The Role of Shocks in Employee Turnover*

This paper reports the findings from a recent study of nurse leavers at eight large hospitals in the National Health Service (NHS) of England and Wales. The study develops and extends an influential theory of employee turnover by describing how for some leavers a single, jarring event or shock triggers the decision to quit. By elaborating on the nature of shocks for this sample of 352 nurse leavers, the paper allows for improved understanding of nursing turnover and thus offers an example of relevant management research. The analysis of shock illustrates how conventional research methodologies can lead to a distorted picture of turnover. This has wider implications, both for any organization wishing to manage turnover effectively and for future research. The paper adds to the limited body of empirical analysis on actual leavers, thereby contributing to an ongoing methodological debate concerning the use of proxy variables. By highlighting flaws in the dominant methodology used to study turnover, the paper offers an example of management research that is also rigorous, and thus ‘pragmatic’.     

Moving in or Breaking Up? The Role of Distance in the Development of Romantic Relationships

Most romantic relationships start with a living apart together (LAT) phase during which the partners live in two separate households. Over time, a couple might decide to move in together, to separate, or to remain together while maintaining their nonresidential status. This study investigates the competing risks that partners in a LAT relationship will experience the transition to coresidence or to separation. We consider the amount of time LAT partners have to travel to see each other to be a key determinant of relationship development. For our statistical analyses, we use seven waves of the German Family Panel Pairfam (2008/2009–2014/2015) and analyze couples in the age group 20–40 years. We distinguish between short-distance relationships (the partners have to travel less than one hour) and long-distance relationships (the partners have to travel one hour or more). Estimating a competing risks model, we find that couples in long-distance relationships are more likely to separate than those living in close proximity. By contrast, the probability of experiencing a transition to coresidence is lower for LAT couples in long-distance than for those in short-distance relationships. Interaction analyses reveal that distance seems to be irrelevant for the relationship development of couples with two nonemployed (unemployed, in education or other inactive) partners.     

TEACHING THE INDEPENDENCE OF X AND S2 IN APPLIED STATISTICS*

In this note, the independence of X and S² is proved without the prerequisite knowledge of differential calculus. The purpose is to compensate for the lack of a text in applied statistics that proves the independence of such statistics.     

The how and why of a firm’s approach to CSR and sustainability: a case study of a large European company

This paper aims to analyse “how” and “why” a company engages in CSR and sustainability. The “how” concerns the features of the firm’s CSR and sustainability approach, defined in terms of a firm’s strategy (implemented issues, initiatives and activities) and organization (organizational structures and roles and managerial systems adopted). The “why” refers to the key determinants, both internal and external, of CSR and sustainability. Finally, how the firm’s CSR and sustainability approach evolves over time and the relation between CSR determinants in various stages of the CSR evolutionary path are also investigated. The research method is based on the longitudinal analysis of a case study concerning a large multinational company operating in the telecommunications industry in Europe. The analysis of the case study shows that sub-cultural differences in the approach to CSR and sustainability may occur across hierarchical levels and functional units. Moreover, embedding CSR and sustainability principles doesn’t follow a linear and continuous process, made by sequential stages. Indeed, it can be characterized by an up and down evolutionary path, based on different stages with a changing emphasis given to CSR and sustainability issues. Finally, we find that the firm CSR and sustainability approach is not an autonomous choice, but it is a consequence of the contingent role played by both the external and the internal drivers and by their relative importance during the company’s CSR history.     

Explaining the demand for structured financial products: survey and field experiment evidence

In many countries structured investment products are popular among retail investors. We explain the demand for these products using unique field data where we let subjects freely design their “favorite” structured product. Results suggest that the supply with capital protected products (guarantee certificates) might indeed be demand-driven. This does not seem to be the case for other product categories where marketing and sales practices might play a more important role. In a survey among financial practitioners we find furthermore that a demand for capital protected products can be explained by loss aversion and saving motifs, e.g. for buying a house.     

Conservative accounting as a signaling device in debt covenants

This paper provides a signaling explanation for benefits of conservative accounting in a debt contracting setting. It develops a model in which firms want to finance more or less risky projects through debt, which is private information. Creditors price the risk on average riskiness, which implies a relatively high interest rate for low-risk firms. These firms can signal their low-risk type by implementing a conservative accounting system. The accounting signal is used in a debt covenant that stipulates early repayment in case of a bad signal. Thus, the low-risk firms benefit from a lower interest cost, but at the cost of higher risk of being forced to liquidate a profitable project. The analysis establishes conditions for separating and pooling equilibria and determines their individual and social welfare implications. It shows that conservative accounting by low-risk firms can even increase social welfare if it mitigates underinvestment.