Cui bono? Depicting the benefits of the new municipal budgeting and accounting regime in Germany

The new budgeting and accounting regime for the public sector (Doppik), which is based on private sector accounting standards, has been the subject of numerous discussions in research and practice in Germany for the last 20 years. However, those discussions were mostly characterized by assertions, unproven statements and logical arguments. The objective of this paper is to empirically analyze the perceived benefits of a reformed municipal accrual budgeting and accounting system by using a structural equation model. Our results show that improved management capabilities are an important indirect factor, whereas efficiency, intergenerational equity, and transparency are direct determinants of benefit. The consistent implementation of the new output-/outcome-oriented management rationality and the necessity of harmonizing budget laws are revealed as prerequisites for further development.     

Deus ex machina? Career progress and the contingent benefits of knowledge management systems

Knowledge management (KM) systems are increasingly common in firms which promote self-managed careers and autonomy, such as professional service firms. Yet, whether or not KM systems provide real benefits is underexplored. Our focus is on the impact of KM use on the career progress of service professionals. We use recorded logs of employee KM system use and career progress data over a two-year period within a strategy consultancy to study the effect of KM use on career advancement speed. We present a contingency-based model to KM use effectiveness, showing that, although KM use generally boosts career progress speed, (a) benefits vary by seniority (more junior employees benefit more), (b) benefits vary by knowledge type (encyclopedic vs. social), with social knowledge use mattering more to career progress, and (c) those service professionals who tap a wider range of knowledge sources progress faster in their careers. We also find mediating effects, specifically that KM system use operates partly by accelerating the development of task-related skills. We draw the conclusion that KM systems contain neither a magical Deus ex machine for boosting employee performance and progress but nor do they warrant excessive skepticism, rather their impact on careers is contingent on employee needs.     

International coopetition for innovation: Are the benefits worth the challenges?

International coopetition has rarely been studied in relation to innovation. Further exploration of effects of international coopetition, i.e. the pursuit of simultaneous cooperation and competition, on a firm’s innovation performance is especially important as such a relationship is challenging with a high propensity to fail. This observation formed the point of departure for this study, which aims to increase the understanding of the effects of international coopetition on firm innovativeness and how these effects are conditioned on the magnitude of the organizational adjustments a firm introduces. We use an unbalanced panel of 9839 firms that participated in four waves of the Swedish Community Innovation Survey between 2008 and 2014 as our empirical base. We illustrate that firms that cooperate with competitors internationally are more likely to exhibit higher propensity to introduce radical innovations, yet this effect is conditioned upon the magnitude of organizational adjustments. Overall, our study contributes to the understanding of the implications of international coopetition and what a firm needs to benefit from it.     

Do nonprofessional investors value the assurance of integrated reports? Exploratory evidence

Using an experimental design, this explorative study provides unique empirical evidence of the effects of an integrated reporting assurance (IRA) on nonprofessional investors’ (NPIs) financial decision-making in a laboratory experiment. For this purpose, two independent experiments were carried out, one relying on a sample of Master’s students, and one focusing on managers of large corporations. In line with our agency theoretical reasoning, we find that students value an IRA positively, evidenced through significantly higher investments, while, contrary to expectations, an IRA has the opposite effect for managers. The results reveal that, dependent on the empirical model, an IRA has either no, or even an investment-decreasing, impact on executives. In order to assess the sense-making process underlying this conundrum, subsequent interviews with the managers were carried out which revealed three dimensions that shape practitioners’ critical attitudes towards assurance engagements. First, managers expressed a general disbelief in the decision usefulness of integrated reporting (IR) to (nonprofessional) investors. Second, interlocutors referred to negative practical experiences with audit and assurance engagements and had technical doubts specific to IRA. Third, managers voiced emotional caveats regarding the audit and assurance profession. These findings indicate a prevailing divergence between the extolled theoretical contribution of an IRA to report credibility and its actual nature in practice. In the further course of the investigation, we also find that the assurance provider (Big 4 auditor versus specialized consultant) does not affect investment decisions, but that a higher assurance level leverages investments among students. The results of this study add to the growing, albeit still small, IRA research body and deliver valuable insights for research, regulators, and practice.     

Does it pay to be eco? The mediating role of competitive benefits and the effect of ISO14001

Eco-innovation has become an important instrument to help companies reduce their environmental impact and gain a competitive advantage in increasingly competitive environments. Despite recent research conducted in this field, findings concerning the relationship between eco-innovation and firm performance remain conflicting, inconclusive and incomplete. This study aimed to clarify this relationship by incorporating competitive benefits as a mediator between eco-innovation and firm performance. Three core questions are examined: How does eco-innovation influence competitive benefits and firm performance? Do competitive benefits mediate the relationship between eco-innovation and firm performance? How does ISO14001 influence competitive benefits and firm performance? The study finds that competitive benefits mediate and strengthen the relationship between eco-innovation and firm performance. In addition, the results reveal that ISO14001 positively affects competitive benefits and thus leads to greater competitive benefits, while the association between ISO14001 and firm performance is not found to be statistically significant. The paper concludes with a discussion of implications for policy makers and companies, limitations, and future research directions.     

Do Lower Top Marginal Tax Rates Slow the Income Growth of Workers?

Top marginal tax rates are positively correlated with the pretax income growth of the bottom 90 per cent — those who are not subject to the top rates. To explain this correlation, this paper presents and tests a model in which executives can increase firm profitability by (i) increasing the firm's level of technology and (ii) decreasing labor costs. In the model, higher marginal tax rates may reduce pretax inequality by increasing the average income growth of workers. This hypothesis is tested by examining the effect of top marginal tax rates on (unobserved) relative bargaining power between labor and firms and, therefore, on the income growth of workers in the USA. Bargaining power, in both the theoretical and the empirical models, is proxied by private‐sector unionization and use of offshore labor resulting in higher imports.     

Do minimum wages increase job satisfaction? Micro‐data evidence from the new German minimum wage

On January 1, 2015, a new statutory minimum wage of € 8.50 per hour of work was introduced in Germany. Using a difference‐in‐differences approach, we estimate effects on worker‐level outcomes of continuing employees. The results reveal a meaningful absolute increase in the affected workers' pay satisfaction. The increase in job satisfaction is modest and predominantly driven by changes in pay satisfaction implying only a small effect on all other dimensions of job satisfaction. Moreover, effects from the minimum wage on work engagement and turnover intention are virtually zero.     

Do the Falling Earnings of Immigrants Apply to Self‐employed Immigrants?

It is well known that the earnings of recent cohorts of immigrant men have fallen further behind native‐born men. Using several years of Canadian Census data, this study finds that immigrants have turned to self‐employment at a much faster rate than the native born. In addition, the earnings gap between self‐employed immigrant and native‐born men has not grown with successive cohorts, but rather has followed a cyclical movement: narrowing at the peak, and widening in times of weaker economic activity. However, immigrants choosing self‐employment still face challenges, as their earnings are far below native‐born earnings, and convergence is a lengthy process.     

How do actors shape social networks during the process of new product development?

Recent studies on new-idea generation and development have highlighted the role played by network structure in the genesis of new combinations or the process of selecting ideas. However, less attention has been paid to the factors that entice actors to shape social networks during the process of the development of new ideas.This research was conducted in an R&D facility of a semi-conductor company. We analysed the generation of five creative projects and their development over a four-year period. We used a longitudinal approach and collected data through interviews and observations to identify the creative contributions and the actors who were involved at different time periods for each project. We mapped the relationships between actors who contributed to the development of each idea through creative thinking and/or helped it to become accepted both internally and externally over three-year windows. This method generated data on network evolution.We also carried out a qualitative analysis and identified four main factors explaining why actors turn to others during the idea-development process: (1) to gain access to information; (2) to enhance credibility; (3) to exercise one’s influence; and (4) to gain access to knowledge through people or objects. We demonstrate that different types of ties or network structures are relied upon to reap different kinds of benefits. This may partially explain network evolution as an idea progresses through different development stages.     

Do exits proxy a liability of foreignness?: The case of Japanese exits from the US

Progress in understanding the liability of foreignness requires accurate measurement of this concept. This paper investigates whether exits of foreign affiliates from a given host market provide a reliable measure. We tackle this question by investigating 32 exits of Japanese manufacturing affiliates from the US. Our goal is to assess the extent to which exits are driven by a liability of foreignness and thus whether exits can serve as a reliable measurement of this liability. We find that less than half of our exits are attributable to a liability of foreignness. We conclude that while the data confirm a liability of foreignness for Japanese early entrants into the US, the presence of many other motives for exit suggests caution when inferring such a liability from exits, especially when exit costs are low.     

Do “protean” employees make better leaders? The answer is in the eye of the beholder

While the protean career (Hall, 1976, 2002) has been lauded for its advantages in helping individuals adapt to changing career contexts, it is not clear how this career orientation may impact how others perceive a person's leadership ability. In this study, we hypothesized that those with a protean career orientation would receive higher leadership ratings from subordinates and superiors, but lower leadership ratings from peers, in part based upon social comparison theory. Using structural equation modeling, our hypotheses regarding subordinates and peers were supported, but not with respect to superiors, who, along with peers, rated those with a protean career orientation lower in terms of transformational leadership as measured by the MLQ. We discuss potential reasons for these findings and the consequences for research and theory. Also, we examine the implications of this research for leadership development, workforce recruitment and retention, and possible generational significance.     

Do ownership and size affect the performance of water utilities? Evidence from Estonian municipalities

Concerns regarding rising water and sewerage prices have generated a renewed interest in measuring and assessing water utility performance. An efficiency analysis can serve as a basis for price setting decisions. This article examines the influence of ownership structure and corporate size on the efficiency of Estonian water companies, and assesses the empirical efficiency gaps through the lens of corporate governance and natural monopoly theories. To assess efficiency and the influence of ownership and corporate size on efficiency, we use a Data Envelopment Analysis and truncated regression with maximum likelihood estimation as well as an ANOVA test. The study sample consists of 43 water utilities, serving more than 68% of the Estonian population. One main finding of the study reveals that ownership structure does not affect the efficiency of Estonian water utilities, while efficiency does increase with corporate size: large water utilities outperform small utilities. An additional conclusion is that the Estonian water sector is too fragmented.     

Do Foreigners Cushion Native Jobs? The Case of European Regions in the 1990s

Abstract. This paper investigates whether foreigners cushion native labour during the phases of the economic cycle. The theoretical model, based on the work of Blanchard and Katz (Brookings Papers on Economic Activity 0(1): 1–75, 1992), assumes that foreigners supply labour with a higher wage elasticity than natives. The empirical analysis, based on an unbalanced panel of 161 European regions during 1988–97, shows that following a labour demand shock the variability of native employment growth is lower the higher the proportion of foreign citizens in the local labour force. These results suggest that foreigners absorb some of the effects of the shock, shielding natives from its full impact. The analysis also reveals that the main channel mediating this ‘cushioning’ effect is the inter‐regional migration of foreign workers, followed (as a far distant second) by their higher/lower unemployment rates.     

Do Work-Life Benefits Enhance the Work Attitudes of Employees? Findings from a Panel Study

Several years of data were obtained from a survey administered in U.S. federal agencies. The results revealed that work-life programs did not negatively affect turnover intentions. In fact, two work-life programs (i.e., teleworking and employee assistance programs) were actually found to increase turnover intentions. However, one of the work-life programs (health and wellness) was found to positively affect satisfaction. The practical and theoretical implications of the article are discussed in the paper.     

Do transformational CEOs always make the difference? The role of TMT feedback seeking behavior

In the present paper, we raise the question whether CEO transformational leadership invariably makes a difference for team performance and change effectiveness. Since in general, CEOs are surrounded by a team of highly influential top managers, we argue that the effectiveness of CEO transformational leadership is contingent on the feedback seeking behavior of their top management team (TMT). Data from 38 TMTs and their CEOs demonstrated that transformational leadership was positively related to both TMT performance and effectiveness of organizational change, but only when the TMT engaged in low levels of feedback seeking behavior. As predicted, there was no relationship between CEO transformational leadership and performance and change effectiveness for teams exhibiting high levels of feedback seeking behavior. These findings suggest that for high-feedback seeking TMTs, organizational results can be achieved without a transformational CEO.     

Governing complexity to challenge neoliberalism? Embedded firms and the prospects of understanding new realities

Many initial assumptions about the appeal of global development and governance have run aground on the shoals of countervailing realities and interests. The overall trend of political despair and disillusionment, the loss of confidence in the markets as a unique arbiter of value creation and distribution, and the marketable appeal of governance best practices seem to have reached their nadir. Management literature has begun to question these issues and to call for a deeper understanding of the dynamics of political, social and corporate change. The question of (corporate) governance is plural and needs multilevel approaches to meet the new challenges of complex realities, especially the pressure of neoliberalism with two central consequences: financialization and globalization of economies. In this reflexive article, we aim to initiate avenues for new thinking at the institutional, corporate and academic levels. Institutional and regulatory frameworks need to be seen as local systems connected internationally and not global systems adapted locally. Theoretical frameworks need to be more integrated to grasp the same phenomena with multiple lenses. Methodological approaches and tools need also to be reinforced mutually to overlay the dichotomic examination of these complex realities.     

Delistings and the costs of governance: a study of European stock exchanges 1996–2004

In recent years there has been a dramatic increase in delistings from stock exchanges in the US and Europe, and this trend has been partly attributed to increasing administrative costs in listed companies. Has corporate governance regulation gone too far? We examine delistings from European stock exchanges 1996–2004 and find that standard corporate governance regulation—like investor protection and corporate governance codes—is associated with more delistings and in particularly going private transactions. In contrast, the tendency to go private is found to be lower, when the quality of overall governance is high. The results continue to hold when we take into consideration that governance policy may be endogenous.