the social meaning of money special monies classic interpretations of the development of the modern world portray money as a key instrument in the rationalization of social life money is reductively defined as the ultimate objectifier homogenizing all qualitative distrinctions into an abstract quantity this paper shows the limits of such a purely utilitarian conception of market money a model of special monies is proposed to examine the extraeconomic social basis of modern money the article argues that while money does indeed transform items values and sentiments into numerical cash equivalents money itself is shaped in the process culture and social structure mark the quality of money by institutionalizing controls restrictions and districtions in the sources uses modes of allocation and even the quantity of money the changing social meaning and structure of domestic money specifically married women s money in the united states 1870 1930 are examined as an empirical case study of a special money

individualism and confucian dynamism a note on hofstede s cultural root to economic growth hofstede and his associates have presented statistical evidence purporting to identify a link between national culture and economic growth this note describes two problems with this line of research first two of the dimensions of culture used in this research individualism and confucian dynamism are treated as if they are independent when in fact they appear to be highly interrelated and second culture is not a sufficient condition to explain economic growth and is related to other important factors that play a role in determining economic growth the consequences of these problems on interpretation of the research findings are discussed and recommendations for future research directions are proposed

culture and ceo compensation the theory and research on chief executive officer ceo compensation tends to be dominated by assumptions and values reflective of those dominant in the national culture of the united states where most of this work is done this suggests that an underlying theme focuses on how ceo compensation is related to instrumental choices made in a competitive capitalist culture this study seeks to expand the understanding of ceo compensation by examining it in the context of other cultures based on the premise that national culture plays a significant part in the nature of compensation strategies we relate cultural dimensions uncertainty avoidance power distance individualism and masculinity femininity developed by hofstede hofstede 1980a 2001 to several dimensions of ceo compensation these dimensions are total ceo pay the proportion of variable pay to total compensation and the ratio of ceo pay to the lowest level employees the main findings of our paper are 1 all of the different dimensions of ceo pay were related to power distance leading us to infer that ceo pay in a culture is most reflective of the strength of the power structure in a society and 2 total compensation and the ratio of variable pay to total pay are related to individualism we conclude that cultural dimensions can contribute to understanding cross national ceo compensation the implication of this conclusion is that there are different ways that ceo compensation fits into the cognitive schema of various cultures and furthermore that these cognitive schema vary across societies that affect the nature of the cultural matrix into which money is incorporated bloch and parry 1989 p 1 moreover our results imply that particular forms of ceo compensation do not mean the same thing in different cultures but rather carry different symbolic connotations depending on the values dominant in a society thus not only does the compensation structure of a firm within a culture have a symbolic meaning within organizations e g trice and beyer 1993 but it can also be seen as an expression of deeper social values hofstede et al 1990 that may differ across countries

the meaning of death some simulations of a model of healthy and unhealthy consumption simulations of a model of healthy and unhealthy consumption are used to investigate the impact of various terminal conditions on life span pathways of health related consumption and health a model in which life span and the death stock of health are fixed is compared to versions in which i the death stock of health is freely chosen ii life span is freely chosen iii both the death stock of health and life span are freely chosen the choice of terminal conditions has a striking impact on optimal plans results are discussed with reference to the existing demand for health literature and illustrate the application of iterative processes to determine optimal life span the role played by the marginal value of health capital in determining optimal plans and the importance of checking the second order conditions for the optimal choice of life span

european patterns of corporate ownership a twelve country study a number of qualitative studies have shown striking international differences in corporate governance systems this paper presents a quantitative analysis of ownership structures among the hundred largest companies in twelve european countries the existence of a highly significant nation effect is confirmed further statistical analysis indicates that the nation effect is party explained by institutional differences

understanding compensation practice variations across firms the impact of national culture with operations spread worldwide firms that find themselves competing in a global marketplace are looking at the implications of the admonition when in rome this raises the question do cultures of countries have an impact on the generally accepted methods of managing human resources the answer to this question is the focus of this article by developing culture specific propositions for four categories of compensation practices based on status performance social benefits and programs and employee ownership plans we seek to determine the extent to which hofstede s four dimensions of culture are associated with specific compensation practices support is found for most of the propositions the implications of the finding for the management of human resources by multinational firms are discussed

the other side of the trade off the impact of risk on executive compensation the principal agent model of executive compensation is of central importance to the modern theory of the firm and corporate governance yet the exiting empirical evidence supporting it is quite wea

management and ownership effects evidence from five countries despite the growing recognition in the corporate governance literature that the relationship between ownership concentration and profitability is context dependent this issue has not yet been subjected to direct empirical investigation using a single cross national sample this study empirically examines the ownership concentration performance relationship across the nations of canada france germany the united kingdom and the united states essentially we argue that the correlation if any between ownership concentration and firm profitability differs across countries in a systematic way determined by the national system of corporate governance results indicate that important and statistically significant differences do in fact exist across the countries studied 1998 john wiley sons ltd

uncertainty and the demand for medical care abstract this paper provides an analysis of the effects of uncertainty on the demand for medical care using a simplified version of grossman s human capital model of the demand for health two types of uncertainty are analysed the uncertainty surrounding the incidence of illness and the uncertainty surrounding the effectiveness of medical care in the first the consumer s basic level of health is assumed to be a random variable in the second the effectiveness of medical care is assumed to be random comparative static results are reported indicating the effects on the demand for medical care of both increases in the means of these distributions and mean preserving spreads of the distributions

moving closer to the action examining compensation design effects on firm risk we examine the influence of ceo equity based compensation on strategic risk taking by the firm building off the behavioral agency model agency theory and prospect theory we develop arguments about when equity based compensation elements will increase or decrease executive risk propensity and in turn strategic risk taking incorporating a behavioral perspective into our models of incentive alignment provides us with new and potentially more accurate predictions about how individual elements of ceo pay will influence risk selection as well as how equity compensation interacts with cash compensation and with other factors to influence risk preferences in general this study provides evidence that ceo equity based compensation significantly influences strategic risk but that this influence is more nuanced and complex than conventional treatments of executive compensation assume in particular we find that different forms of equity based pay exhibit dissimilar influences on strategic risk and that their influence changes as their value and vesting status change second we find that cash based forms of pay moderate the incentive properties of equity based pay indicating that cash based pay may affect how executives perceive risks associated with equity pay finally we find that stock price volatility and board actions each also moderate the incentive effects of equity based pay in sum our results argue for increased recognition of a behavioral perspective on executive compensation and greater precision in how we measure and model the incentive alignment properties of ceo compensation

non monotonic health behaviours implications for individual health related behaviour in a demand for health framework a number of behaviours influence health in a non monotonic way physical activity and alcohol consumption for instance may be beneficial to one s health in moderate but detrimental in large quantities we develop a demand for health framework that incorporates the feature of a physiologically optimal level an individual may still choose a physiologically non optimal level because of the trade off in his or her preferences for health versus other utility affecting commodities however any deviation above or below the physiologically optimal level will be punished with respect to health distinguishing between two individual types we study a the qualitative properties of optimal time paths of health capital and health related behaviour b the perturbations of the optimal time paths that result from changes in exogenous parameters and c steady state properties predictions of the model and the implications for empirical analysis are discussed at length some comments on potential future extensions conclude the paper

an institution based view of executive compensation a multilevel meta analytic test we offer a multilevel meta analytic study of the firm performance executive compensation relationship comprising prior tests derived from 332 primary studies nested in 29 countries although our work modestly supports the optimal contracting theory based expectation that compensation is positively associated with performance it also reveals considerable cross country variability in this relationship we trace this variance to differences in the level of development of the formal and informal institutions protecting investors against managerial overcompensation and underperformance in terms of intentionally devised and enforced formal institutions we find significant positive moderating effects on the focal relationship of the rule of law and strength of investor protection variables for self enforcing informal institutions we find similar effects for concentrated ownership and compensation related entries in codes of good corporate governance we also find that formal and informal institutions function in a complementary manner in shaping the performance sensitivity of executive compensation the focal relationship becomes stronger when concentrated owners have access to well functioning courts and when informal norms of good governance are supported by shareholder protection laws our study thus suggests that optimal contracting theory must be supplemented with an institution based view to account for the conditioning effects of institutions on national contracting environments

determinants of management compensation with risk averse agents and dispersed ownership of the firm abstract the salaries of top managers consist of two parts one part depending on profits the other being constant in a model of management compensation schemes with risk averse agents holmstrom and milgrom 1987 predict that an increasing variance in profits should reduce the profit relatedness of salaries using data from germany we show that indeed a larger variance of profits reduces the pay performance sensitivity moreover we analyze the relative influence of profits as compared to firm size on managerial compensation in general as well as the relationship between pay performance sensitivity and ownership structure

employer investments in employee health implications for the family as health producer the model presented in this paper further extends the demand for health model in which the family is the producer of health investments to consider the case in which an employer has incentives for investing in the health of a family member the household and the employer are assumed to interact strategically in the production of health the general insight provided is that the conditions which determine the nature of the relationship between the employer and the employee for instance market conditions production technologies taxes and government regulation will also affect the allocation of health investments and health capital within the family

uncertainty avoidance and the timing of employee stock option exercise we examine the impact of the cultural norm of uncertainty avoidance on employee stock option eso exercise behavior using proprietary data from a multinational firm we find that employees from countries with higher levels of uncertainty avoidance exercise their stock options earlier these findings lend support to a maintained assumption in the eso literature that employee attitudes toward uncertainty influence stock option exercise behaviors our findings further help to explain prior findings of cross cultural differences in firms compensation practices by indicating that employee responses to option based pay and firms consequent financial reporting costs vary as functions of employee uncertainty avoidance

when in rome look like caesar investigating the link between demand side cultural power distance and ceo power agency theory grounded research on boards of directors and firm legitimacy has historically viewed ceo power as de legitimating often taking this fact for granted in theorizing about external assessors evaluations of a firm with few exceptions this literature has focused exclusively on capital market participants e g investors securities analysts as the arbiters of a firm s legitimacy and has accordingly assumed that legitimate governance arrangements are those derived from the shareholder oriented prescriptions of agency theory we extend this line of research in new ways by arguing that customers also externally assess firm legitimacy and that firms potentially adjust their governance characteristics to meet customers norms and expectations we argue that the cultural cognitive institutions prevalent in customers home countries influence their judgments regarding a firm s legitimacy such that firms competing heavily in highpower distance cultures are more likely to have powerful ceos with ceo power a source of legitimacy rather than illegitimacy among customers we also argue that the more dependent a firm is on its customers and the more salient cultural power distance is as a demand side institutional norm the greater this relationship will be data from 151 u s semiconductor and pharmaceutical firms over a 10 year period generally support our predictions

friends or foes optimal incentives for reciprocal agents abstract widely used performance based contracts put positive or negative externalities on co workers these externalities have been proven to shape an organization s working climate especially when workers exhibit social preferences however it is a priori unclear whether a more friendly or a more competitive working environment should be encouraged in this paper we develop a theoretical model in which a self interested principal has to motivate a set of agents to work hard agents are symmetric potentially risk averse and exhibit reciprocity concerns towards each other we show that the principal reduces the cost of achieving high effort provision by designing a psychological gift exchange game thereby replacing monetary with psychological incentives we find that the optimal incentive scheme depends on the interplay between the agents attitudes towards risks and their preferences for reciprocity in particular the optimal scheme implements i a relative performance compensation scheme which induces an exchange of unkindness if agents are relatively little risk averse and ii a joint performance compensation scheme which induces an exchange of kindness if agents are sufficiently risk averse our findings can explain some puzzling empirical results

a reformulation of the portfolio model of hedging comment in a recent article stewart l brown finds that hedge ratios estimated using percentage price change data are not significantly different from one while hedge ratios estimated using price level data are he argues that a the use of percentage price change data which he calls returns is more appropriate and b his empirical results do not support the portfolio theory of hedging many objective functions do indeed suggest the use of price change data although not necessarily percentage price change data instead of price level data when estimating hedge ratios and brown gives no new reasons for their use however brown s conclusion that hedge ratios significantly less than one support the portfolio theory while ratios not significantly different from one do not is erroneous moreover his paper misrepresents previous research on this topic my comment is intended to clarify these two issues

the family as producer of health an extended grossman model deriving a model where each family member is the producer of his own and other family members health shows that the family will not try to equalise marginal benefits and marginal costs of health capital for each family member they will rather invest in health until the rate of marginal consumption benefits equals the rate of marginal net effective costs of health capital the level of compensation in the social insurance system the effective price of care health related information and transfer payments will all affect the production possibility set and therefore the optimal level and distribution of family health

explaining diversity in the worldwide diffusion of codes of good governance extending earlier literature on diffusion of codes of good governance cggs by integrating the effect of national culture this study offers a novel perspective on cross national diversity in the worldwide diffusion of corporate governance best practices we argue that particular cultural dimensions affect the indicators i e total number of codes per country and identity of issuing organizations of such diffusion for a sample of 67 countries our analysis reveals that individualist cultures have a stronger tendency to develop cggs in cultures with a high receptivity to power differences there is a higher probability that the first issuers are the government directors or professional associations whereas with low receptivity the stock exchange and investors groups of issuers are more likely to initiate the first code the effects of culture remain significant even after accounting for differences in legal systems and economic institutions indicating that national culture may serve as a comprehensive indicator of the regulatory stance with respect to good governance indeed the effect size is large enough to give pause e g to a location choice and possibly has relevance for strategic decision making by international companies

demand for health a generalised grossman model the demand for health and medical care is analysed within a generalised grossman type health investment model its underlying assumptions are shown to differ from those employed earlier in a manner which avoids some of the criticisms levelled at grossman s model the comparative static predictions of the generalised model are examined and it is demonstrated that most previous health investment models are derivable from it also the present model is applicable to a new wider range of problems thus increasing the scope of economic explanations of health behaviour