Search

We study redistribution in a setting where individual responsibility and circumstance characteristics determine pre-tax income. We distinguish between ex ante and ex post versions of the key principles of compensation and reward. Furthermore, we distinguish between absolute and relative versions of reward. On the basis of these axioms, we provide characterizations of five familiar and two new redistribution mechanisms.

We compare the implications of speculation versus hedging channels for bond markets in heterogeneous agents’ economies. Treasuries command a significant risk premium when optimistic agents speculate by leveraging their positions using bonds. Disagreement drives a wedge between marginal agent versus econometrician beliefs (sentiment). When speculative demands dominate, the interaction between belief heterogeneity and sentiment helps rationalize several puzzling characteristics of Treasury markets. Empirically, we test model predictions and find that larger disagreement (i) lowers the risk-free rate, (ii) raises the slope of the yield curve, and (iii) with positive sentiment increases bond risk premia and makes its dynamics countercyclical. This paper was accepted by Karl Diether, finance.

Contains fulltext : 235981.pdf (Publisher’s version ) (Open Access) In this study, we expand on the existing work on job crafting by focusing on (1) within-person fluctuation in affective experiences in relation to job crafting and person-job fit and (2) between-person fluctuations in personal growth initiative (PGI) as an important boundary condition of these relationships. Using multilevel data from 116 employees (341 observations), our results showed that fluctuations in positive active emotions (PAE) and negative active emotions (NAE) related positively to daily job crafting; this relationship was moderated by overall PGI levels. Next, we found a positive association between daily job crafting and daily person-job fit. Finally, we found indirect effects from NAE and PGI to daily fluctuations in person-job fit via daily fluctuations in job crafting; NAE and PGI energized employees to engage in daily job crafting, which contributed to their daily person-job alignment. We discuss implications for theory and practice. 20 p.

The aim of this study was to identify developmental patterns of job insecurity, taking into account quantitative as well as qualitative job insecurity, and to examine if these groups vary with regard to different work-related learning aspects, that is, occupational self-efficacy, learning from supervisor and colleagues, and acquired knowledge and skills (KSAOs). We conducted latent class growth analysis using three-wave data of 1366 Dutch employees. Five job insecurity patterns were identified: (1) high stable (n = 132), (2) moderate-low stable (n = 555), (3) low stable (n = 217), (4) decreasing (n = 357) and (5) increasing (n = 105). In every class, the change pattern was similar for quantitative and qualitative job insecurity. Those in trajectories with high initial levels of job insecurity had lower initial levels of occupational self-efficacy, learning from others, and KSAOs than those with low initial levels of job insecurity. Additionally, job insecurity trajectories differed in the development of occupational self-efficacy over time. The findings indicate that there are distinct trajectories of the combination of quantitative and qualitative job insecurity, and that these demonstrate a substantial amount of heterogeneity concerning work-related learning.

We study whether carbon emissions affect the cross-section of US stock returns. We find that stocks of firms with higher total carbon dioxide emissions (and changes in emissions) earn higher returns, controlling for size, book-to-market, and other return predictors. We cannot explain this carbon premium through differences in unexpected profitability or other known risk factors. We also find that institutional investors implement exclusionary screening based on direct emission intensity (the ratio of total emissions to sales) in a few salient industries. Overall, our results are consistent with an interpretation that investors are already demanding compensation for their exposure to carbon emission risk.

A new design can be compared with its contemporaries or older designs. In this study, we argue that the temporal distance between the new design and its comparison play an important role in understanding how a new design’s similarity with other designs contributes to its valuation. Construing the value of designs as a combination of their informational value and their expressive value, we propose the “anchored differentiation” hypothesis. Specifically, we argue that expressive value (which is enhanced by how much the new design appears different from others) is emphasized more than informational value (which is enhanced by how much the new design appears similar to others) compared with contemporary designs. Informational value, however, is emphasized more than expressive value when compared against designs from the past. Therefore, both difference from other contemporary designs (contemporary differentiation) and similarity to other past designs (past anchoring) help increase the value of a new design. We find consistent evidence for our theory across both a field study and an experimental study. Furthermore, we show that this is because temporal distance changes the relative emphasis on expressive and informational values. We discuss our contribution to the growing literature on optimal distinctiveness and design innovation by offering a dynamic perspective that helps resolve the tension between similarities and differences in evaluating new designs.

On October 26, 2008, Porsche announced a largely unexpected domination plan for Volkswagen. The resulting short squeeze in Volkswagen’s stock briefly made it the most valuable listed company in the world. We argue that this was a manipulation designed to save Porsche from insolvency and the German laws against this kind of abuse were not effectively enforced. Using hand-collected data we provide the first rigorous academic study of the Porsche-VW squeeze and show that it significantly impeded market efficiency. Preventing manipulation is important because without efficient securities markets, the EU’s major project of the Capital Markets Union cannot be successful.

Within national and international innovation systems a pandemic calls for large-scale action by many actors across sectors, to mobilise resources, developing and manufacturing Crisis-Critical Products (CC-Products) efficiently and in the huge quantities needed. Nowadays, this also includes digital innovations from complex epidemiological models, AI, to open data platforms for prevention, diagnostic and treatment. Amongst the many challenges during a pandemic, innovation and manufacturing stakeholders find themselves engaged in new relationships, and are likely to face intellectual property (IP) related challenges. This paper adopts an IP perspective on the COVID-19 pandemic to identify pandemic related IP considerations and IP challenges. The focus is on challenges related to research, development and urgent upscaling of capacity to manufacture CC-Products in the huge volumes suddenly in demand. Its purpose is to provide a structure for steering clear of IP challenges to avoid delays in fighting a pandemic. We identify 4 stakeholder groups concerned with IP challenges: (i) governments, (ii) organisations owning existing Crisis-Critical IP, described as incumbents in Crisis-Critical Sectors (CC-Sectors), (iii) manufacturing firms from other sectors normally not producing CC-Products suddenly rushing into CC-Sectors to support the manufacturing of CC-Products (new entrants), and (iv) voluntary grassroot initiatives that are formed during a pandemic. This paper discusses IP challenges related to the development and manufacturing of technologies and products for (i) prevention (of spread), (ii) diagnosis of infected patients and (iii) the development of treatments. We offer an initial discussion of potential response measures to reduce IP associated risks among industrial stakeholders during a pandemic., Comment: 18 pages, 4 figures, 3 tables

Household financial decisions are complex, interdependent, and heterogeneous, and central to the functioning of the financial system. We present an overview of the rapidly expanding literature on household finance (with some important exceptions) and suggest directions for future research. We begin with the theory and empirics of asset market participation and asset allocation over the life cycle. We then discuss household choices in insurance markets, trading behavior, decisions on retirement saving, and financial choices by retirees. We survey research on liabilities, including mortgage choice, refinancing, and default, and household behavior in unsecured credit markets, including credit cards and payday lending. We then connect the household to its social environment, including peer effects, cultural and hereditary factors, intra-household financial decision-making, financial literacy, cognition, and educational interventions. We also discuss literature on the provision and consumption of financial advice. (JEL D15, G41, G50, J26, Z13)

ispartof: JOURNAL OF MONETARY ECONOMICS vol:121 pages:15-18 status: published

In this paper we extend to a dynamic setting the robust Orlicz premia and Haezendonck–Goovaerts risk measures introduced in Bellini, Laeven and Rosazza Gianin (2018). We extensively analyze the properties of the resulting dynamic risk measures. Furthermore, we characterize dynamic Orlicz premia that are time-consistent, and establish some relations between the time-consistency properties of dynamic robust Orlicz premia and the corresponding dynamic robust Haezendonck–Goovaerts risk measures.

Ecosystems are distinguished from other structural arrangements for value co-production by the nature of their governance and coordination challenges. As ecosystems are marked by their relative non-reliance upon formal, 1–1 supplier contracts to govern and coordinate productive activities, they need to find non-hierarchical ways of orchestrating ecosystem constituents such that a coherent system-level value offering is enabled and targeted at a defined user audience. Importantly, ecosystems cannot rely on ‘command-and-control’ governance to coordinate inputs from different participants, as would be the case of conventional supply chains. Instead, ecosystem leaders need to persuade others to make voluntary inputs that are consistent with the ecosystem’s overarching value offering. I call this task ‘ecosystem orchestration’. In this essay I suggest an ecosystem orchestration framework that distinguishes between technological, economic, institutional, and behavioural layers of ecosystem orchestration. I begin by highlighting distinctive governance challenges of ecosystems. I then provide a brief overview of the ecosystem orchestration literature. Then I introduce the different domains in which orchestration can be exercised. I conclude with a framework for orchestrating innovation ecosystems from birth to maturity. In addition to distinguishing between and describing technological, economic, institutional, and behavioural layers of ecosystem orchestration, the model also distinguishes between three stages of ecosystem momentum creation: initiation, scaling, and control. This framework has been designed to help practitioners to design strategies for ecosystem momentum creation.

In this paper, we examine the impact of including environmental, social and governance (ESG) criteria in the allocation of equity portfolios. We focus on the risk and return characteristics of the resulting ESG portfolios and investment strategies. Two specific measures are considered to quantify the ESG performance of a company; the ESG rating and the greenhouse gas (GHG) emission intensity. For both measures, we carry out empirical portfolio analyses with assets in either the STOXX Europe 600 or the Russell 1000 index. The ESG rating data analysis does not provide clear-cut evidence for enhanced performance of portfolios with either high or low ESG scores. We moreover illustrate that the choice of rating agency has a significant impact on the performance of the resulting ESG-constrained portfolios. Secondly, we study the impact of GHG emission reductions and increases. We show that emission reductions do not necessarily lead to increased risk or diminished returns, which gives confidence in a smooth transition towards the green economy pursued by the European Green Deal.

Economic theories posit conflicting hypotheses on how wealth inequality affects entrepre-neurial dynamism. We investigate the impact of wealth inequality on business dynamics by constructing local measures of household wealth inequality based on financial rents, home equity, and 1880 farmland. We then identify the effect of wealth inequality on entrepre-neurship by instrumenting it with land distribution under the 1862 Homestead Act. Wealth inequality decreases firm entry and exit, and the proportion of high-tech businesses across metropolitan statistical areas. Wealth inequality also lowers the supply of public goods, such as education. Growth in income per capita consequently lags.

Entrepreneurship is uniquely stressful. Entrepreneurs often cannot avoid entrepreneurial stressors (e.g., uncertainty, workload, resource constraints) and these stressors can deter natural recovery activities (e.g., detachment and sleep). Yet, entrepreneurs may be able to lessen the negative impact of stress on their well-being, health, and productivity by engaging in recovery. In this editorial, we outline how scholars can employ recovery interventions to ameliorate some of entrepreneurship’s ill effects and support entrepreneurs’ health, well-being, and productivity. We aim to move the focus of scholarly inquiry from documenting the health and well-being challenges of entrepreneurs, toward identifying and implementing solutions to support entrepreneurs.

This paper analyzes the effect of a discrete treatment Z on a duration T. The treatment is not randomly assigned. The confounding issue is treated using a discrete instrumental variable explaining the treatment and independent of the error term of the model. Our framework is nonparametric and allows for random right censoring. This specification generates a nonlinear inverse problem and the average treatment effect is derived from its solution. We provide local and global identification properties that rely on a nonlinear system of equations. We propose an estimation procedure to solve this system and derive rates of convergence and conditions under which the estimator is asymptotically normal. When censoring makes identification fail, we develop partial identification results. Our estimators exhibit good finite sample properties in simulations. We also apply our methodology to the Illinois Reemployment Bonus Experiment.

Applying qualitative and quantitative analyses across four studies and seven samples, we clarified the meaning and developed a new measure of career insecurity. Career insecurity is defined as ���an individual���s thoughts and worries that central content aspects of one���s future career might possibly develop in an undesired manner.��� The new Multidimensional Career Insecurity Scale (MU-CI-S) measures eight career insecurity (CI) dimensions: (1) CI-Career opportunities, (2) CI-Decreased prestige and qualification requirements of the employment, (3) CI-Contractual employment conditions, (4) CI-Unemployment, (5) CI-Change of workplace, (6) CI-Retirement, (7) CI-Work-nonwork interactions, and (8) CI-Discrepancy between individual resources and work demands. Across all studies, the MU-CI-S showed excellent psychometric properties (e.g., factor loadings of all items and internal consistencies of all dimensions) and high levels of construct validity (e.g., theoretically assumed factorial structure and discriminant and convergent validity). Moreover, the analyses showed concurrent, predictive, and incremental validity beyond neuroticism and other job and career insecurity measures for predicting health and well-being, job performance, career success, and career attitudes. The results provide a comprehensive assessment and investigation of career-related insecurity perceptions in the current labor market. Moreover, the results offer theoretical and practical implications for individual career planning, career counseling, and organizational career management.

Do credit ratings help enforce market discipline on banks? Analyzing a uniquely comprehensive data set consisting of 1,081 rating change announcements for 154 international financial institutions between January 2004 and December 2015, we find that rating downgrades for internal reasons, such as adverse changes in the operating performance or capital structure of banks, are associated with a significant credit default swap spread widening. However, this widening only occurs for banks that are not perceived as to be Too-Big-to-Fail (TBTF). Our findings question the reliability of credit ratings as a tool to discipline TBTF banks and suggest that regulatory monitoring should remain the main mechanism for disciplining these banks.

Managing an online corporate reputation (OCR) is increasingly strategic to improving the corporation's eco-nomic performance. What becomes crucial is to collect, process and analyse the comments expressed in the online medium, considering them as an intangible asset with an impact on tangible assets and consequences on business value. This research contributes to show the potential of the big-data environment, enhanced by the use of business intelligence tools and combined with panel econometric models. This is complemented by the elaboration of an Online Corporate Reputation Index (OCRI) to measure the economic corporate performance. The findings show that after applying the conceptual model to the banking sector, the experience associated with ethics is the intangible asset that has the most impact on the economic performance associated with each bank. In addition, the definition of an index helps to position one company in relation to another and to an entire economic sector. FCT - Foundation for Science and TechnologyPortuguese Foundation for Science and Technology [UIDB/04020/2020]; University of the Algarve, Portugal; University of Malaga, Spain info:eu-repo/semantics/publishedVersion

Conflicts are ubiquitous in all life’s domain where people live and perform interdependent tasks, including convents. Managing conflicts among followers is an essential responsibility of leaders. The way leaders behave while managing such conflicts have received little academic attention; available studies have focused on business contexts. This study aimed to examine the relationship between servant leadership, and emotional exhaustion through team conflicts, and further investigates the mediating role of lead-ers’ third-party conflict behaviors such as avoiding, forcing, and problem-solving. Data were gathered from 453 religious sisters (followers), in 166 convents, in a Catholic Women Religious Institute mostly based in Nigeria. Structural equation modeling confirmed that servant leadership was associated with reduced team conflicts through leaders’ third-party behaviors. Further findings showed that perceived servant leadership was negatively related to emotional exhaustion through a nonforcing expression. We dis-cussed theoretical and practical implications.

We compare the performances of a wide set of regression techniques and machine learning algorithms for predicting recovery rates on non-performing loans, using a private database from a European debt collection agency. We find that rule-based algorithms such as Cubist, boosted trees and random forests perform significantly better than other approaches. In addition to loan contract specificities, the predictors referring to the bank recovery process -- prior to the portfolio's sale to the debt collector -- are also proven to strongly enhance forecasting performances. These variables, derived from the time-series of contacts to defaulted clients and clients' reimbursements to the bank, help all algorithms to better identify debtors with different repayment ability and/or commitment, and in general with different recovery potential.

The topic of work engagement is moving up on the managerial agenda as it sets the stage for numerous beneficial outcomes for both organizations and their employees. It is clear, however, that not all employees are equally engaged in their job. The current study taps into theory on positive self-fulfilling prophecies induced by leaders’ high expectations of followers (i.e., the Pygmalion effect) and examines their potential to facilitate follower work engagement. By integrating literature on implicit followership theories with the Pygmalion model, we investigate the assumption that leaders’ high expectations are universally perceived as and therefore foster the same desirable results for all employees. We argue and find that the extent to which followers’ work engagement benefits from high leader expectations depends on their implicit followership theory of industry (IFTI; i.e., the general belief that employees are hardworking, productive, and willing to go above and beyond). We also find that when followers hold a high IFTI but feel that their leader does not convey high expectations, their engagement at work suffers. In addition, we examine whether leaders’ IFTI forms the origin of naturally occurring Pygmalion effects. Our results show that a positive IFTI among leaders is especially interpreted as high/positive expectations by followers who also hold a high/positive IFTI. Our study introduces boundary conditions to the Pygmalion-at-work model by revealing the interactive role of leaders’ and followers’ implicit followership theory of industry. We contribute to the advancement of cognitive, follower-centric perspectives on leadership and provide evidence for the importance of schema congruence.

Small and micro-enterprises are usually majority-owned by entrepreneurs. Using a unique sample of loan applications from such firms, we study the role of owners’ gender in bank credit decisions and post-credit-decision firm outcomes. We find that, ceteris paribus, female entrepreneurs are more prudent loan applicants than are males because they are less likely to apply for credit or to default after loan origination. The relatively more aggressive behavior of male applicants pays off, however, in terms of higher average firm performance after loan origination.

We study a symmetric private value auction with signaling, in which the auction outcome is used by an outside observer to infer the bidders' types. We elicit conditions under which an essentially unique D1 equilibrium bidding function exists in the second-price and the English auctions. We establish there is no equivalence between these two auction designs, neither in bidding strategies nor in expected revenue. This is because the presence or the absence of an increasing price clock affects signaling incentives differently in both auction formats, and thereby also the bidders' incentives to overbid their types. This leads to a strictly higher expected revenue in the second-price auction than in the English auction. Our analysis is completed by a comparison with other disclosure policies. Applications include art auctions and charity auctions.

In this study, we build on the foundational observations of Selznick and Stinchcombe that organizations bear the lasting imprint of their founding context and explore how characteristics shaped during founding are coherently carried forward through time. To do so, we draw on an ethnography of a social venture where the entrepreneurs left soon after founding. In examining how an initial organizational imprint evolves beyond a venture’s founding phase, we focus on the actions and interactions of organizational members, the founders’ imprint, the venture’s new leadership, and the external environment. The process model we develop shows how the organizational imprint evolves as a consequence of the interplay between top-down and bottom-up forces. We first find that the initial imprint is transmitted through a bottom-up mechanism of imprint reinforcement, and second, that the venture is reimprinted after the founding period through two processes which we call imprint reforming and imprint coupling. The result of this is the formation of a sedimented imprint. Our findings further illuminate that, although the initial imprint sticks, its function and manifestation changes over time.

We build an empirical model to attribute delays in mortgage refinancing to psychological costs inhibiting refinancing until incentives are sufficiently strong; and behavior, potentially attributable to information-gathering costs, lowering the probability of household refinancing per unit time at any incentive. We estimate the model on administrative panel data from Denmark, where mortgage refinancing without cash-out is unconstrained. Middle-aged and wealthy households act as if they have high psychological refinancing costs; but older, poorer, and less-educated households refinance with lower probability irrespective of incentives, thereby achieving lower savings. We use the model to understand frictions in the mortgage channel of monetary policy transmission. (JEL E52, G21, G51, R31)

Supplemental material file: online appendix We show that negative interest rate policy (NIRP) has expansionary effects on credit supply through a portfolio rebalancing channel. By shifting down and flattening the yield curve, NIRP differs from rate cuts just above the zero-lower-bound and has effects similar to QE. For identification, we exploit ECB’s NIRP and the Italian credit register and, for external validity, European and U.S. datasets. NIRP affects more banks with higher ex-ante liquid assets, including net interbank positions. More exposed banks reduce liquid assets, expand credit supply, especially to financially-constrained firms, and cut loan rates, inducing firms to increase investment and the wage bill. This project received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No 648398). Peydró also acknowledges financial support from the ECO2015-68182-P (MINECO/FEDER, UE) grant and the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2015-0563).

Research on behavioral ethics is thriving and intends to offer advice that can be used by practitioners to improve the practice of ethics management. However, three barriers prevent this research from generating genuinely useful advice. It does not suffciently focus on interventions that can be directly designed by management. The typical research designs used in behavioral ethics research require such a reduction of complexity that the resulting fndings are not very useful for practitioners. Worse still, attempts to make behavioral ethics research more useful by formulating simple recommendations are potentially very damaging. In response to these limitations, this article proposes to complement the current behavioral ethics research agenda that takes an ‘explanatory science’ approach with a research agenda that uses a ‘design science’ approach. Proposed by Joan van Aken and building on earlier work by Herbert Simon, this approach aims to develop field-tested ‘design propositions’ that present often complex but useful recommendations for practitioners. Using a ‘CIMO-logic’, these propositions specify how an ‘intervention’ can generate very different ‘outcomes’ through various ‘mechanisms’, depending on the ‘context’. An illustration and a discussion of the contours of this new research agenda for ethics management demonstrate its advantages as well as its feasibility. The article concludes with a refection on the feasibility of embracing complexity without drowning in a sea of complicated contingencies and without being paralyzed by the awareness that all interventions can have both desirable and undesirable effects. ispartof: Journal Of Business Ethics vol:181 issue:181 pages:933-944 status: published

Research Summary: Variance decomposition methods allow strategy scholars to identify key sources of heterogeneity in firm performance. However, most extant approaches produce estimates that depend on the order in which sources are considered, the ways they are nested, and which sources are treated as fixed or random effects. In this paper, we propose the use of an axiomatically justified, unique, and effective solution to this limitation: the “Shapley Value” approach. We show its effectiveness compared to extant methods using both simulated and real data, and use it to explore how the importance of business group effects varies with group diversification and internationalization in a large, representative sample of European firms. We thus demonstrate the method's superior accuracy and its usefulness in asking and answering new questions. Managerial Summary: A key contribution of strategic management research to managerial practice is identifying drivers of firm performance that operate at firm, corporation, industry, and national levels. A branch of this research measures the relative importance of factors at these different levels in producing variation in firm performance, thus helping top managers focus efforts on aspects of their businesses most likely to yield performance differences. However, estimates produced by extant methods are sensitive to method used, and to modeling choices made. This paper proposes the use of the “Shapley Value” approach, which is free from such sensitivity, shows its effectiveness compared to extant methods, and uses it to explore how the importance of factors at the level of the business group varies with group diversification and internationalization.

We define the concept of good trade execution and we construct explicit adapted good trade execution strategies in the framework of linear temporary market impact. Good trade execution strategies are dynamic, in the sense that they react to the actual realisation of the traded asset price path over the trading period; this is paramount in volatile regimes, where price trajectories can considerably deviate from their expected value. Remarkably however, the implementation of our strategies does not require the full specification of an SDE evolution for the traded asset price, making them robust across different models. Moreover, rather than minimising the expected trading cost, good trade execution strategies minimise trading costs in a pathwise sense, a point of view not yet considered in the literature. The mathematical apparatus for such a pathwise minimisation hinges on certain random Young differential equations that correspond to the Euler-Lagrange equations of the classical Calculus of Variations. These Young differential equations characterise our good trade execution strategies in terms of an initial value problem that allows for easy implementations., 31 pages, 3 figures

We report a study designed to determine the most efficient means of pursuing sonic seasoning in international marketing. For the first time, music chosen to trigger specific emotional responses was directly and cross-culturally compared with music chosen as crossmodally congruent with specific taste/flavors (the latter usually referred to as ‘sonic seasoning’). The effects triggered by ‘emotional’ music were more prominent than those triggered by ‘crossmodally-corresponding’ music. Specifically, chocolate was liked more, rated as sweeter, and the purchase intent was higher, when tasted while listening to music that conveyed positive, as compared to negative, emotion. By contrast, the same chocolate was mostly rated as tasting more bitter with the negative music, as compared to the positive music. Companies looking to use sonic seasoning in marketing strategies, should therefore principally aim at intelligently classifying music based on the likely emotions that they can trigger in their customers (at least when thinking globally).

We explicitly derive and explore the optimal consumption and portfolio policies of a loss-averse individual who endogenously updates his or her reference level over time. We find that the individual protects current consumption by delaying painful reductions in consumption after a drop in wealth, and increasingly so with higher degrees of endogeneity. The incentive to protect current consumption is stronger with a medium wealth level than with a high or low wealth level. Furthermore, this individual adopts a conservative investment strategy in normal states and typically a more aggressive strategy in good and bad states. Endogeneity of the reference level increases overall risk-taking and generates an incentive to reduce risk exposure with age even without human capital. The welfare loss that this individual would suffer under the conventional constant relative risk aversion (CRRA) consumption and portfolio policies easily exceeds 10%. This paper was accepted by Tyler Shumway, finance.

We study the impact ofQuickpay, a federal reform that indefinitely acceleratedpayments to small business contractors of the U.S. government. We find a strong di-rect effect of the reform on employment growth at the firm-level. Importantly, how-ever, we also document substantial crowding out of non-treated firms’ employmentwithin local labor markets. While the overall net employment effect was positive,it was close to zero in tight labor markets – where crowding out was stronger. Ourresults highlight an important channel for alleviating financing constraints in smallfirms, but also emphasize the general-equilibrium effects of large-scale interventions,which can lead to lower aggregate outcomes depending on labor market conditions.

Research Summary: This study explores the impact of parent university linkages on the market performance of university spin-off firms (USOs). We argue that spin-offs' performance is not only affected by competencies inherited from their parent universities at start-up but also by linkages maintained over time. We longitudinally study 551 USOs established between 2000 and 2008 in Italy. Using estimations that account for attrition and endogeneity, we find that equity-based university linkages increase USOs' market performance and that geographical proximity strengthens this effect. Furthermore, increasing technological ties between USOs' entrepreneurial teams and their parent universities has a detrimental effect on performance, especially for companies that remain geographically proximate to their parent universities. The results have implications for theory and practice related to strategic linkages, alliances, and academic entrepreneurship. Managerial Summary: This study explores the extent to which university spin-off firms (USOs) benefit from maintaining linkages with their parent universities over time. We study 551 USOs established between 2000 and 2008 in Italy, assessing their market performance (i.e., sales revenues) up to 2012. We find that USOs that maintain equity shares with their parent universities have better market performance. This positive effect is stronger for USOs located near their parent universities. In contrast, USOs that maintain close technological ties to their parent universities have worse market performance, especially if located near their parent universities. These findings are relevant to policymakers, university managers, and academic entrepreneurs interested in understanding how to effectively design and manage the different linkages between USOs and their parent universities.

New products can evoke anticipatory emotions such as hope and anxiety. On the one hand, consumers might hope that innovative offerings will produce goal-congruent outcomes; on the other hand, they might also be anxious about possible outcomes that are goal-incongruent. The authors demonstrate the provocative and counterintuitive finding that strong anxiety about potentially goal-incongruent outcomes from a new product actually enhances (vs. weakens) consequential adoption intentions (Study 1) and actual adoption (Studies 2 and 3) when hope is also strong. The authors test action planning (a form of elaboration) and perceived control over outcomes as serial mediators to explain this effect. They find that the proposed mechanism holds even after they consider alternative explanations, including pain/gain inferences, confidence in achieving goal-congruent outcomes, global elaboration, affective forecasts, and motivated reasoning. Managerially, the findings suggest that when bringing a new product to market, new product adoption may be greatest when hope and anxiety are both strong. The findings also point to ways in which marketers might enhance hope and/or anxiety, and they suggest that the use of potentially anxiety-inducing tactics such as disclaimers in ads and on packages might not deter adoption when hope is also strong.

The paper investigates the problem of optimal control of water distribution networks without storage capacity. Using mathematical optimization, we formulate and solve the problem as a non-convex NLP, in order to obtain optimal control curves for both variable speed pumps and pressure reducing valves of the network and thus propose a methodology for the automated control of real operational networks. We consider both single-objective and multi-objective problems with average zonal pressure, pump energy consumption and water treatment cost as objectives. Furthermore, we investigate global optimality bounds for the calculated solutions using global optimization techniques. The proposed approach is shown to outperform state-of-the-art global optimization solvers. The described procedure is demonstrated in a case study using a large size operational network.

The COVID-19 pandemic induces the worst economic downturn since the Second World War, requiring governments to design large-scale recovery plans to overcome this crisis. This paper quantitatively assesses the potential of government investments in eco-friendly construction projects to boost the economy and simultaneously realise environmental gains through reduced energy consumption and related greenhouse gas emissions. The analysis uses a Computable General Equilibrium model that examines the macroeconomic impact of the COVID-19 crisis in a small open economy (Belgium). Subsequently, the impact of the proposed policy is assessed through comparative analysis for macroeconomic parameters as well as CO2 equivalent emissions for four scenarios. Our findings demonstrate that the COVID-19 pandemic damages economies considerably, however, the reduction in emissions is less than proportionate. Still, well-designed public policies can reverse this trend, achieving both economic growth and a disproportionally large decrease in emissions. Moreover, the positive effect of such a decoupling policy on GDP is even stronger during the pandemic than compared to the pre-COVID-19 period. This is the result of a targeted, investment-induced green transition towards low energy-intensive economic activities. Finally, this paper describes how the net effect on the government budget is positive through the indirect gains of the economic uptake. ispartof: ENVIRONMENTAL & RESOURCE ECONOMICS vol:76 issue:4 pages:731-750 ispartof: location:Netherlands status: published

The aim of the present study is to improve the understanding regarding the acceptance of tourism apps available for the marketing and tourism destination. For this purpose, the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) was adapted to investigate the determinants of users' behavioral intention for mobile tourism applications according to the quality and user experience of tourism applications. In order to understand whether the design of and user experience with tourist applications influence those apps' use and acceptance, the variable Trust in the Internet operator was added to UTAUT2 as an external variable, as well as App Quality and App User Experience. To investigate the determinants of the users' behavioral intention, a survey of 552 users was performed, and the data were analyzed using the partial least squares path modeling in Spain and Portugal. The results contribute to a deeper understanding of user needs when they decide whether to download a mobile tourism app and whether to use it at their destination. FCT - Foundation for Science and TechnologyPortuguese Foundation for Science and Technology [UIDB/04470/2020 CiTUR] info:eu-repo/semantics/publishedVersion

We consider a procurement auction where the buying firm can manipulate the distribution of the uncertainty facing competing suppliers via reducing subjectivity in the scoring rule announced before the auction, and we examine the optimal choice of information revelation for the buyer. Specifically, we model a multi-attribute scoring auction in which the suppliers submit bids involving both price and non-price attributes and the buyer selects one supplier according to a weighted scoring system. Although the scoring rule is preannounced and the buyer commits to it during the bid evaluation, it contains elements that are subjective in nature and not precisely defined, so the suppliers still do not have full information about the exact score that will be awarded. It may be possible for the buyer to reduce the subjective component in the scoring rule by giving unusually detailed descriptions of what corresponds to specific scores. We demonstrate that it is beneficial for the buyer to limit the information revealed by retaining some subjective or imprecisely defined components in the announced scoring rule, so that the suppliers continue to be uncertain about their final scores. It is also shown that the buyer can gain more from this type of imprecision (i.e., releasing less information) if the suppliers are more different in terms of their costs to achieve a given quality level or other aspects of utility for the buyer. We consider both sealed bid and open auction formats.

In their striving to be an attractive employer, organizations aspire to create effective employer brands. Building on HRM system strength theory, we posit that the effectiveness of an employer bran...

Interest in job crafting as a means to create more work meaning has led to the development of multiperspective conceptualizations of job crafting. Although useful comprehensive portraits of complex job crafting activities have emerged, these synthetic conceptualizations tend to overlap, and even inconsistent with each other. This study aimed to clarify these blurred conceptualizations by examining the component and incremental validity of five distinct job crafting measures and their theoretical propositions in predicting work engagement and innovation behaviour.A cross-sectional sample of 162 health professionals and a two-wave longitudinal sample of 130 R&D employees were used. Results revealed that approach crafting is mainly composed of approach-promoting behaviour and active coping behaviour. In predicting work engagement and innovation behaviour,active coping behaviour was distinguished from withdrawal behaviour; role identities crafting was less strongly associated with these outcomes than job characteristics; cognitive crafting accounted for small increments in the variance beyond behaviour crafting. Apparently, crafting essentially comprises behaviour with a positive attitude. Withdrawal behaviour should be removed from crafting concept because its maladaptive perspective is negative. Job crafting measures which promote situational characteristics with personal meaningfulness, as well as precise descriptions of behaviour crafting and cognitive crafting,are recommended. Refereed/Peer-reviewed

We explore how large and small banks make funding decisions when system-wide bailouts are possible. We show that bank size, purely on strategic grounds, is a key determinant of banks’ leverage choices, even when bailout policies treat large and small banks symmetrically. Large banks leverage more than small banks because they internalize that their decisions directly affect bailout policies. In equilibrium, this effect is amplified by strategic spillovers to small banks since banks’ leverage choices are strategic complements. Overall, the presence of large banks makes bailouts more likely. The optimal regulation features size-dependent policies that disproportionately restrict large banks’ leverage.

We develop a new method to measure CEO behavior in large samples via a survey that collects high-frequency, high-dimensional diary data and a machine learning algorithm that estimates behavioral types. Applying this method to 1,114 CEOs in six countries reveals two types: “leaders,” who do multifunction, high-level meetings, and “managers,” who do individual meetings with core functions. Firms that hire leaders perform better, and it takes three years for a new CEO to make a difference. Structural estimates indicate that productivity differentials are due to mismatches rather than to leaders being better for all firms.

Default risk significantly affects the corporate policies of a firm. We develop a model in which a limited liability entity subject to default at an exponential random time jointly sets its dividend policy and capital structure to maximize the expected lifetime utility from consumption of risk‐averse equity investors. We give a complete characterization of the solution to the singular stochastic control problem. The optimal policy involves paying dividends to keep the ratio of firm's equity value to investors' wealth below a critical threshold. Dividend payout acts as a precautionary channel to transfer wealth from the firm to investors for mitigation of losses in the event of default. Higher the default risk, more aggressively the firm leverages and pays dividends.

In spite of the growing success of the online channel, brick-and-mortar stores can continue to play a pivotal role in consumers’ shopper journey. We discuss how technology can be a key enabler by allowing physical stores to offer the level of convenience consumers have become used to in the online channel.

This paper explicitly derives the optimal dynamic consumption and portfolio choice of an individual with prospect theory preferences. The individual is loss averse, endogenously updates his reference level over time, and distorts probabilities. We show that the optimal consumption strategy is rather insensitive to economic shocks. In particular, in case the individual sufficiently overweights unlikely unfavorable events, our model generates an endogenous floor on consumption. As a result, an individual with prospect theory preferences typically implements a (very) conservative portfolio strategy. We discuss implications of our results for the design of investment-linked annuity products.

Religious organizations are social systems operating in a complex and changing environment. By looking to an authority beyond themselves, religious organizations have comparatively little control over defining their own goals. In this juggling between sticking to the ultimate goal of an organization and adapting to complex changing environments, that is, in the juggling between tradition and renewal, transformational leadership seems to play an important role in religious organizations. The extensive body of literature on transformational leadership has focused more on the outcomes of transformational leadership than on its antecedents. We extend the existing literature by linking managers' motivation to their transformational leadership behaviors in a religious organization. More specifically, we examined the associations of intrinsic and prosocial motivation with transformational leadership, and we investigated the relationship between transformational leadership and innovation among 252 managers in the largest nonprofit organization in Norway, the Church of Norway. Analyses in structural equation modeling revealed a positive relationship between intrinsic motivation and transformational leadership, whereas the relationship between prosocial motivation and transformational leadership was not significant. Transformational leadership was positively associated with innovation. Based on the results of the study, we discuss practical implications regarding how to support intrinsic motivation, transformational leadership, and innovation in religious organizations. (Less)

A classic approach to financial risk management is the use of scenario analysis to stress test portfolios. In the case of an S&P 500 options portfolio, for example, a scenario analysis might report a P&L of −$1m in the event the S&P 500 falls 5% and its implied volatility surface increases by 3 percentage points. But how accurate is this reported value of −$1m? Such a number is typically computed under the (implicit) assumption that all other risk factors are set to zero. But this assumption is generally not justified as it ignores the often substantial statistical dependence among the risk factors. In particular, the expected values of the non-stressed factors conditional on the values of the stressed factors are generally non-zero. Moreover, even if the non-stressed factors were set to their conditional expected values rather than zero, the reported P&L might still be inaccurate due to convexity effects, particularly in the case of derivatives portfolios. A further weakness of this standard approach to scenario analysis is that the reported P&L numbers are generally not back-tested so their accuracy is not subjected to any statistical tests. There are many reasons for this but perhaps the main one is that scenario analysis for derivatives portfolios is typically conducted without having a probabilistic model for the underlying dynamics of the risk factors under the physical measure P. In this paper we address these weaknesses by embedding the scenario analysis within a dynamic factor model for the underlying risk factors. Such an approach typically requires multivariate state-space models that can model the real-world behavior of financial markets where risk factors are often latent, and that are sufficiently tractable so that we can compute (or simulate from) the conditional distribution of unstressed risk factors. We demonstrate how this can be done for observable as well as latent risk factors in examples drawn from options and fixed income markets. We show how the two forms of scenario analysis can lead to dramatically different results particularly in the case of portfolios that have been designed to be neutral to a subset of the risk factors.

We document the evolution of market power based on firm-level data for the U.S. economy since 1955. We measure both markups and profitability. In 1980, aggregate markups start to rise from 21% above marginal cost to 61% now. The increase is driven mainly by the upper tail of the markup distribution: the upper percentiles have increased sharply. Quite strikingly, the median is unchanged. In addition to the fattening upper tail of the markup distribution, there is reallocation of market share from low- to high-markup firms. This rise occurs mostly within industry. We also find an increase in the average profit rate from 1% to 8%. Although there is also an increase in overhead costs, the markup increase is in excess of overhead. We discuss the macroeconomic implications of an increase in average market power, which can account for a number of secular trends in the past four decades, most notably the declining labor and capital shares as well as the decrease in labor market dynamism.

Organizations typically employ a division of labor between specialist creator roles and generalist business roles in a bid to orchestrate innovation. We seek to determine the extent to which individuals dividing the work across roles can also benefit from dividing their network. We argue that collaborating individuals benefit from connecting to the same groups but different individuals within those groups—an approach we label dual networking—rather than from a pure divide-and-conquer approach. To test this argument, we study a dual career-ladder setting in a large multinational in which R&D managers and technologists partner up in their quest for innovation. We find that collaborators who engage in dual networking attain an innovation performance advantage over those who connect to distinct groups. This advantage stems from the opportunity to engage in the dual interpretation of input the partners receive, as well as from dual influencing that helps them to gain momentum for their proposed innovations, and it leads to more effective elaboration and championing of their ideas. In demonstrating these effects, we advance understanding of how collaborators organize their networking activities to best achieve innovative outcomes.