corporate philanthropy ownership type and financial transparency drawing on stakeholder theory and the concept of enlightened self interest we argue that firms that actively engage in corporate philanthropic giving also tend to demonstrate greater concern for investors interests by providing more transparent financial information and avoiding corporate misconduct moreover the relationships between corporate giving financial information transparency and corporate misconduct vary significantly according to the firm s ownership type which affects the fundamental motivations for corporate philanthropy in a sample of chinese publicly listed firms from the 2003 2009 period we find a positive relationship between corporate giving and financial transparency and note that the relationship is stronger for non state owned enterprises non soes we also find a significantly negative association between corporate giving and corporate misconduct for non soes but not for soes taken together these findings suggest that responsibility to both stakeholders and shareholders is a vital part of building trust and reputations in china s non soe sector

ethical investment processes and outcomes there is a growing body of literature on ethical or socially responsible investment across a range of disciplines this paper highlights the key themes in the field and identifies some of the major theoretical and practical challenges facing both scholars and practitioners one of these challenges is understanding better the complexity of the relationship between such investment practices and corporate behaviour noting that ethical investment is seldom characterised by agreement about what it actully constitutes and that much of the extant research focuses on a narrow set of issues the paper argues that there are benefits associated with examining ethical investment as a process

corporate social performance firm valuation and industrial difference evidence from hong kong this study addresses two issues first does corporate social performance matter in hong kong second if yes is it relevant to some industries more than others to answer these questions we develop a corporate social performance index csp to measure the quality of corporate social performance of major hong kong listed firms the criteria are based on the oecd principles of corporate governance using the 3 year period from 2002 to 2005 we find that firm valuation is positive and significantly associated with csp interestingly this relation matters less in china related firms and firms with a concentrated ownership structure the results also show that csp impacts firm valuation more positively when the firm is in the service sector we further find that csp is positively related to the market valuation of the subsequent year

social investing mainstream or backwater social investing though not yet fully mainstream has the potential to obtain such status questions relating to the future of social investing include the following 1 what properly falls within the ambit of social investing assuming that no single definition of social responsibility is feasible what then are the limits 2 what do we need to know about investor psychology concerning social investing what motivates people to buy socially screened investments and why do they sometimes act inconsistently 3 how can we improve the measures of social performance is it possible to develop gaap and gaas equivalents for social reporting 4 should social reports by firms be audited if so how 5 what sorts of public policies are necessary to support the social screening of investments

what will consumers pay for social product features the importance of ethical consumerism to many companies worldwide has increased dramatically in recent years ethical consumerism encompasses the importance of non traditional and social components of a company s products and business process to strategic success such as environmental protectionism child labor practices and so on the present paper utilizes a random utility theoretic experimental design to provide estimates of the relative value selected consumers place on the social features of products

the financial performance of a socially responsible investment over time and a possible link with corporate social responsibility this paper empirically examines the financial performance of a uk unit trust that was initially conventional and later adopted socially responsible investment sri principles ethical investment principles comparison is made with three similar conventional funds whose investment objectives remained unchanged analysis techniques employed in previous studies find similar results mean risk adjusted performance is unchanged by the switch to sri with no evidence of over or under performance relative to the benchmark market index by any of the four funds more interestingly changes in variability of returns over time are also modelled using generalised autoregressive conditional heteroscedasticity models not previously applied to sri funds so far as is known results show a temporary increase in variability of returns followed by a return to previous levels after around 4 years evidence shows the increased variability to be associated with the adoption of sri rather than with a change in fund management possible explanations for the subsequent reduction in variability include the spread of corporate social responsibility activities by firms and learning by fund managers in addition to reporting on a previously unobserved phenomenon this paper raises questions for further research

three lenses on the multinational enterprise politics corruption and corporate social responsibility scholars who analyze multinational enterprises mnes recognize the complex relationship between international business ib and society however compared with other ib topics research on politics corruption and corporate social responsibility three lenses on the mne remains somewhat embryonic with unresolved issues regarding frameworks measurement methods and theory this presents unique opportunities for integration and extension of disciplinary perspectives which we explore in this article we provide an introduction to potential linkages across these three lenses an agenda for additional theoretical and empirical research and a review of the papers in the jibs focused issue

comparing virtue consequentialist and deontological ethics based corporate social responsibility mitigating microfinance risk in institutional voids due to the nature of lending practices and support services offered to the poor in developing countries portfolio risk is a growing concern for the microfinance industry though previous research highlights the importance of risk for microfinance organizations not much is known about how microfinance organizations can mitigate risks incurred from providing loans to the poor in developing countries further though many microfinance organizations practice corporate social responsibility csr to help create economic and social wealth in developing countries the impact of such csr practices remains an underdeveloped area of inquiry we use a normative ethics lens to develop an ethics based csr theory that differentiates between three forms of ethics based csr virtue consequentialist and deontological we argue that while all three forms can help mitigate risk virtue ethics based csr is potentially the most useful form of csr toward mitigating microfinance portfolio risk we test our hypotheses using a sample of microfinance organizations from across the world our findings suggest that virtue ethics based csr is not just an important philosophical paradigm it can actually help mitigate microfinance portfolio risk when implemented in practice

measuring investors socially responsible preferences in mutual funds the aim of this study is to analyze investor behavior towards socially responsible mutual funds the analysis is based on an experimental study where a sample of individuals takes investment decisions under different parameters of information about the investment alternatives and expected returns in the experiment each participant decides how to distribute an investment budget between two funds returns on which are uncertain and change over time two treatments are conducted each providing a different degree of information on the socially responsible sr character of one of the two investment alternatives the results obtained suggest that although individuals criteria for investment are essentially guided by returns and diversification participants invest significantly more in a fund when they are explicitly informed about its sr nature in particular participants who declare being concerned about sr actually invest significantly more in the sr alternative furthermore the level of sr faithfulness among a small group of investors is such that they invest the main share of their budget in the sr fund even when the return differential is highly unfavorable providing clear information about the sr characteristics of an investment is crucial to help investors express their preferences

being good when being international in an emerging economy the case of china the importance imposed on corporate social responsibility csr is greater in developed economies than in emerging markets the pressures from various stakeholder groups on the csr are expected to have substantial spillover impact on companies domiciled in emerging economies that obtain revenues from companies in developed economies based on the data from 1 330 listed companies in china the largest emerging economy in the world this study provides evidence that the csr performance of china firms is positively related to the degree of their internationalization and such a positive association is less pronounced for state owned enterprises our findings support the hypothesis that internationalized companies in emerging economies are motivated to improve their csr practices to address concerns from their importers or outsourcers in developed economies

stakeholder pressures as determinants of csr strategic choice why do firms choose symbolic versus substantive self regulatory codes of conduct to encourage corporations to contribute positively to the environment in which they operate voluntary self regulatory codes src have been enacted and refined over the past 15 years two of the most prominent are the united nations global compact and the global reporting initiative in this paper we explore the impact of different stakeholders pressures on the selection of strategic choices to join srcs our results show that corporations react differently to different sets of stakeholder pressures and that the src selection depends on the type and intensiveness of the stakeholder pressures as well as the resources at hand to respond to those pressures our contribution offers a more specific and finely variegated analysis of firm stakeholder interactions

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

compensating outside directors with stock the impact on non primary stakeholders two obvious trends in corporate governance include broadening board accountability beyond shareholders interests and paying outside directors with equity compensation stock and stock options by integrating common agency and instrumental stakeholder theories we examine the effect of stock compensation on secondary stakeholders and a firm s participation in social issues two areas where interests are less aligned with shareholder value consistent with our predictions we found that while stock compensation may be an effective way to align directors goals to those of shareholders it has adverse effects on important non shareholder constituencies in the company s operating environment

exploring factors that influence social retail investors decisions evidence from desjardins fund most studies on the choices motivations and behavior of investors consist of segmentations focused on socio demographic characteristics such as age income education level etc such approaches seem to simplify even mutilate reality by aggregating data about observable variables and considering investors as homogeneous groups these perspectives are inspired by a scientific approach that consists of separating in order to better understand the observed phenomena by considering individual as a homo economicus that is to say a rational and autonomous individual who makes decisions motivated by material gains these studies fail to recognize all the complexity that shapes human behavior this paper argues that to understand the behavior and choices of investors in regards to socially responsible investing sri we must consider social investors as complex individuals in addition we should take into account influence that the institution may exercise throughout the role of advisors and sri promotion strategies our research builds on a multidimensional approach that explores to what extent demographic environmental social and governance esg issues the trade offs between financial return and social values the attitudes and the role of the institution throughout the role of the advisor and sri promotion strategies influence the decisions of individual social investors moreover it adopts a more open approach by exploring the characteristics and behaviors of individual social investors in relation to those of conventional investors our research provides evidence from the desjardins fund qualitative and quantitative data gathered by desjardins from online surveys are subjected to bivariate and multivariate analyses and are complimented by ten semi structured interviews with managers analysts and advisors who provided further insight into sri investment behavior and choice the results show that while demographic characteristics still remain important in understanding the behavior and attitudes of social investors it is their social values esg issues financial return considerations and the role played by the institution in mediating investment decisions that are significantly associated with sri portfolios our research highlights the complexity surrounding the phenomenon of sri and has several implications both in terms of theory and practice

creating modern art the changing careers of painters in france from impressionism to cubism paul cezanne died in october 1906 at the age of 67 in time he would be generally regarded as the most influential painter who had worked in the nineteenth century e g clive bell 1982 clement greenberg 1993 art historians and critics would also agree that his greatest achievement was the work he did late in his life in the judgment of historian meyer schapiro for example the years from 1890 to his death in 1906 are a period of magnificent growth meyer schapiro 1952 theodore reff 1977 roger fry 1989 in the spring of 1907 25 year old pablo picasso showed a few friends a large new painting that would be given the title les demoiselles d avignon this would become the most important painting of the twentieth century as the forerunner of cubism the most complete and radical artistic revolution since the renaissance which picasso and his friend georges braque went on to create in the next few years john golding 1988 galenson 2001 picasso would paint for another 66 years until his death in 1973 at the age of 92 during this enormously productive career he would become by far the most celebrated artist of the twentieth century yet he would never again execute a painting as important as the demoiselles nor produce another body of work as significant as that he made in the years between 1907 and the outbreak of world war i the dramatic contrast between the careers of cezanne and picasso raises intriguing questions about artists productivity art historians have not systematically addressed the question of when in their careers modem artists have typically done their best work and previous research consequently affords no basis for judging whether it is simply a matter of chance that cezanne and picasso made their greatest contributions so close in time in spite of the difference of more than 40 years in their ages but research by psychologists on the ages at which successful practitioners in other disciplines have done their best work is suggestive mathematicians theoretical physicists and poets typically make their most important contributions at younger ages than do astronomers biologists and novelists psychologists have argued that this is because creative ideations can be produced and elaborated more rapidly in disciplines that deal with abstract conceptual entities than in those whose central ideas are more complex and concrete harvey c lehman 1953 dean keith simonton 1988 1994 economists have also identified a number of factors that can change the relationship between age and productivity within a given activity yoram ben porath 1967 anne p bartel and nachum sicherman 1993 1995 in view of these results for other disciplines and the potential for change considered by economists we argue that it was not a matter of chance that cezanne and picasso made their greatest contributions at such different ages but rather that this was a result of the process that gave rise to the creation and early development of modem painting under the influence of the increased demand for innovation that had prompted the beginning of modern painting new generations of artists made painting an increasingly conceptual activity in which young practitioners could make important advances we will use evidence drawn from the twentieth century auction market to examine the relationship between artists ages and the value of their paintings for a group of artists including cezanne and picasso who dominated that early development this will allow a test of the hypothesis that this relationship changed systematically during the first century of that art galenson department of economics university of chicago chicago il 60637 and national bureau of economic research weinberg department of economics ohio state university columbus oh 43210 we thank gary becker britt salvesen tom sargent and two anonymous referees for comments and thomas walker for research assistance

inflation targeting and real exchange rates a bias correction approach this paper examines whether inflation targeting it influences purchasing power parity ppp by a bias correction approach under cross sectional dependence the recursive mean adjustment rma method proposed by so and shin 1999 and shin and so 2001 is employed to correct a downward bias in half life estimates of real exchange rates more importantly the empirical results show that it lowers variability of real exchange rates and plays an important role in providing favorable evidence for long run ppp

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

are real exchange rates nonstationary evidence from a panel data test it is well documented that real exchange rates between the united states and many industrialized countries in the post bretton woods period are integrated this result implies that purchasing power parity ppp does not hold even as a long run relationship this paper demonstrates that the failure to reject the unit root hypothesis may result from the low power of existing univariate test procedures i test for unit roots in real exchange rates by employing a more powerful panel based procedure using both cpi and wpi real dollar exchange rate data i strongly reject the null hypothesis of a unit root my results provide overwhelming support for the long run ppp under the current float copyright 1996 by ohio state university press

the signaling effect of corporate social responsibility in emerging economies what signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility csr practices we argue that in emerging economies firms that adopt csr practices positively signal investors that their firms have superior capabilities for filling institutional voids from an institution based view we hypothesize that the institutional environment moderates the signaling effect of csr on a firm s financial performance based on a sample of firms from ten asian emerging economies we find a positive relationship between csr practices and financial performance this positive relationship is stronger in the less developed capital market than in the more developed one the financial benefits of csr practices are also more salient in the low information diffusion market than in the high one we emphasize that signaling theory and the institution based view can jointly contribute to the csr literature

dimension reduction and model averaging for estimation of artists age valuation profiles abstract in hedonic regression models of the valuation of works of art the age or period at which an artist produces a particular work is often found to have highly significant predictive value most existing results are based on regressions that pool many painters although the uniqueness of artists career paths makes it interesting to estimate such regressions for individual artists sample sizes are often inadequate for a model that would also include the large number of other relevant variables we address this problem of inadequate degrees of freedom in individual artist regressions by using two statistical methods model averaging and dimension reduction to incorporate information from a potentially large number of predictor variables despite relatively small samples we find that individual age valuation profiles can differ substantially from general pooled profiles suggesting that methods that are more responsive to the unique features of individual artists may provide better predictions of art valuations at auction and may be useful more generally in hedonic valuation problems

ppp strikes back aggregation and the real exchange rate we show the importance of a dynamic aggregation bias in accounting for the ppp puzzle we prove that the aggregate real exchange rate is persistent because its components have heterogeneous dynamics established time series and panel methods fail to control for this using eurostat data we find that when heterogeneity is taken into account the estimated persistence of real exchange rates falls dramatically its half life for instance may fall to as low as eleven months significantly below the consensus view of three to five years

employee well being firm leverage and bankruptcy risk employees of liquidating firms are likely to lose income and non pecuniary benefits of working for the firm which makes bankruptcy costly for employees this paper examines whether firms take these costs into account when deciding on the optimal amount of leverage we find that firms with leading track records in employee well being significantly reduce the probability of bankruptcy by operating with lower debt ratios moreover we observe that firms with better employee track records have better credit ratings even when we control for differences in firm leverage

socially responsible investment and fiduciary duty putting the freshfields report into perspective a critical issue for the future growth and impact of socially responsible investment sri is whether institutional investors are legally permitted to engage in it in particular whether it is compatible with the fiduciary duties of trustees an ambitious report from the united nations environment programme s finance initiative unep fi commonly referred to as the freshfields report has recently given rise to considerable optimism on this issue among proponents of sri the present article puts the arguments of the freshfields report into some further both empirical and critical perspective however and suggests that its findings do not call for very much optimism the general argument is that while the understanding of fiduciary duty outlined by the freshfields report seems to allow institutional investors to at least sometimes take some social or environmental considerations into account the support it gives for sri is notably contingent and furthermore it rules out exactly the kind of sri which proponents of social responsibility and environmental sustainability should hold in highest regard proactive cases and socially effective investment strategies if sri is to become an important force for corporate social responsibility through its adoption by institutional investors then it is suggested that legal reform is needed

clarifying the epistemology of corporate sustainability abstract business research is placing increasing focus on the relationship between the natural environment and the political concept of sustainable development within this nexus one area labelled corporate sustainability emphasizes the interactions between economic environmental and social values the need to consider multiple values has contributed to a blur in the conceptual landscape this is partly due to the fact that authors often address epistemological challenges on an implicit level moreover hidden ideologies e g the profit maximization paradigm can explain the conceptual obscurity the contribution of this article is twofold firstly a conceptual framework is developed based on the dichotomy of positivism and constructivism a relation is established between these epistemological positions and the analytic treatment of environmental and social values the framework can be applied to increase transparency on epistemological challenges and thereby strengthening construct validity in the field secondly an analysis of the most influential literature from the last 50 years shows that there is a trend of clustering theoretical positions and value constructs without any critical awareness of their philosophical assumptions the authors hope that acknowledgement of a multi paradigmatic approach can help to clarify the epistemology of the research area by establishing pluralism as an explicit position

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

what good does doing good do the effect of bond rating analysts corporate bias on investor reactions to changes in social responsibility in this study we explore how investors reconcile information on firms social responsibility with analysts assessments of future firm risk in the pricing of long term bonds we ask whether investors pay attention to small strides toward and or small slips away from socially responsible behavior arguing that analysts corporate bias toward gains and against losses influences investor reactions to corporate social responsibility we hypothesize that analysts notice and reward improvements in social responsibility yet excuse lapses we find support for this hypothesis using a unique dataset of long term bonds that combines lagged measures of firm level financial and social performance with bond specific data pertaining to risk of default and pricing the empirically robust asymmetry in investor responses to small but often cumulative increases versus decreases in corporate social responsibility reveals an under examined root cause of longer term larger scale distortions in financial market returns regarding corporate social performance our findings elaborate earlier behavioral research on how corporate bias influences analysts short term assessments of economic risk by theorizing why this corporate bias may influence long term assessments of social risk our work also motivates more critical scrutiny of the role analysts play in revising the future risk of today s social action versus inaction

doing well while doing bad csr in controversial industry sectors in this article we examine the empirical association between firm value and csr engagement for firms in sinful industries such as tobacco gambling and alcohol as well as industries involved with emerging environmental social or ethical issues i e weapon oil cement and biotech we develop and test three hypotheses the window dressing hypothesis the value enhancement hypothesis and the value irrelevance hypothesis using an extensive us sample from 1995 to 2009 we find that csr engagement of firms in controversial industries positively affects firm value after controlling for various firm characteristics to address the potential endogeneity problem we further estimate a system of equations and change regression and continue to find a positive relation between csr engagement and firm value our findings support the value enhancement hypothesis and are consistent with the premise that the top management of us firms in controversial industries in general considers social responsibility important even though their products are harmful to human being society or environment

the effects of top management team integrative complexity and decentralized decision making on corporate social performance we examine the influence of top management teams tmts integrative complexity and decentralization of decision making on corporate social performance we argue that both factors increase tmt ability to gather information on and attend to stakeholder needs thereby yielding higher corporate social performance we further predict that decentralization moderates the relationship between integrative complexity and corporate social performance in such a way that the relationship is stronger under conditions of centralization using a q sort methodology which translates complex qualitative observations into quantitative metrics we examined integrative complexity and decentralization in 61 fortune 500 firms and found support for our predictions in the wake of numerous corporate scandals corporate social performance has garnered much attention from business practitioners and academics alike corporate social performance refers to a business organization s configuration of principles of social responsibility processes of social responsiveness and policies programs and observable outcomes as they relate to the firm s societal relationships wood 1991 693 the dominant perspective taken in evaluating a firm s corporate social performance is the stakeholder approach according to which firms act in a socially responsible manner when they take the interests of multiple stakeholders e g customers employees into account mcguire dow argheyd 2003 ruf muralidhar brown janney paul 2001

understanding socially responsible investing the effect of decision frames and trade off options over the past two decades the phenomenon of socially responsible investing has become more widespread however knowledge about the individual socially responsible investor is largely limited to descriptive and comparative accounts the question of why do some investors practice socially responsible investing and others don t is therefore still largely unanswered to address this shortcoming in the current literature this paper develops a model of the decision to invest socially responsibly that is grounded in the cognition literature the hypotheses proposed in the model are tested with an experimental survey the results indicate that the framing of the investing situation influences the likelihood of engagement in socially responsible investing and how much return the individuals are willing to sacrifice when choosing socially responsible over conventional investments the study does not find support for a relationship between expectations about corporate social responsibility and the likelihood of engagement in socially responsible investing

the roles of stakeholder support and procedure oriented management on asset recovery abstract as the management of returned products is fast becoming a business trend caused by pressure for compliance asset recovery is increasingly viewed as a fertile area for firms to reduce cost and improve quality environmental management is a viable approach for chinese manufacturers to respond to the escalating international quest for conserving the environment to tackle the problem of rising raw material costs and to improve product quality by analyzing returned products to reach the goals of cost reduction and product quality improvement manufacturers need to understand how asset recovery can be leveraged through procedure based practices and stakeholder support to enhance performance product type characterized by different levels of demand uncertainty and time to market may affect the outcomes of asset recovery adoption and should also be taken into account drawing on the environmental management and business logistics literature we provide empirical insights on asset recovery adoption using survey data collected from export oriented chinese manufacturers we find that asset recovery and stakeholder support are complementary in strengthening manufacturers financial performance regardless of product type in addition the performance impact of asset recovery can be substantial when manufacturers environmental management practices are less procedural allowing flexibility in the logistics management of product flows

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

the close but adversarial model of supplier relations in the u s auto industry while cooperative buyer supplier relations are an important source of sustainable competitive advantage noncooperative behavior persists widely this paper tests a model incorporating noncooperative behavior within a context of formal commitment using data from the u s auto industry this close but adversarial model appears to be reasonably well supported by the data suggesting that even within professed cooperative buyer supplier relationships adversarial behavior persists in contrast a small but significant minority of the relationships were found to be characterized by high levels of trust as well as informal commitment the results suggest specific strategies for developing cooperative supplier relations 1998 john wiley sons ltd

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

some new stylized facts of floating exchange rates abstract this paper re examines real exchange rate behavior of oecd currencies under the current float using the more extensive dataset that an additional decade s worth of experience has made available what emerges is a new set of stylized facts which suggest that the problems of the current float were not as commonly believed generic to that system but in fact rather specific being largely confined to one sub period the early and mid 1980s and one currency the us dollar this dollar behavior ranks as one of the important puzzles of the past 25 years

reputation price and death an empirical analysis of art price formation i introduction art prices are often claimed to substantially increase when the artist dies these claims appear to be largely based on anecdotal evidence they are promulgated by hearsay and sometimes cleverly insinuated by art dealers who attempt to convince naive customers that it is justified to mark up the artwork of recently deceased artists this study provides a theory guided empirical analysis of the so called death effect on art prices the analysis employs hedonic price regressions and makes use of a dataset which exceeds the sample size of traditional studies in cultural economics by an order of magnitude thereby shedding a new light on previous investigations of art price formation even though the literature on art auctions art price indices and rates of return in the visual arts market is by now quite voluminous see respectively ashenfelter and graddy 2006 ginsburgh mei and moses 2006 frey and eichenberger 1995 the death effect has not received much attention so far to be sure there are a few empirical studies which allow for a death effect but these studies do so in a rather cursory and off hand manner by merely including in their regressions a dummy variable that distinguishes between works of art created by living and late artists see e g agnello 2002 worthington and higgs 2006 the first investigation that has squarely addressed death induced changes in art prices is by ekelund ressler and watson 2000 these authors go some way in providing a theoretical underpinning of the death effect by pointing out that artists produce durable goods under market conditions of monopolistic competition thus given rational actors in the art market the coase conjecture applies coase 1972 even though artists have in principle some discretion in setting prices they cannot exert market power because they are unable to credibly commit to not lowering their prices in the future by spoiling the market with an inflationary increase in production during an artist s lifetime prices will therefore settle well below the monopoly price death of course is the ultimate device to commit to discontinuing production art prices thus increase when the artist dies because her oeuvre all of a sudden becomes scarcer than originally anticipated after having laid this theoretical foundation ekelund ressler and watson proceed to empirically identify the death effect with the help of a hedonic price regression their data consists of a panel of auction records relating to the work of 21 latin american artists who died near or during the observation period 1977 1996 the prices are shown to peak in the years immediately following an artist s death thus lending support to the existence of a death effect from a theoretical point of view the main concern with this pioneering analysis relates to the artists age at death since the probability of dying increases with age the information of an old artist s death is not very surprising and should therefore already be largely reflected in the price implying a small death effect the death of an old artist moreover causes a relatively small reduction in the anticipated size of her oeuvre which again translates into a relatively small price increase when her death is made public assuming rational expectations one would therefore expect the death effect to decrease with the artist s age at death a formal rendering of this argument is shown by itaya and ursprung 2008 who investigate the death effect in an infinite horizon dynamic general equilibrium setting it therefore stands to reason that the death effect depends on the age at death neglecting this relationship in empirical investigations may of course give rise to a seriously misspecified econometric model a recent study by maddison and jul pedersen 2008 acknowledges that the prices of an artist s works should depend on the expected total supply which in turn depends on the artist s conditional life expectancy at the time of sale

the construct validity of the kinder lydenberg domini social performance ratings data carroll 1991 encouraged researchers in social issues management sim to continue to measure corporate social performance csp from a variety of different perspectives utilizing a variety of different measures in addition wolfe and aupperle 1991 and others have asserted that there is no single best way to measure csp and that multiple measures and perspectives help develop the field however pfeffer 1993 suggest that a lack of consistent measurement has constrained organization studies and by implication the field of social issues management in its development as a field it may be in the best interest of social issues management researchers to try to development a common body of measures and data recently kinder lydenberg and domini co kld a social choice investment advisory firm has made available their social performance database the kld data have potential to become a widely accepted set of csp measures the purpose of this paper is to present a construct validity study comparing the kld data to other measures of csp

corporate social responsibility product differentiation strategy and export performance this article argues that corporate social responsibility csr may contribute to product differentiation in export markets and thus improve export performance we test this argument by observing a period of decreasing export competitiveness in a leading emerging economy brazil using a large scale survey design with 252 questionnaires completed by medium and large sized brazilian exporters we used structural equations modelling to test our hypotheses the results suggest that csr product differentiation predicts export performance better than product quality differentiation and almost as well as product innovation differentiation multi group analysis further revealed that the positive and significant effect of csr product differentiation on export performance is likely to be contingent on the number and type developing vs developed of countries that are targeted our study contributes to the literature on csr and export performance by developing and empirically validating a model that explains under which conditions csr based product differentiation may lead to improved export performance

are investors willing to sacrifice cash for morality the paper uses questionnaire responses provided by a sample of ethical investors to investigate willingness to sacrifice ethical considerations for financial reward the paper examines the amount of financial reward necessary to cause an ethical investor to accept a switch from good ethical performance to poor ethical performance conjoint analysis is used to allow quantification of the utilities derived from different combinations of ethical and financial performance ethical investors are shown to vary in their willingness to sacrifice ethical for financial performance and hence to display more heterogeneity than the all encompassing ethical label implies because of the existence of sub groups of ethical investors with different attitudes towards financial reward an attempt has been made to associate observable investors characteristics with their level of willingness to trade off morality for cash one sub group of investors in particular appears highly resistant to the idea of accepting higher financial return as compensation for poor ethical performance this unwillingness casts doubt on jensen and meckling s widely reported claim that trade off behaviour is ubiquitous in all areas of life

model averaging in economics an overview standard practice in empirical research is based on two steps first researchers select a model from the space of all possible models second they proceed as if the selected model had generated the data therefore uncertainty in the model selection step is typically ignored alternatively model averaging accounts for this model uncertainty in this paper i review the literature on model averaging with special emphasis on its applications to economics finally as an empirical illustration i consider model averaging to examine the deterrent effect of capital punishment across states in the usa

reviewing the business case for corporate social responsibility new evidence and analysis this study complements previous empirical research on the business case for corporate social responsibility csr by employing hitherto unused data on corporate social performance csp and proposing statistical analyses to account for bi directional causality between social and financial performance by allowing for differences in the importance of single components of csp between industries the data in this study overcome certain limitations of the databases used in earlier studies the econometrics employed offer a rigorous way of addressing the problem of endogeneity due to simultaneous causality although the study s results provide no evidence that there is a generic or universal business case for csr they indicate that there is a strong link between single stakeholder related issues of csr and financial performance however the analysis does not establish causality within these relationships

the choice architecture of sustainable and responsible investment nudging investors toward ethical decision making this paper applies insights from behavioral economics and nudge theory to foster sustainable and responsible investment sri sri provides an opportunity to express and promote ethical values via choice of financial instruments while policy makers have tried to encourage greater participation in sri the majority of retail investors retain a conventional approach to investment i develop a conceptual framework to improve the effectiveness of sri policy making the first part of the framework comprises a transmission mechanism which emphasizes the role of sri as a driver for sustainable development the second part is a model of the individual decision for or against sri the framework suggests that low sri demand is a case of behavioral market failure and that nudging is a suitable tool for dismantling behavioral barriers to sri a specific example of smart choice architecture is used to illustrate the framework s potential in the design of an sri nudge assuming the nudge stands up to the rigors of empirical testing it may well provide a feasible alternative for policy makers

predicting stakeholder orientation in the multinational enterprise a mid range theory as the reach of corporations increasingly extends across borders a key research question is whether overseas subsidiaries adopt a shareholder centric orientation centered on maximizing shareholder wealth or a stakeholder centric orientation centered on creating value for a broader range of stakeholders existing theories addressing the corporate level of analysis focus on forces exogenous to the firm local resource pressures and institutional norms using a combination of induction and fuzzy set analysis i draw on documentary evidence and 298 interviews with managers and stakeholders to build theory about the conditions that shape subsidiaries stakeholder orientations two major findings emerge first although theory emphasizes external stakeholders control over resources internal control through the corporate parent can crowd out the voices of local stakeholders second although institutional theory proposes isomorphism with local norms and standards some corporations are subject to scrutiny by global stakeholders and their subsidiaries face higher requirements for social engagement than their peers these findings are the foundation of a mid range theory that combines conventional explanations focused on environmental factors and an internal stakeholder perspective based around the roles of the parent corporation as owner and resource provider to predict stakeholder orientation

support for investor activism among u k ethical investors an important goal of ethical investment is to influence companies to improve their ethical and environmental performance the principal means that many ethical funds employ is passive market signalling which may not on its own have a significant effect a much more promising approach may be active engagement this paper reports on a questionnaire study of a sample of 1146 ethical investors in order to assess whether u k ethical investors would support more activist ethical investment and whether they would be prepared to invest in companies which are failing ethically in order to do so the results show general support for the current practice of passive signalling accompanied by soft engagement in the form of lobbying and the development of dialogue in order to improve corporate practice the harder options of investing in companies that err in order to change them is however favoured by consistent minorities

it s a matter of principle the role of personal values in investment decisions we investigate the role of personal values in an investment decision in a controlled experimental setting participants were asked to choose an investment in a bond issued by a tobacco company or a bond issued by a non tobacco company that offered an equal or sometimes lower yield we then surveyed the participants regarding their feelings toward tobacco use to determine whether these values influenced their investment decision using factor analysis we identified investment and tobacco related dimensions on which participants responses tended to load two of these factors relating to the societal impact of investment decisions and the health effects of tobacco were highly significant in determining whether participants selected a tobacco or non tobacco related investment more importantly we found that when the rate of return on a tobacco related investment exceeds the rate of return on an investment not involving tobacco by 1 the intensity of participant concerns about the societal effects of their investment decisions was especially important in determining investment choices this finding indicates that traditional wealth maximization approaches which do not consider the personal values of the investor omit an important factor that affects investment decisions

market reactions to corporate environmental performance related events a meta analytic consolidation of the empirical evidence research on the relationship between corporate environmental performance cep and corporate financial performance cfp has consistently grown and is gaining widespread attention given the vast body of cep cfp studies recently scholars have begun to take stock of the cumulative results however no study so far has meta analyzed the findings yielded by event studies assessing the stock market reactions to corporate environmental performance related events cep related events this paper sets out to close this gap by synthesizing previous empirical results regarding the stock market impact of positive and negative cep related events results indicate a positive relationship across studies in terms of positive market reactions to positive events and negative reactions to negative events furthermore the findings show that the market reactions are stronger for negative events than for positive events i e asymmetry in the stock market reaction finally this study examines whether methodological artifacts i e differences in the study designs may explain the differences in the findings of the analyzed event studies

searching for stationarity purchasing power parity under the current float abstract using panel data methods we investigate long run purchasing power parity by testing for unit roots in real exchange rates of industrial countries under the current float the evidence against the unit root hypothesis is stronger for larger than for smaller panels for monthly than for quarterly data and when the german mark rather than the united states dollar is used as the base currency while we find that accounting for serial correlation considerably weakens the evidence against the unit root null the results as a whole are consistent with long run purchasing power parity

selection of socially responsible portfolios using hedonic prices this research presents a novel framework for selecting socially responsible investment sri portfolios the hedonic price method hpm is applied to obtain an evaluation of sri criteria that is integrated into a multi objective mathematical programming model this approach allows us to obtain a portfolio whose financial performance is similar to which the investor would have reached if he or she had not taken into account social ethical and environmental see characteristics when making his or her investment decisions this methodology is applied to portfolios composed of socially responsible and conventional mutual funds domiciled in spain

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd