performance as well as between csr and social and environmental performance a twofold discrepancy appears in the literature opening future research paths a disconnection between our understanding of csr drivers and csr impacts and a knowledge gap between csr financial and social consequences the latter having received little attention

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

the effects on output of money growth and interest rate volatility in the united states in october 1979 the federal reserve began a policy of disinflation and also stopped stabilizing interest rates subsequently interest rates became much more volatile using a methodology advanced by barro this paper estimates what this change in policy did to output in the united states the paper finds that the stagnation of the u s economy since 1979 stemmed almost as much from increased interest rate volatility as from reduced money growth the paper also assesses the extent to which increased volatility of money growth has contributed to stagnation it finds no evidence of any appreciable contribution the paper concludes that stabilizing interest rates is probably sensible monetary policy

private sector training and graduate earnings this paper uses a survey of british graduates to estimate the impact of employer provided training on the earnings of men and women graduates the results indicate that although the training impact is reduced after controlling for endogeneity some forms of training have a considerable impact however there are substantial gender differences in the earnings impact of various typ es of training moreover men graduates are more likely to receive training than otherwise identical women

the economic impacts of voluntary environmental performance of firms a critical review new trends in studies on the governance of natural assets include substantial consideration of the role of voluntary initiatives a traditional economic view states that there is a trade off between being green and being competitive according to that view no voluntary environmental action is expected to occur to undertake an in depth analysis of the scope for voluntary action this paper reviews empirical literature that analyzes the relationship between manufacturing firms environmental initiatives or performance and economic results this review moves beyond the general test of the pay to be green hypothesis preferring instead to systematize empirical results in more specific research questions empirical findings of the reviewed literature generally support that there is no penalty for being green in addition the typology of firms the methods utilized for implementing environmental initiatives the intensity of abatement efforts and stockholders valuation of green firms have all been shown to have a sizeable influence on the actual economic results of environmental action or management consequently the findings of this paper challenge the traditional strategic theory that predicts widespread free riding it holds major implications for environmental policy making and environmental business decisions

voluntary environmental investment and responsive regulation instances of corporate voluntary environmental investments have been rising in recent years motivations for such activities include corporate image building regulatory preemption and production cost savings while some of these investments arise from industry attempts to set environmental standards where none currently exist many investments seem to be aimed at reducing the costs of complying with existing regulations using a simple game theoretic model we investigate firm motivations for and welfare consequences of these types of voluntary investments by focusing on the role regulatory enforcement might play we find that such investments unambiguously increase when an enforcement regulator acts as a stackelberg follower a regulatory structure we refer to as responsive regulation in setting its monitoring and enforcement strategy these additional investments may be socially undesirable necessitating a restructuring of non compliance penalties

money and price dispersion in the united states this paper reports an empirical test of a price dispersion equation using data on the u s after world war ii the equation derived elsewhere from a version of the partial informationlocalized market models relates price dispersion to the magnitude of the aggregate shocks in order to test the model a price dispersion series is computed using annual wholesale price indexes and weights for the period 1948 76 the data on money shocks are the unanticipated money growth series estimated by barro the tests also include a measure of aggregate real disturbances from the theoretical point of view the results are negative they do not detect an effect of money shocks on price dispersion but support the predicted effect of real shocks

privatization matters bank efficiency in transition countries abstract to investigate the impact of bank privatization in transition countries we take the largest banks in six relatively advanced countries namely bulgaria the czech republic croatia hungary poland and romania income and balance sheet characteristics and efficiency measures computed from stochastic frontiers are compared across four bank ownership types our empirical results support the hypotheses that foreign owned banks are most efficient and government owned banks are least efficient in addition the importance of attracting a strategic foreign owner in the privatization process is confirmed however counter to the conjecture that foreign banks cherry pick the most profitable opportunities we find that domestic banks have a local advantage in pursuing fee for service business finally we show that both the method and the timing of privatization matter to performance specifically voucher privatization does not lead to increased efficiency and early privatized banks are more efficient than later privatized banks even though we find no evidence of a selection effect

doing well by doing good green office buildings this paper provides the first credible evidence on the economic value of the certification of green buildings in the commercial sector value derived from impersonal market transactions rather than engineering estimates we match publicly available information on the addresses of energy star and leed rated office buildings to a commercial data source detailing the characteristics of u s office buildings and their rental rates we analyze the micro data on 694 certified green buildings and on 7489 other office buildings located within a quarter mile of the certified buildings we find systematic evidence that rents for green offices are about two percent higher than rents for comparable buildings located nearby effective rents i e rents adjusted for the occupancy levels in office buildings are about six percent higher in green buildings than in comparable office buildings nearby at prevailing capitalization rates conversion of the average non green building to an equivalent green building would add more than 5 million in market value these results are robust to the statistical models employed

charity as a substitute for reputation evidence from an online marketplace consumers respond positively to products tied to charity particularly from sellers that are relatively new and hence have limited alternative means for assuring quality we establish this result using data from a diverse group of ebay sellers who experiment with charity by varying the presence of a donation in a set of otherwise matched product listings most of charity s benefits accrue to sellers without extensive ebay histories consistent with charity serving as a quality signal we find fewer customer complaints among charity intensive sellers

environmental technological change and governance in sustainable development policy abstract an evolutionary economics perspective between technological innovation and public policy is applied to analyse the relationships between technological change sustainable development and industrial competitiveness this leads us to emphasise the fundamental role that firm s strategies vis a vis the endogenisation of technological change can play for giving effect to win win strategies however allowing industrial competition to become the only factor determining win win strategies could lead to locked technological and social options being chosen which do not contribute to overall goals of ecological social and economic sustainability for this reason we introduce as complements to competitiveness the requirement of new forms of governance in pursuit of ecological economic sustainability

does social performance really lead to financial performance accounting for endogeneity the empirical relationship between a firm s social performance and its financial performance is still not well established in the literature despite more than 30 years of research and more than 100 empirical studies on the issue the results are still mixed we argue that the heterogeneous results found in previous studies are not due exclusively to problems related with the measurement instruments or the samples used instead we posit that a more fundamental problem related with the endogeneity of social strategic decisions could be driving most of the empirical findings we show that using a panel data of 658 firms from 1991 to 2005 how some of the results found in previous research change and some are even reversed when endogeneity is properly taken into account

a change in market responses to the environmental management ranking in japan abstract this article investigates stock price reactions to the release of the environmental management ranking issued by nihon keizai shimbun nikkei newspaper from 1998 to 2005 by using a standard event study methodology an examination of stock price movements of the top 100 manufacturing companies reveals that stock prices during the sample period did not respond significantly to the release of the ranking within a 3 day event window however market responses became significantly positive after 2003 while they were significantly negative in 1999 and 2000 the stock prices of upgraded companies in particular reacted negatively before 2000 but positively after 2002 these results indicate that market reactions were changed between 2001 and 2002 when the japanese government showed its strong commitment to environmental policies by establishing the ministry of the environment and signing the kyoto protocol following a number of legislations

inflation real returns and capital investment we find evidence for the hypothesis of mundell 1963 and tobin 1965 that the expected real return component of interest rates is negatively related to the expected inflation component in the mundell tobin model the variation in expected real returns is caused by the variation in expected inflation our evidence suggests however that the variation in expected real returns is more fundamentally an outcome of the capital expenditures process equilibrium expected real returns vary directly with capital expenditures in order to induce equilibrium allocations of resources between consumption and investment this positive relation between expected real returns and real activity which comes out of the real sector combines with a negative relation between expected inflation and real activity which is traced to the monetary sector thus inducing the negative relation between expected inflation and expected real returns predicted by mundell and tobin but explained in terms of a model much different from theirs

investment bank reputation information production and financial intermediation we model reputation acquisition by investment banks in the equity market entrepreneurs sell shares in an asymmetrically informed equity market either directly or using an investment bank investment banks who interact repeatedly with the equity market evaluate entrepreneurs projects and report to investors in return for a fee setting strict evaluation standards unobservable to investors is costly for investment banks inducing moral hazard investment banks credibility therefore depends on their equity marketing history investment banks evaluation standards their reputations underwriter compensation the market value of equity sold and entrepreneurs choice between underwritten and nonunderwritten equity issues emerge endogenously

health and wage a simultaneous equation model with multiple discrete indicators in this article we propose all econometric approach for estimating the simultaneouls effects of health and wages in a structural equations framework in the theoretical works of grossmana 1972a 1972b health is viewed as anl elldogen1oulsly determined capital stock the demand for health should rise with the wage rate as the rate of return to health investment increases with wage onl the other hand better health should raise market productivity and hence wages since health capital is an abstract theoretical concept it can hardly be measured quantitatively however most population surveys include various health indicators these indicators are usually discrete variables in the empirical work of grossman and benham 1974 these qualitative indicators are treated as continuous variables and two stage least squares estimation techniques are used this specification raises various econometric problems see e g goldberger 1964 pp 248 255 domencich and mcfadden 1975 and nerlove and press 1973 a satisfactory specification should take into account the discrete nature of the indicators our specification generalizes the dummy variables simultaneous equations system of heckman 1978 the measurement models of joreskog and goldberger 1975 and is closely related to the models of muthe n 1976 1979 muthen studies full information maximum likelihood procedures for estimation except for very simple cases this does not generally yield feasible or tractable procedures in this article we introduce a tractable procedure for statistical estimation and testing this specification and the estimation procedure is then applied to study the joint dependence of health and wages another departure of our approach from others is that we will test and correct the possible incompatibility of the various health capital indicators in the population surveys one may have subjective health indicators such as self evaluation of health which may reflect different populations perception of health we propose a statistical procedure for testing measurement compatibility and if required for correcting this problem this article is divided into two parts initially we describe the model specification estimation and statistical tests in a general simultaneous equation model with multiple discrete indicators in the second part of the paper we consider specification of a simultaneous equation model for health and wages the model

corporate social responsibility business strategy and the environment we examine the concept of firms sacrificing profits in the social interest within the environmental realm with particular focus on the case of the united states by addressing four key questions may they do so within the scope of their fiduciary responsibilities to their shareholders can they do so on a sustainable basis or will the forces of a competitivemarketplace render such efforts and their impacts transient at best do firms in fact frequently or at least sometimes behave this way reducing their earnings by voluntarily engaging in environmental stewardship should firms carryout such profit sacrificing activities i e is this an efficient use of social resources we address these questions through the lens of economics including insights from legal and business scholarship

can corporate social responsibility resolve the sanitation question in developing asian countries abstract the existing state of sanitation in developing asian countries fails to deliver a level of service that is adequate for meeting the human right to a standard of living consistent with dignity and health or for sustaining the capacity for future generations to have access to clean water resources and healthy ecosystems we argue that translating the current neo centralised technologies and institutional arrangements mainstreamed by industrialised countries would not resolve the problem in the context of developing countries instead it is necessary to leap frog to the emerging technological and institutional arrangements that are responsive to current needs and contexts and to potential risks the sustainability focus and often decentralised technologies of this emergent stage in sanitation present many opportunities for new actors to enter the urban sanitation industry at the same time there are many barriers to entry particularly from the perspective of conventional business management focused on increasing shareholder value we propose that perspectives from the corporate social responsibility discourse have the potential to provide both the pull for seizing the business opportunity for profit while serving social needs and the push to overcome the barriers in order to serve a wider social purpose for corporations the wealth of nations at least as reported in ubiquitous gdp terms has greatly increased through the activities of corporations driven by a profit motive but the increased poverty injustice and ecosystem degradation that have resulted from economic activity suggest that corporations perhaps ought to have regard for broader concerns beyond shareholder value we explore how the alternative relational view of a corporation as a metaphorical person within society who adopts a moral code consistent with both buddhist economics and adam smith s philosophy may facilitate profitable corporations that provide better economic ecological and social outcomes in serving the need for sustainable sanitation services in developing asian countries

morally motivated self regulation 2 this paper focuses on self regulation motivated by altruistic moral concerns the context is one in which individuals can voluntarily self regulate in the presence of opportunities to free ride on the self regulation of their trading partners moral preferences can mitigate free riding but moral preferences can be limited in the sense that they may be weaker the greater the socioeconomic distance from a trading partner and can depend on whether others are expected to reciprocate the scope of self regulation can be increased by moral suasion but individuals can also form organizations to reduce free riding this paper characterizes the scope of self regulation as a function of the form and strength of moral preferences and explains the effectiveness of organizations in expanding that scope moral preferences can be conditional on the actions of others or limited by socioeconomic distance a citizen thus may self regulate when interacting with someone close but not with someone far away moral preferences can also be conditional or unconditional unconditional moral preferences are independent of the action of others whereas with conditional preferences a citizen is more willing to self regulate if other citizens are expected to reciprocate 3

international co movements of real and financial economic variables this study presents a first attempt at investigating whether the international co movements of real economic activity conform to the same international co movements of financial activity this study tests the international co movements of real economic activity on the one hand and financial variables such as stock returns interest rates inflation rates and risk premiums on the other hand we employ a dynamic correlation model on data from oecd countries for the period 1980 2010 our findings demonstrate that international stock markets co react in accordance with the underlying international economic forces we also document three other results first the correlation among countries with respect to real economic activity is statistically positive but the level of this correlation is lower than that of financial variables second there is a significant increase over time in the international correlation level with respect to the financial variables finally the creation of the euro monetary union

a theory of environmental risk disclosure abstract the regulation of environmental risks increasingly emphasizes the awareness and empowerment of stakeholders the success of this approach however seems to depend crucially on the quality of environmental disclosures in this paper we investigate the amount and quality of the information that would be voluntarily delivered to some stakeholder by a potential polluter we find that information may be hazier when the stakeholder is confident or naive a priori the cost of analyzing the received reports increases little with their complexity or a polluter s net expected payoff from undertaking an industrial activity that would turn out to be unsafe is small a worried stakeholder and a low cost of producing more accurate figures on the other hand favor disclosure of high quality information by delivering information of very good quality safe firms can set themselves apart more easily from dangerous ones the higher the relative ex post payoff from their current industrial activity implications of this framework for the scope and design of public programs of environmental disclosure are briefly examined

information aggregation inflation and the pricing of indexed bonds using daily prices of indexed bonds between 1970 and 1979 we test whether announcements of the israeli cpi contain information that is not already reflected in bond prices the results indicate that bond prices reflect about 85 percent of the new information about inflation as it occurs i e when the central bureau of statistics samples prices the announcement of the cpi 15 days after the end of the sampling period causes the remaining 15 percent adjustment in bond prices this evidence raises questions about the empirical importance of misperceptions about inflation as a source of nonneutrality in monetary policy

voluntary pollution reductions and the enforcement of environmental law an empirical study of the 33 50 program abstract this paper studies determinants and effects of firms participation in the 33 50 program which is a voluntary pollution reduction vpr program initiated by government regulators we examine a wide range of explanations for voluntary corporate environmentalism and find evidence in support of an enforcement theory that predicts that 1 vpr participation is rewarded by relaxed regulatory scrutiny 2 the anticipation of this reward spurs firms to participate in the program and 3 the program rewards regulators with reduced pollution we also find that 33 50 participation was more likely for firms operating in states with larger environmentalist constituencies

analysis of social performance in the spanish financial industry through public data a proposal banking firms are becoming increasingly aware that their clients management of environmental and social risks may in term threaten their own business as lenders and investors in addition stakeholders are requiring banks to improve their social performance as a result some banks are developing corporate social responsibility csr policies and management systems to reduce potential risks and improve their performance in the spanish financial system half of the banking firms are savings banks most of which have always used some corporate social responsibility csr criteria in their management private banks have only recently started to integrate social aspects in their performance however no formal analysis has been carried out on the impact of csr strategies various initiatives have been launched nationally and internationally to include the social dimension in management systems the purpose of this research is to analyse the social performance of the main spanish financial companies through public data such as social or sustainability reports and media sources in order to do this we need to determine which csr criteria most greatly affect banking firms and to choose the most accurate quantitative and qualitative indicators to measure social performance

market failure and government failure f or several decades a debate has been raging in development economics on the relative virtues of the free market as opposed to state intervention with the help of analytical models of a market economy the interventionists demonstrate what they consider serious instances of market failure that is the inability of a market economy to reach certain desirable outcomes in resource use the protagonists of free markets on the other hand compile impressive lists of ill conceived and counterproductive policy measures implemented by the governments of different countries at various times leading to wasteful use of resources in their economies this debate inevitably remains inlconclusive the analytical results on market failure do not disappear in the face of the evidence that most governments or for that matter most economies of less developed countries with or without state intervention have performed rather badly when there appears to be scope for imnprovement over the market outcome the search for the appropriate corrective measures goes on some protagonists of government failure question the significance of such market failures others voice skepticism about the ability of governments to take any action in the economy which is not counterproductive but none of them seems to be able to explain why a less developed country like india failed to grow during the first half of this century under a non interventionist colonial adnministration thus while the debate goes on neither side succeeds in convincing the other

futures markets and the fluctuations in inflation monetary growth and asset returns inflation and nominal interest rates have been volatile in recent years futures contracts in price indices would help in this environment by enhancing information about prices and by providing a convenient means for people to hedge against inflation there is some evidence that the availability of these instruments would encourage investment and reduce the mean real rate of return on long term bonds indexed bonds which are now significant in britain serve a similar purpose in the absence of such bonds there would be a market for price index futures although the volume of trading would probably be modest this abstract was borrowed from another version of this item

the comovement between output and prices evidence from a dynamic conditional correlation garch model abstract estimation results based on a multivariate dynamic conditional correlation garch model reveal that the overall price level tended to move in the same direction as output in periods before world war ii but in the opposite direction after the war

does environmental performance affect financial performance a meta analysis abstract what do we know about the impact of environmental regulations performance on firm performance after more than three decades of theoretical as well as empirical research the results seem to remain inconclusive some papers suggest that regulations harm firms while others claim that regulations may contribute positively and give an impetus to innovations therefore i examine the heterogeneity in financial environmental performance nexus empirically carrying out a meta regression analysis of 64 outcomes from 37 empirical studies to uncover the underlying factors which can influence the observed variation in the empirical results the results suggest both that the empirical method used matters for the nexus and that the likelihood of finding a negative link between environmental and financial performance significantly increases when using simple correlation coefficients instead of more advanced econometric analysis the results also indicate that the portfolio studies tend to report a negative link between environmental and financial performance this likely reflects the omitted factors in portfolio studies the positive link is found more frequently in common law countries than in civil law countries the results also point to the importance of appropriate time coverage to establish a positive link between environmental and financial performance

do fair trade and eco labels in coffee wake up the consumer conscience abstract in this study a face to face survey was conducted in order to reveal consumer preferences for ethical and environmentally sound labeling programs in coffee valuation questions regarding the fair trade shade grown and organic coffee labels were asked using a payment card format after consumers were previously informed about each of the labeling programs results suggest that consumers are very receptive toward both fair trade and shade grown coffee labels and consequently are willing to pay higher premiums for these labeling programs than for the organic coffee

environmental regulation and mnes location does csr matter abstract we investigate whether firms with relatively low environmental standards are more often located in countries that are poor corrupt or have weak environmental regulations we find new empirical evidence in favor of the pollution haven hypothesis which states that mnes are transferring their dirty operations to countries with weak environmental regulation our findings suggest that these are not necessarily the poorest or most corrupt countries we establish that mnes with strong social responsibility avoid locating their operations in countries with weak environmental regulation

does competition destroy ethical behavior explanations of unethical behavior often neglect the role of competition as opposed to greed in assuring its spread using the examples of child labor corruption excessive executive pay corporate earnings manipulation and commercial activities by universities this paper clarifies the role of competition in promoting censured conduct when unethical behavior cuts costs competition drives down prices and entrepreneurs incomes and thereby reduces their willingness to pay for ethical conduct nonetheless i suggest that competition might be good for ethical behavior in the long run because it promotes growth and raises incomes higher incomes raise the willingness to pay for ethical behavior but may also change what people believe to be ethical for the better this abstract was borrowed from another version of this item

the comovement between output and prices abstract in this paper i analyze the comovement of us prices and output in the postwar period i use a new set of statistics to characterize the comovement between variables the statistics capture important information about the dynamics in the system the estimation procedure does not require assumptions about the order of integration or the types of assumptions needed for var decompositions i find that the comovement between output and prices is positive in the short run and negative in the long run i show that a model in which demand shocks dominate in the short run and supply shocks dominate in the long run can explain these empirical results while sticky price models with only demand shocks cannot

private vs public regulation political economy of the international environment minimum standards set by a world environmental organization weo and ngo labelling are promoted as alternative approaches to international environmental protection we explore the potential inter play between these two approaches when the weo is subject to pressure from producers we find that if weo and ngo schemes are mutually exclusive then the existence of an ngo alternative increases industry resistance to weo proposals and this may reduce welfare if however the schemes are run in parallel existence of the ngo lessens producer opposition to weo activities this allows the weo to be bolder in its proposals which is good for welfare

measuring risk in environmental finance abstract environmental sustainability indices such as the dow jones sustainability indexes and the ethibel sustainability index quantify the development and promotion of sustainable social ethical and environmental values in the community moreover such indices provide a benchmark for managing sustainability portfolios and developing financial products and services that are linked to sustainable economic environmental social and ethical criteria this paper reviews the existing data and risk indices in environmental finance the main purpose of the paper is to analyse existing sustainability and ethical indices in environmental finance and evaluate empirical environmental risk by estimating conditional volatility clustering that is inherent in these indices financial volatility models are estimated to analyse the underlying conditional volatility or time varying risk that is inherent in alternative environmental sustainability indices volatility clustering is observed for most series but some extreme observations are also evident the log and second moment conditions suggest that valid inferences can be drawn for purposes of sensible empirical analysis

the curse of the haven the impact of multinational enterprise on environmental regulation abstract we analyze the behavior of multinational enterprises in the context of resource rich and poor countries and regarding high and low income countries we depart from the pollution haven hypothesis and the resource curse the pollution haven hypothesis states that multinational enterprises move their dirty operations to countries with weak environmental regulation the resource curse holds that economic growth in countries abundant in natural resources is reduced we find that more polluting firms are relatively more often located in countries with weak environmental regulation however multinational enterprises do not have a significant impact on environmental regulation in the host country it appears that it is mainly the quality of institutions that drives both the pollution haven and the resource curse

corporate social responsibility in the banking industry motives and financial performance abstract the current study investigates the association between corporate social responsibility csr and financial performance fp and discusses the driving motives of banks to engage in csr three motives namely strategic choices altruism and greenwashing suggest that the relationship between csr and fp is positive non negative and non existent respectively we obtained our sample which covered 2003 2009 from the ethical investment research service eiris databank and bankscope database the data consists of 162 banks in 22 countries we then classified the banks into four types based on their degree of engagement in csr this study proposes the use of an extended version of the heckman two step regression in which the first step adopts a multinomial logit model and the second step estimates the performance equation with the inverse mills ratio generated by the first step the empirical results show that csr positively associates with fp in terms of return on assets return on equity net interest income and non interest income in contrast csr negatively associates with non performing loans hence strategic choice is the primary motive of banks to engage in csr

event studies in management research theoretical and empirical issues we examined the use of event studies in management research and found that there was inadequate attention paid to theoretical and research design issues this lack of attention may lead to false in

bringing economic opportunity into line with environmental influence a discussion on the coase theorem and the porter and van der linde hypothesis environmental concerns and tightened environmental policy parameters have been associated with the notion of additional costs of compliance rather than with innovation and sustainability the contrary has also been suggested claiming that strict environmental legislation merely serves as a catalyst for firms to retain obvious economic and environmental mutual gains so called win wins laying around waiting to be collected such implications can be seen from the porter and van der linde writings heavily criticised by palmer et al as being built on faulty examples this paper supports that conclusion and uses property rights and transactions costs theories to find private incentives to explore the win wins for those actors who have the largest potentials to diminish the pressure on our environment by applying the coase theorem emphasising transaction costs and property rights this paper argues that strong public support is needed to create private incentives for exploring economic and environmental win win innovations the public support suggested is to a extend producer responsibilities where the same costs which may be neglected by the end consumers will if transferred to the design owner be viewed as a production cost and to b enforce environmental public procurement both may be combined with a support to c actors such as non governmental organisations and consumer agencies positioning themselves as information bridges by informing the consumers the negative effects of asymmetric information among actors can thereby be diminished as well as the low interest to primarily care for the environment among common consumers

dynamics of sectoral business cycle comovement abstractsectoral comovement accounts for a considerable share of the variance of aggregate variables however little is known about its time varying aspects by now in this article a multivariate dcc garch framework is employed to study dynamics of sectoral comovement across manufacturing sectors both in the united states and in germany to account for possible nonlinearities asymmetric effects in conditional volatilities as well as in conditional correlations are being assessed we find that comovement across sectors is not stable but shows irregular movements particularly contractions tend to be more synchronized than expansions in manufacturing sector moreover we examine the role of various aggregate factors for the fluctuations in conditional correlations our findings reveal that both the non constant variability of common factors and the changes in the effects of these factors play role for the fluctuations in sectoral comovement

direct foreign ownership institutional investors and firm characteristics in this paper we characterize foreign ownership using a dataset of ownership and attributes of swedish rms the analysis reveals that foreigners show a preference for large rms rms paying low dividends and rms with large cash positions on their balance sheets when we further analyze the preference for large rms we nd that market liquidity and presence in international markets measured through export sales or listings on other exchanges seem to characterize foreign holdings better than rm size alone foreigners also tend to underweight rms with a dominant owner importantly we demonstrate that most of the features associated with foreign ownership are driven by the fact that foreign investors typically are mutual funds or other institutional investors hence we identify an institutional investor bias rather than a foreign investor bias finally using ownership data on a country level we conclude that the results are particularly strong among u s investors who comprise the largest institutions among foreign investors 2001 elsevier science s a all rights reserved jel classixcation g1 g15

short term interest rates as predictors of inflation on testing the hypothesis that the real rate of interest is constant in an innovative and provocative paper in this review eugene fama presents evidence which appears to be consistent with the joint hypothesis that the real rate of interest ignoring taxes is a constant and that the market for u s treasury bills is efficient in the sense of embodying rational expectations those findings are strikingly at variance with a long list of previous studies which seemed to support the view that the real rate of interest varies over time and can be related to economic variables such as real output monetary policy and so forth 2 the methodologies which lead to these contradictory conclusions are quite different previous studies had followed the lead of irving fisher by relating nominal interest rates to distributed lags on past rates of inflation 3 these distributed lags are generally interpreted as approximations to the market s expected rate of inflation and thus any remaining variation is attributed to variation in the real rate 4 fama s methodology on the other hand draws on the fact that the difference between the market interest rate and the subsequently observed rate of inflation the ex post real interest rate consists by definition of the ex ante real interest rate plus a pure forecasting error 5 the hypothesis of market efficiency implies that these forecasting errors must be serially random thus observing ex post real rates is equivalent to observing ex ante real rates with random measurement error these errors of course confound the problem of identifying variation in the ex ante real rate in this paper we will argue that the relative magnitude of these measurement errors is such that the tests carried out by fama were not powerful enough to reject the joint hypothesis that the ex ante real rate is a constant and expectations are rational more powerful tests which are presented in this paper using the same data do lead to rejection of that hypothesis of course rejection

an empirical examination of institutional investor preferences for corporate social performance this study investigates the pattern of institutional shareholding in the u k and its relationship with socially responsible behavior by companies within a sample of over 500 uk companies we estimate a set of ownership models that distinguish between long and short term investors and their largest components and which incorporate both aggregated and disaggregated measures of corporate social performance csp the results suggest that long term institutional investment is positively related to csp providing further support for earlier studies by johnson and greening 1999 academy of management journal 42 564 576 and graves and waddock 1994 academy of management journal 37 1034 1046 disaggregation of csp into its constituent components suggests that the pattern of institutional investment is also related to the form which csp takes investigation of the impact of investment screens on the selection of stocks suggests that long term institutional investors select primarily through exclusion rejecting those firms which have the worst csp