When it’s not personal but positional: The upside of CEO power

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Abstract

We examine links between corporate cash holdings and types of CEO power, and how these affect firm performance, using agency and stewardship theories to distinguish two types of CEO power: one attributable to the CEO position, and one attributable to CEO personal characteristics. Measured as indices, we find positive associations with cash holdings for both types of power, individually and in combination, but only positional power with higher cash holdings is positively associated with firm performance. Our findings are shown to be robust and suggest that scrutiny of cash holdings by CEOs with high personal power may be prudent.

Does it matter how we ship the good apples out? On specific tariffs, transport modes, and agricultural export prices

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Abstract

Free-on-board (FOB) export prices for identical products from the same origin often differ across destinations, even when accounting for the trade costs and attributes of the destination country. One explanation for this observed price difference is per-unit trade costs, and the ability of exporters to vary their markups and/or product quality. Using a novel dataset that details trade flows between countries by mode of transport, we estimate the transport mode-specific effect of a per-unit trade cost, specifically specific tariffs, on the FOB export prices of agricultural products. We find an elasticity of specific tariffs to export prices of 1.8%. However, the estimates are heterogeneous across modes of transport. The elasticity of specific tariffs to export prices is 2% for air transport, 5% for road transport, and  .3% for sea cargo. Since the observed positive export price effect can reflect product quality differences or markups, we account for the quality element and find that for a given product quality, markups increase with increasing specific tariffs. This form of price discrimination is less pronounced for higher-quality products that are predominantly shipped by air.

Evaluating Public Spending Efficiency and its Determinants Towards Social Outcomes: Empirical Evidence from Indian States

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The Indian Economic Journal, Ahead of Print.
The topic of public expenditure efficiency has gained a key position in the spheres of public policy goals. This article tries estimating the efficiency of public spending on health and education sectors across Indian states from 1990–1991 to 2016–2017. In input–output linkage, we have computed efficiency using a slacks-based measure model of data envelopment analysis through different orientations. The study also captures the externalities of public spending efficiency with some exogenous factors. It also suggests that these exogenous factors (such as good governance, per capita income and proportion of literates in the household) have significantly improved the output efficiency score of the health as well as the education sectors across Indian states.JEL Codes: H51, H52, H21, E61

The direct and indirect effects of cash transfer program on the consumption of nutrients: Evidence from Kenya

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Abstract

How does the receipt of a cash transfer impact consumption of nutrients, vitamins, and minerals in households? To answer this question, we use a randomized controlled trial dataset from Hunger Safety Net Program (HSNP) with 9,246 households spread across the four districts (Turkana, Marsabit, Wajir, and Mandera) of Kenya. In the experiment, HSNP treated households received a bi-monthly cash transfer of about United States of America Dollar (USD) 20 relative to households in control sub-locations. Using difference in-difference specification, we find that HSNP poor beneficiary households in treated households increased (by approximately 96%, 50%, and 61%) the consumption of vitamins A, C, and beta carotene, respectively compared to those in control sub-locations. Moreover, HSNP non-poor, non-beneficiary households residing in treated sub-locations increased (by about 70% and 46%) the consumption of vitamin A and Beta carotene, respectively compared to those in control sub-locations. In addition, HSNP-poor beneficiary households in treated sub-locations sourced most of their nutrients, vitamins, and minerals from the market. We rule out alternative pathways that could potentially increase consumption and conclude that a rise in consumption amongst HSNP non-poor, non-beneficiary households is due to sharing of HSNP transfer amongst social network members.

Investigating the economic impact of climate change on agriculture in Iran: Spatial spillovers matter

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Abstract

In this study, we enhance our understanding of the economic impacts of climate change on agriculture in Iran to provide further information for moving Iran's climate policy forward by linking farmland net revenue to novel climatic and non-climatic variables. We take advantage of spatial panel econometrics to better circumvent omitted factors extraneous to the agricultural sector and to develop a more reliable and consistent model when data are inherently spatial. In contrast to conventional panel studies which relied on year-to-year weather observations, we exploit a hybrid approach to compromise between the disadvantages and advantages of longer-term cross-sectional analysis and shorter-term panel models. We estimate the potential impacts of climate change on agriculture under several global warming scenarios based on the Sixth Phase of the Coupled Model Intercomparison Project (CMIP6). We find that (I) farmlands’ net revenues are projected to decline by 8%–19% and 14%–51% by 2050 and 2080; (II) the distributional impacts of climate change would highly depend on climate zones and geographical locations; (III) a few counties might benefit from climate changes; (IV) finally, failing to account for spatial spillovers when they are present leads to a misspecified model.

Do hometown CEOs treat their employees better? Evidence from China

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Abstract

Employees are the most fundamental stakeholders in business operations, and safeguarding their rights and interests is an important manifestation of a firm's level of social responsibility. Little research has addressed whether hometown CEOs can affect employee-related CSR (E-CSR) and how the corporate ownership and regional economic development would moderate such an impact. Using an informal institutional perspective, we extend the literature on CEO characteristics by exploring the factors leading to employee welfare. Analysing a panel dataset of 1018 firms from Chinese A-share listed companies between 2008 and 2020, we find a positive relationship between hometown identity and E-CSR. Further research indicates that the effect is more pronounced in state-owned enterprises and underdeveloped areas. Against the backdrop of weak labour protection in China's labour market, we contribute to research on informal institutions and employee benefits in pursuing harmonious labour relations.

Investment centre manager’s multiperiod fairness perceptions and intertemporal dependency

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Abstract

This paper explores the motivation of investment centre managers when their investment centre's performance is affected by decisions made by their predecessor. Through a qualitative case study of a Japanese manufacturer, the effectiveness of conventional remedies for motivational issues and further motivational issues caused by the same remedies, as identified in the extant literature, are examined. The field data underscore managers' multiperiod as opposed to period-by-period fairness perceptions as key to preventing the further motivational issues. This paper also demonstrates the potential usefulness of the vignette technique as a data collection method in qualitative accounting research.

Stock Market Integration Through Internationally Tradable Assets

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The Indian Economic Journal, Ahead of Print.
The study examines the influence of tradable assets in integrating the Indian stock market with global stock markets. The movement in the foreign indices has a direct spillover effect on the assets cross-listed on these exchanges in the form of American depository receipts and global depositary receipts, and the effect is simultaneously shifted to the domestic market index due to the dual listing of domestic assets. The findings of the study indicate that there is a prolonged effect of all markets combined on the Indian market during the period, and that the long-term effect between the Indian and US markets is also consistent in the long run, while the Wald test also supports the presence of a short-term effect between the Indian and US markets. Long-term and short-term causation patterns are lacking in the Luxembourg market, illustrating the partial integration of the financial markets. The present study is instrumental for investors in identifying exogenous markets for portfolio diversification, thus enabling businesses to have a global reach.JEL Codes:J C32, C58, D53