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Supplier Collaboration in Collaborative Product Development with Internal Competition
No full textThis paper examines a development process in which a firm explores alternative approaches for the development of a single product. To do this, the firm employs competing internal teams, but it also needs to involve key suppliers who are responsible for the development of a key component (or subsystem) via a collaboration with one or several internal teams. We explore how internal competition affects the suppliers' collaborative efforts and the firm's profits, and also how the firm should allocate the internal teams to potential suppliers. Our analysis suggests that this setting is significantly different from standard tournament settings, implying that existing research results should not be simply extrapolated to supply chain settings. For example, unlike in traditional tournaments, we find that increasing supplier competition by increasing the number of teams per supplier can actually increase supplier efforts. We develop a tournament model with two suppliers who differ both in their expertise for the specific type of development project and in their development costs (i.e., their cost-effectiveness). We also identify a critical influential factor: the cost savings resulting from the similarity between different development efforts by the same supplier (with different internally competing teams). If the cost savings are not very high, i.e., if the different development efforts are not very similar, the firm should optimally allocate more teams to the supplier with less relevant expertise or lower cost-effectiveness. Similarly, involving a third supplier is beneficial only if the cost savings are low. While companies make significant efforts to identify the supplier with the best expertise, our results show that allocating more teams to the stronger supplier generally undermines the suppliers' incentives to exert high levels of effort. Hence, allocating the most teams to that supplier might not always improve firm profits
Sectoral Effects of Social Distancing
No full textThe health crisis caused by the outbreak of the COVID-19 virus has led many countries to implement drastic social distancing rules. By reducing the quantity of labor, social distancing in turn leads to a drop in output which is difficult to quantify without taking into account relationships between sectors. Starting from a standard model of production networks, we analyze the sectoral effects of the shock in the case of France. We estimate that six weeks of social distancing brings GDP down by 5.6%. Apart from sectors directly concerned by social distancing mesures, those whose value added decreases the most are upstream sectors, i.e. sectors most distant from final demand. The same exercise is carried out for other European countries, taking into account national differences in sectoral composition and propensity to telework. Finally, we analyze the economic impact of selectively phasing out social distancing by sector, region or age group
Europe’s Democracy Challenge: Citizen Participation in and Beyond Elections
No full textAs the EU enters a new political cycle, this article provides a critical analysis of the state of EU democracy by focusing on its two main components: representative and participatory democracy through their theoretical and practical realities.It argues that it is for EU democracy — and potentially for the Conference on the Future of Europe — to rethink its system of representative and participatory channels in order for these channels to become more complementary and more effectively engage with the citizenry. While it will not magically treat the EU democratic malaise, it could make the system more intelligible, accessible, and ultimately responsive to citizen-driven issues — without necessarily undertaking Treaty reform.The immediate priority is therefore to ensure that EU citizen level participation appear prominently in the agenda of the new Commission without being totally appropriated by the ad hoc Conference on the future of Europe.Europe will not find its democratic soul in a large-scale, stand-alone, and pre-framed deliberation exercise. It is instead through the creation of an accessible, equalizing, and safe space, which accommodates public input on a daily basis, that the EU will overcome its own chronic democratic malaise
ESG Investing: How to Optimize Impact?
No full textThis paper develops a general equilibrium model of a productive economy with negative externalities. Investors are not willing to accept lower returns than their best investment alternatives and entrepreneurs maximize profits. If capital markets are subject to a search friction, an ESG fund can raise assets and improve social welfare despite the selfishness of all agents. The presence of the ESG fund forces companies to partially internalize externalities. We derive the fund's optimal policy in terms of industry allocation and pollution limits imposed to portfolio companies. The fund prioritizes investments in companies where (i) the inefficiency induced by the externality is particularly acute and (ii) the capital search friction is strong. We also show that the ESG fund can take advantage of the supply-chain network: It can amplify its impact by imposing restrictions on the suppliers of the firms where it invests
The Influence of Pay Transparency on Inequity, Inequality, and the Performance-Basis of Pay in Organizations
No full textRecent decades have witnessed a growing focus on two distinct income patterns: persistent pay inequity, particularly a gender pay gap, and growing pay inequality. Pay transparency is widely advanced as a remedy for both. Yet we know little about the systemic influence of this policy on the evolution of pay practices within organizations. To address this void, we assemble a novel data set combining detailed performance, demographic and salary data for approximately 100,000 US academics between 1997 and 2017. We then exploit staggered shocks to wage transparency to explore how this change reshapes pay practices. We find evidence that pay transparency causes significant increases in both the equity and equality of pay, and significant and sizeable reductions in the link between pay and individually-measured performance
Credit Rating Agencies and Accounting Fraud Detection
No full textThis study examines whether and when credit rating agencies (CRAs) take negative rating actions against issuers committing accounting fraud before the fraud is publicly revealed and the economic impact of such rating actions. Our findings show that these fraud firms experience a greater number of negative rating actions during the four quarters prior to the public fraud revelation, including lower ratings, more rating downgrades, and more negative credit watch additions, compared to firms with similar economic fundamentals and stock performance. Our findings also show that such negative rating actions are not limited to fraud firms in financial distress, suggesting that our effect reflects CRA responses to accounting fraud per se. In addition, we find CRAs take more timely actions when frauds are more severe, when they involve accounts more often scrutinized by CRAs during their credit analysis, and when short sellers target firms. Last, we find that CRAs’ negative rating actions against fraud firms are informative to the market and are associated with shorter fraud duration. Overall, we conclude that CRAs possess private information about accounting fraud prior to the public revelation of this fraud and that they incorporate this information into negative ratings actions, accelerating fraud discovery
Same-Sex Marriage and Italian Exceptionalism
No full textThis article unveils Italy’s exceptionalism in recognising and protecting same-sex couples by adopting a three-dimension analysis: constitutional, comparative and supranational. It maintains that, compared to other countries whose courts were sympathetic with the legal claims raised by lesbian and gay people, Italy’s Constitutional Court adopted a totally different approach, reinforcing the heteronormativity of marriage in a way that delayed all efforts to pass a law on same-sex registered partnerships. The Constitutional Court, in particular, interpreted the Constitution, the experience of other nations and supranational law according to heteronormativity, an example that is unique in the comparative context. As an illustration, this article addresses the case Bernaroli vs Ministry of the Interior. In Bernaroli, a male-to-female transgender person wanted to remain married to her wife notwithstanding the transition. The case ignited a heated debate among scholars and questioned the courts’ opinions as to the human rights dynamics surrounding same-sex marriage and, more importantly, about the current role of heteronormativity in marriage law. This article concludes that the legal existence of Bernaroli’s marriage represents a constant challenge to the status quo and highlights the permanent crisis of heteronormativity. After the Austrian Constitutional Court’s recent ruling that declared the law on same-sex domestic partnership to be discriminatory, heteronormativity’s defence became even more untenable, making Italy’s a true exception in the continent’s legal landscape
Do Investors Actually Value Sustainability Indices? Replication, Development, and New Evidence on CSR Visibility
No full textIn this paper, we replicate and expand Hawn, Chatterji, & Mitchell (2018) that used DJSI events to measure variations in firms’ CSR-activism and examined their effect on a firm’s stock price. We use DJSI events to capture variations in firms’ CSR visibility, holding CSR-activism constant by restricting our analyses to CSR-equivalent firms. First, we find similar results on stock price (i.e., no impact) and on trading volumes. Second, because professional market participants pay more attention to CSR-oriented firms and use visible cues such as DJSI- events, we study and find that additions to DJSI lead to more analysts following a firm, and that continuations on the DJSI lead to an increase in equity being held by long-term investors
The Heliospheric Current Sheet and Plasma Sheet during Parker Solar Probe's First Orbit
No full textInternational audienceWe present Heliospheric Current Sheet (HCS) and Plasma Sheet (HPS) observations during Parker Solar Probe's (PSP) first orbit around the Sun. We focus on the eight intervals that display a true sector boundary (TSB; based on suprathermal electron pitch angle distributions) with one or several associated current sheets. The analysis shows that (1) the main density enhancements in the vicinity of the TSB and HCS are typically associated with electron strahl dropouts, implying magnetic disconnection from the Sun, (2) the density enhancements are just about twice that in the surrounding regions, suggesting mixing of plasmas from each side of the HCS, (3) the velocity changes at the main boundaries are either correlated or anticorrelated with magnetic field changes, consistent with magnetic reconnection, (4) there often exists a layer of disconnected magnetic field just outside the high-density regions, in agreement with a reconnected topology, (5) while a few cases consist of short-lived density and velocity changes, compatible with short-duration reconnection exhausts, most events are much longer and show the presence of flux ropes interleaved with higher-β regions. These findings are consistent with the transient release of density blobs and flux ropes through sequential magnetic reconnection at the tip of the helmet streamer. The data also demonstrate that, at least during PSP's first orbit, the only structure that may be defined as the HPS is the density structure that results from magnetic reconnection, and its by-products, likely released near the tip of the helmet streamer
Towards a European Strategy on Business-To-Government Data Sharing for the Public Interest
No full textData is increasingly regarded as an essential infrastructural resource for economic growth, innovation and the overall wellbeing of society. Thanks to our enhanced capability to collect, process and use data, we are able to know where the epicentre of an earthquake is, how to limit a pandemic such as Zika from spreading or even how to reduce pollution in cities.This data ‘revolution’ must be contextualised within a broader, 3-centurylong attempt to neutralise irrationality in human decisionmaking by gaining increased access to information. Yet, while virtually every organisation today, including small companies or grassroots movements, is a data entity, only a few of them (generally in the private sector) have collected vast amounts of data (be it personal or non-personal) and acquired a unique capability to make sense of such information.As a result, most of this much-prized data is in the hands of businesses, not of public authorities, with the latter lagging behind in embracing the power of data to inform their daily policies and service-delivery actions. Hence the challenge — entrusted by the European Commission to our expert group — to explore the creation of an enabling environment for privately held data to be shared with (or at least be accessible to) public authorities in complying with their public-interest missions. For the time being, most of the efforts focus on getting the supply-side ready (e.g. by developing data-sharing models, de-risking data sharing or re-skilling personnel) for B2G data sharing, but omit the need to sensitise and prepare the demand side (the public authorities). More critically, at a time in which reputation-based mechanisms transcend the mere financial rating and venture into state-driven ‘social credit’ scoring, the role that citizens play in the data-sharing equation remains limited and ancillary to most of the solutions at stake.This report, which has benefited from the experience and dedication of 23 experts coming from different walks of life, strives to address both of these systemic shortcomings. By carving out a role to play for both the public sector and citizens, it offers an initial set of ethically-aware paths the EU might chart to break new ground in advancing and accompanying B2G data sharing. The hope is that by following some of this expert advice the EU might become a global leader in fostering not only a market for B2G data access, but also a sensible, inclusive and participatory data culture through a set of viable, practicable and scalable welfare-enhancing solutions. Only a more cautious, humble and humanised approach to the unprecedented amount of data we produce and collect every day may pave the way for a future in which it is the human factor that defines our daily life experience