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 corporation tax elasticity of charitable donations abstract with the continued downward pressure on corporation tax rates this paper analyses the corporation tax elasticity of donations there is strong evidence of an inverted u shape relationship between corporation tax rates and donations donations are initially increasing at a decreasing rate as a function of the corporation tax rate and are maximised at a rate of 27 percent between 2014 and 2018 the uk corporation tax rate decreased from 21 percent to 19 percent our results indicate that ceteris paribus this equates to a 34 percent decrease in an average uk firm s donations as corporation tax rates continue to decline the potential revenue implications for charities are increasing in importance the evidence also supports the theory of management utility maximisation as a determinant of corporate giving

corporate philanthropic disaster response and ownership type evidence from chinese firms response to the sichuan earthquake this article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms ownership type using a unique dataset of listed firms in china where state ownership is still prevalent based on the data of chinese firms response to the 2008 sichuan earthquake we find that the extent of corporate contributions for state owned firms following this disaster is less than that for private firms state owned firms are also less likely to respond in this disaster compared to private firms the results also reveal that firm size profitability geography cash resource available and leverage affect firms philanthropic disaster response behavior in china

nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

corporate social responsibility of the most highly reputed european and north american firms the objective of this article is double first to analyze using a descriptive analysis the main differences in the level and components of social behaviour between european and north american firms and second to contrast empirically using a multiple linear regression model whether the motives behind corporate social behaviour are different depending on the region or country of the firm with this aim an indicator of social behaviour termed effort in sustainability has been constructed by aggregating the firm s social effort with customers employees community and environment for a sample of the 40 european and north american companies most highly reputed in the years 2003 and 2004 the results obtained indicate that the region or country of the firm influences the level components and motivation of its social behaviour

the inventory investment equation an empirical work using business survey data abstract the most widely used model in empirical work on inventory investment has been the one that combines the accelerator motive with a target adjustment mechanism however the rationale for this type of relations remains normally quite vague in this paper a small theoretical model of inventory investment developed with solid micro economic foundations is presented and estimated using portuguese and belgian business survey data the model can help explaining some concepts that are frequently confused in empirical work and can also rationalize some of the most popular beliefs about inventory behaviour

what ended the great depression re evaluating the role of fiscal policy conventional wisdom contends that fiscal policy was of secondary importance for the economic recovery in the 1930s the recovery is then connected to monetary policy that allowed non sterilised gold inflows to increase the money supply often this is shown by measuring the fiscal multipliers and demonstrating that they were relatively small this paper shows that problems with the conventional measures of fiscal multipliers in the 1930s may have created an incorrect consensus on the irrelevance of fiscal policy the rehabilitation of fiscal policy is seen as a necessary step in the reinterpretation of the positive role of new deal policies for the recovery

a moral basis for corporate philanthropy the authors argue that corporate philanthropy is far too important as a social instrument for good to depend on ethical egoism for its support they claim that rule utilitarianism provides a more compelling though not exclusive moral foundation the authors cite empirical and legal evidence as additional support for their claim

corporate social responsibility and firm productivity evidence from the chemical industry in the united states prior research suggests that participating in corporate social responsibility csr activities can lead to higher future productivity however the empirical evidence is still scarce the purpose of this study is to examine the relationship between csr and future firm productivity in the u s chemical industry specifically this study examines the relationship between csr in year t and firm productivity in year t 1 t 2 and t 3 we use data envelopment analysis a non parametric method to measure firm productivity results from the regression analysis support a significantly positive relationship between csr and future firm productivity suggesting that csr can lead to higher productivity in the chemical industry the findings add to the validity of the proposition in prior research

how successful was the new deal the microeconomic impact of new deal spending and lending policies in the 1930s the new deal during the 1930s was arguably the largest peace time expansion in federal government activity in american history until recently there had been very little quantitative testing of the microeconomic impact of the wide variety of new deal programs over the past decade scholars have developed new panel databases for counties cities and states and then used panel data methods on them to examine the impact of new deal spending and lending policies for the major new deal programs in most cases the identification of the effect comes from changes across time within the same geographic location after controlling for national shocks to the economy many of the studies also use instrumental variable methods to control for endogeneity the studies find that public works and relief spending had state income multipliers of around one increased consumption activity attracted internal migration reduced crime rates and lowered several types of mortality the farm programs typically aided large farm owners but eliminated opportunities for share croppers tenants and farm workers the home owners loan corporation s purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex post cost to taxpayers the reconstruction finance corporation s loans to banks and railroads appear to have had little positive impact although the banks were aided when the rfc took ownership stakes

what or who started the great depression abstract herbert hoover i develop a theory of labor market failure for the depression based on hoover s industrial labor program that provided industry with protection from unions in return for keeping nominal wages fixed i find that the theory accounts for much of the depth of the depression and for the asymmetry of the depression across sectors the theory also can reconcile why deflation low nominal spending apparently had such large real effects during the 1930s but not during other periods of significant deflation

a decade s debate on the nexus between corporate social and corporate financial performance a critical review of empirical studies 2002 2011 abstract theoretical discussions and empirical studies on the nexus between corporate social responsibility corporate social performance and corporate financial performance have never ceased since the origin of the concepts the development trajectories of such studies should be articulated with a view to informing practical corporate social responsibility applications and theoretical studies in the future this paper presents a critical review of relevant empirical research articles on the nexus between corporate social performance and corporate financial performance published during the ten year period from 2002 to 2011 using mixed methods of content analyses and statistical analyses the paper reviews 84 empirical studies of this kind published during the period the results indicate that despite the enormous amount of previous studies the corporate social performance and corporate financial performance nexus is a line of inquiry that remains inconclusive the pattern of corporate social performance corporate financial performance relationship research in the decade examined has shifted towards exploring the linkages between specific aspects of the two constructs the positive relationships between these specific aspects in dual directions are confirmed by most of the studies examined in this paper the paper also examines the impact of time and space change on the corporate social performance corporate financial performance nexus the findings show that researchers have gradually recognized that the relationship is not static but changes over time furthermore the paper finds that corporate social responsibility has been increasingly debated in developing countries and in specified industrial settings the review concludes that to explore the corporate social performance corporate financial performance nexus by contextualizing it in a specified community and or examine its dynamics is a promising research area that can yield significant academic and practical values

identifying fiscal policy in effectiveness from the differential counter cyclicality of government spending in the interwar period differences across decades in the counter cyclical stance of fiscal policy can identify whether the growth in government spending affects output growth and so speeds recovery from a recession we study government spending reaction functions from the 1920s and 1930s for twenty countries there are two main findings first surprisingly government spending was less counter cyclical in the 1930s than in the 1920s second the growth of government spending did not have a significant effect on output growth so that there is little evidence that this feature of fiscal policy played a stabilizing role in the interwar period resume identifier le caractere effectif ou non de la politique fiscale a partir de la contra cyclicite differentielle des depenses gouvernementales pendant l entre deux guerres des differences dans le degre de contra cyclicite de la politique budgetaire peuvent servir a identifier si la croissance des depenses publiques a un effet sur la croissance de l output et accelere ainsi la reprise de l activite suivant une recession nous etudions des fonctions de reaction des depenses publiques pour les annees 1920 et 1930 ce pour vingt pays il en ressort deux resultats principaux premierement et fait surprenant les depenses publiques etaient moins contra cycliques durant les annees 1930 que 1920 deuxiemement la croissance des depenses publiques n a pas eu d effet significatif sur la croissance de l output ce qui permet de douter que cet aspect de la politique budgetaire ait joue un role stabilisateur durant l entre guerre

criteria for responsible business practice in smes an exploratory case of u k fair trade organisations this paper develops a set of 16 criteria divided into four groupings for responsible business practice rbp in small and medium sized enterprises smes drawn from the existing sme rbp literature the current lack of a general set of criteria against which such activity can be judged is noted and this deficit is redressed in order to make an initial assessment in support of the criteria so derived an exploratory feasibility study of rbp in u k fair trade organisations was conducted the findings from this study show that most but not all of the rbp criteria seem to be applicable to u k fair trade organisations but it is recommended that the complete set of criteria continues to be used in further research until such time as there is a general consensus as to which criteria are appropriate implications for rbp in small businesses in general and for fair trade organisations in particular are drawn out and suggestions for further research are identified

corporate philanthropic giving advertising intensity and industry competition level this article examines whether the likelihood and amount of firm charitable giving in response to catastrophic events are related to firm advertising intensity and whether industry competition level moderates this relationship using data on chinese firms philanthropic response to the 2008 sichuan earthquake we find that firm advertising intensity is positively associated with both the probability and the amount of corporate giving the results also indicate that this positive advertising intensity philanthropic giving relationship is stronger in competitive industries and firms in competitive industries are more likely to donate this study thus provides evidence suggesting that even in the wake of catastrophic events corporate philanthropic giving is strategic

political connection ownership structure and corporate philanthropy in china a strategic political perspective this paper investigates whether philanthropic giving decisions and amount of charitable giving are related to firms political connections and ownership type to this end chinese firms listed on either the shenzhen or shanghai stock exchange between 2004 and 2011 are examined where government interference in the business sector is prevalent state ownership structure is dominant and corporate political connections prevail our analyses show 1 a significant and positive relationship between political connections and the likelihood and extent of firm contributions 2 a significant and negative relationship between state ownership and extent of firm contributions and 3 a stronger relationship between political connections and corporate philanthropy in non state owned firms these findings with regard to the relationship between corporate giving political connections and ownership type have important implications for understanding corporate giving behavior in china and in emerging markets in general

an absence of transparency the charitable and political contributions of us corporations although stockholders may benefit from information regarding the frequently substantial charitable and political contributions of the corporations they own us corporations are typically not required to disclose any information about such payments in annual financial statements or information submitted periodically to regulatory agencies this lack of transparency is confounded by disclosure requirements of private foundations which a corporation may choose to establish for the purposes of administering charitable giving for the corporation the resulting disclosure fog engendered by extant regulations may be confusing to those corporation owners who would like to know what corporation contributions are being made to charities and politicians this article enumerates the magnitude of the charitable and political gifts of 40 of the most generous public corporations in the usa the current disclosure requirements for public companies the role of foundations rationales for withholding relevant information from owners and ethically questionable strategies that corporations may use to manage those disclosures for their benefit

fundamentals panics and bank distress during the depression we assemble bank level and other data for fed member banks to model determinants of bank failure fundamentals explain bank failure risk well the first two friedman schwartz crises are not associated with positive unexplained residual failure risk or increased importance of bank illiquidity for forecasting failure the third friedman schwartz crisis is more ambiguous but increased residual failure risk is small in the aggregate the final crisis early 1933 saw a large unexplained increase in bank failure risk local contagion and illiquidity may have played a role in pre 1933 bank failures even though those effects were not large in their aggregate impact

the creation of value through corporate reputation the relationship between social and financial performance csp fp has been a main objective in the literature on business management as it would provide an economic justification for the social investment insofar as it contributes to the creation of value this relationship has been empirically tested by several authors though without using a theoretical model that sustains this relationship the aim of this article is to propose a theoretical model of the process of the creation of value from the reputation generated by companies integrating the factors that have been shown to be more relevant in this process from previous research in such a way that hypotheses are put forward regarding the existence of this relationship and the factors that determine it finally an empirical test is performed using the 100 most prestigious companies operating in spain during 2004

aggregate inventory behavior in large european economies abstract inventory fluctuations are known to be an important propagation mechanism for u s business cycles this paper compares the significance of inventory fluctuations in the u s with four other major industrial economies in europe a general model of aggregate inventory demand is specified which seeks to encompass the models presented in recent studies of inventory behavior this model is estimated for the large european economies united kingdom west germany france and italy the preferred models that result from this analysis are compared with the empirical evidence for the u s

great expectations and the end of the depression what ended the great depression in the united states this paper suggests that the recovery was driven by a shift in expectations this shift was triggered by president franklin delano roosevelt s fdr policy actions on the monetary policy side roosevelt abolished the gold standard and announced an explicit policy objective of inflating the price level to pre depression levels on the fiscal policy side roosevelt expanded real and deficit spending which helped make his policy objective credible the key to the recovery was the successful management of expecta tions about future policy roosevelt s rise to power is modeled as a policy regime change as in thomas sargent 1983 and peter temin and barry wigmore 1990 this paper formalizes temin and wigmore s argu ment in a repeated game setting using a dynamic stochastic general equilibrium dsge model and argues that the regime change can account for the recovery in the model a regime change means the elimination of certain policy dogmas that constrain the actions of the government the regime change generates an endogenous shift in expectations due to a coordination of mon etary and fiscal policy this coordination ended the great depression by engineering a shift in expectations from contractionary i e the private sector expected future economic contrac tion and deflation to expansionary i e the public expected future economic expansion and inflation the expectation of higher future inflation lowered real interest rates thus stimulating demand while the expectation of higher future income stimulated demand by raising permanent income

reexamining the expected effect of available resources and firm size on firm environmental orientation an empirical study of uk firms an emergent body of literature examined why some firms apply some environmental initiatives while other firms do not take responsibility for their natural environment thus firm environmental orientation responsiveness and performance are linked in the literature to several variables unfortunately the relationship between firm environmental orientation and either available resources or firm size showed mixed results and inconclusive evidence therefore the aim of this paper is to show empirically how available resources and firm size can explain differences in firm environmental responsiveness and environmental performance econometric results of environmental responsiveness using the logistic regression model demonstrated that firm size does appear to add something unique in explaining differences in environmental responsiveness while available resource can be safely dropped from the model however econometric analysis of environmental performance using the maximum likelihood random effects model showed strong evidence that available resources and firm size are significant predictors of firm environmental performance

accounting for endogeneity and the dynamics of corporate social corporate financial performance relationship abstract this paper examines the endogeneity problem in studies dealing with corporate social performance and financial performance relationship since randomized controlled experiments in the business research field are often unfeasible researchers rely mostly on observational data to make claims about doing good doing well arguments in response to several strong calls for additional well crafted empirical research that address endogeneity we revisit the csp cfp relationship in the airline industry to understand how endogeneity arises and how to control for it in studies based on observational panel data we exploit various approaches such as ols fixed effects fixed effects iv 2sls dynamic system gmm and gls estimators we show the appropriateness behind the use of the dynamic system gmm estimator and its benefits over the fixed effects estimator in addition we demonstrate that results in models that do not account for endogeneity lead to inflated estimations misleading interpretations and wrong theoretical propositions about the dynamic nature of csp cfp relationship

income inequality in the united states 1913 1998 this paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the united states using individual tax returns data top income and wages shares display a u shaped pattern over the century our series suggest that the large shocks that capital owners experienced during the great depression and world war ii have had a permanent effect on top capital incomes we argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks top wage shares were flat before world war ii dropped precipitously during the war and did not start to recover before the late 1960s but are now higher than before world war ii as a result the working rich have replaced the rentiers at the top of the income distribution

episodes of war and peace in an estimated open economy model we analyze the effects of world wars on the macroeconomic dynamics of the u s france germany and the uk by means of an estimated open economy model the model allows wars to affect the economy through capital depreciation sovereign default a military draft household preferences and spillovers on other exogenous processes productivity investment trade policy variables if the bulk of fluctuations during war episodes can be explained by the rise in government spending in the u s other factors are crucial in other countries we also discuss the size and state dependence of public spending multipliers and a counterfactual welfare exercise

an investigation into the givings by large corporate donors to uk charities 1979 86 this paper the first study of its kind to date carried out for the uk is concerned with the scale and determinants of charitable givings by large corporate donors in the uk the investigation is carried out using pooled information on 53 companies over the 8 years from 1979 to 1986 during which period the rate of corporation tax fell from 52 to 35 a result of particular interest is that contributions were related positively to the rate of tax

the harm of symbolic actions and green washing corporate actions and communications on environmental performance and their financial implications we examine over 100 top performing canadian firms in visibly polluting industries as we seek to answer four research questions what specific environmental issues are firms addressing how do these issues differ between industries are both symbolic and substantive actions financially beneficial does green washing measured as the difference between symbolic and substantive action and or green highlighting measured as the combined effect of symbolic and substantive actions pay we find that substantive actions of environmental issues green walk neither harm nor benefit firms financially but symbolic actions green talk are negatively related to financial performance we also find that green washing discrepancy between green talk and green walk has a negative effect on financial performance and green highlighting concentrated efforts of the talk and walk has no effect on financial performance in this article we provide explanations of our findings and put forth future research directions

lessons from the 1930s great depression this paper provides a survey of the great depression comprising both a narrative account and a detailed review of the empirical evidence focusing especially on the experience of the united states we examine the reasons for and flawed resolution of the american banking crisis as well as the conduct of fiscal and monetary policy we also consider the pivotal role of the gold standard in the international transmission of the slump and leaving gold as a route to recovery policy lessons for today from the great depression are discussed as are some implications for macroeconomics

exploring the curvature of the relationship between hrm csr and corporate financial performance this article contributes to the general literature on the relationship between corporate social performance and corporate financial performance as well as to the emerging hrm csr literature by exploring the curvature of the relationship between hrm csp and cfp we advance conceptual arguments in favor of an inverted u shaped relationship our results demonstrate a significant quadratic relationship between hrm csp and cfp we provide evidence that this relationship is not linear or s shaped but rather inverted u shaped

trends and determinants of corporate non financial disclosure in greece an increasing number of business organizations around the world engage in the accounting for and reporting on non financial aspects of performance mainly within the domains of social and environmental responsibility using a composite disclosure index this study investigates the status of the non financial disclosure practices of the top 100 companies operating in greece a number of determinants which potentially drive greek firms to publicly disclose such information are examined an investigation of the reporting practices of a subgroup of firms which is on the spotlight regarding their environmental performance is performed while overlapping perspectives for the greek case are outlined the analysis suggests that only a small group of leading greek firms appears to endorse a meaningful business and society dialogue as an instrument for stakeholder communication and the discharging of organizational accountability most other corporations still tend to treat such practices superficially and in an imprecise manner

macroeconomic effects from government purchases and taxes for u s annual data that include world war ii the estimated multiplier for temporary defense spending is 0 4 0 5 contemporaneously and 0 6 0 7 over 2 years if the change in defense spending is permanent gauged by ramey s defense news variable the multipliers are higher by 0 1 0 2 since all estimated multipliers are significantly less than 1 greater spending crowds out other components of gdp particularly investment the lack of good instruments prevents estimation of reliable multipliers for nondefense purchases multipliers in the literature of two or more likely reflect reverse causation from gdp to nondefense purchases increases in average marginal income tax rates measured by a newly constructed time series have significantly negative effects on gdp when interpreted as a tax multiplier the magnitude is around 1 1 the combination of the estimated spending and tax multipliers implies that the balanced budget multiplier for defense spending is negative we have some evidence that tax changes affect gdp mainly through substitution effects rather than wealth effects

a study of the link between a corporation s financial performance and its commitment to ethics a number of studies have tested the relationship between a corporation s social and ethical performance and its financial performance in contrast this is the first study to demonstrate a link between overall financial performance and an emphasis on ethics as an aspect of corporate governance it identifies the 26 8 percent of the 500 largest u s public corporations that in their annual report to shareholders commit to ethical behavior toward their stakeholders or emphasize compliance with their code of conduct the financial performance of these corporations ranks higher than that of those who do not at a significance level of p 0 005 using the 1997 business week ranking which averages eight publicly reported measures of historical financial performance these findings should motivate more corporations to utilize the principles of social and ethical accounting auditing and reporting seaar

corporate social and financial performance an investigation in the u k supermarket industry the comparison of corporate social performance with corporate financial performance has been a popular field of study over the past 25 years the results while broadly conclusive of a positive relationship are not entirely consistent in addition most of the previous studies have concentrated on large scale cross industry studies and often with a single variable for corporate social performance in order to produce statistically significant results this weakens the richness of understanding that might be obtained from a single industry study with multiple social variables which would also allow investigation of inter relationships between individual and sub sets of social performance measures and between individual and sub sets of social performance and financial performance measures there have also been criticisms that the results lack a rigorous theoretical basis and the paper demonstrates clearly how stakeholder theory must form the basis for this area of research following a review of the literature this paper presents the initial findings from a study of the u k supermarket industry which suggest that contemporaneous social and financial performance are negatively related while prior period financial performance is positively related with subsequent social performance positive relationships between both age and size of the company with social performance are also found

corporate philanthropy in the u k 1985 2000 some empirical findings this paper briefly reviews the theories that seek to explain the phenomenon of corporate charitable donations and then provides a review of the empirical issues that have arisen in previous studies in this area the findings of an analysis of charitable donations data from the entire u k ftse index for the years 1985 2000 are then reported these findings include the observation of a time related increase in charitable donations which is compared with an earlier study to give a 24 year history of charitable donations in the u k the findings note little responsiveness of the monetary value of charitable donations to the economic performance of firms an international comparison over time against u s trends is also reported and shows how u s corporations have traditionally been more generous than u k firms but that the trend in the u s is downwards membership of a u k based tithing club the percent club is shown to be associated with higher profit performance against non members members charitable contributions against profit are shown to be higher than the ftse mean although short of the 0 5 target figure in cash terms the paper concludes with a brief discussion of these findings in relation to the theoretical positions advanced for corporate philanthropy

striking at the roots of crime the impact of welfare spending on crime during the great depression abstractduring the great depression contemporaries worried that people hit by hard times would resort to crime president franklin roosevelt argued that the massive government relief efforts struck at the roots of crime by providing subsistence income to needy families after constructing a panel data set for 81 large american cities for the years 1930 40 we estimate the effect of relief spending by all levels of government on crime rates the analysis suggests that a 10 percent increase in relief spending during the 1930s reduced property crime by roughly 1 5 percent by limiting the amount of relief recipients free time work relief may have been more effective than direct relief in reducing crime more generally our results indicate that social insurance which tends to be understudied in economic analyses of crime should be more explicitly and more carefully incorporated into the analysis of temporal and spatial variations in criminal activity

corporate philanthropy in the united kingdom the increasing demands placed on private welfare services and calls for business to fulfil its social responsibilities have heightened interest in corporate charitable donations in the united kingdom adjustments to the corporation tax system have been made to encourage companies to give more the article outlines the legal and fiscal background to company giving examines its magnitude and reports on a survey of company practice

do suppliers applaud corporate social performance the influence of corporate social performance csp on stakeholders is one of the focal issues in corporate social responsibility csr research using data of listed companies in china this paper examines whether csr behavior in the form of charitable donations garners a positive reaction from suppliers results derived from both level and change model regressions show that superior csp makes it easier for a firm to obtain trade credit from suppliers although the effect is significant only in non state owned enterprises non soes the results are robust to various measures of csp and endogeneity tests the results support the strategic philanthropy view and apply stakeholder theory in supply chain that strategic csr can help firms to attract suppliers and consolidate cooperative relationships with them which in turn benefits the firms in terms of more trade credit financing from suppliers this paper also shows that state owned enterprises and non soes have different csr intentions and use csr to achieve strategic goals in different ways the conclusions drawn from this study provide practical guidance on csr strategy suggesting that csr activities can help a firm in transition economies to enhance its corporate image establish and consolidate the good relationship with suppliers and obtain economic benefits or achieve long term business objectives

blood and treasure exiting the great depression and lessons for today although avoiding the policy mistakes of the 1930s helped define how policy makers responded to the 2007 8 financial crisis and ensuing recession policy applications to the recovery phase are less well understood we draw on the experience of the us in the 1930s to shed light on exit strategies movements back to institutional conditions associated with steady state growth including stable inflation and broadly non interventionist credit and capital market policies we describe how policy responses to the deflation and banking crises of the 1930s coloured the exit policy debate after the great depression we show that a full exit from the great depression defined as the point at which interventionist credit and capital market policies and institutions were wound down did not occur in the 1930s it took until the 1950s for this to occur and for the federal reserve to regain its independence and return unfettered to its longer run

corporate reputation and philanthropy an empirical analysis this paper analyzes the determinants of corporate reputation within a sample of large uk companies drawn from a diverse range of industries we pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries given that reputational indices tend to reflect the financial performance of organizations above other factors fryxell g e and j wang 1994 journal of management 20 1 14 and that elements of the literature emphasise that discretionary aspects of social responsibility including corporate donations may not be in the financial interests of organizations e g friedman m 1970 the social responsibility of business is to increase its profits new york times magazine september 13 this is a significant finding it suggests that philanthropic expenditures may play a significant role in stakeholder management and may in particular lead to stakeholders holding more positive impressions of philanthropic corporations

monetary intervention mitigated banking panics during the great depression quasi experimental evidence from a federal reserve district border 1929 1933 the federal reserve act divided mississippi between the 6th atlanta and 8th st louis districts during the great depression these districts policies differed atlanta championed monetary activism and the extension of aid to ailing banks st louis eschewed expansionary initiatives during a banking crisis in 1930 atlanta expedited lending to banks in need st louis did not outcomes differed across districts in atlanta banks survived at higher rates lending continued at higher levels commerce contracted less and recovery began earlier these patterns indicate that central bank intervention influenced bank health credit availability and business activity

lessons from the political economy of the new deal the new deal produced a fundamental change in the structure of american government the national government came to play a much larger role in the financing of social welfare programmes while administration of the programmes was largely located at the states both the purely national and the shared federal parts of the welfare system were characterized by impersonal rules the political economy of how the rules came about and how the new deal experience may have contributed to americans changing their views on the danger of dealing with the national government is the primary focus the paper closes with speculations about the possible effect of changing views on american participation in the second world war after 1939

us monetary and fiscal policy in the 1930s the paper provides a survey of fiscal and monetary policies during the 1930s under the hoover and roosevelt administrations and how they influenced the policies during the recent great recession the discussion of the causal impacts of monetary policy focuses on papers written in the last decade and the findings of scholars using dynamic structural general equilibrium modelling the discussion of fiscal policy shows why economists do not see the new deal as a keynesian stimulus describes the significant shift toward excise taxation during the 1930s and surveys estimates of the impact of federal spending on local economies the paper concludes with discussion of the lessons for the present from 1930s monetary and fiscal policy

serial correlation and the fixed effects model this paper generalizes the durbin watson type statistics to test the ols residuals from the fixed effects model for serial independence also generalized are the tests proposed by sargan and bhargava for the hypothesis that the residuals form a random walk a method for efficient estimation of the parameters is also developed finally an earnings function is estimated using the michigan survey of income dynamics in order to illustrate the uses of the tests and the estimation procedures developed in this paper

labor friendly corporate practices is what is good for employees good for shareholders as corporate managers interact with non shareholder stakeholders potential tradeoffs emerge and questions arise as to how these interactions impact shareholder value we argue that this shareholder stakeholder debate is an important issue within the overall corporate governance and corporate policy domain and examine one such stakeholder group employees by studying labor friendly corporate practices we find that announcements of labor friendly policies are associated with positive abnormal stock returns labor friendly firms also outperform otherwise similar firms both in terms of long run stock market returns and operating results in addition we find that the probability and benefits of labor friendliness increase with the demand for highly skilled labor our analysis of excess executive compensation suggests that top management derives no pecuniary benefits from labor friendly practices we interpret our results as consistent with a genuine concern for employees translating into higher productivity and profitability which in turn facilitate value creation it appears that the benefits of labor friendly practices significantly outweigh the costs and that what is good for employees is good for shareholders

british monetary and fiscal policy in the 1930s current economic turbulence has revived interest in interwar macroeconomic instability and policy this paper provides a guide to the current state of knowledge on british macroeconomic policy between 1929 and the eve of the second world war for today s economists and policy makers mindful that some will seek lessons from this earlier age it makes clear the very particular economic and policy context of the time including the marked difference between british and american economic performance and policies and the challenge posed by the massive rise in debt brought about by the first world war knowledge transfer is possible here for policy learning but what transpires is that lessons are typically stronger as negatives than as positives namely what should not be done in general as against what might be done this largely situation specific the focus is the role and effectiveness of the monetary and fiscal policies pursued together with an assessment of the principal policy not adopted namely the keynesian solution of significant loan financed public works to remedy mass unemployment the analysis is comparative with respect to us macroeconomic economic performance and policy it explores the different macroeconomic shocks of the contraction phase the term great depression is not really appropriate to the british experience in the two countries comparative policy regimes and then in turn analyses the policy mix and policy effectiveness of monetary and fiscal policy including for britain the counterfactual keynesian solution a business cycle periodization is adopted with the key role for the abandonment of the gold standard in terms of regaining freedom of choice in macroeconomic policy itself experiencing significant developments after 1931 the traditional role of the cheap money induced housing boom in britain s post 1932 economic recovery is reaffirmed the impact of the fiscal policies actually pursued are then discussed as are assessments of the likely effectiveness of the keynesian solution had the 1929 liberal party s we can conquer unemployment spending package been implemented

a rose by any other name are family firms named after their founding families rewarded more for their new product introductions the authors explore the relation between the way different family firms are named and the shareholder value impact of these firms new product introductions using an event study of 1 294 product introduction announcements of 107 publicly listed u s family firms the authors find that the presence of the founding family s name as part of a family firm s name acts as a valuable firm resource increasing the abnormal stock returns surrounding the firm s new product introductions superior returns to family named firms new product introductions are partially mediated by these firms history of ethical product related behavior family named firms particularly those with corporate branding and those wherein a founding family member holds the ceo or chairman position are more likely to exhibit a history of avoiding such product related controversies as product safety issues and deceptive advertising the authors highlight the managerial and theoretical contributions of this research

voluntary donations and public expenditures in a federal system proponents of the new federalism argue that nonprofit organizations and local governments will fully offset federal social service expenditure cutbacks the author analyzes this proposition as a competitive game in which donations are motivated by private and public good considerations the author characterizes the response of political economic equilibrium to exogenous changes in federal expenditures when local voters are cognizant of donor reactions partial replacement is the most likely outcome though others are possible copyright 1987 by american economic association

europe s great depression coordination failure after the first world war in this paper i survey and reinterpret the extensive literature on europe s great depression i argue that europe could not exploit its vast economic potential after 1918 because the war had not yet come to an end indeed it did not end before 1945 both domestic and international institutions suffered from a lack of reciprocal trust and commitment which can be clearly illustrated in the realm of monetary policy but affected many other areas of policy making such as energy or migration policies these institutions in turn affected expectations and thereby the extent to which for example expansionary policies could be effective

complementary resources and capabilities for an ethical and environmental management a qual quan study managers commitment to contribute to sustainable development holds the key to their long term business success and may be a source of competitive advantage the managerial perception of business ethics is influenced by the level of moral development and personal characteristics of managers these perceptions are also shaped by forces existing in the environment of the firm including available resources societal expectations sector and regulations the resource based perspective can thus contribute to the analysis of ethical issues offering important insights on how they can influence the environmental strategy of the firm the findings of this study show that firm resources have a strong influence on business managers ethical attitudes in addition the application of resource based rationales to ethical issues can be justified in the following several ways it influences a managerial perception of natural environment as a competitive opportunity it requires investments of financial and human resources flexibility and speed in the adaptation to environmental changes and it creates new resource based opportunities through changes in prevention pollution technology policy process and market forces

capital controls and recovery from the financial crisis of the 1930s abstract we examine the first widespread use of capital controls in response to a global or regional financial crisis in particular we analyze whether capital controls mitigated capital flight in the 1930s and assess their causal effects on macroeconomic recovery from the great depression we find evidence that they stemmed gold outflows in the year following their imposition however time shifted difference in differences dd estimates of industrial production prices and exports suggest that capital controls did not accelerate macroeconomic recovery relative to countries that went off gold and floated countries imposing capital controls also appear to perform similar to the gold bloc countries once the latter group of countries finally abandoned gold time series analysis suggests that countries imposing capital controls refrained from fully utilizing their newly acquired monetary policy autonomy

the great crash and the onset of the great depression this paper argues that the collapse of stock prices in october 1929 generated temporary uncertainty about future income which led consumers to forgo purchases of durable goods that the great crash generated uncertainty is evidenced by the decline in surety expressed by contemporary forecasters that this uncertainty affected consumer behavior is shown by the fact that spending on consumer durables declined drastically in late 1929 while spending on perishable goods rose slightly this effect is confirmed by the fact that there is a significant negative relationship between stock market variability and the production of consumer durables in the prewar era

can the production smoothing model of inventory behavior be saved the production smoothing model of inventory behavior has a long and venerable history and theoretical foundations that seem very strong yet certain overwhelming facts seem not only to defy explanation within the production smoothing framework but actually to argue that the basic idea of production smoothing is all wrong most prominent among these is the fact that the variance of detrended production exceeds the variance of detrended sales this paper first documents the stylized facts then it derives the production smoothing model rigorously and explains how the model can be amended to make it consistent with the facts finally it reviews the theoretical and empirical evidence and tries to draw some tentative conclusions

principal principal conflicts and corporate philanthropy evidence from chinese private firms the principal principal perspective suggests that controlling shareholders have excessive influence on corporate philanthropy and may direct corporate funds to charitable causes to support their personal interests analysis of a sample of chinese private firms listed on the shenzhen or shanghai stock exchange between 2004 and 2011 shows that 1 there is a significant and negative relationship between corporate giving and the share held by the largest shareholders suggesting that controlling shareholders are opportunistic in directing corporate charitable contributions 2 there is a significant and positive relationship between corporate giving and the political connections of the largest shareholders and their agents suggesting compatibility between corporate contributions and the personal interests of the controlling shareholders 3 there is a stronger negative relationship between corporate giving and the share of the company held by the largest shareholders in politically connected firms suggesting that political connections contribute to increased opportunistic corporate giving overall our study provides important evidence for the one dominant controlling shareholder phenomenon yigududa by testing and extending the principal principal framework and showing that the largest shareholders of chinese firms appear to donate to charitable causes that ultimately serve their personal interests at the expense of minority shareholders

investing in socially responsible companies is a must for public pension funds because there is no better alternative with assets of over us 1 0 trillion and growing public pension funds in the united states have become a major force in the private sector through their holding of equity positions in large publicly traded corporations more recently these funds have been expanding their investment strategy by considering a corporation s long term risks on issues such as environmental protection sustainability and good corporate citizenship and how these factors impact a company s long term performance conventional wisdom argues that the fiduciary responsibility of the pension funds trustees must be solely focused on their beneficiaries and therefore their investment criteria must be based strictly on narrowly defined financial measures it is also asserted that well established financial measurements of corporate performance already include long term risk assessment through discounted present value of future flow of earnings consequently all other criteria are contrary to the best interest of the pension funds beneficiaries in this paper we assert that contrary to conventional wisdom pension funds and for that matter other mutual funds must be concerned with the long term survival and growth of corporations these measures are generally referred to socially responsible investing sri and when applied to corporations it is termed socially responsible corporate conduct srcc we demonstrate that current measurement of future risk assessment invariably understates and quite often completely overlooks these long term risks because of the inherent bias towards short run on the part of financial intermediaries whose compensation depends greatly on short term results furthermore there is ample evidence to suggest that these intermediaries have been engaging in self serving practices and thus failing in their duties to serve their clients i e pension funds best interests because of their large holdings in the total market as well as individual companies these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets hence they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long term aspects of their operations in terms of their impact on environment sustainability and community welfare to name a few we argue that an exclusionary and even a primary focus on short term financial criteria is no longer a viable option it also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance thus socially responsible investing practices are not merely discretionary and desirable activities they are a necessary imperative which both the corporations and public pension funds and other large institutional holders will ignore at serious peril to themselves finally the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities it also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long term corporate survival and growth in the context of a changing economic environmental and socio political dynamic

fostering corporate social responsibility through public initiative from the eu to the spanish case should csr be approached only on a voluntary basis or should it be complemented with a compulsory regulatory framework what type of government intervention is more effective in fostering csr among companies this paper is an attempt to answer these questions reviewing the debate between proponents of the voluntary case and the obligatory case for csr and critically analysing current international government led initiatives to foster csr among companies and national government led initiatives in the eu area finally the paper focuses on the spanish case as an example of the failure of an exclusively voluntary approach despite the rapid uprise of csr spain is still far behind late in csr promotion strategies most action has been undertaken by companies themselves with no common guidelines governmental support or independent verification the lack of a regulatory framework for csr or ethical investment issues and the virtual absence of other indirect incentives explains the misbalance between private public and third sector initiatives based on the spanish context which is quite similar to other non oecd countries the authors call for a more proactive government position in csr related issues the conclusions of the paper detail the features of this regulatory framework and other policies to promote csr in spain as well as in other oecd countries

implementing supplier codes of conduct in global supply chains process explanations from theoretic and empirical perspectives western buying companies impose supplier codes of conduct scc on their suppliers in developing countries however many suppliers cannot fully comply with scc and some of them even cheat in scc in this research we link contract characteristics price pressure production complexity contract duration to the likelihood of supplier s commitment to scc through a mediating process how the buying companies govern their suppliers our structural equation model analysis shows that the hierarchy relational norms governance is a perfect mediator of contract characteristics effects on the likelihood of supplier s commitment the market governance an insignificant one the managerial implications are provided for successfully implementing scc in global supply chains

on the theory of the firm underlying empirical models of aggregate price behavior recent empirical work on aggregate and industrial price behavior has been conducted within the framework of a static neo classical theory of price formation 2 the purpose of this paper is to propose a more general theoretical framework for analyzing price behavior the proposed framework is neo classical in its basic characteristics but unlike the recent literature it is based on a dynamic theory of firm behavior in which decisions on price inventories and the capital stock are integrated to serve as a basis for comparison with the model developed here it is useful to state briefly the main propositions of the static neo classical model the model presumes that the typical firm behaves as if it were a simple monopolist that faces competitive factor input markets and sets its price so as to maximize current profits assuming a log linear demand function and production function the model yields the result that the firm s long run optimal price policy in general is

accounting for the great depression economists have offered many theories for the u s great depression but no consensus has formed on the main forces behind it here we describe and demonstrate a simple methodology for determining which theories are the most promising we show that a large class of models including models with various frictions are equivalent to a prototype growth model with time varying efficiency labor and investment wedges that at least on face value look like timevarying productivity labor taxes and investment taxes we use u s data to measure these wedges feed them back into the prototype growth model and assess the fraction of the fluctuations in 1929 39 that they account for we find that the efficiency and labor wedges account for essentially all of the decline and subsequent recovery investment wedges play at best a minor role this article originally appeared in the american economic review american economic association

ethical commitment financial performance and valuation an empirical investigation of korean companies a variety of stakeholders including investors corporate managers customers suppliers employees researchers and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics as a subject of research the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated this article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures consistent with anecdotal evidence we have found a significant association between the ethical commitment of korean companies and their valuation on the korean stock market however the result reveals that the association between ethical commitment and financial performance is not significantly supported

why do corporations give to charity this paper explores whether corporate contributions should be tax dedu ctible within the more general context of an examination of the profi t and utility maximization motives driving contributions the theoret ical section develops a formal structural model of the contributions process illustrates comparative statics and derives a set of empiri cally testable hypotheses using a new source of firm data the empir ical results indicate that profit maximization is an important motive driving contributions this finding supports the current tax deducti ble status of contributions up to a seldom encoun tered ceiling and favors a reform that allows firms to treat contributions as ordinary business expenses copyright 1988 by the university of chicago

inventories and sticky prices more on the microfoundations of macroeconomics the role of inventories in making prices sticky is studied by analyzing a dynamic linear quadratic model of a monopoly firm facing stochastic demand but able to store its finished goods in inventory it is shown that in contrast to the usual presumption firms that exhibit the smallest output responses to demand fluctuations may also exhibit the smallest price fluctuations specifically firms which have very flexible inventory storage facilities or are subjected to very transitory demand shocks will rely on inventories as buffers and will change neither production nor price very much on the other hand firms which have very inflexible storage facilities or whose demand shocks are quite permanent will display large swings in both price and output the standard assumption about inventory carrying costs that has been used in the literature that they are linear is shown to imply that production is impervious to fluctuations in demand it is also established that prices may respond more strongly to positive demand shocks than to negative ones if it is impossible to hold negative inventories i e to have unfilled orders the model offers an explanation for stickiness in relative prices however under certain circumstances it may help explain the persistence of inflation this abstract was borrowed from another version of this item

monetary factors in the great depression this paper examines the role of monetary policy in the early stages of the great depression and considers the mechanism whereby this policy may have affected real activity i conclude that the depression was preceded by a dramatic shift towards a highly contractionary monetary policy the economic impact of this policy seems unlikely to have come through the conventional keynesian channels of a shortage of liquidity and high ex ante real interest rates but instead may have operated through unanticipated deflation and after 1930 through the disruption of financial intermediation as a consequence of the banking panics

an investigation of the determinants of manufacturing employment in the united kingdom in this paper we present and estimate an adjustment cost model of industry employment which takes explicit account of both expectations and aggregation over different labour types the resulting model is subject to a large number of tests and is a highly robust representation of the data finally forecasts are produced for manufacturing employment up to 1990

on the economics of philanthropy friedman says that he accepts this argument as justifying governmental action to alleviate poverty economists will be familiar with this kind of argument someone takes as a premise that a particular activity is the subject of altruistic concern by individuals he shows that if matters are left to unco ordinated private philanthropy a free rider problem will arise and then he claims that this problem can be solved by some kind of intervention by government this strategy has been used to justify many kinds of intervention including compulsory transfers of income through the tax system hochman and rodgers i969 public policy to stimulate saving and investment marglin i963 sen i967 and the subsidisation or public provision of health care arrow i963 lindsay i969 culyer i976 this whole line of argument rests on a particular theory of private philanthropy which in turn relies on three principal assumptions first there is the publicness assumption the charitable activity in question say the relief of poverty or the provision of health care is a common argument in many individuals utility functions and so is a public good in the theoretical sense samuelson i954 in some cases of private philanthropy it is indisputable that the charitable activity is a public good from which donors derive utility consider for example the case of yachtsmen contributing to the royal national lifeboat institution or potential cancer victims contributing to the cancer research campaign in other cases the assumption takes on a rather different character rich britons contribute towards famine relief in cambodia childless old age pensioners contribute towards the care of handicapped children in such cases one would have to be extremely cynical to believe that the charitable activity furthers the self interest of the donor in any significant way but one might suggest that for purely altruistic reasons the donor derives utility from knowing that less fortunate people are being made better off such an effect will be called an altruistic externality friedman along with all of the other writers quoted in the first paragraph of this paper relies on altruistic externalities to justify the publicness assumption the second assumption is that of utility maximisation each individual s decisions concerning his philanthropic

work sharing during the great depression did the president s reemployment agreement promote reemployment the president s reemployment agreement pra of 1933 directed firms to reduce workweeks during the great depression so existing jobs could be spread into additional employment opportunities similar work sharing policies have recently been implemented across europe in hopes of reducing unemployment i find that ceteris paribus the work sharing aspects of the pra created nearly 2 5 million new employment opportunities in around four months however the programme also required firms to raise hourly wage rates offsetting close to half of these gains furthermore most of the remaining employment gains were wiped out after cartel oriented industry specific codes of fair competition supplanted the pra

a study of management perceptions of the impact of corporate social responsibility on organisational performance in emerging economies the case of dubai although a number of studies have shown that corporate social responsibility csr activities often lead to greater organisational performance in western developed economies researchers are yet to examine the strategic value of csr in emerging economies using survey data from 280 firms operating in dubai this study examines the link between csr activities and organisational performance the results show that csr has a positive relationship with all three measures of organisational performance financial performance employee commitment and corporate reputation these results reinforce the accumulating body of empirical support for the positive impact of csr on performance and challenge the dominant assumption that given the weak institutional framework in emerging economies csr activities drain resources and compromise firms competitiveness