A Contingency Model of Boards of Directors and Firm Innovation: The Moderating Role of Firm Size

This study asserts that the effects of board characteristics on firm innovation need to be evaluated with reference to contingency variables. A literature review suggests that relatively few studies adopt a contingency view when examining the outcomes of boards of directors. This study examines the influence on firm innovation of characteristics such as board size, outsider ratio and board diversity, and suggests that their influence is contingent upon firm size. The model is tested on a sample of Italian companies and finds support for the contingency hypothesis. This study advances research on boards of directors by emphasizing the importance of context.     

Corporate governance and management practices: stakeholder involvement, quality and sustainability tools adoption

Local public services are the field in which New Public Management (NPM) and Public Governance issues are most in evidence. The local public services are characterized by the rethinking of the role played by local government in the provision of services. An evolution has taken place. From a traditional configuration in which local public services were managed by local governments they moved to a configuration where a separation has taken place between the local government role (which continues to be the guarantor of the satisfaction of public needs) and the role of local public utilities (LPUs) (responsible for delivering the services). This transformation implies both the delegation of resources and authority to lower organisational levels within the public sector and the reconfiguration of accountability chains between the state institutions and the society. In recent years, an intense debate has developed regarding the introduction of new tools and control systems. Particular attention has been paid to planning and control systems, human resources management systems, and performance management systems, leaving a few pioneers to develop their analysis on corporate governance mechanisms with regard their relationships with both the external (stakeholders) actors and the internal (management) ones. On one hand, the OECD wrote guidelines in order to ensure good corporate governance practices, focusing on relations with stakeholders. On the other hand, the dialogue between corporate governance and stakeholders has been already tackled by a number of International organizations guidelines or principles, following a debate on corporate governance that has progressively combined a stakeholder perspective with a more classic shareholder-maximizing model of governance. This article contributes to the debate on the stakeholder involvement process. By means of both a theoretical discussion and an empirical research conducted on 37 Italian LPUs, this paper attempts to analyse specific management tools which can be used to improve the quality of corporate governance in LPUs, by extending the stakeholder involvement. Some NPM’s tools, such as quality standards and sustainability tools imply an effort to offer new forms of organizational behaviour in the decision-making processes (i.e. the choice of the performance indicators and the reporting tools) and to create a dialogue between the enterprise and its stakeholders. In particular, in our study we focus on the adoption of quality standards (ISO 9000 and Customer Satisfaction) and sustainability tools (sustainability reports and ISO 14000 standard) as NPM’s tools to facilitate the stakeholder involvement practices.     

Pensions and gender in Latin America: Where do we stand in the Southern Cone?

This article summarizes gender-related aspects of the current social security reform paradigm in the countries of Latin America's Southern Cone—Argentina, Brazil, Chile, and Uruguay. The author, Fabio M. Bertranou, begins with a review of the main elements that justify dealing with various aspects of social protection—old age, disability and survival. Bertranou then provides a summary of the main performance aspects of these reformed social security programs in the countries of the Southern Cone region in terms of providing protection for the risks of old age. Results for substitution (replacement) rates by gender are provided for Argentina, Brazil, Chile and Uruguay. The author also discuss other conceptual and empirical evidence produced by other international agencies such as the World Bank and ECLAC. Finally, Bertranou discusses some of the general implications for incorporating this dimension in the debate about public policies and reforms of social protection systems, particularly pensions and related programs.     

Empirical evidence on internal control systems and corporate governance in Italy

The Corporate Governance (CG) theme has recently been the subject of significant measures to try to restore confidence among investors by encouraging information and communication transparency. The Italian Parliament approved Law 262 in 2005; and in 2006 the CG Committee of the Italian Stock Exchange approved the new Self-Regulatory Code for listed companies. This paper deals with control matters and moves on to causes and cases of their failures in relation to a sample of Italian companies. More precisely, it investigates, through an empirical survey, the main limits and areas for improvement in the working of company Internal Control (IC) system(s) and in the objectives of the role of the three main professional bodies currently in charge of it in Italy (i.e. Internal Auditing, Statutory Auditors and External Auditors). The results obtained show that the Italian situation is very unusual, due to a long tradition: the possibility to choose between different administration and control systems, often with coexisting and overlapping roles, creates problems in terms of responsibility and control. The first answers to the critical issues highlighted are given by the aforementioned laws, intended as the main catalysts for a review of the roles of all IC bodies. However, much work has still to be done. The final aim was to come up with suggestions about the possibility of finding areas for improvement within those companies’ IC systems.     

Financial Instruments for Mitigation of Flood Risks: The Case of Florence

This article analyzes the mechanisms and effects of innovative financial instruments that a central public administration (CPA) may adopt to minimize the flood risk in particularly exposed regions. The pattern we suggest assumes that in risky areas the CPA can issue two financial instruments, called project options and CAT‐bonds, producing a dynamic interaction among three types of agents: the CPA itself, the local public administrations, and private investors. We explore the possible scenarios of such interaction and the conditions under which the CPA's goal of maximal risk reduction is attained. This pattern is proposed for flood risk mitigation in the city of Florence, where the model dynamics are tested assuming parameters obtained from engineering studies.     

A new geometric INAR(1) process based on counting series with deflation or inflation of zeros

In this paper, we introduce a new non-negative integer-valued autoregressive time series model based on a new thinning operator, so called generalized zero-modified geometric (GZMG) thinning operator. The first part of the paper is devoted to the distribution, GZMG distribution, which is obtained as the convolution of the zero-modified geometric (ZMG) distributed random variables. Some properties of this distribution are derived. Then, we construct a thinning operator based on the counting processes with ZMG distribution. Finally, an INAR(1) time series model is introduced and its properties including estimation issues are derived and discussed. A small Monte Carlo experiment is conducted to evaluate the performance of maximum likelihood estimators in finite samples. At the end of the paper, we consider an empirical illustration of the introduced INAR(1) model.     

The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms

This study addresses the controversial issue of how non-financial performance affects the cost of debt capital and access to it. The relationship between corporate social performance and two measures of debt cost (accounting-based and market-based) and the measure of debt access are analysed by means of a multi-theoretical framework combining economics with social theories. By observing a sample of listed European non-financial firms over an 8-year period from 2005 to 2012, we find a negative relationship between corporate social performance and interest rate. Consistent with this result, we find a positive relationship between corporate social performance and debt rating. Thus, corporate social performance has a positive role in reducing the cost of debt capital. Moreover, firms with better corporate social performance are more attractive to lenders in terms of leverage allowance. Overall, our findings provide deeper insight into the reasons why companies should improve their corporate social performance.     

A Bayesian approach for non-homogeneous gamma degradation processes

A Bayesian approach based on the Markov Chain Monte Carlo technique is proposed for the non-homogeneous gamma process with power-law shape function. Vague and informative priors, formalized on some quantities having a “physical” meaning, are provided. Point and interval estimation of process parameters and some functions thereof are developed, as well as prediction on some observable quantities that are useful in defining the maintenance strategy is proposed. Some useful approximations are derived for the conditional and unconditional mean and median of the residual life to reduce computational time. Finally, the proposed approach is applied to a real dataset.     

Pension reforms in Chile and social security principles, 1981–2015

Chile pioneered in Latin America not only the introduction of social security pensions, but the structural reform that privatized them and a process of “re‐reform” implementing key improvements. A Presidential Commission in Chile, appointed in 2014 to evaluate reform progress and remaining problems in the pension system, released its report in September 2015. In light of the Commission's findings, the article assesses Chile's compliance with International Labour Organization social security guiding principles: social dialogue, universal coverage, equal treatment, social solidarity, gender equity, adequacy of benefits, efficiency and affordable administrative cost, social participation in management, state role and supervision, and financial sustainability. The exercise follows three stages: the structural reform (1981–2008), the re‐reform (2008–2015), and the Presidential Commission proposals (2015)     

MANAGERS AND (SECRET) SOCIAL NETWORKS: THE INFLUENCE OF THE FREEMASONRY ON FIRM PERFORMANCE

In this paper, I study the impact of managers’ affiliations with the Freemasonry on the performances of companies. Using a unique data set of 412 companies quoted on the London Stock Exchange between 1895 and 1902, I find that young and small firms run by Masonic managers exhibited larger leverage ratios. These companies earned higher profits, although the effect is not statistically significant. Large publicly quoted corporations managed by Freemasons instead had lower profits and lower Tobin’s Q. I discuss the issue of the endogeneity of Freemasonry membership, and I use four different approaches to partially address this.