a factor approach to realized volatility forecasting in the presence of finite jumps and cross sectional correlation in pricing errors there is a growing literature on the realized volatility view the mathml source forecasting of asset returns using high frequency data we explore the possibility of forecasting view the mathml source with factor analysis once considering the significant jumps a real high frequency financial data application suggests that the factor based approach is of significant potential interest and novelty

investors in need of social ethical and environmental information in this contribution we will briefly discuss the shareholders need for social ethical and environmental information and the efforts of corporations to address this need looking at three cases we will raise some doubt with regard to the adequacy of corporate see reporting to meet the needs of shareholders we will discuss the following three cases bp s investments in azerbaijan nike s management of its labour conditions of child labour and security issues and monsanto s production of genetically modified seeds

the disaggregation of corporations selective intervention high powered incentives and molecular units a vast array of organizational innovations and changes are transforming us corporations large firms have dramatically downsized refocused and vertically disaggregated they increasingly obtain goods and services pursue complex development efforts and exploit horizontal synergies without the aid of formal hierarchy large firms are also internally disaggregating into smaller more autonomous units that are treated much like external subcontractors the authors argue that these organizational innovations share an important underlying commonalty economic activity is converging toward exchange involving either internal within firm or external between firm networks of small autonomous production or service units small units and small firms have become the basic building block the molecular units of these new forms further exchange among the small autonomous units is commonly a mix of both market like and hierarchical features the authors develop a theoretical explanation for these trends the

answering the skeptics yes standard volatility models do provide accurate forecasts a voluminous literature has emerged for modeling the temporal dependencies in financial market volatility using arch and stochastic volatility models while most of these studies have documented highly significant in sample parameter estimates and pronounced intertemporal volatility persistence traditional ex post forecast evaluation criteria suggest that the models provide seemingly poor volatility forecasts contrary to this contention we show that volatility models produce strikingly accurate interdaily forecasts for the latent volatility factor that would be of interest in most financial applications new methods for improved ex post interdaily volatility measurements based on high frequency intradaily data are also discussed

public information as a deterrent to environmental infractions past studies of the impact of publicly announced violations of environmental laws on the market value of the offending firms have yielded equivocal results a particularly troubling aspect of this research is whether the market imposes a reputation penalty for such violations this article uses the event study methodology to estimate the effect of announced environmental infractions on the market returns of the violators stockholders experienced significant negative abnormal returns in the event window cross sectional analysis showed these cumulative losses to be a function of firm size type of legal action and specific toxin the reputation component of abnormal returns was influenced by these factors as well

compliance with mandatory environmental reporting in financial statements the case of spain 2001 2003 corporate social ethical and environmental reporting seer should ideally discharge the accountability of an organisation to its stakeholders voluntary reporting has been characterised by a dearth of neutral and objective information such that the advocates of seer recommend that it be made compulsory their underlying rationale is that legally specified disclosure requirements and enforcement mechanisms will enhance the quality of such reporting this paper sets out to explore how realistic this scenario actually is in view of the conflicting interpretations in the literature on this subject to that end a survey of the reporting patterns of 78 of the largest spanish companies between 2001 and 2003 examines the extent of their compliance with the icac 2002 standard which obliged them to make environmental disclosures in their financial statements the results suggest that progressive and improved regulation could increase the volume and quality of seer disclosures they also suggest however that persistent non compliance means that the problems associated with voluntary disclosure still exist finally through an impression management perspective the study reveals the diverse strategies ranging from dismissal to concealment that are employed by companies to avoid transparency as regulation improves and enforcement expectations rise it becomes more difficult to dismiss compulsory reporting norms as a result some firms engage in more complex concealment strategies to attain corporate legitimacy depriving stakeholders of regulatory information the latter point serves to reconcile apparently contradictory explanations in the literature as to whether legitimacy theory might explain partial compliance with seer regulation

corporate voluntary carbon information disclosure evidence from china s listed companies this article seeks to answer two questions i what factors drive firms to decide whether or not to disclose the information related to their greenhouse gas emissions also called carbon information ii what forces lead firms to disclose more carbon information using data hand collected from the annual corporate social responsibility reports of china s listed companies from 2008 to 2012 we find the following i firms that operate in sectors of high emission industries are more likely to make carbon information disclosure cid hereafter ii the more companies within one industry that make cid the more likely it is that a company in that industry will make cid iii companies having a higher sales rank within an industry are more likely to make cid

the impact of legitimacy pressure and corporate profitability on green innovation evidence from china top 100 abstract green innovation is an important approach for achieving sustainable development most research on determinants of corporate green innovation has focused on either external or internal drivers combining institutional theory and resource based view the scientific value of this study lies in simultaneously exploring the influence of external legitimacy pressure and internal corporate profitability and their interaction on green innovation samples of the top 100 listed companies in china from 2008 to 2012 were used and the results demonstrated that legitimacy pressure from stakeholders has a significantly positive influence on both corporate green product innovation and process innovation the results also revealed that corporate profitability positively affects green product innovation while there was found to be no significant influence on green process innovation moreover corporate profitability positively moderates the relationship between legitimacy pressure and green product innovation the results show that not only the single factor of external legitimacy pressure and internal profitability but also their interaction affects corporate green innovation practices this offers an integrating perspective on how corporations can be more innovative in sustainability

how the market values greenwashing evidence from china in china many firms advertise that they follow environmentally friendly practices to cover their true activities a practice called greenwashing which can cause the public to doubt the sincerity of greenization messages in this study i investigate how the market values greenwashing and further examine whether corporate environmental performance can explain different and asymmetric market reactions to environmentally friendly and unfriendly firms using a sample from the chinese stock market i provide strong evidence to show that greenwashing is significantly negatively associated with cumulative abnormal returns car around the exposure of greenwashing in addition corporate environmental performance is significantly positively associated with car around the exposure of greenwashing furthermore my findings suggest that corporate environmental performance has two distinct effects on car around the exposure of greenwashing the competitive effect for environmentally friendly firms and the contagious effect for potential environmental wrongdoers respectively the results are robust to various sensitivity tests

accounting window dressing and template regulation a case study of the australian credit union industry this article documents the response of cooperative institutions that were required to adhere to new capital adequacy regulations traditionally geared for profit maximising organisations using data from the australian credit union industry we demonstrate that the cooperative philosophy and internal corporate governance structure of cooperatives will lead management to increase capital adequacy ratios through the application of accounting window dressing techniques this is opposite to the intended purpose of template regulation aimed at efficiently increasing operating margins and lowering risk our results raise several debatable issues regarding the ethics of accounting management and the imposition of one shoe fits all external regulation

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

the effect of green investment on corporate behavior this paper explores the effect of exclusionary ethical investing on corporate behavior in a risk averse equilibrium setting while arguments exist that ethical investing can influence a firm s cost of capital and so affect investment no equilibrium model has been presented to do so we show that exclusionary ethical investing leads to polluting firms being held by fewer investors since green investors eschew polluting firms stock this lack of risk sharing among non green investors leads to lower stock prices for polluting firms thus raising their cost of capital if the higher cost of capital more than overcomes a cost of reforming i e a polluting firm cleaning up its activities then polluting firms will become socially responsible because of exclusionary ethical investing a key determinant of the incentive for polluting firms to reform is the fraction of funds controlled by green investors in our model empirically reasonable parameter estimates indicate that more than 20 green investors are required to induce any polluting firmss to reform existing empirical evidence indicates that at most 10 of funds are invested by green investors

roughing it up including jump components in the measurement modeling and forecasting of return volatility a rapidly growing literature has documented important improvements in financial return volatility measurement and forecasting via use of realized variation measures constructed from high frequency returns coupled with simple modeling procedures building on recent theoretical results in barndorff nielsen and shephard 2004a 2005 for related bi power variation measures the present paper provides a practical and robust framework for non parametrically measuring the jump component in asset return volatility in an application to the dm exchange rate the s p500 market index and the 30 year u s treasury bond yield we find that jumps are both highly prevalent and distinctly less persistent than the continuous sample path variation process moreover many jumps appear directly associated with specific macroeconomic news announcements separating jump from non jump movements in a simple but sophisticated volatility forecasting model we find that almost all of the predictability in daily weekly and monthly return volatilities comes from the non jump component our results thus set the stage for a number of interesting future econometric developments and important financial applications by separately modeling forecasting and pricing the continuous and jump components of the total return variation process

banking panics and policy responses we study how banking panics unfold in av ersion of the diamond and dybvig 1983 model with limited commitment as is well known the banking authority could eliminate the possibility of a run on the banking system by committing to suspend payments to depositors if a run were to start once a run is under way however the banking authority will choose to reschedule rather than suspend payments we construct equilibria in which depositors run on the banking system with positive probability and we show that an equilibrium bank run in this setting is necessarily partial with only some depositors participating we also show that a run naturally occurs in waves with each wave of withdrawals prompting a further policy response from the banking authority the number of waves that occur in equilibrium is stochastic and can be arbitrarily large

stock market s reaction to disclosure of environmental violations evidence from china the stock market s reaction to information disclosure of environmental violation events eves is investigated multi dimensionally for chinese listed companies including variables such as pollution types information disclosure sources information disclosure levels modernization levels of the region where the company locates ultimate ownership of the company and ownership held by the largest shareholder using the method of event study daily abnormal return ar and accumulative abnormal return car are calculated under different event window for examining the extent to which the stock market responds to the eves furthermore statistical significance of the difference in stock market reaction is compared between event firms with different characteristics the relationship between car and its impact factors is examined by multivariate analysis the findings reveal that the average reduction in market value is estimated to be much lower than the estimated changes in market value for similar events in other countries demonstrating that the negative environmental events of chinese listed companies currently have weak impact on the stock market

clean and productive empirical evidence from the german manufacturing industry abstract in view of the controversial policy debate on green growth and corresponding stimulus packages we empirically investigate the production effects of environmental investment as well as of environmental and energy expenditures using a panel dataset of german manufacturing sectors our econometric analysis identifies a positive impact of environmental investment on production growth in contrast our estimation results cannot support the hypothesis of positive production impacts induced by environmental or energy expenditures we thus conclude that environmental regulation should in particular stimulate environmental investment in order to be compatible with the pursuit of production growth

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

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

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

corporate environmental responsibility in polluting industries does religion matter using a sample of chinese listed firms in polluting industries for the period of 2008 2010 we empirically investigate whether and how buddhism china s most influential religion affects corporate environmental responsibility cer in this study we measure buddhist variables as the number of buddhist monasteries within a certain radius around chinese listed firms registered addresses in addition we hand collect corporate environmental disclosure scores based on the global reporting initiative gri sustainability reporting guidelines using hand collected buddhism data and corporate environmental disclosure scores we provide strong and robust evidence that buddhism is significantly positively associated with cer this finding is consistent with the following view buddhism can serve as social norms to evoke the consciousness of social responsibility and thereof strengthen cer our findings also reveal that the positive association between buddhism and cer is attenuated for firms with higher law enforcement index the results are robust to various measures of buddhism and a variety of sensitivity tests

factors that drive chinese listed companies in voluntary disclosure of environmental information based on the institutional theory this article attempts to examine two consecutive questions regarding the impact of various factors on corporate decision in environmental information disclosure eid 1 whether or not to disclose and 2 the level of disclosure the relevance of these factors is empirically tested using data collected from publicly listed manufacturing companies from 2006 to 2008 in china some interesting findings appear we find that firms that are state owned those that operate in environmentally sensitive industries those having more industrial peers engaged in eid and those with better reputation are more likely to disclose environmental information when it comes to the content of eid variables that attempt to capture external institutional pressures exhibit either no or weak explanatory power only the variable of organizational image and reputation is demonstrated to have a significant impact on both the act and the content of eid this study provides a snapshot of the dialogues between constituencies in the organizational field and eid development

corporate environmental citizenship variation in developing countries an institutional framework this study focuses on why some companies in developing countries go beyond environmental regulations when implementing their corporate environmental social responsibilities or citizenship behavior drawing mainly upon the new institutional theory this study develops a conceptual framework to explain three institutional factors companies market orientations industrial characteristics and corporate identities accordingly we suggest that companies from developing countries that are oriented to markets in developed countries operate in highly concentrated industries and have missionary identities adopt corporate environmental citizenship behavior by going beyond environmental regulations the study also discusses the theoretical policy and managerial implications of the conceptual framework

information as regulation the effect of community right to know laws on toxic emissions abstract there is growing academic and policy level interest in the use of information as quasi regulatory mechanisms such as toxic release inventory tri and green labels mandatory disclosure requirements have been touted as market based incentives that may affect firm behavior we provide new evidence on the effectiveness of disclosure requirements by examining firm behavior in response to disclosures of tri emissions we find that firms with the largest stock price decline on the day this information became public subsequently reduced emissions more than their industry peers this is consistent with the view that financial markets may provide strong incentives for firms to change their environmental behavior

enforcement leverage when penalties are restricted in the united states empirical studies of the enforcement of continuous compliance with environmental regulations especially air and water pollution regulations have repeatedly demonstrated the following i for most sources the frequency of surveillance is quite low ii even when violations are discovered fines or other penalties are rarely assessed in most states iii sources are nonetheless thought to be in compliance a large part of the time the evidence for the apparently low level of enforcement activity is found in a number of case studies of state and local enforcement of air and water quality regulations conducted jointly by the environmental protection agency epa and council on environmental quality ceg together with periodic surveys of implementation of air and water quality legislation conducted by the general accounting office gao these surveys show

ekc analysis for studying economic growth and environmental quality a case study in china compared with the extensive research on the relationship between economic growth and environmental quality in developed countries there is a paucity of an empirical research on studying the relation for developing countries based upon the environmental kuznets curve ekc theory this paper develops regression models for investigating the relationship between economic growth and environmental quality in china the ekc analysis based on six pollution indices is illustrated with a case study in jiaxing of zhejiang china

business ethics and finance in greater china synthesis and future directions in sustainability csr and fraud following the financial crisis and recent recession the center of gravity of global economic growth and competitiveness is shifting toward emerging economies as a leading and increasingly influential emerging economy china is currently attracting the attention of academics practitioners and policy makers there has been an increase in research interest in and publications on issues relating to china within high quality international academic journals we therefore organized a special issue conference in conjunction with the journal of business ethics jbe in lhasa tibet on may 19 20 2014 on business ethics in greater china past present and future the papers for the special issue focused on the intersection of ethics and finance and fit within one of the three themes environment and sustainability corporate social responsibility and fraud within these themes issues of intellectual capital protection gender equality political connections regional development investor protection corporate stewardship trust and corruption and corporate transparency each play a significant role in this paper we survey these studies and the related literature to provide a comprehensive coverage of business ethics and finance issues that affect china

epa s voluntary 33 50 program impact on toxic releases and economic performance of firms abstract this paper examines the motivations for participation in the voluntary 33 50 program and the program s impact on the toxic releases and economic performance of firms in the u s chemical industry it demonstrates that the benefits due to public recognition and the potentially avoided costs of liabilities and compliance under mandatory environmental regulations provide strong incentives for participation after controlling for sample selection bias and the impact of other firm specific characteristics this paper shows that program participation led to a statistically significant decline in toxic releases over the period 1991 93 the program also had a statistically significant negative impact on the current return on investment of firms but its impact on the expected long run profitability of firms was positive and statistically significant

do corporate global environmental standards create or destroy market value arguments can be made on both sides of the question of whether a stringent global corporate environmental standard represents a competitive asset or liability for multinational enterprises mnes investing in emerging and developing markets analyzing the global environmental standards of a sample of u s based mnes in relation to their stock market performance we find that firms adopting a single stringent global environmental standard have much higher market values as measured by tobin sq than firms defaulting to less stringent or poorly enforced host country standards thus developing countries that use lax environmental regulations to attract foreign direct investment may end up attracting poorer quality and perhaps less competitive firms our results also suggest that externalities are incorporated to a significant extent in firm valuation we discuss plausible reasons for this observation

from resistance to opportunity seeking strategic responses to institutional pressures for corporate social responsibility in the nordic fashion industry using survey responses from 400 fashion companies in denmark norway sweden finland and iceland we examine the diversity of strategic responses to institutional pressures for corporate social responsibility csr within the nordic fashion industry we also develop and test a new model of strategic responses to institutional pressures that encompasses both resistance and opportunity seeking behaviour our results suggest that it is inconsistent pressures within rather than between stakeholder groups that shape strategic responses to csr pressures and that increasing pressures stimulates opportunity seeking at the expense of compliance

why japanese firms choose to certify a study of managerial responses to environmental issues abstract this paper examines empirically the determinants that led large japanese manufacturers to 1 incorporate environmental goals in their decisions 2 obtain environmental certification iso 14001 and 3 become early adopters of environmental certification we estimate two sets of models 1 models based on a profit maximization assumption and 2 models which incorporate utility maximization arguments recognizing that managers values attitudes and beliefs may also influence firms decisions the empirical analysis suggests that while the costs and benefits of voluntary actions to enhance or protect the environment and the capacity to act are significant determinants of voluntary environmental commitment so are the environmental values beliefs and attitudes of managers

applying gri reports for the investigation of environmental management practices and company performance in sweden china and india the relationship between environmental management practices emps and company performance has recently been debated in literature and is of interest for both industrial managers and political decision makers this paper investigates the relationship between emps and firm performance in manufacturing companies in sweden china and india with the content analysis of global reporting initiative gri reports and financial reports of sample companies the levels of emps and the companies financial performances were coded further statistical assessment was conducted in order to identify patterns and correlations the results indicate that only selected emps have been employed differently in three different countries most emps clearly do not have a positive correlation with the financial performance i e employing emps does not necessarily improve the economic consequence of companies nevertheless a number of emps do have a strong correlation with improving innovation performance in various companies it is also interesting to note that a negative correlation exists between the environmental standard for suppliers and sales growth this is possibly due to increasing operational costs and a delay in market acceptance this research illustrates the possibility of using standard environmental data from gri reports as a resource for future studies of emps in order to improve long term financial performance this study also suggests that innovation should gain a substantial amount of attention when emps are employed

firm self regulation through international certifiable standards determinants of symbolic versus substantive implementation international certifiable management standards that have been advocated as a governance mechanism for firm self regulation of corporate social responsibility issues are effective only if certified firms comply with the requirements of the standards our empirical analysis shows that iso certified firms in china strategically select their level of compliance depending on customer preferences customer monitoring and expected sanctions by customers our findings have implications for the effectiveness of a global system of self regulation based on certifiable standards research on certifiable standards and for practicing managers who require suppliers to obtain standard certifications

disentangling the incentive and entrenchment effects of large shareholdings this article disentangles the incentive and entrenchment effects of large ownership using data for 1 301 publicly traded corporations in eight east asian economies we find that firm value increases with the cash flow ownership of the largest shareholder consistent with a positive incentive effect but firm value falls when the control rights of the largest shareholder exceed its cash flow ownership consistent with an entrenchment effect given that concentrated corporate ownership is predominant in most countries these findings have relevance for corporate governance across the world

disclosure of environmental violations and the stock market in the republic of korea for almost 20 years the ministry of environment of the republic of korea has published on a monthly basis a list of enterprises that fail to comply with national environmental laws and regulations in this paper the authors examine the reaction of investors to the publication of these lists and show that enterprises appearing on these lists have experienced a significant decline in their market valuation firms in developing countries are often said to have no incentives to invest in pollution control because they typically face weak monitoring and enforcement of environmental regulations the findings of the authors however indicate that the inability of formal institutions to control pollution through fines and penalties may not be as serious an impediment to pollution control as is generally argued environmental regulators in developing countries could harness market forces by introducing structured programs to release firm specific information about environmental performance

price competition short termism and environmental performance this paper studies the relationships between the intensity of price competition time horizon and environmental performance we hypothesize that more intense price competition discourages environmental performance by inducing short termism in companies we test the hypotheses on a sample of 3152 companies from twelve european countries using structural equation modeling test results show that price competition significantly shortens the time horizon that companies apply in strategic decisions and that long time horizon significantly increases their environmental performance however the net negative effect of the intensity of price competition on environmental performance is small in absolute terms the policy implication is that there is no serious dilemma between fostering environmental performance on one hand and increasing consumer surplus by encouraging price competition on the other hand

toxics release information a policy tool for environmental protection abstract this study examines investor reactions to the repeated public disclosure of environmental information about firms in the chemical industry and the effectiveness of this information as a decentralized mechanism for deterring their pollution by allowing investors to benchmark the performance of firms repeated provision of the toxics release inventory led firms to incur statistically significant negative stock market returns during the one day period following the disclosure of that information in the years 1990 1994 these losses had a significant negative impact on subsequent on site toxic releases and a significant positive impact on wastes transferred off site but their impact on total toxic wastes generated by these firms is negligible

liquidity monetary policy and the financial crisis a new monetarist approach a model of public and private liquidity integrates financial intermediation theory with a new monetarist monetary framework nonpassive fiscal policy and costs of operating a currency system imply that an optimal policy deviates from the friedman rule a liquidity trap can exist in equilibrium away from the friedman rule and there exists a permanent nonneutrality of money driven by an illiquidity effect financial frictions can produce a financial crisis phenomenon that can be mitigated by conventional open market operations working in an unconventional manner private asset purchases by the central bank are either irrelevant or they reallocate credit and redistribute income jel e13 e44 e52 e62 g01 liquidity is a class of assets that is useful in exchange some of these liquid assets are government liabilities federal reserve notes treasury bills and treasury notes some are private liabilities the deposit liabilities of banks and some asset backed securities for example conventional wisdom holds that the main role of a central bank is to manage public liquidity in a manner that controls inflation and enhances the provision of private liquidity and credit however the mechanism by which central bank actions work to perform this role still appears to be poorly understood as has been highlighted by the financial crisis and the ensuing policy responses the purpose of this paper is to build a model of public and private liquidity that captures the features of modern economies essential to the analysis of monetary policy and that can be used to shed light on some current monetary policy problems and questions what is a liquid asset and what roles do privately provided and publicly provided liquid assets play in exchange in a model where we capture these roles for liquid assets what are the implications for monetary policy under what circumstances can a liquidity trap occur how does monetary policy work when there is a positive quantity of excess reserves held by banks what does a financial crisis do to the supply of private liquidity and what should monetary policy do in response

from voluntarism to regulation a study on ownership economic performance and corporate environmental information disclosure in china this article examines whether economic performance could affect eid and how the relationship is determined by the form of ownership from voluntarism to regulation under the current chinese context in this study our empirical results show that the relationship between firms performance and eid is complex and the interactive impact of ownership and economic performance on eid significantly varies from voluntary disclosure to mandatory disclosure this study provides a more comprehensive understanding of the motivations in corporate eid the performance impression theory can be used to explain the disclosure behaviors during the period of voluntary disclosure while the pressure legitimacy theory can be used during the period of mandatory disclosure the finding suggests that when evaluating corporate eid associated with economic performance in emerging economies such as china it needs to be cautious as which tends to vary with the form of ownership and whether there is any mandatory regulation in place

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

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

whether top executives turnover influences environmental responsibility from the perspective of environmental information disclosure we have empirically examined the relationship between top executives turnover and the corporate environmental responsibility by identifying the influence of ten specific turnover reasons resulting in the chairman s departure and two important types of chairman s succession using a sample of 782 manufacturing listed companies across 3 years in china we find that the corporate environmental responsibility is negatively associated with the involuntary and negative turnover i e dismissal health and death and forced resignation and positively associated with improving corporate governance and not associated with the normal turnover i e retirement and contract expiration and the types of chairman s succession i e independence and internal or external promotion our study significantly contributes to research in environmental disclosure by revealing the relationship between chairman s turnover and the corporate environmental responsibility a feasible way is suggested to regulators and other stakeholders in monitoring or assessing the possible abnormality of environmental responsibility when firms experience involuntary and negative chairman s turnover in the emerging economies

initiating disclosure of environmental liability information an empirical analysis of firm choice this paper investigates potential motivations for late adopting u s companies to begin disclosing environmental liability amounts in their financial statements based on a review of 10 k reports filed from 1998 through 2012 inclusive we identified 55 firms initiating environmental liability disclosure over the period with all but three doing so by 2006 focusing on the disclosers up through 2006 we argue that the companies may have used the disclosure as a tool of impression management to avoid potential stakeholder mis estimation of previously undisclosed liability exposures we first compute tests to identify firms that may have begun the disclosure due to 1 materiality and 2 concerns of having proprietary costs imposed upon them due to changes in their environmental media coverage and environmental performance and we find very few cases where these explanations might hold for the remaining companies we compared their newly disclosed liability amount on average with the mean level of environmental liability being disclosed by other firms in the year prior to the sample companies initiation and find that it is significantly smaller thus supporting our impression management argument finally we find that overall level of environmental liability amounts was consistently decreasing over the time frame examined suggesting that earlier adoption would have made more sense however it may also explain why almost no new firms began disclosing after the mid 2000s

functional mechanisms of mandatory corporate environmental disclosure an empirical study in china abstract this paper analyzes the functions of a government oriented disclosure program in china which rates company environmental performance into five colors and discloses the results to the public the rating results and their annual changes during 2005 2007 are statistically summarized by using the detailed database provided by municipal environmental protection bureau of the study area changshu city in jiangsu province the reflexive deterrent and enhancement mechanisms preliminarily identified for the disclosure program are qualitatively evaluated by using the information collected by onsite interviews to 32 program participating firms in overall the firms environmental performances have been improved the companies with worse rating records would be more likely to improve their environmental performances in the following years the disclosure program encourages the firms to be more reflexive to their internal environmental problems the deterrent and enhancement functions of the program are weak due to the marginal pressure from the classified stakeholders such as investors business partners and creditors the influence of the public such as neighboring communities and environmental ngos is weak too encouraging serious reactions of firm s stakeholders to the disclosed rating results should be addressed in order to enhance the effectiveness of the disclosure strategy

truth or consequences enforcing pollution standards with self reporting abstract evidence suggests that a surprisingly large fraction of firms comply with pollution emission standards even though expected penalties for noncompliance are low we offer an explanation of this puzzle by extending the standard model of enforcement to include a self reporting requirement and enforcement power these extensions are enough to challenge the conventional result that higher fines lead to higher compliance rates we find that under plausible conditions higher compliance rates are achieved with lower fines for noncompliance and the cost of enforcing a given level of aggregate pollution is minimized by setting the fine for noncompliance equal to zero

environmental reporting in the spanish wind energy sector an institutional view abstract the aim of this paper is to explore the relevance of institutional influences on corporate environmental reporting practices the wind energy sector in spain was chosen for analysis because of its rapid growth and significant impact on moves towards cleaner energy production a content analysis of recent sustainability reports 2005 2009 from seven main wind energy companies facilitated a longitudinal comparison of the levels of compliance with global reporting initiative indicators of sustainability results show that initial institutional pressures for reporting have been replaced by imitation by companies of each other s practices leading to a reduction in the differences between environmental disclosures results confirm the importance of examining different institutional pressures on disclosure practices to development of policy however a key finding is that the disclosures have been minimal and their lack of effectiveness and unreliability mean they are not conducive to the notion of increasing transparency in the wind generated clean energy electricity sector as a result the credibility of relying on a voluntary sustainability standard such as the global reporting initiative gri as an incentive for informative environmental reporting is challenged

current federal reserve policy under the lens of economic history a review essay this review essay reviews the volume edited by owen humpage current federal reserve policy under the lens of economic history essays to commemorate the federal reserve system s centennial and provides a broader perspective on central banking issues the papers in the humpage volume address various aspects of central banking history money and private banking with a focus on putting recent fed policies in perspective the topics covered include the role of the central bank as lender of last resort the effects of open market operations versus central bank lending central bank independence the political economy of monetary unions financial crises the effects of unconventional monetary policies commodity monies and the canadian financial system as a natural experiment

the intra industry effect of corporate environmental violation an exploratory study abstract regenerative sustainability at firm level is a matter of proactive corporate environmental strategy to prevent firms from committing environmental misconducts which not only do harm to the ecological environment but also arouse negative reactions from stakeholders drawing on signaling theory this study explores the intra industry effect of corporate environmental violations of chinese listed companies we propose that the environmental violation announcement carries predominantly negative information regarding rival firms and thus the stock market reacts negatively not only to the firms who commit environmental violations but also to rival firms empirical results corroborate the intra industry contagion effect for rival firms whose cash flow characteristics are similar to those of the violating firm and also reveal that official disclosure of environmental violations committed by a state owned enterprise soe inflicts an additional adverse effect on rival soes to some extent additionally the intra industry effect is shown to be more profound in non environmentally sensitive industries finally the stock market is found to be more sensitive to environmental violations occurring within final goods industries than intermediate goods industries

scarcity of safe assets inflation and the policy trap abstract a goal of this paper is to make sense of the seemingly puzzling behavior of interest rates and inflation and the role of central banks in that behavior during and after the great recession particularly in the united states to this end we construct a model in which government debt plays a key role in exchange and can bear a liquidity premium if asset market constraints bind then there need not be deflation under an indefinite zero interest rate policy zirp further zirp may not be optimal under these circumstances a taylor rule central banker could be subject to a zirp trap and persistently undershoot target inflation as well a liquidity premium on government debt creates additional taylor rule perils because of a persistently low real interest rate we make a case that this is the key policy predicament currently faced by many central banks in the world

the impact of corporate pollution on market valuation some empirical evidence abstract this paper investigates the relation between the market valuation of publicly listed corporations and their social performance as measured by their pollution record relative to environmental regulations expectations are that corporations with a good bad environmental record should be valued at a premium discount by the stock market such a relation results from the emergence of ethical or green investing and from an increased awareness by investors of the potential negative consequences from corporate environmental damages two significant innovations are introduced in this study first using governmental data a pollution index is computed for each sample firm second the relevance of social information for investors purposes is directly assessed by looking at the relation between the pollution index and a firm s market valuation within the accounting identity framework modigliani and miller 1958 results suggest that a firm s pollution performance is interpreted by market participants as providing information about its environmental liabilities furthermore results weakly support the existence of a premium discount in the stock market valuation of firms that meet do not meet environmental regulations thus lending some credence to the existence of a demand by some stock market participants for ethical or green investments this suggests that the disclosure of audited social information of a non financial nature in a firm s annual report could be beneficial to market participants

jumps in financial markets a new nonparametric test and jump dynamics this paper introduces a new nonparametric test to detect jump arrival times and realized jump sizes in asset prices up to the intra day level we demonstrate that the likelihood of misclassiflcation of jumps becomes negligible when we use high frequency returns using our test we examine jump dynamics and their distributions in the u s equity markets the results show that individual stock jumps are associated with prescheduled earnings announcements and other company speciflc news events additionally s p 500 index jumps are associated with general market news announcements this suggests difierent pricing models for individual equity options versus index op

environmental corporate social responsibility and financial performance disentangling direct and indirect effects abstract this paper assesses the impact of environmental corporate social responsibility ecsr on corporate financial performance cfp measured by roa and tobin s q we show that the relationship between firms return on assets roa and ecsr strengths and concerns is negative and statistically significant we also show that firms tobin q and ecsr strengths and concerns are negatively correlated in a statistically significant way however accounting for the interaction between firms environmental efforts and r d yields a different perspective while the direct impact of ecsr on cfp is still negative the interaction of ecsr and r d has a positive and significant impact on it ecsr strengths and concerns harm cfp since they are perceived as a potential cost however this csr activity fosters r d efforts of firms which generates additional value indirect effect

corporate environmental initiatives in the chinese context performance implications and contextual factors although a number of studies have been conducted on the relationship between environmental management and firm performance most of them are conducted in the western context due to the unique social and economic environments in china the performance implications of environmental management might be quite different in the chinese context we examine the impact of corporate environmental initiatives ceis on the market value of firms in china we find that in contrast to the findings in the western context chinese investors react negatively to cei announcements the negative reaction is more significant when the announcements are related to processes rather than products and for state owned enterprises rather than privately owned corporations however there is no difference whether the cei is self declared or third party endorsed overall our research indicates that chinese investors consider ceis to be in conflict with shareholder interest in particular ceis in state owned enterprises might be considered by investors as signals that firms need to sacrifice profits to shoulder more social responsibility

exploring the transition to integrated reporting through a practice lens an australian customer owned bank perspective this article explores the transition to integrated reporting by a customer owned bank referred to as goodbank and identifies the drivers of this transition thereby providing insights for other businesses seeking to engage in such reporting practice theory provides a theoretical lens for this study a case study approach encompassing in depth interviews and documents analysis enabled the data to be collected for this research this study finds that a customer owned business context enables innovative approaches to reporting an understanding of reporting and recognition of the potential value of integrated reporting basic guidelines for such a practice and organisational ethical values and goals based on a combination of economic social and environmental considerations matched by an organisational structure that embeds economic social and environmental responsibilities rather than treating these as separate silos enabled goodbank to transition to integrated reporting and differentiate itself from its competitors and other organisations

non mandatory approaches to environmental protection the approach to environmental protection has been evolving from a regulation driven adversarial government push approach to a more proactive approach involving voluntary and often business led initiatives to self regulate their environmental performance this has been accompanied by increasing provision of environmental information about firms and products to enlist market forces and communities in creating a demand for corporate environmental self regulation by signaling their preferences for environmentally friendly firms this paper provides an overview of the non mandatory approaches being used for environmental protection and surveys the existing theoretical literature analyzing the economic efficiency of such approaches relative to mandatory approaches it also discusses empirical findings on the factors motivating self regulation by firms and its implications for their economic and environmental performance it examines the existing evidence on the extent to which information disclosure is effective in generating pressures from investors and communities on firms to improve their environmental performance