Does a firm’s exposure to ethical failures matter to financial markets? A governance perspective

This paper investigates if a firm’s ethical reputation, in conjunction with its governance, affects its standing within financial markets. A firm`s ethical reputation, as measured by ethical failures, arises from its involvement in ethical violations and incidents while a comprehensive index proxies for governance. We assess a firm’s standing within financial markets through two complementary perspectives, i.e., the level of information asymmetry between managers and investors, as inferred from analyst forecast dispersion and analyst forecast error, and the relation between a firm’s earnings and its stock market valuation or return (value relevance). Our results suggest that a firm`s ethical reputation affects financial analysts’ forecasts as well as the stock market value assigned to its reported earnings. Moreover, it appears that corporate governance moderates such relations, with strong (weak) governance compensating for a weak (strong) ethical reputation. Overall, our evidence shows that ethical failures do not seem to pay.     

RANKING ECONOMICS DEPARTMENTS IN EUROPE: A STATISTICAL APPROACH

We provide a ranking of economics departments in Europe and we discuss the methods used to obtain it. The JEL CD‐ROM serves as a database for a period covering ten years. Journals are ranked using a combination of expert opinions and citation data to produce a scale from 1 to 10. The publication output and habits of fifteen European countries plus California are then compared. Individuals with a contribution greater than a predetermined minimum level are regrouped into departments which are ranked according to their total scores. A standard deviation is provided to underline the uncertainty of this ranking. (JEL: I29, D63, C12, C14)     

A Latent Class Binomial Logit Methodology for the Analysis of Paired Comparison Choice Data

A latent class model for identifying classes of subjects in paired comparison choice experiments is developed. The model simultaneously estimates a probabilistic classification of subjects and the logit models' coefficients relating characteristics of objects to choices for each respective group among two alternatives in paired comparison experiments. A modest Monte Carlo analysis of algorithm performance is presented. The proposed model is illustrated with empirical data from a consumer psychology experiment that examines the determinants of perceived consumer risk. The predictive validity of the method is assessed and compared to that of several other procedures. The sensitivity of the method to (randomly) eliminate comparisons, which is important in view of reducing respondent fatigue in the task, is investigated.     

The contribution of opinion surveys in forecasting aggregate demand in the four main EC countries

This paper presents for the four main EC countries forecasting models of aggregate demand components based on various tendency surveys. Its objective is to work out practical models both in terms of data requirement and computation as the models are to be used regularly for very short-term forecasting. In spite of a great simplicity of the specifications, the regression results prove quite acceptable. Forecasting exercises compare reasonably well with the results of more elaborate procedures.     

Social choice,optimal inference and figure skating

We approach the social choice problem as one of optimal statistical inference. If individual voters or judges observe the true order on a set of alternatives with error, then it is possible to use the set of individual rankings to make probability statements about the correct social order. Given the posterior distribution for orders and a suitably chosen loss function, an optimal order is one that minimises expected posterior loss. The paper develops a statistical model describing the behaviour of judges, and discusses Markov chain Monte Carlo estimation. We also discuss criteria for choosing the appropriate loss functions. We apply our methods to a well-known problem: determining the correct ranking for figure skaters competing at the Olympic Games.     

Learning from experience or learning from others?: Inferring informal training from a human capital earnings function with matched employer–employee data

A model of informal training which combines learning from own experience and learning from others is proposed in this paper. It yields a closed-form solution that revises Mincer–Jovanovic's [Mincer, J., Jovanovic, B., 1981. Labor mobility and wages. In: Rosen, S. (Ed.), Studies in Labor Markets. Chicago University Press, Chicago, pp. 21–64] treatment of tenure in the human capital earnings function. We estimate the structural parameters of this non-linear model on a large French cross-section with matched employer–employee data. We find that workers on average can learn from others 10% of their own human capital on entering one plant, and catch half of their learning from others’ potential in just 2 years. The private marginal returns to education are declining with education as more educated workers have less to learn from others and share the social returns of their own education with their less qualified co-workers. The potential for learning from others on the job varies across jobs and establishments, and this provides a new distinction between imitation jobs and experience jobs. Workers in imitation jobs, who learn most from others, tend to have considerably longer tenure than workers in experience jobs. Although workers in experience jobs can learn little from others, we find that they learn a lot by themselves. We document several analogies between the imitation jobs/experience jobs “dualism” and the primary/secondary jobs and firms’ dualism implied by the dual labor market theory. However, our binary classification of jobs depicts the data more closely than the dual theory categorization into primary-type and secondary-type establishments. Competition prevails between jobs and firms but jobs differ by their learning technology.     

Risk Perception of the "Mad Cow Disease" in France: Determinants and Consequences

Since 1996, when bovine spongiform encephalopathy (BSE) was assessed as a possible human transmissible disease, a variant of Creutzfeldt-Jakob disease (vCJD), French people have entered into a long period of fear and avoidance of beef and bovine byproducts, which produced an unprecedented collapse in the beef market. This article deals with the perceived risk of the "mad cow disease" (MCD) in the French general population. Two surveys were conducted on a representative sample of the adult population, the first one in 2000 during the peak of the crisis and the second one 13 months later in a quieter period. The main assumption we made was that changes in beef consumption are strongly related to the perceived risk of MCD, which we defined as people's cognitive and affective responses to hazard. Our objective was to identify the determinants and consequences of this perceived risk and to compare them in different sociopolitical contexts. The results issued from a bivariate and multivariate analysis show that: (i) the distribution of most of the variables significantly related to the perceived risk identified in the first survey had changed in the second survey, in relation with the reduction of worry and the resumption of national beef consumption; (ii) the propensity for self-protection through avoiding or ceasing beef eating was more related to feelings of worry than to subjective vCJD risk assessments; and (iii) the main determinant of less avoidance to beef products was the preference for beef, a feeling identified prior to emergence of the risk of MCD, remaining unchanged in various contexts.     

Management science in the United States and Europe: A decade of change in the literature

This paper focuses upon the investigation of change in the management science literature from 1965 to 1974. Both subject areas and reported areas of implementation are investigated. The study classifies the content of each article published during the past decade in the following set of European and American journals: United States—Management Science; British—Operational Research Quarterly; and German—Zeitscrift für Operations Research. A comparison of the results along both inter and intra country dimensions is presented.     

Mixed refinements of Shapley's saddles and weak tournaments

We investigate refinements of two solutions, the saddle and the weak saddle, defined by Shapley (1964) for two-player zero-sum games. Applied to weak tournaments, the first refinement, the mixed saddle, is unique and gives us a new solution, generally lying between the GETCHA and GOTCHA sets of Schwartz (1972, 1986). In the absence of ties, all three solutions reduce to the usual top cycle set. The second refinement, the weak mixed saddle, is not generally unique, but, in the absence of ties, it is unique and coincides with the minimal covering set. Received: 14 August 1998/Accepted: 12 November 1999     

Cardiac conditions

Cardiovascular disease (CVD) is the leading cause of death in the US. The growth of the older population in coming decades will inevitably increase the incidence of age-related cardiac disease. Increasing evidence has shown the prevalence of co-morbid mental health conditions in CVD patients. Specifically, depression and anxiety have been linked with CVD mortality. Due to the risk of psychosocial conditions with cardiac patients, mental health practitioners in health and gerontology need to be well-informed about CVD-related mental health comorbidity and current research developments. Accordingly, this article provides a systematic review of the clinical evidence about the efficacy, cost-effectiveness, and any potential risk of psychosocial intervention with cardiac patients.