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.     

“Facing” leaders: Facial expression and leadership perception

This experimental study investigated the effect of a leader's expression of happy versus nervous emotions on subsequent perceptions of leadership and ratings of traits associated with implicit leadership theories (ILTs). Being fast and universally understood, emotions are ideal stimuli for investigating the dynamic effects of ILTs, which were understood in this study in terms of the constraints that expressed emotions impose on the connectionist networks that activate ILTs. The experimental design contrasted videotaped and still frame presentations of a leadership event; however, this methodological factor had no significant effects and analyses were thus collapsed across this factor. Key findings were that the expression of a happy versus nervous emotion at the end of a problem-solving sequence had multiple effects: happy emotions resulted in higher leadership ratings, higher trait ratings, greater correlations among trait ratings, and greater dependence of trait ratings on leadership perceptions. An exploratory model suggested that leadership impressions mediated the effects of facial emotions on trait ratings. The discussion further links the study findings with interpretations in terms of ILTs and many types of constraints on these cognitive structures. It also suggests ways to integrate these ideas with advances in neuroscience research.     

Justice Sensitivity in Childhood and Adolescence

Individuals differ in their sensitivity toward injustice. Justice‐sensitive persons perceive injustice more frequently and show stronger responses to it. Justice sensitivity has been studied predominantly in adults; little is known about its development in childhood and adolescence and its connection to prosocial behavior and emotional and behavioral problems. This study evaluates a version of the justice sensitivity inventory for children and adolescents (JSI‐CA5) in 1472 9‐ to 17‐year olds. Items and scales showed good psychometric properties and correlations with prosocial behavior and conduct problems similar to findings in adults, supporting the reliability and validity of the scale. We found individual differences in justice sensitivity as a function of age and gender. Furthermore, justice sensitivity predicted emotional and behavioral problems in children and adolescents over a 1‐ to 2‐year period. Justice sensitivity perspectives can therefore be considered as risk and/or protective factors for mental health in childhood and adolescence.     

Vicarious ostracism and control in young children

After observing ostracism or social exclusion, older children, adolescents and adults report decreased satisfaction of the need for control. Attempting to regain control can motivate aggression in ostracized adults. Research has shown that the onset of ostracism’s harmful effects on children’s behavior is at preschool age. We investigated whether preschoolers would exert more control after witnessing ostracism. A sample of 53 children (Mage = 5 years, 5 months) first watched priming videos either showing ostracism or not. Subsequently, they participated in two ball games. In both of the games (order counterbalanced), children could control the flow of a ball’s motion, either live between two people (i.e., social control) or between two bars on a laptop screen (i.e., non‐social control). Overall, children understood social exclusion when it was displayed in the videos. We found an effect of observed ostracism only on social control. Four‐ to five‐year‐old boys who witnessed ostracism stopped a ball game between two persons longer than boys who did not witness ostracism. Our results suggest that observing social exclusion elevates young boys’ need for control over a social situation. Girls showed a different pattern but their responses did not differ significantly between ostracism and non‐ostracism conditions.     

Followers' Personality and the Perception of Transformational Leadership: Further Evidence for the Similarity Hypothesis

Managers and supervisors are thought to affect their followers' attitudes and behaviour. Within leadership research, behaviour of leaders and managers is usually considered as the independent variable whilst followers' reactions are considered the dependent variable. In this study, we reverse this order and investigate the degree to which the evaluation of leadership is a result of followers' perceptions and attributions. In order to corroborate and extend previous experimental research, a field study was conducted to analyse the influence of followers' personality and perceived leader personality on followers' perception of leadership within an organizational setting. The results provide further evidence that followers' personality influences the perception of transformational leadership and commitment to the supervisor. Moreover, the perception of leaders' personality was related to the perception of leadership and commitment to the supervisor. The finding that the perception of supervisors' personality mediates both the relationship between followers' personality and the perception of leadership and commitment provides support for the similarity hypothesis. Results are discussed in the light of feedback and leader development.     

Social Capital in Emerging Collaboration Between NPOs and Volunteers: Performance Effects and Sustainability Prospects in Disaster Relief

VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations - Disaster management research increasingly focuses on how to collaborate with emergent volunteers in order to support...