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Financial Centers And The Relationship Between ESG Disclosure And Firm Performance: Evidence From An Emerging Market
Get PDFIs the disclosure of non-financial information, such as that related to environmental, social, and governance (ESG), important for firm performance in emerging markets? Does the extent of information asymmetries affect the way stock market participants react towards ESG disclosure? This paper answers these questions and shows that ESG disclosure is negatively related to firm performance in environments with lower information asymmetries. We argue that this negative relationship exists because ESG activities are considered as unrelated costs that reduce shareholders profits and wealth. Our results also show no significant impact of ESG disclosure on firm performance in environments with higher information asymmetries. Given that information is less reliable in environments with lower information asymmetries, it is very much possible that ESG disclosure is not valued by stock market participants
How Much Cash Is At Risk In U.S. Non-Financial Firms? A VaR-Type Measurement
Get PDFRisk management techniques first developed by, and for, banks are now being adopted by non-financial corporations. However, while firms are already engaged in activities intended to develop their risk management practices, they often do not possess risk measures focused on key corporate financial results such as earnings or cash flow. The main contribution of this paper is to develop a cash flow-based risk measure conditional on specific company-level factors. With U.S. firm-level data, we present evidence that Cash Flow-at-Risk and Expected shortfall differ across main non-financial industries. Our results call for renewed attention to the role that VaR-type measures for cash flow can play in empirical studies dedicated to corporate risk analysis, and with respect to corporate-level risk management purposes
Institutional Determinants Of Foreign Direct Investment In MENA Region: Panel Co-Integration Analysis
Get PDFThis study examines the impact of institutional Determinants of Foreign Direct Investment (FDI) inflows in MENA (Middle East and North Africa) region during the period 1984-2011. Using panel data techniques by considering two hypotheses of economic interdependencies and structural changes, it is found that the macro determinants like openness, growth rate, exchange rate, and economic instability, and institutional indicators like government stability, investment profile, rule of law, internal and external conflict, have a long-run effect on attracting FDI inflows
Is CSR Really Profitable? Evidence From Korea
Get PDFWe empirically investigate whether corporate social responsibility (CSR) is really profitable in Korea. Specifically, we examine whether a potential measurement problem of CSR score measured by KEJI (Korea Economic Justice Institute) index affects the relationship between CSR and corporate financial performance (CFP). The empirical results regarding the relationship between CSR and CFP in prior studies have been inconsistent. Although some studies (e.g. Waddock & Graves, 1997) point out that the potential measurement problem of CSR score is likely to be an important factor to resolve the issue of mixed results, CSR measurement problem to date draws little attention from researchers particularly in Korea setting. We suspect that prior studies that report positive relationship between CSR and CFP using KEJI index is biased upward due to potential measurement problem of KEJI index that includes operating performance component. To examine this issue, we employ an adjusted CSR score which excludes operating performance component included in the unadjusted CSR score to mitigate measurement problem that can show a positive upward bias in the relationship between CSR and CFP in the prior studies.We employ the sample data of 1,301 firm-year observations of manufacturing firms listed in Korea Stock Price Index (KOSPI) market during 2005-2010. Using adjusted CSR score, we find that the positive CSR-CFP relationship significantly weakens compared to unadjusted CSR score. This result remains robust after we perform various sensitivity tests. This study suggests that CSR measurements problem is likely to distort the relationship between CSR and CFP in Korea setting. This study’s main contribution is to provide evidence on the measurement problem of KEJI CSR score in the study on the relationship between CSR and CFP
Does Zero-leverage Policy Increase Inefficient Investment? - From The Perspective Of Lack Of Bank Creditors
Get PDFUsing a sample of up to 12023 firm-year observations across 2358 individual firms from 2007 to 2013, this paper examines whether zero-leverage policy increases firms’ inefficient investment from the perspective of lack of bank creditors. Due to the lack of bank creditor monitoring, zero-leverage policy leads to more serious information asymmetry and agency problems, which are the two types of frictions that affect investment efficiency. The empirical results show that zero-leverage policy indeed increases inefficient investment. Furthermore, we test whether external monitoring helps to mitigate the effects of zero-leverage policy on inefficient investment. Our findings suggest that the sensitivity between zero-leverage policy and inefficient investment will be lower in firms with strong external monitoring. Overall, the zero-leverage policy seems to be a key determinant of inefficient investment
The Labor Force Participation Rate: A Rexamination Of The Determinants Of Its Decline
Get PDFThe U.S. Labor Force Participation Rate (LFPR) is defined as the number of people in the labor force as a percentage of the civilian noninstitutional population 16 years and over. In a paper published in November, 2013, we examined the determinants of the decline in the LFPR from a 1998 peak of 67.2% to then, 63.3%. Consensus of a number of economic studies at that time was that the primary determinant of the decline was cyclical and that an improving economy would stop, if not reverse, the downward trend. Since that time the unemployment rate has declined from 7.2% to 5.3%. However, the LFPR has continued its decline to 62.6%. Structural issues in the economy would appear to have far greater effect on LFPR decline than previously believed. In this paper we examine the following classes of structural determinants and their effects on LFPR: demographics, including not only the prime working cohort of ages 25 to 54, but also those of retirement age; the impact of a welfare system that appropriately provides a critical safety net, but one that reduces incentive to work through disability payments, extended unemployment benefits, and other subsidies; education for both those of a higher level of attainment, as well as an underclass that no longer receives training by business, but must rely on both public and private vocational education; and finally the consequences of globalization on the economy, including the virtual disappearance of semi-skilled industries in the United States that heretofore have provided jobs for high school graduates
Upgrading Export Structure In Sub-Saharan Africa
Get PDFA major focus of research on trade policy reform relates to whether changes in global economic participation, brought about by such reform, provides for sustainable income growth in the countries concerned. The challenge for many African economies in this context is to improve their position in the global economy by upgrading their export structures. The authors empirical work suggests that export diversification is a critical first step in upgrading export structure in Sub-Saharan African (SSA) countries. The authors find that the knowledge gained from the export diversification process, along with technology spillovers associated with FDI flows, are important drivers. Furthermore, they find evidence of learning by doing productivity gains from SSA exporting activity. On the whole, the authors do not find that the rise of Asian driver economies poses a significant threat to SSA export sophistication. What is crucial to the further success of SSA countries upgrading their export structure is government policy initiatives that prioritise the upgrading of infrastructure, human capital development and institutional reform. These efforts will ensure that SSA countries can realise real economic gains through improvements in their export structures rather than locking their economies into commodity dependence on the basis of their favourable natural resource endowments
Strategic Technology Management As A Causality To South African Company Performance
Get PDFCutting edge technology management goes beyond basic research and development (R&D). Increasingly, corporate strategists are making a more precise distinction between “technology” and “technology management.” The main purpose of this study was to develop an empirically derived classification system (taxonomy) for sustaining industry leadership, through the relationships that exist between technology and innovation strategy, technology management and company performance. A non-probability, judgment sample of companies listed on the Johannesburg Stock Exchange (JSE) were taken. Seminal research studies were used to identify a set of technology strategy, technology management and innovation strategy dimensions. Four distinct technology factors obtained with the analysis, were proved to positively influence the company performance dimensions and were classified as Control Market Planning, Product Development Intensity, R&D Commitment and Technology Focus factors. As a result a conceptual model has been developed to demonstrate the integrated properties of this new proposed taxonomy of technology and innovation. The results show that strategic technology management choices can significantly affect company performance
Medical Errors In U.S. Healthcare Organizations: Have We Made Any Progress?
Get PDFSince the Institute of Medicine’s landmark 1999 report on medical errors, mandates, legislation, and recommendations have been forced on the U.S. healthcare industry. However, only limited progress has been made. Part of the difficulty is identifying the scope of the problem, which has been far larger than thought since the advent of new reporting tools. The major causes of medical errors lie in the lack of a (a) pervasive safety culture, (b) commitment by top healthcare organization management to reduce medical errors, and (c) integrated IT systems, including electronic health records. Compared to other “high reliability” organizations that have achieved excellent results in regard to safety, healthcare is perceived as lagging far behind. Healthcare is not the sole industry needing a safety culture. However, many healthcare leaders perceive existing industry tools that high reliability organizations routinely use as irrelevant. Positive change will come when attitudes change and healthcare organizations embrace the solutions that other industrial organizations have utilized to produce satisfactory safety outcomes.
Nurses’ Deployment Risk And Resilience In Times Of War Conflicts: Checking The Status, Reporting The Future
Get PDFTo date, year August, 2014, as Benghazi, Libya is in a time of conflict depicting a war zone environment, the researcher conducted a study to capture the moment and experiences of foreign national nurses currently deployed in the country performing their duties as healthcare providers. Despite the raised Alert level 4 warning given by the government, meaning "full evacuation mode" from Libya, most nurses refused to be repatriated and stayed to continue serving in Libya. A selected group of sixty-three (63) nurses of different nationalities, working in three (3) different hospitals at the heart of Benghazi, described their present deployment risk level and resilience. Deployment risk level is measured by the Deployment Risk and Resilience Inventory (DRRI) utilizing two of its subscales (C and G) - Difficult Living and Working Environment Scale (Deployment Environment) and the Perceived Threat Scale (Deployment Concern). On the other hand, resilience is measured by the Connor-Davidson Scale. Findings revealed lower risk at exposure to events or circumstances representing repeated or day-to-day irritations and pressures related to life, revealed more perceived threat, but highly resilient during deployment at the war zone. Furthermore, no correlation was found between deployment risk (deployment concern) and resilience, negative low correlation between deployment risk (deployment environment) and resilience, and no significant difference in resilience was observed between genders. Checking the nurses’ current status of deployment risk and resilience in Libya, gave light to future implications on nursing profession.