labor force participation interest rate shocks and unemployment dynamics in emerging economies abstract emerging economies emes have highly volatile unemployment and real wages standard models with interest rate shocks can generate higher unemployment volatility but still fall quantitatively short of matching the empirical volatility of unemployment a small open economy search model with endogenous participation and self employment a feature of emes generates 90 percent of the volatility of unemployment in the data highly volatile wages and quantitatively consistent cyclical aggregate dynamics amid productivity and interest rate shocks of plausible magnitudes endogenous participation amplifies shocks and plays a critical role in overcoming a key limitation of standard search models for emes

what drives corporate social performance the role of nation level institutions based on whitley s national business systems nbs institutional framework we theorize about and empirically investigate the impact of nation level institutions on firms corporate social performance csp using a sample of firms from 42 countries spanning seven years we construct an annual composite csp index for each firm based on social and environmental metrics we find that the political system followed by the labor and education system and the cultural system are the most important nbs categories of institutions that impact csp interestingly the financial system appears to have a relatively less significant impact we discuss implications for research practice and policymaking

on the sources of aggregate fluctuations in emerging economies recent research on macroeconomic fluctuations in emerging economies has advocated introducing a stochastic productivity trend or allowing for interest rate shocks and financial frictions we estimate a model that encompasses these two approaches shedding light on their relative merits and on how financial frictions affect the transmission of shocks the model accounts for aggregate fluctuations by assigning a dominant role to financial frictions in amplifying conventional temporary productivity shocks whereas trend shocks play a minor role a link between spreads and expected future productivity emerges as essential for a reasonable approximation to the data

on corporate borrowing credit spreads and economic activity in emerging economies an empirical investigation abstract we document a considerable increase in foreign financing by the corporate sector in emerging economies emes since the early 2000s mainly in the form of bond issuance and claim that it has opened up an important channel by which external financial factors can drive economic activity in these economies such claim is substantiated by a strong negative relationship between economic activity and an external financial indicator that we construct for several emes using micro level data on spreads of bonds issued by emes corporations in foreign capital markets three salient features characterize such a negative relationship first the financial indicator has considerable predictive power on future economic activity in these economies even after controlling for other potential drivers of business cycles such as movements in sovereign spreads and global financial risk among others second on average an identified adverse shock to the financial indicator generates a large and protracted fall of real output growth in these economies and up to 14 of its forecast error variance is associated to this shock lastly fluctuations in this indicator also respond strongly to shocks in global financial risk emanating from world capital markets thereby implying that changes in corporate spreads also serve as a powerful propagating mechanism of the effect of changes in global investors risk appetite in emerging markets

cultural values and international differences in business ethics we analyze ethical policies of firms in industrialized countries and try to find out whether culture is a factor that plays a significant role in explaining country differences we look into the firm s human rights policy its governance of bribery and corruption and the comprehensiveness implementation and communication of its codes of ethics we use a dataset on ethical policies of almost 2 700 firms in 24 countries we find that there are significant differences among ethical policies of firms headquartered in different countries when we associate these ethical policies with hofstede s cultural indicators we find that individualism and uncertainty avoidance are positively associated with a firm s ethical policies whereas masculinity and power distance are negatively related to these policies

barriers against globalizing corporate ethics an analysis of legal disputes on implementing u s codes of ethics in germany global firms need to decide on the correspondence between their corporate ethics and the globalization of their activities when firms go global they face ethical complexities as they operate in different legal and cultural environments that may impact the admissibility and appropriateness of their approach to institutionalize and implement corporate ethics global firms may have good reasons to establish global codes of ethics that are to be obeyed by all employees worldwide however developing and implementing such codes can be rather difficult due to various and partly competing conditions in the countries of operation in this article two legal disputes are analyzed to illustrate some of the difficulties that may emerge when firms globalize their codes of ethics i argue that these conflicts can be mitigated when firms carefully design their codes and the processes of code implementation

poverty alleviation as business strategy evaluating commitments of frontrunner multinational corporations summary in the debate on how to combat poverty the positive role of mncs is frequently mentioned nowadays although doubts and criticism remain facing this societal debate mncs feel the pressure to formulate a position this paper analyzes mncs policies on their poverty alleviating potential frontrunner mncs turn out not to be very outspoken especially not on those issues that have the largest potential to help alleviate poverty placed in the context of other mncs behavior a sector coordinated morality seems important which means that a meso approach to poverty alleviation needs to complement the current global macro and individual company micro focus

corporate social responsibility in transnational spaces exploring influences of varieties of capitalism on expressions of corporate codes of conduct in nigeria drawing from the varieties of capitalism theoretical framework the study explores the home country influences of multinational corporations mncs on their corporate social responsibility csr practices when they operate outside their national regional institutional contexts the study focusses on a particular csr practice i e corporate expressions of code of conducts of seven mncs from three varieties of capitalism coordinated 2 mixed 2 and liberal 3 market economies operating in the oil and gas sector of the nigerian economy the study concludes that the corporate codes of conduct of these mncs operating in nigeria to a large extent reflect the characteristics of their home countries model of capitalism respectively albeit with certain degree of modifications the home countries model of capitalism is also found to have implications for the degree of adaptability of these mncs csr practices to the nigerian institutional context with the mixed market economy model of capitalism adapting more flexibly than the liberal and coordinated market economies respectively the findings of this study will contribute to the emerging literature on the institutional embeddedness of csr practices in transnational social spaces understanding of varieties of capitalism and csr in developing economies

evaluating an estimated new keynesian small open economy model abstract this paper estimates and tests a new keynesian small open economy model in the tradition of christiano et al 2005 nominal rigidities and the dynamic effects of a shock to monetary policy journal of political economy 113 1 1 45 and smets and wouters 2003 an estimated stochastic dynamic general equilibrium model of the euro area journal of the european economic association 1 5 1123 1175 using bayesian estimation techniques on swedish data to account for the switch to an inflation targeting regime in 1993 we allow for a discrete break in the central bank s instrument rule a key equation in the model the uncovered interest rate parity uip condition is well known to be rejected empirically therefore we explore the consequences of modifying the uip condition to allow for a negative correlation between the risk premium and the expected change in the nominal exchange rate the results show that the modification increases the persistence in the real exchange rate and that this model has an empirical advantage compared with the standard uip specification

sharing a ride on the commodities roller coaster common factors in business cycles of emerging economies fluctuations in commodity prices are an important driver of business cycles in small emerging market economies emes this paper documents how these fluctuations correlate strongly with the business cycle in emes a commodity sector is then embedded into a multi country emes business cycle model where exogenous fluctuations in commodity prices follow a common dynamic factor structure and coexist with other driving forces the estimated model assigns to commodity shocks 42 percent of the variance in income of which a considerable part is linked to the common factor a further amplification mechanism is a spillover effect from commodity prices to risk premia

assessing participation in voluntary environmental programmes in the developing world the role of fdi and export orientation on iso14001 adoption in thailand empirical assessments of the determinants of firm participation in voluntary environmental programmes veps in the developing world are largely absent from the environmental regulation literature leaving a number of important factors unique to such countries unexplored this article examines these factors namely the roles played by foreign direct investment fdi and export orientation in addition to factors deemed important in the industrialized world context to the problem of iso14001 adoption in one developing nation thailand we make use of unique primary data from 494 firms and focus on three important industries the resource based food and beverages industry the labour intensive textiles and wearing apparel industry and the more high technology electronics and electrical appliances industry we find that fdi plays a role in iso14001 adoption especially fdi from organization for economic co operation and development oecd and iso14001 rich countries other important determinants include fi

multinationality and corporate ethics codes of conduct in the sporting goods industry the international operations of firms have substantial impact on the formulation and implementation of business ethical principles such as codes of conduct the international sporting goods industry has been a pioneer in setting up codes and thus provides much relevant experience different sourcing strategies degrees of multinationality and national backgrounds affect the contents of codes moreover international non governmental organizations prove equally effective in triggering sophisticated codes

child labor and multinational conduct a comparison of international business andstakeholder codes increasing attention to the issue of child labor has been reflected in codes of conduct that emerged in the past decade in particular this paper examines the way in which multinationals business associations governmental and non governmental organizations deal with child labor in their codes with a standardized framework it analyzes 55 codes drawn up by these different actors to influence firms external societal behavior the exploratory study helps to identify the main issues related to child labor and the use of voluntary instruments such as codes of conduct apart from a specific indication of the topics covered by the code especially minimum age requirements this also includes monitoring systems and monitoring parties most important to company codes are the sanctions imposed on business partners in case of non compliance severe measures may be counterproductive as they do not change the underlying causes of child labor and can worsen the situation of the child workers by driving them to more hazardous work in the informal sector this underlines the importance of a broad rather than a restrictive approach to child labor in codes of conduct the paper discusses the implications of this study offering suggestions for future research

pattern of trade between underemployed economies in this paper the authors analyze the factors determining the pattern of trade between underemployed economies they find among other things that a low wage land abundant country exports the land using labor intensive product to a high wage capital abundant country the authors also find conditions under which a high wage capital rich country may export the labor intensive product the leonteif paradox copyright 1990 by the london school of economics and political science

do corporate codes of ethics reflect national character evidence from europe and the united states this paper analyses the usage and contents of corporate codes of ethics the results from a sample of 600 large european companies are contrasted with findings reported for similar u s firms the comparison reveals that significantly fewer european than u s firms adopted codes of ethics in europe the large majority of codes have been introduced only very recently and there are indications that codes made their way into europe via subsidiaries of u s firms however there are striking differences in content between u s and european codes of ethics pointing to the existence of a distinctly european approach to codifying ethics

how virtuous global firms say they are a content analysis of ethical values this study compares the different emphases on virtuous characters presented in their values across global firms considering country and industry of origin it presents a content analysis of the 122 codes of conduct statements from fortune global 500 firms drawn from four sectors and using correspondence analysis american firms tend to emphasize courage while european firms emphasize integrity and empathy surprisingly with asian firms being closer to european ones retailers and pharmaceutical firms emphasize empathy while banks and petroleum emphasize courage this study extends the newly emerging strategic paradigm of organizational virtue by introducing an empirical study of ethical values implications for multinational companies are then discussed

the price of imported capital and consumption fluctuations in emerging economies abstract we study the role played by fluctuations in the price of imported capital in determining the behavior of consumption fluctuations in developing countries for this we decompose the price of imported capital into common and country specific components where the common component is the price of capital in the us empirically we document that in contrast to small industrialized countries consumption in developing countries responds more than output to unexpected changes in the price of capital in the us as such fluctuations in the price of capital in the us contribute to a high volatility of consumption relative to that of output in developing countries we then show that a small open economy real business cycle model driven by fluctuations in the price of imported capital can account for the responses of consumption and output to innovations of the price of capital in the us and for the high relative volatility of consumption observed in developing country finally confronting the model to the data we further find that fluctuations in the price of capital in the us contribute substantially to fluctuations of consumption in countries that display a low volatility of output and a large relative volatility of consumption

the influence of country and industry on ethical perceptions of senior executives in the u s and europe this paper reports the results of a large scale survey among senior executives in the u s the u k germany and austria the research provides empirical evidence on the variation of perceptions of ethical issues by country and type of firm our findings suggest that country and industry type have significant effects both with regard to identification of ethical problems and the comprehensiveness of written ethics policies and ethics training

international factor mobility non traded goods tariffs and the terms of trade the present paper develops a general model with one imported one exported many non traded goods where some factors of production are internationally mobile within this framework the analysis establishes the validity of some earlier results and extends others that is 1 a tariff increase reduces the country s welfare 2 tariff induced international factor flows reduce a country s welfare 3 an improvement in a country s terms of trade in the presence of a tariff raises its welfare more when factors are internationally mobile than when not and 4 with preferential trading agreements trade creation always improves the country s welfare while trade diversion may or may not

the emergence of regional business cycle in africa a reality or myth a bayesian dynamic factor model analysis this paper examines the evolution and the underlying forces of the business cycle co movements among seven african a 7 countries over the period 1970 2016 these countries accounted for over 60 of regional gdp have abundant natural resources access to the global capital market and widely viewed as potential drivers of regional or african business cycle we model the national business cycle using real output consumption and investment we employ a dynamic factor model to decompose fluctuations in these macro variables into a regional country specific and idiosyncratic components using bayesian methods we also analyse the relative importance of some notable drivers of business cycle fluctuations found in the literature we find that the idiosyncratic component is dominating cyclical fluctuations in the a 7 countries while country specific and regional factors play a negligible role suggesting the inexistence of a common regional cycle despite deepening intra african trade among the driving variables the terms of trade shocks exert greater influence on the a 7 business cycle while exchange rate movements and changes in money supply explain sizeable fluctuations in consumption and investment in most of the a 7 countries shocks associated with changes in relative domestic oil prices monetary and fiscal policies cause large output fluctuations

factor mobility and customs unions theory the standard theory of customs unions originated with the pathbreaking work of viner 11 viner draws a distinction between the trade creating and the trade diverting effects of customs unions trade creation involves a shift of consumption of the importable good from a high cost domestic producer to a lower cost foreign producer trade diversion however involves a switch from the lowest cost external producers to a higher cost producer viner argues that trade creation improves the home country s welfare and trade diversion dampens it viner s analysis was refined by gehrels 4 lipsey 8 and batra 1 the theory was reexamined in light of unemployment by yu 12 and in the presence of variable returns to scale by choi and yu 3 viner s main results were modified accordingly underlying the standard theory of customs unions is the assumption that factors are perfectly mobile between industries in a given country this assumption simplifies the analysis but cannot be supported by empirical observations it is notable that the two sector trade model has been recently extended to accommodate varying degrees of factor mobility mussa 10 considered the case in which capital is sector specific but labor displays any degree of mobility grossman 5 posited capital immobility but allowed perfect labor mobility casas 2 studied the implications of labor immobility which gives rise to an endogenous wage differential hill and mendez 6 developed a general model which allows any degree of mobility in both factors yu and parai 14 adopted casas approach to examine the gains from trade issues this factor mobility literature has generated many interesting results in the neoclassical trade theory the implications of factor immobility for the customs union theory however remain by and large unexplored the purpose of this paper is to make a modest contribution by considering the customs unions theory in the presence of any degree of mobility of both factors as a secondary contribution we elucidate how the presence of factor immobility makes the extent of factor price differentials

corporate support for ethical and environmental policies a financial management perspective a random sample of 146 fortune 500 firms were surveyed in 1996 to determine whether firm size and industry type affect employers level of involvement and support of ethical and environmental policies and practices the study found relationships between firm size and ethical and environmental policies and practices while the majority of firms 90 3 regardless of size have a formal written code of ethics large firms are more likely to employ an ombudsperson to handle ethical concerns and to have a network confidentiality policy although most firms 83 5 have a formal written environmental policy large firms are more inclined to invest in new ways to reduce the production of various types of waste another interesting twist to the study has to do with the relationships found between industry type and ethical and environmental policies and practices industries such as the computers and electronics and scientific and photographics sectors that are involved with high precision products and industries such as mining crude oil and petroleum refining that utilize natural resources are more inclined to have a formal written code of ethics and social responsibility in addition industries that utilize natural resources are more likely than other industries to have formal written environmental policies and practices

business cycle implications of rising household credit market participation in emerging countries abstract a small open emerging economy model is extended with a household sector financial constraint to investigate business cycle implications of a rise in household access and use of financial services estimating the model on mexican data and consistent with empirical findings this paper finds that a rise in household credit market participation 1 yields larger aggregate consumption volatility and 2 amplifies the effects of shocks in the domestic economy particularly those transmitted through the interest rate channel the estimated model also highlights that 3 the lesser financial frictions are the lower is the increase of consumption growth and trade balance volatility driven by a rise in household credit market participation and 4 trend productivity shocks become a more relevant source of business cycle fluctuations finally standard measures of predictive accuracy suggest that the extended model outperforms the baseline emerging market model

the language of business codes of ethics implications of knowledge and power in australia as is the case elsewhere ethics is a developing aspect of business behaviour many educational institutions and business enterprises have a strong interest in the subject particularly from the practical viewpoint of creating an ethical culture in business that has substantial practical effects in this paper the codes of ethics of five large enterprises are examined they were selected as being typical of a collection of corporate codes used in australia held by the ethics research group at the university of technology sydney two codes were from international companies a chemical manufacturing company and a health beauty and medical manufacturer the other codes were from an australian bank an australian federal government business agency and an australian mining company

the influence of retail management s use of social power on corporate ethical values employee commitment and performance recent cases in retailing reflect that ethics have a major impact on brands and performance in turn demonstrating that brand owners employees and consumers focus on ethical values in this study we analyze how various sources of social power affect corporate ethical values retailer s commitment to the retail organization and ultimately sales and service quality multi source data based on a sample of 225 retailers indicated a strong link between power ethics and commitment and that these affected output performance

is corporate responsibility converging a comparison of corporate responsibility reporting in the usa uk australia and germany corporate social reporting while not mandatory in most countries has been adopted by many large companies around the world and there are now a variety of competing global standards for non financial reporting such as the global reporting initiative and the un global compact however while some companies e g henkel bhp johnson and johnson have a long standing tradition in reporting non financial information other companies provide only limited information or in some cases no information at all previous studies have suggested that there are country and industry specific differences in the extent of csr reports e g kolk et al 2001 business strategy and the environment10 15 28 kolk 2005 management international review45 145 166 maignan and ralston 2002 journal of international business studies33 3 497 514 however findings are inconclusive or contradictory and it is often difficult to compare previous studies owing to the idiosyncratic methods used in each study graafland et al 2004 journal of business ethics53 137 152 furthermore previous studies have relied mainly on simple measures such as word counts and page counts of reports to compare the extent of reporting that may not capture significant differences in the content of the reports in this article we seek to overcome some of these deficiencies by using textual analysis software and a more robust statistical method to more objectively and reliably compare the csr reports of firms in different industries and countries we examine a sample of leading companies in four countries us uk australia and germany and test whether or not membership of the global compact makes a difference to csr reporting and is overcoming industry and country specific factors that limit standardization we conclude that globalcompact membership is having an effect only in certain areas of csr reporting related to the environment and workers and that businesses from different countries vary significantly in the extent to which they promote csr and the csr issues that they choose to emphasize in their reports these country differences are argued to be related to the different institutional arrangements in each country

imperfect labor mobility and unemployment in ldcs in the two sector two factor general equilibrium literature generic unemployment has been introduced under the assumption of decreasing returns to scale in production see e g batra and seth 1 295 306 and yu 10 399 404 whereas sector specific unemployment has been introduced under the assumption of sticky wages e g harris and todaro 6 136 42 corden and findlay 5 59 78 khan 8 527 47 and marjit 9 527 47 in either case however labor is assumed to be perfectly mobile between two sectors the latter assumption has recently been a major topic of further research in the two sector general equilibrium literature specifically it is argued that in a perfectly competitive environment despite significant intersectoral wage differential caused by various parametric policy changes enough labor do not move from the low wage to the high wage sector to equate the wage rates in two sectors even in the long run locational preferences attachment to existing arrangements and also the high costs of relocation are usually cited as the possible reasons behind the sluggish movement of labor from one sector to the other casas 2 747 61 in a pioneering article has modeled this phenomenon of general immobility of labor in a standard two sector model of production in his model however casas assumes full employment of labor the purpose of the present paper is to extend the casas model further by incorporating unemployment caused by sector specific sticky wages of the harris todaro variety and examine the effects of growth and trade policies on output employment and welfare of a small country we will highlight the role of the elasticity of labor mobility parameter in our main results and demonstrate that there exists a critical minimum value of the elasticity of labor mobility parameter that will ensure the validity of the conventional results even in the world of imperfect labor mobility several interesting results emerge from our analysis in particular we have shown that capital accumulation causes urban unemployment to rise and the optimal tariff for a small open economy is positive the paper is organized as follows in section ii we lay out the basic model of labor immobility and unemployment and in section iii we derive the basic comparative static results in

clubmed cyclical fluctuations in the mediterranean basin we investigate the similarities of macroeconomic fluctuations in the mediterranean basin and their convergence a model with three geo political indicators covering the west the east and the mena portions of the mediterranean characterizes well the historical experience since the early 1980 convergence and divergence coexist in the region and are reversible except for the west domestic cyclical fluctuations are still due to national and idiosyncratic causes the outlook for the next few years looks rosier for the mena and the east blocks than for the west

corporate social responsibility in challenging and non enabling institutional contexts do institutional voids matter the extant literature on comparative corporate social responsibility csr often assumes functioning and enabling institutional arrangements such as strong government market and civil society as a necessary condition for responsible business practices setting aside this dominant assumption and drawing insights from a case study of fidelity bank nigeria we explore why and how firms still pursue and enact responsible business practices in what could be described as challenging and non enabling institutional contexts for csr our findings suggest that responsible business practices in such contexts are often anchored on some csr adaptive mechanisms these mechanisms uniquely complement themselves and inform csr strategies the csr adaptive mechanisms and strategies in combination and in complementarity then act as an institutional buffer i e institutional immunity which enables firms to successfully engage in responsible practices irrespective of their weak institutional settings we leverage this understanding to contribute to csr in developing economies often characterised by challenging and non enabling institutional contexts the research policy and practice implications are also discussed

emerging market fluctuations what makes the difference aggregate fluctuations in emerging countries are quantitatively larger and qualitatively different in key respects from those in developed countries using data from mexico and canada this paper decomposes these differences in terms of shocks to aggregate efficiency and shocks that distort the decisions of households about how much to invest consume and work in a standard model of a small open economy the decomposition exercise suggests that most of these differences are explained by fluctuations in aggregate efficiency distortions in labor decisions over the business cycle and most importantly fluctuations in country risk other distortions are quantitatively less important

the nature of ethics codes in franchise associations around the globe the worldwide growth of franchising has been phenomenal during the past decade at the same time there has been increased media attention to questionable business practices in franchising similar to some trade associations and professions franchising has sought self regulation by developing codes of conduct or ethics this study examines the codes of ethics covering franchising activities in 21 countries the results reveal that there is considerable variation in the activities issues covered by the codes specifically the codes cover most stages of the franchising relationship focus on a narrow set of stakeholders are short on ethical guidance and offer few enforcement provisions the implications of these findings for international franchising and research are discussed

redistributive fiscal policies and business cycles in emerging economies abstract government expenditures are pro cyclical in emerging markets and counter cyclical in developed economies we show this pattern is most pronounced in social transfers which are also a large component of total government expenditures 28 39 the discrepancy in the cyclicality of spending on goods and services is smaller by contrast and the category accounts for just 11 16 of total government expenditures in a small open economy model we find disparate social transfer policies can account for about half of the larger cyclical volatility of consumption relative to output in emerging economies compared to developed we analyze how differences in tax policy and the nature of underlying inequality amplify or mitigate this result

have business cycles changed over the last two decades an empirical investigation abstract we document the properties of business cycles of 71 countries 23 industrial countries and 48 emerging market economies or emes from 1970q1 to 2012q4 using the harding and pagan dating algorithm first recessions are deeper steeper and costlier among emes especially in east asia and latin america second recoveries are swifter and stronger among emes partly due to stronger rebound effects third recessions became less costly during the globalization period 1985 2007 for industrial countries and emes thus reflecting institutional changes made during the great moderation fourth the dynamic behavior of macroeconomic indicators around peaks in real gdp is more volatile in downturns associated with crisis compared to other downturns fifth peaks in financial cycles credit and asset prices tend to precede peaks in real output cycles finally although both industrial and emerging markets have experienced deep recessions during the recent global financial crisis the emerging markets have recovered faster

financial development unemployment volatility and sectoral dynamics abstract we document a negative and significant relationship between domestic financial development and unemployment volatility in developing and emerging economies demes and the absence of such relationship in advanced economies aes a business cycle labor search model with firm heterogeneity collateral constraints and interfirm input credit capital can quantitatively rationalize these facts greater financial development is associated with lower usage of input credit capital greater bank credit and greater capital accumulation all of which make firms more resilient in the presence of financial shocks firms increased shock resiliency stabilizes employment decisions ultimately leading to smoother unemployment fluctuations then by establishing explicit linkages between firms interfirm input credit acts as an important mechanism that fosters lower volatility across firms under greater financial development as such increases in financial development have a smaller impact in stabilizing unemployment in economies with higher average bank credit gdp ratios and less input credit usage which is the case of aes compared to economies with lower average bank credit gdp ratios and more input credit usage which is the case of demes

customs union and unemployment in ldcs abstract welfare effects of customs union are examined for a small open economy with unemployment of labor of harris todaro type and some new results are reported specifically it is demonstrated that for ldcs afflicted with urban unemployment trade creating customs union continues to be an effective policy

the external finance premium and the macroeconomy us post wwii evidence abstract the central variable of theories of financial frictions the external finance premium is unobservable this paper distils the external finance premium from a dynamic stochastic general equilibrium dsge model estimated on us macroeconomic data covering the period 1954 to 2004 within the dsge framework movements in the premium can be given an interpretation in terms of shocks driving business cycles a key result is that the estimate based solely on non financial macroeconomic data picks up over 70 of the dynamics of lower grade corporate bond spreads the paper also identifies a gain in fitting key macroeconomic aggregates by including financial frictions in the model and documents how shock transmission is affected

drivers of socially responsible investing a case study of four nordic countries in this study we try to establish what determines the substantial differences in the nordic countries size and composition of socially responsible investing sri we investigate if these differences between denmark finland norway and sweden can be associated with key characteristics in economics finance culture and institutions we find that in particular economic openness the size of the pension industry and cultural values of masculinity femininity and uncertainty avoidance can be associated with the differences in sri in the four countries on basis of these findings we lay foundations for an international theory of sri

regime switching in emerging market business cycles interest rate volatility and sudden stops abstract we document the presence of discrete regime switching in emerging market business cycles particularly in the volatility of interest rates at which countries borrow internationally using a multi country regime switching vector autoregressive model we study the statistical relationship of such business cycle regimes with episodes of sudden stops periods of high volatility tend to be persistent and are associated with high interest rates the occurrence of sudden stops in external financing and large declines in economic activity most strikingly we show that regime switches drive the countercyclicality of interest rates in emerging markets documented in previous literature neumeyer and perri 2005 and that high volatility regimes forecast sudden stops 6 and 12 months ahead

emerging market business cycles learning about the trend abstract emerging market business cycles feature a higher variability of consumption relative to output and a strongly countercyclical trade balance an equilibrium business cycle model in which agents learn to distinguish between the permanent and transitory components of total factor productivity shocks using the kalman filter accounts for these features calibrated to mexico the model accounts for the behavior of consumption and the trade balance for a wide range of variability and persistence of permanent shocks relative to transitory shocks estimation for mexico and canada suggests more severe informational frictions in emerging markets than in developed economies

the hunt vitell general theoryof marketing ethics can it enhance our understanding of principal agent relationships in channels of distribution this paper advances the hunt vitell general theory of marketing ethics as a framework for enriching current understanding of both long term marketing relationships in general and principal agent associations specifically under economic models of agency theory manufacturer distributor relationships are conceptualized as principal agent associations where both parties are assumed be motivated exclusively by short term financial self interest within the logical constraints of zero sum game conditions as a general model of ethical decision making and behavior in marketing the hunt vitell theory illustrates how ethical decisions are predicated not only upon estimations of potential benefits or outcomes using teleological criteria but also deontological evaluations which invoke norms and values furthermore the recent ideas advanced in relationship marketing perspectives suggest that distribution channel associations premised upon non zero sum or symbiotic assumptions may be more effective and more jointly profitable based upon the hunt vitell model propositions are formulated that complement the understanding of agency theory within the context of marketing channel relationships and thus may represent a basis for more effective agency selection and interaction in marketing practice

sector heterogeneity and credit market imperfections in emerging markets this paper shows that the impact of country interest rate shocks on emerging markets economic activities can be associated with credit market imperfections affecting principally non tradable activities i present novel evidence documenting that tradable and non tradable activities respond asymmetrically to changes in credit conditions in emerging markets i show that country interest rate shocks are amplified through non tradable activities and that local credit substantially explains their output growth unlike the non tradable sector tradable activities are not significantly affected by changes in local credit conditions to rationalize these findings i introduce a small open economy model with heterogeneous access to international borrowing that accounts for the asymmetric response of tradable and non tradable activities

business codes of multinational firms what do they say business codes are an oft cited management instrument but how common are codes among multinationals and what is their content in an unprecedented study the codes of the largest corporations in the world have been collected and thoroughly analyzed this paper presents the results of that study of the 200 largest companies in the world 52 5 have a code more than half f these codes describe company responsibilities regarding quality of products and services 67 adherence to local laws and regulations 57 and the protection of the natural environment 56 many codes make reference to principles governing stake holder relations e g transparency 55 honesty 50 and fairness 45 corporate core values e g teamwork 43 appropriate conduct among employees e g discrimination 44 and intimidation 43 and treatment of company property by employees e g conflict of interests 52 corruption 46 and fraud 45 monitoring compliance with the code is addressed in 52 of the codes based on this content study three types of codes are distinguished the stakeholder statute 72 the values statement 49 and the code of conduct 46 the results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes

corporate governance and codes of ethics as a result of recent corporate scandals several rules have focused on the role played by boards of directors on the planning and monitoring of corporate codes of ethics in theory outside directors are in a better position than insiders to protect and further the interests of all stakeholders because of their experience and their sense of moral and legal obligations female directors also tend to be more sensitive to ethics according to several past studies which explain this affirmation by early gender socialization the fact that women are thought to place a greater emphasis on harmonious relations and the fact that men and women use different ethical frameworks in their judgments the goal of this paper is to determine the influence of these characteristics of the board in terms of promoting and hindering the creation of a code of ethics our findings show that a greater number of female directors does not necessarily lead to more ethical companies moreover within europe as a continent board ownership leads to an entrenchment of upper level management generating a divergence between the ethical interests of owners and managers in light of this situation the presence of independent directors is necessary to reduce such conflicts

financial shocks and the us business cycle employing the financial accelerator fa model of bernanke gertler and gilchrist 1999 enhanced to include a shock to the fa mechanism we construct and study shocks to the efficiency of the financial sector in post war us business cycles we find that financial shocks are very tightly linked with the onset of recessions more so than tfp or monetary shocks the financial shock invariably remains contractionary for sometime after recessions have ended the shock accounts for a large part of the variance of gdp and is strongly negatively correlated with the external finance premium second moments comparisons across variants of the model with and without a stochastic fa mechanism suggests the stochastic fa model helps us understand the data

commodity booms and busts in emerging economies abstract emerging economies particularly those dependent on commodity exports are prone to highly disruptive economic cycles this paper proposes a small open economy model for a net commodity exporter to quantitatively study the triggers of these cycles the economy consists of two sectors one of which produces commodities with prices subject to exogenous international fluctuations these fluctuations affect both the competitiveness of the economy and its borrowing terms as higher commodity prices are associated with lower spreads between the country s borrowing rate and world interest rates both effects jointly result in strongly positive effects of commodity price increases on gdp consumption and investment and a negative effect on the total trade balance furthermore they generate excess volatility of consumption over output and a large volatility of investment besides explicitly incorporating a double role of commodity prices the model structure nests the various candidate sources of shocks proposed in previous work on emerging economy business cycles estimating the model on argentine data we find that the contribution of commodity price shocks to fluctuations in post 1950 output growth is in the order of 38 in addition commodity prices account for around 42 and 61 of the variation in consumption and investment growth respectively we find transitory productivity shocks to be an important driver of output fluctuations exceeding the contribution of shocks to the trend which though smaller is not negligible

feldstein horioka puzzles abstract the high correlation between national saving and investment rates in advanced economies the feldstein horioka puzzle has been referred to as the mother of all puzzles perhaps more puzzling is that for emerging economies saving investment correlations tend to be significantly lower though still positive this deepens the feldstein horioka puzzle because the mobility of capital is generally believed to be much lower in emerging economies than in advanced economies and a country with less mobile capital should have a tighter relationship between local saving and investment rates this paper develops a dsge model that without resorting to any real or financial friction simultaneously explains these two aspects of the feldstein horioka puzzle positive saving investment correlations in both advanced and emerging economies and significantly lower saving investment correlations in emerging economies than in advanced economies the main features of the model include long run risk an endogenous world interest rate and cross correlations of national and global shocks the findings hold for both quarterly time series and long run averages

optimal trade policies for a small open economoy this paper investigates optimal trade policies for a small open economy with unemployment when factor prices are rigid random foreign prices result in random unemployment of resources the ranking of second best policies is investigated if the marginal propensity to consume the importable is positive and nonincreasing in income the optimal composite tariff dominates the optimal target price which in turn dominates the optimal quota copyright 1993 by the london school of economics and political science

ethical sourcing codes of large uk based corporations prevalence content limitations codes of conduct have become the perhaps most often used tool to manage corporate social responsibility csr researchers have primarily analysed such documents at company wide or trans company levels whereas there is a dearth of studies into the use of codes for particular corporate functions hence this article will examine one particular group of sub company level codes namely codes of conduct that stipulate csr criteria for suppliers examining such ethical sourcing policies adopted by the ftse100 corporations the article draws out what environmental social and economic issues large corporations perceive to be important in the management of their supply chains at an aggregate level the coverage of csr issues is rather extensive yet at the level of the individual corporation a degree of selectivity in the issues that are addressed becomes noticeable the code content analysis furthermore confirms the business case and public pressure to be the most important drivers of csr finally the study highlights the role of isomorphic processes in the adoption of csr tools

a study of codes of ethics for mexican microfinance institutions most scholarly interest in codes of ethics or conduct has focused on traditional companies little is known about the codes of social enterprises or hybrid organizations such as microfinance institutions mfis our paper provides a comparative case study of the codes of a mexican microfinance network and seven mfis using the corporate integrity model we analyze the content of mfis codes compared to those of traditional organizations we then examine to what extent some specific features of mfis such as their mission target group and applied credit methodologies are factors that determine the content of their code we find that mfis codes like those of traditional companies include traditional stakeholder principles nevertheless they put greater emphasis on socially oriented principles or on terms such as people and common good mfis codes differ with respect to the items they include and exclude and the size of the covered sections we also find that these codes attempt to address prevailing concerns in microfinance but rarely tackle two critical debates namely levels of interest rates and of profitability we finally argue that it is difficult to move toward a global code owing to regional disparities and the variety of organizational models and missions