the human firm in the natural environment a socio economic analysis of its behavior abstract new realities are leading an increasing number of businesses to discard their old managerial perspectives and practices with regard to the natural environment as desirable as the new approaches are the environmental behavior pollution pollution prevention etc of these firms cannot be explained by the neoclassical model thus this paper develops a socio economic model of the firm s environmental behavior that incorporates managerial social environmental and ethical realities not found in the neoclassical model in contrast to short term oriented opportunistic approaches managements are increasingly setting high environmental goals integrating environmental management with other aspects of management developing environmentally oriented strategies that harmonize economic and environmental interests and utilizing system wide approaches along with socially responsible decision making this cannot be explained by the neoclassical model in which the firm s environmental behavior is an outcome of economic incentives from 1 product and resource markets and 2 regulators the socio economic model adds four important new elements 1 the firm s internal organizational capability 2 environmental opportunities 3 society s environmental concerns awareness and demands and 4 influences from extra firm institutions therefore the firm s environmental behavior is an outcome not only of economic incentives but of 1 the firm s capacity to take advantage of opportunities and 2 the external social influences on it

the fisher hypothesis and the forecastability and persistence of inflation abstract for the period 1860 to 1939 the simple correlation of the u s commercial paper rate with the contemporaneous inflation rate is 0 17 the corresponding correlation for the period 1950 to 1979 is 0 71 this paper attributes this apparent change in the fisher relation to differences in the stochastic process of inflation rather than a change in any structural relationship between interest rates and expected inflation contrary to recent claims in the literature there is little evidence of inflation non neutrality in data from the pre world war i period

the market value of outstanding government debt 1919 1975 abstract several new series on the market value of outstanding government debt are reported and their methods of construction described the new series on federal debt are compared with other existing estimates and are shown to be markedly superior to them

vive la difference social banks and reciprocity in the credit market social banks are financial intermediaries paying attention to non economic i e social ethical and environmental criteria to investigate the behavior of social banks on the credit market this paper proposes both theory and empirics our theoretical model rationalizes the idea that reciprocity can generate better repayment performances based on a unique hand collected dataset released by a french social bank our empirical results are twofold first we show that the bank charges below market interest rates for social projects second regardless of their creditworthiness motivated borrowers respond to advantageous credit terms by significantly lowering their probability of default we interpret this outcome as the first evidence of reciprocity in the credit market

the purchasing power of money and nominal interest rates a re examination while it has been known for some time that under uncertainty the original version of the fisher hypothesis is not precisely correct empirical researchers have largely ignored this fact such an omission has possibly resulted in erroneous conclusions concerning other hypotheses most notably the impact of prices on the real economy this paper clarifies some of the previous interpretations of the existing empirical literature and provides a theoretical version of the relation between prices and interest rates empirical tests based on both the livingston survey data and data from time series forecasting models provide support for the fisher effect and the hypothesis that only covariance risk is priced in the treasury bill market one of the basic hypotheses concerning rationality in financial markets is based on statements generally attributed to fisher 18 fisher argued that the nominal or money rate of return on an asset should compensate an investor for his or her required real rate of return and changes in the purchasing power of money for the uncertainty case fisher replaced known purchasing power changes with the expected inflation rate whereas the fisher relationship under certainty is well defined his basic theorem under uncertainty is not precise as fama 15 has argued it is changes in the purchasing power of money not the inflation rate that should concern investors under uncertainty the expected value of one is not by jensen s inequality the inverse of the expected value of the other moreover fama and farber 16 grauer and litzenberger 20 and benninga and protopapadakis 3 have shown that when investors are risk averse the fisher relationship will generally not hold even after adjustment has been made for the distinction between purchasing power changes and the inflation rate in particular these authors show that an adjustment must be made for the fact that the real rate of return on nominal bonds is random while these issues have been discussed in the theoretical literature they have largely been ignored in the empirical work on this topic given the fact that nominal rates do not seem to adjust as rapidly to price changes as fisher hypothesized numerous empirical researchers have expanded the basic fisher model in an attempt to explain this empirical anomaly these extensions include the incorporation of a inflation rate variability and the growth in real output

responsible entrepreneurship in developing countries understanding the realities and complexities developing countries have recently experienced a burgeoning of small scale individual entrepreneurs sies who range from petty traders to personal service workers like small street vendors barbers and owners of small shops as a result of market based reforms rapid urbanisation unemployment landlessness and poverty while sies form a major part of the informal workforce in developing countries and contribute significantly to economic growth their potential is being undermined when they engage in irresponsible and deceptive business practices such as overpricing sale of underweight or substandard products or attempts to hoard goods to name a few despite the growing interest in corporate social responsibility csr initiatives of small businesses in developing countries the sies have received almost no attention to address this void in the literature we explore the reasons for the less than optimal level of social responsibility demonstrated by some sies in developing countries we do so by drawing upon the existing literature to develop a comprehensive framework of social responsibility of sies highlighting their unique characteristics and the different contextual factors that they encounter in developing countries based on this framework we then present a set of propositions specifying the influence of these contextual factors such as business environment cultural traditions socio economic conditions and both international and domestic pressures on the business practices of sies the framework offers an explanation for the lack of responsible entrepreneurship of sies and has important implications for promoting sustainable business practices in developing countries where businesses are striving hard to survive and compete

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

were price changes during the great depression anticipated abstract this paper reassesses whether the large swings in prices during the 1930 s were anticipated we argue that uncertainty about monetary fiscal and exchange rate policies induced systematic differences between the rate of price change expected by economic agents at the time and the time series forecasts of inflation our analysis of nominal interest rates and ex post inflation strongly supports this view in fact our results suggest that the deflation of the early depression years and the inflation that followed were both largely unanticipated

codes of ethics partly as a result of much recent evidence of business and government crime a large proportion of major corporations have adopted codes of ethics government service is also making more use of them the electrical manufacturing anti trust conspiracy and 1973 1976 investigation of foreign and domestic bribery were immediate prods there are also government codes of which the aspa code is most widely distributed corporate codes discuss relations to employees interemployee relationships whistle blowing effect on environment commercial bribery insider information other conflicts of interest anti trust accounting consumer relations and political activities a discussion of use of codes shows partly favorable results a number of corporation decisions have not yet become a subject of code provisions codes will be more useful if the reasons behind each order are stated and team work is encouraged

a positive theory of environmental quality regulation this paper demonstrates that environmental quality regulation may enhance producer wealth while simultaneously reducing an externality problem by restricting access to common property regulation not only corrects a resource misallocation but it creates a scarcity rent as well in the recent history of environmental quality the common access problem has been addressed by federal and state agencies through a standards based approach rather than through the enforcement of tradable property rights as a consequence rents from the right to use these assets have accrued to producers the data are convincing that there is a strong interplay between producers consumers and the victims of pollution each party has some influence on the outcome and one sided analysis neglects many important aspects of regulation environmental quality regulation is complicated but many of the observed perplexities are consistent with a rent seeking self interest theory of government 46 references 1 figure 7 tables

toward a theoretical model of voluntary overcompliance abstract we explain why some firms voluntarily overcomply with environmental regulation in our model all consumers value environmental quality but differ in their willingness to pay which depends on their income levels publicly available information on environmental performance of firms enables consumers to identify clean firms firms participate in a two stage duopoly game where they first choose their levels of cleaning technology and next engage in price competition the market gets segmented by income levels a minimum standard binding on the dirty firm has the effect of improving the performance of the cleaner firm a subsidy obtains the same competitive outcome

the capital gains and losses on u s government debt 1942 1987 the capital gains and losses on u s treasury securities are calculated and reported on a quarterly basis over the 1942 87 period these data are then used to calculate an adjusted measure of the federal budget deficit for the years 1975 87 whereas the rising trend in interest rates over the 1975 81 period substantially reduced the federal deficit this study shows that the reversal of that trend over the 1981 86 period contributed even more greatly to an increase in the deficit also calculated and reported are holding period rates of return on overall marketable treasury debt providing a contrast to existing interest rate series copyright 1989 by mit press

corporate autonomy and buyer supplier relationships the case of unsafe mattel toys this article analyses supplier buyer relationships where the suppliers adapt to the buyers needs and expectations to gain mutual advantages in some cases such closely knit relationships lead to violations of the autonomy of one or both partners a concept of corporate autonomy ca is developed to analyze this problem three different facets can be distinguished rule autonomy executive autonomy and control autonomy a case study of mattel s problems with lead contaminated toys produced in china shows that the ca of buyer and supplier can be restricted as a result of a dysfunctional partnership involving a moral dilemma

is ricardian equivalence a good approximation ricardian equivalence may be a good approximation even if all households have finite horizons many households have short horizons and an appreciable fraction of wage income is received by liquidity constrained households the approximation is likely to be better the more imperfect annuity markets are

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

the power lessness of industry self regulation to promote responsible labor standards insights from the chinese toy industry the provision of responsible labor standards along the entire value chain poses considerable challenges for corporations in particular management shortcomings and institutional deficits which are partly related to cultural issues frequently impede the realization of responsible business practices in emerging and developing countries it is widely established in theory that industry self regulation constitutes a particularly promising approach for overcoming these challenges nonetheless it is still an open question as to whether industry initiatives effectively promote responsible standards in practice this contribution aims to enrich the current discussion about the power of industry self regulation to ensure responsible labor standards in factories in emerging and developing countries for this purpose we analyze the icti care process icp the self regulation initiative of the international toy industry that aims to promote responsible business practices in chinese toy factories the assessment of the icp shows that corporations buying behavior is decisive in order for industry self regulation to become an appropriate means of improving labor standards based on the insights from the study and from theoretical reasoning we develop a framework for effective industry self regulation that integrates the perspective of factories

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

does customer auditing help chinese workers the authors find that auditing by downstream firms has limited effects on chinese firms adherence to labor standards and other measures of blue collar workers well being auditing does not affect the supplier s blue collar employees wages probability of belonging to a union or likelihood of working overtime audited firms however are more likely to provide rural migrant workers who usually face discrimination with government sponsored medical insurance business medical insurance and unemployment insurance

seasonal fluctuations and the life cycle permanent income model of consumption this paper examines a new possible explanation for the recent rejections of the life cycle permanent income model of consumption the treatment of seasonal fluctuations the paper shows that when the seasonal fluctuations in consumption purchases are included in an analysis of the life cycle permanent income model there is no evidence in the aggregate data against the model the estimates of the parameters of agents utility functions obtained with seasonally unadjusted data are plausible and the unadjusted data do not reject the overidentifying restrictions on the model

exploring the effects of union ngo relationships on corporate responsibility the case of the swedish clean clothes campaign in the current era governments are playing smaller roles in regulating workers rights internationally and transnational corporations tncs non governmental organisations ngos involved in the struggle for workers rights and labour trade unions have started to fill this governance gap this paper focuses on the least researched of the relationships among these three actors the union ngo relationship by analysing the ways in which it affects definitions of tnc responsibility for workers rights at their suppliers factories based on a qualitative study of the union ngo relationship in the swedish garment industry between 1996 and 2005 we propose that there are six main configurations of union ngo relationships by linking these configurations to their effects on tnc responsibility we propose that co ordination relationships between unions and ngos particularly high commitment co ordination relationships are likely to result in a broadening of the definition of tnc responsibility while conflictual relationships both high and low commitment result in a narrowing of the definition of tnc responsibility the study indicates that co operation is generally more beneficial for both unions and ngos than is any form of conflictual relationship in terms of broadening the definition of tnc responsibility

the methods used to implement an ethical code of conduct and employee attitudes in the process of implementing an ethical code of conduct a business organization uses formal methods of these training courses and means of enforcement are common and are also suitable for self regulation the usa is encouraging business corporations to self regulate with the federal sentencing guidelines fsg the guidelines prescribe similar formal methods and specify that unless such methods are used the process of implementation will be considered ineffective and the business will therefore not be considered to have complied with the guidelines business organizations invest enormous funds on formal methods however recent events indicate that these are not by themselves yielding the desired results our study based on a sample of 812 employees and conducted in an israeli subsidiary of a leading multinational high tech corporation headquartered in the us indicates that of the methods used in the process of implementation one of the informal methods namely the social norms of the organization is perceived by employees to have the most influence on their conduct this result when examined against employee tenure remains relatively stable over the years and stands in contradistinction to the formalistic approach embedded in the fsg we indirectly measure the effectiveness of the percieved most influential implementation process methods by analyzing their impact on employee attitudes namely personal ethical commitment and employees commitment to organizational values our results indicate that the informal methods manager sets an example or social norms of the organization are likely to yield greater commitment with respect to both employee attitudes than the formal method training and courses on the subject of ethics the personal control method my own personal values differs significantly from all the other methods in that it yields the highest degree of personal ethical commitment and the lowest degree of employees commitment to organizational values

supply chain specific understanding the patchy success of ethical sourcing initiatives as a number of high profile companies have found to their cost corporate reputations can be significantly affected by firms management of sustainability issue including those that are outside their direct control such as the environmental and social impacts of their supply networks this paper begins by examining the relationship between corporate social responsibility reputation and supply network conditions it then looks at the effectiveness of one tool for managing supply network sustainability issues ethical sourcing codes of conduct by examining how the characteristics of three supply networks branded clothes diy wood products and branded confectionary affects the implementation ethical sourcing codes of conduct it ends by setting out conclusions on why implementation of such codes has been so much more successful in some sectors than others and recommendations on effective approaches to managing sustainability issues in supply networks

bond and stock returns in a simple exchange model this paper studies asset pricing in a general equilibrium representative agent exchange model the assumptions of isoelastic period utility and lognormal endowment allow the derivation of closed form solutions for asset returns without restricting the serial correlation of the log endowment risk premiums on stocks and real bonds are found to be simple functions of relative risk aversion the variance of the log endowment innovation and the weights in the moving average representation of the log endowment the paper analyzes the sign of term premiums the size of the equity premium and the effect of taste shocks on asset prices

redistributive taxation in a simple perfect foresight model abstract we investigate the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation first even unanticipated redistributive capital taxation is severely limited in its effectiveness since it depresses wages second under any convergent redistributive tax policy which maximizes a paretian social objective the capital income tax will converge to zero independent of the factor supply elasticities these results are independent of workers holdings of capital

do codes of conduct improve worker rights in supply chains a study of fair wear foundation the rise of private regulation of sustainability in global production networks has led to intensive debates about the impact of this regulation at the point of production yet few empirical studies have systematically examined this impact in practice based on multiple factory audits of 43 garment factories conducted by the multi stakeholder initiative fair wear foundation we show that codes of conduct improve although marginally worker rights on an overall level but that few significant results are found for specific worker rights our findings also lend support to the widespread argument that codes have uneven impact furthermore we show that even rigorous multi stakeholder factory audits seldom are able to identify process rights violations such as those affecting freedom of association and discrimination and that auditing is thus is more fundamentally flawed than assumed in previous research given companies extensive investments in private regulation of worker rights the findings have important implications for both scholars and managers

institutionalizing sustainability a structural equation model of sustainable procurement in us public agencies abstract the rapidly growing interest in sustainable operations in practice has been mirrored by an equivalent expanding attention within the academic community yet as encouraging and significant as the recent growth in the area has been there is still much that needs to be done for instance there is surprisingly little empirical research on public sector management and on factors that might lead an organization to become more likely to adopt sustainable practices the scope of this research therefore is to explore the conditions under which a given organization is more likely to engage and prioritize sustainable procurement practices and to determine the extent to which the leadership style of the organization s top leader can explain the degree to which sustainability is promoted within a specific organization data collected with the help of a self administered survey from a random sample of us public agencies is analyzed using structural equation modeling among others the results of the empirical analysis confirm that the leadership style of an organization s top executive is positively associated with the probability that an agency will engage in sustainable procurement practices this research is among the first to attempt to provide an actionable model of adoption of sustainable procurement at an organizational level it contributes to the diffusion of research on sustainability by studying sustainable procurement practices adoption and by developing a model that draws simultaneously on systems theory stakeholder theory transformational leadership theory and institutional theory

responsibility boundaries in global value chains supplier audit prioritizations and moral disengagement among swedish firms to address substandard working conditions in global value chains companies have adopted private regulatory systems governing worker rights scholars agree that without onsite factory audits this private regulation has limited impact at the point of production companies however audit only a subset of their suppliers severely restricting their private regulatory attempts despite the significance of the placement of suppliers inside or outside firms responsibility boundaries and despite scholars having called for more research into how firms prioritize what suppliers to audit few if any systematic studies have examined the topic this is problematic as the placement of firms responsibility boundaries determines what suppliers and workers are included in firms private regulatory attempts based on a study of 12 swedish firms and the theory of moral disengagement this paper starts to fill this research gap by exploring how firms responsibility boundaries are placed the paper illustrates how firms responsibility boundary placement is best described as a patchwork with firms defining and delimiting their responsibilities differently the paper also demonstrates that three supplier types i e the worst morally justified and immediate suppliers are particularly likely to be placed inside firms responsibility boundaries while a fourth type i e disregarded suppliers is likely be placed outside

suppliers as stewards managing social standards in first and second tier suppliers buyer supplier relationships are often framed as principal agent relationships based on contractual arrangements that temporarily align the goals of both parties the underlying notion is that the relationship between buyers and suppliers is adversarial in nature and that the supplier acting in the role of the agent will take advantage of the principal if not sufficiently controlled we propose that there is empirically also another type of partnership which reflects the propositions of stewardship theory according to this theory suppliers are motivated to work autonomously towards contractually agreed objectives we analyse how the agency and stewardship theories differ regarding their descriptions of autonomy motivation identification authority stakeholder orientation and short versus long term collaboration we analyse the case of a first tier supplier and four second tier suppliers situated in turkey in the area of istanbul which collaborate with the aim of improving their social and environmental performance the results show that the relationship between the partners in this case has become more collaborative over time and can now be described in terms of stewardship theory rather than in terms of agency theory we conclude that the distinction between agency and stewardship relationships is empirically meaningful in the context of supplier buyer relationships and adds a new aspect to our understanding of how to achieve more sustainable supply chains

revisiting supplier compliance with mnc codes of conduct recoupling policy and practice at chinese toy suppliers does private regulation of workers rights in global value chains improve working conditions on the factory floor drawing on one of the first systematic longitudinal studies of supplier compliance with multinational corporation mnc codes of conduct this paper finds in contrast to previous research substantial improvements over time while in 2004 the four examined chinese toy suppliers violated most of the evaluated code of conduct criteria and consciously decoupled the code of conduct policy from actual practices by 2009 they had recoupled policy and practice and complied with nearly all examined criteria except working hours the paper contributes to the private regulation literature by challenging previous research claims identifying factors that could make private regulation effective and outlining a research method for empirically studying the effects of codes of conduct over time the paper also contributes to new institutional theory by discussing how recoupling could be influenced by two factors not identified in previous research i trusting relationships between the organization and the stakeholder exerting pressure and ii factors unrelated to main external pressures leading to accidental recoupling

suppliers compliance with mncs codes of conduct behind the scenes at chinese toy suppliers despite increased academic and practitioner interest in codes of conduct there has been little research into the actual compliance of suppliers in developing countries with the codes of conduct of multinational corporations mncs this paper addresses this lack by analysing chinese suppliers level of compliance with swedish toy retailers codes of conduct based on unannounced and unofficial interviews with employees of chinese suppliers the study shows that all of the nine studied suppliers breached some of the standards in the toy retailers codes with over two thirds of the suppliers not complying with the majority of the studied standards while there are different explanations of this lack of compliance the main explanation seems to be that chinese suppliers successfully deceive toy retailers monitoring organisations by decoupling the formal monitored part of their organisation from the actual operational part of their organisation the paper concludes with a discussion of how to increase compliance with mncs codes of conduct

scoring firms codes of ethics an explorative study of quality drivers research in the field of management has increasingly focused on strategies and tools related to corporate sustainability of the tools examined codes of ethics have been found to play a primary role many studies have investigated the content of such codes as well as their capacity to condition the behaviour of people within organizations however few studies have considered the intrinsic quality of codes of ethics this study aims to investigate the impact that specific factors firm size degree of internationalization and industry effect can have on the quality of codes of ethics based on a sample of 248 listed italian companies the results of the empirical analysis show that the quality standard is particularly high in larger companies and in those firms operating in industries in which relationships established with critical stakeholders and disclosure to those stakeholders play a crucial role these results have interesting implications for both researchers and practitioners

interpreting the movements in short term interest rates this article uses modern asset pricing theory to examine the behavior of short term nominal interest rates over the past twenty five years the analysis investigates whether variation in the stochastic behavior of consumption growth and inflation can explain movements in the rate of interest the model estimated allows for taste shocks to utility the authors results reveal that much of the month to month movement in nominal interest rates reflects changes in the real rate and the risk premia in addition to inflationary expectations copyright 1992 by university of chicago press

discovering the link between inflation rates and inflation uncertainty a new time series model is used to reassess the strength of the link between inflation uncertainty and the level of inflation in the united states the model provides several statistical measures that can be used to examine different aspects of uncertainty the main finding is that uncertainty about the long rather than short term prospects for inflation moved strongly with the rate of inflation since the early 1970s copyright 1991 by ohio state university press

private regulation and trade union rights why codes of conduct have limited impact on trade union rights codes of conduct are the main tools to privately regulate worker rights in global value chains scholars have shown that while codes may improve outcome standards such as occupational health and safety they have had limited impact on process rights such as freedom of association and collective bargaining scholars have though only provided vague or general explanations for this empirical finding we address this shortcoming by providing a holistic and detailed explanation and argue that codes in their current form have limited impact on trade union rights due to i buyers paying lip service to trade union rights ii workers being treated as passive objects of regulation in codes of conduct iii auditing being unable to detect and remediate violations of trade union rights iv codes emphasizing parallel means of organizing v suppliers having limited incentives for compliance and vi codes being unable to open up space for union organizing when leveraged in grassroots struggles our arguments suggest that there is no quick fix for codes limited impact on trade union rights and that codes in their current form have limited potential to improve trade union rights we conclude by discussing ways in which codes of conduct and private regulation of worker rights more generally could be transformed to more effectively address trade union rights

the econometric analysis of models with risk terms summary in this paper we have attempted to provide an integrated approach to the estimation of models with risk terms it was argued that there exist orthogonality conditions between variables in the information set and higher order moments of the unanticipated variable density these could be exploited to provide consistent estimators of the parameters associated with the risk term specifically it was recommended that an iv estimator should be applied with instruments constructed from the information set four existing methods commonly used to estimate models with risk terms are examined and applications of the techniques are made to the estimation of the risk term in the us c exchange market and the effects of price uncertainty upon production

self reporting and the design of policies for regulating stochastic pollution abstract existing environmental regulations frequently require firms to self report their compliance status to regulatory agencies using a principal agent framework i derive and compare incentive compatible regulatory policies with and without self reporting i find the firm needs to be audited less often when self reporting is required but punished more often the sign and magnitude of the gains from self reporting depend on the relative size of audit and sanction costs the accuracy of the regulator s monitoring technology and the desired level of abatement effort

the time varying behaviour of real interest rates a re evaluation of the recent evidence a time varying parameter model with markov switching conditional heteroscedasticity is employed to investigate two sources of shifts in real interest rates 1 shifts in the coefficients relating the ex ante real rate to the nominal rate the inflation rate and a supply shock variable and 2 unconditional shifts in the variance of the stochastic process the results underscore the importance of modelling continual change in the ex ante real rate in terms of other economic variables rather than relying on a statistical characterization that permits only a limited number of discrete jumps in the mean of the process copyright 1999 john wiley sons ltd

trade offs in supply chain transparency the case of nudie jeans co though transparency is increasingly central to corporate sustainability and sustainable supply chains the scholarly conversation about supply chain transparency is limited as it defines supply chain transparency inconsistently and lacks an empirical basis we address these shortcomings by developing a multidimensional definition of supply chain transparency and studying the swedish garment retailer nudie jeans attempt to become the most transparent company in the world we extend the scholarly conversation by analyzing how a company in practice attempts to work with supply chain transparency and how to explain the transparency outcomes of such attempts we argue that three underlying tradeoffs i e threat vs collaboration standardization vs differentiation and means vs ends shape a firm s transparency outcomes we question whether more supply chain transparency is always desirable and argue that managers must choose between a compliance or cooperation approach to supply chain transparency

are government bonds net wealth evidence for the united states this paper investigates whether government bonds are viewed as net wealth if they are the nominal interest rate in steady state equilibrium should be an increasing function of the government debt and of government spending using forward interest rates realized during world war ii this paper finds no evidence of such a relationship these data afford an especially powerful test because the federal debt rose from 29 to 106 percent of trend output during the war this enormous increase in government debt actually appears to have reduced forward interest rates by a statistically significant but small amount

do codes make a difference the case of bank lending and the environment codes of conduct are a conspicuous feature of modern business organization but doubts have been raised regarding their efficacy in ensuring high standards of behavior although some of the issues involved have been discussed at some length in the business ethics literature the amount of systematic empirical evidence on the impact of codes is very limited this paper seeks to make a contribution to that body of knowledge by studying the policies and procedures of a sample of banks which have signed a statement on banking and the environment promulgated by the united nations development programme although some differences are found when compared with a sample of banks which did not sign the statement they are not extensive the implications of the findings for codes of conduct and for future empirical studies are then discussed

ricardian equivalence in the presence of capital market imperfections abstract it is a common claim that ricardian equivalence fails if capital markets are imperfect the validity of this claim is examined for the case of informationally imperfect capital markets we present three alternative models of adverse selection and analyze the effects of debt finance in these models it is shown that a debt financed tax cut can lead to pareto improvement in some cases in the theoretically most preferable model however ricardian equivalence survives in spite of genuine imperfections in the capital market the results point to the importance of specifying the exact nature of imperfection

finite horizons infinite horizons and the real interest rate finite horizons infinite horizons and the real interest rate using an overlapping generations model in which households may have either finite or infinite horizons i derive the implications of each horizon for the steady state real interest rate i then formulate an econometric model of the steady state real interest rate and devise tests that can distinguish between finite and infinite horizons these tests are applied to annual and quarterly u s data which span the period 1875 1988 the results are inconsistent with finite horizons and broadly consistent with infinite horizons i introduction in conventional macroeconomic analysis government budget deficits raise perceived wealth and stimulate aggregate demand because households are modeled as having finite horizons if households are instead modeled as having infinite horizons budget deficits need not stimulate aggregate demand and hence need not affect output employment interest rates and the price level the reason is that households with infinite horizons do not view the government debt as net wealth thus they may treat budget deficits i e future taxes and current taxes as equivalent ricardian equivalence is said to hold if households treat budget deficits as equivalent to current taxes 1 three reasons are typically advanced for assuming households have finite horizons first the individuals who comprise current households have finite lifetimes second some households face binding liquidity constraints either now or in the future 2 third boundedly rational households may choose to behave myopically acting as if their current decisions do not affect allocations occurring beyond some horizon 3 these three reasons however do not necessitate modeling households as having finite horizons first barro 1974 has shown that finite lifetimes need not imply finite horizons second hayashi 1987 and yotsuzuka 1987 have shown that lenders may impose liquidity constraints that vary one for one with the government debt in such an environment the government debt relaxes no liquidity constraints third because bounded rationality assumes fixed costs of decision making it may be able to explain why aggregate demand would respond to small short term budget deficits but cannot explain why aggregate demand would respond to large or long term budget deficits because logically consistent reasons can be adduced for modeling households as having either finite or infinite horizons the issue of which is the better modeling strategy should ultimately be decided by empirical analysis this paper offers such an analysis it investigates the implications of finite and infinite horizons for the steady state behavior of the real interest rate the evidence reported here is inconsistent with finite horizons and broadly consistent with infinite horizons the rest of the paper is organized as follows using barro s 1974 overlapping generations model i derive its implications for the steady state real interest rate in section ii these implications differ according to whether households have inoperative bequest motives and finite horizons or operative bequest motives and infinite horizons in section iii i formulate an econometric model that encompasses the implications of the theoretical model of section ii for both of these cases in sections iv v vi and vii i test these implications using u s data in section viii i investigate whether the real interest rate evidences any short term departures from ricardian equivalence finally in section ix i draw some tentative conclusions ii an overlapping generations model of the steady state in this section i lay out barro s overlapping generations model which is the simplest model in which one can derive the implications of finite and infinite horizons for the steady state real interest rate

inflation and real interest rates on assets with different risk characteristics given the importance of ex ante real interest rates to economic decision making it is no surprise that much empirical research focuses on them 1 several recent studies find that the ex ante real returns for short term u s treasury securities are not constant and are negatively correlated both with inflation and with nominal interest rates this paper examines the extent to which these findings hold for assets of longer maturity are robust with respect to the choice of price index and are stable over time we expand the set of assets studied to include those of longer maturity both publicly and privately issued for two reasons first their ex ante real returns may differ substantially from that of a short term nominally riskless security second because longer maturity assets have risk characteristics closer to capital their ex ante real returns are potentially more relevant for investment and savings decisions we explore the use of various price indices because the index used in most studies the consumer price index severely overstates inflation during the 1970s as a result of its inappropriate treatment of residential housing costs 2 this overstatement casts doubt on an important finding of previous studies that there are long stretches of time during the 1970s when ex ante real rates are significantly negative given the existence of holding costs for the goods relevant to most price indices and the absence of a riskless real return no arbitrage conditions are violated by a negative ex ante real rate however its persistence is problematical because asset holders are typically assumed to have a positive rate of time preference which ensures a positive ex ante real rate in the long run we find that before 1979 a negative relationship of ex ante real rates both with inflation and with nominal interest rates appears for the longer maturity assets as well as the short term nominally riskless asset indeed the relationship grows

real and nominal interest rates under uncertainty the fisher theorem and the term structure this paper examines the relation between nominal and real interest rates and the nominal and real term structure under uncertainty we show that two separate risk terms cause the fisher theorem to fail one risk term is related only to the variability of money prices while the other is related to the purchasing power riskiness of the nominal bond monetary policy can affect the value of both these risk terms we also show that the pure expectations hypothesis of the term structure fails for both real and nominal bonds because of risk premia even if the economy is neutral with respect to monetary policy monetary policy can alter the nominal term structure

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

asian transnational corporations and labor rights vietnamese trade unions in taiwan invested companies according to the reports in the past decade some asian subcontractors mainly taiwan hong kong and korea transnational corporations tend to be labor abusive in their overseas investment destinations like china or southeast asia taking vietnam as an example this paper raises questions as to why taiwanese transnational companies can control workplace unions in a trade union supportive regime given the government s constraint of political rights and the individualized workplace unions the function of trade unions in vietnam is destined to be limited the trade unions turn out be an arm of management rather than representing workers interests in these transnational companies this article also explores the influence of the newly developed codes of conducts from western buyers in the survey of three companies which are required to follow the codes of conduct by buyers trade unions had no more freedom than those in companies without codes of conduct the paper discusses the implications of this research offering strategies for labor rights improvements

green business and blue angels this paper presents a model of a monopolist svoluntary overcompliance with legal environmentalstandards under asymmetric information about thefirm s environmental impacts the key assumptions are the existence of quality premia for environmentalsoundness a positive but imperfect degree ofmonitoring and adaptive consumer expectations conditions necessary for overcompliance to arise in aprofit maximizing equilibrium are derived the effectsof a third party eco labeling system are analyzed itis shown that the existence of an independent labelingauthority increases the likelihood of overcomplianceto be profit maximizing moreover firms might have anincentive to lobby for the introduction of such asystem the effect of consumers risk preferences andan instrument for preventing greenwash companieslying about their environmental performance is alsodiscussed

sustainable supply chain management when focal firms are complex a network perspective the purpose of the paper is to generate an understanding of the prerequisites for sustainable supply chain management a common tendency in the literature is to see sustainable supply chain management as something that is undertaken by a focal firm at the end of the chain even though many scholars point to the need for cooperative approaches focal firms are still considered to manage supply chains from one fixed and coherent vantage point the managerial outlook of the focal firm itself understood as a structurally coherent top down controlled unit through an illustration from the swedish retail sector we argue that such a vantage point is problematic we suggest a deeper analysis of focal firms and sustainable supply chain management in terms of a network perspective employed mainly in the industrial marketing and purchasing imp literature the adopted network perspective recognizes both internal and external complexity of sustainable supply chain management implying for example difficulties to control entire organizations and the existence of multiple supply chains to manage it is also suggested that sustainable supply networks may be a viable concept to use when dealing with sustainability issues related to production since it relates sustainability in the supply chain to the more general responsibility context of firms

understanding real interest rates this paper outlines an approach to measuring real interest rates and testing hypotheses on their behavior it then describes what we know about real interest rates in the aggregate economy and provides estimates of real interest rates for the agricultural sector the evidence presented in this paper indicates that real interest rates for the agricultural economy have been extremely high in the l98ds and that their behavior seems to be linked to that found for real rates in the aggregate economy what has been the source of these high real rates the answer seems to be that it was a result of a concerted effort by the monetary authorities to disinflate the economy however the brunt of the fed s disinflationary policy has fallen more heavily on the farm sector which has had to face far higher reel rates than the rest of the economy although breaking the back of inflation was certainly a worthy goal for the fed farmers have had to pay a heavy price they have had to suffer for the sins of an economy that was excessively inflationary which then had to be brought back into line with disinflationary policy this abstract was borrowed from another version of this item

why haven t nominal rates declined the capital asset pricing model can be used to help explain the seemingly anomalous behavior of interest rates over the past several years specifically an examination of the covariances between the market returns and real unexpected rates of return on stocks bills and bonds of various durations indicates that the variance of return on longer term bonds increased appreciably between 1977 79 and 1980 81 while their correlations with stock returns rose the relative risk premiums on these bonds should have risen accordingly the calculated real risk premium on bonds of eight years duration did increase significantly between june 1979 and december 1981 it is entirely possible that this increase more than offset any decline in the long term expected inflation rate although risk alone cannot account for the increase in the real short term rate the timing of the increase suggests a possible correlation with the change in the federal reserve s operating procedures in october 1979 the puzzle of the flat nominal yield curve in the early 1980s may not be a puzzle at all

the relation between religiosity and private bank outcomes abstract we examine the effect of headquarters local religiosity on private bank outcomes religiosity is associated with lower risk taking for public banks but the unique features of private banks may result in a different effect for private banks we find religiosity is associated with greater asset risk taking at the same time however religiosity is negatively associated with solvency risk and return on asset roa volatility and is associated with higher roas and fewer failures we reconcile these results by finding banks in areas with higher religiosity recognize larger fees from providing additional banking services likely due to relationships formed from more risky lending as a result these banks are more less likely to realize extreme positive negative performance we also find religiosity is associated with lower earnings management and increased conservatism collectively our results confirm private banks are unique and religiosity can have a significant and nuanced effect on bank outcomes

heterogeneous information and the theory of the business cycle the inability to observe the money supply and price level has been an essential ingredient of informational based equilibrium models of cycles here we assume these data are available but show that heterogeneous information about the productivity of capital can lead to a monetary theory of fluctuations in equilibrium each agent s investment depends on the difference between his own productivity and the perceived real rate in the presence of money demand shocks the nominal rate is noisy signal of the real rate this leads to greater fluctuations in output than if all agents had the same information

do expected shifts in inflation affect estimates of the long run fisher relation recent empirical studies suggest that nominal interest rates and expected inflation do not move together one for one in the long run a finding at odds with many theoretical models this article shows that these results can be deceptive when the process followed by inflation shifts infrequently we characterize the shifts in inflation by a markov switching model based upon this model s forecasts we reexamine the long run relationship between nominal interest rates and inflation interestingly we are unable to reject the hypothesis that in the long run nominal interest rates reflect expected inflation one for one

the behavior of u s short term interest rates since october 1979 short term interest rates in the united states have been too high since october 1979 in the sense that both unconditional and conditional forecasts based on an estimated vector autoregression model summarizing the prior experience under predict short term interest rates during this period although a non structural model cannot directly answer the question of why this has been so comparisons of alternative conditional forecasts point to the post october 1979 relationship between the growth of real income and the growth of real money balances as closely connected to the level and pattern of short term interestrates this finding is consistent with the authors earlier conclusion based on analysis of a small structural macroeconometric model that the high average level of interest rates has been due to a combination of slow growth of nominal money supply and continuing price inflation which together have kept real balances small in relation to prevailing levels of economic activity this abstract was borrowed from another version of this item

labour leverage in global value chains the role of interdependencies and multi level dynamics the global segmentation of production and distribution has resulted in highly complex global value chains gvcs where vertical and horizontal dynamics are equally important in determining working conditions and providing points of leverage for labour borrowing notions of multi level governance we propose an analytical framework for describing and explaining success and failure of labour agency when attempting to improve working conditions along gvcs our starting point is that the high complexity of gvcs and the absence of a global overarching authority have been balanced by the emergence of governance mechanisms of different forms and at different levels an assessment of these mechanisms which emphasize process over institutions reveals how different types of interactions and interdependencies along gvcs impact on labour s use of power we argue that in order to fully situate labour agency within governance debates any future research agenda needs to be driven by micro level bottom up approaches