nep-bec New Economics Papers
on Business Economics
Issue of 2007‒06‒18
twelve papers chosen by
Christian Calmes
University of Quebec in Ottawa

  1. A Note on Corporate Taxation, Limited Liability, and Asymmetric Information By Miglo, A.
  2. Developing a closed-form cost expression for an (R,s,nQ) policy where the demand process is compound generalized Erlang. By Larsen, Christian; Kiesmüller, Gudrun P.
  3. Les stock-options en faveur des dirigeants: déterminants d'octroi et impact sur la performance des enreprises, le cas français By Abdoulkarim Idi Cheffou
  4. Exponential Spectral Risk Measures By Cotter, John; Dowd, Kevin
  5. Reciprocity, Inequity Aversion, and Oligopolistic Competition By Pinto, Luis Santos
  6. "Gender Disparities in Employment and Aggregate Profitability in the United States" By Melissa Mahoney; Ajit Zacharias
  7. Why demand uncertainty curbs investment: Evidence froma a panel of Italian manufacturing firms By Elena Bontempi; Roberto Golinelli; Giuseppe Parigi
  8. Including estimates of the future in today's financial statements By Mary Barth
  9. Value of Intangible Job Characteristics in Workers' Job and Life Satisfaction: How much are they worth? By Namkee Ahn
  10. The Conceptual Framework for Business Process Innovation: Towards a Research Program on Global Supply Chain Intelligence By Møller, Charles
  11. The empirics of multinationality and performance By Bowen, H.P.
  12. Business Process Risk Management, Compliance and Internal Control: A Research Agenda By Rikhardsson, Pall; Best, Peter; Green, Peter; Rosemann, Michael

  1. By: Miglo, A.
    Abstract: Becker and Fuest (forthcoming) provides a new explanation for the important and puzzling link between limited liability and corporate taxation. The authors argue that a corporate tax on all entrepreneurs with limited liability is optimal when entrepreneurs can offset potential losses and when asymmetric information exists regarding projects' qualities. This note considers a model with slightly modified production technology. It confirms that entrepreneurs' abilities to offset losses and the existence of asymmetric information may affect government policy. However, it also shows that the optimal taxation policy differs from that in Becker and Fuest (forthcoming).
    Date: 2007
  2. By: Larsen, Christian (Department of Management Science and Logistics, Aarhus School of Business); Kiesmüller, Gudrun P. (Faculty of Technology Management)
    Abstract: We derive a closed-form cost expression for an (R,s,nQ) inventory control policy where all replenishment orders have a constant lead-time, unfilled demand is backlogged and inter-arrival times of order requests are generalized Erlang distributed
    Keywords: Inventory control; Compound renewal process; Generalized Erlang distribution;
    Date: 2006–06–20
  3. By: Abdoulkarim Idi Cheffou (DRM - Dauphine Recherches en Management - [CNRS : UMR7088] - [Université Paris Dauphine - Paris IX])
    Abstract: Ce papier a comme premier objectif, l'analyse des déterminants de l'octroi des stock-options aux dirigeants des entreprises. Le deuxième objectif visé est la vérification de l'impact des nouvelles attributions des stock-options sur la performance subséquente de la firme. Sur la base des données portant sur la rémunération des dirigeants de 101 entreprises cotées à la bourse de Paris de 2002 à 2004, nous trouvons une relation positive et significative entre les attributions de stock-options et la taille de la firme. Les relations entre les attributions des stock-options et les politiques d'endettement et de dividende, s'avèrent négatives et significatives. <br /> S'agissant de la relation stock-options/performance, nos résultats font ressortir une relation positive et significative entre les stock-options en faveur des dirigeants et la performance de l'entreprise, mesurée par le Q de Tobin et le ROA. Ainsi, nos résultats semblent confirmer les prédictions des théories de l'agence et de l'incitation, qui considèrent les stock-options comme un outil d'alignement des intérêts des dirigeants sur ceux des actionnaires.
    Keywords: Stock-options ; théorie de l'agence ; alignement des intérêts
    Date: 2007–06–05
  4. By: Cotter, John; Dowd, Kevin
    Abstract: Spectral risk measures are attractive risk measures as they allow the user to obtain risk measures that reflect their subjective risk-aversion. This paper examines spectral risk measures based on an exponential utility function, and finds that these risk measures have nice intuitive properties. It also discusses how they can be estimated using numerical quadrature methods, and how confidence intervals for them can be estimated using a parametric bootstrap. Illustrative results suggest that estimated exponential spectral risk measures obtained using such methods are quite precise in the presence of normally distributed losses.
    JEL: G10 G0
    Date: 2007
  5. By: Pinto, Luis Santos
    Abstract: This paper studies how reciprocity and inequity aversion influence the behavior of firms in imperfectly competitive markets. The paper shows that if reciprocal firms compete à la Cournot, then they are able to sustain “collusive” outcomes under a positive reciprocity equilibrium. By contrast, Stackelberg warfare outcomes may emerge under a negative reciprocity equilibrium. The results for inequity aversion are similar. Cournot competition between inequity averse firms can be harmful to consumers if it leads to equilibria where firms feel compassion toward each other. However, in equilibria where inequity averse firms are envious of each other consumers are better off than if firms were selfish. The paper also shows that only under very restrictive conditions does reciprocity or inequity aversion have an impact on Bertrand competition. Finally, the paper shows that non-selfish preferences have a greater impact on equilibrium outcomes in markets with a small number of firms.
    Date: 2007
  6. By: Melissa Mahoney; Ajit Zacharias
    Abstract: This paper explores the relationships between aggregate profitability and women's labor market participation in the United States during the 1980s and 1990s. We investigate, using decomposition analysis, whether the contribution of the stagnant or declining share of wages in national income to the upswing in profitability was aided by the growing incorporation of women into employment. Comparisons are made between counterfactual and actual wage shares to assess the relative contributions of gender wage disparity and female share of employment to the changes in the wage share. Additionally, we decompose the change in wage share into distributional changes within sectors and changes in the sectoral composition of aggregate value added to examine whether the effects of gender wage disparity and female share of employment on the aggregate wage share were dominated by the effects of compositional changes.
    Date: 2007–04
  7. By: Elena Bontempi (University of Ferrara); Roberto Golinelli (University of Bologna); Giuseppe Parigi (Bank of Italy Research Dept.)
    Abstract: From a theoretical point of view, uncertainty over the demand for a firm’s product may not have clear effects on investments, because of the influence of a number of factors, such as the production technology and the amount of competition in the product market.Until now, a deeper investigation of the interplay of different factors in the temporal dimension has not been possible because the empirical research has been based on cross-section analysis. This omission makes biased estimates of the investment-uncertainty relationship likely.The aim of this paper is to extend the findings of the empirical literature by using a panel of Italian firms over the period 1996-2004, covering a complete business cycle. The availability of a panel of survey data on companies’ investment plans, expected future sales and demand uncertainty allows us to account for unobservable individual firm differences, macroeconomic shocks and the temporal evolution of the investment-uncertainty relationship. A key finding of our paper concerns the role of the competition faced by Italian firms in 1996-2004. The gradual loss of market power experienced by Italian manufacturing firms along with the increasing flexibility of labour input may have weakened the negative effect of uncertainty on investment decisions. We show that, in repeated cross-section estimates, the omission of firm-specific effects together with the dynamic interplay described above, would have lead to misleading conclusions about the relevance of demand uncertainty in explaining investment decisions.
    Keywords: planned investments, demand uncertainty, survey data, panel estimation.
    JEL: E22 C33
    Date: 2007–04
  8. By: Mary Barth (Stanford Graduate School of Business)
    Abstract: This paper explains why the question is how, not if, today's financial statements should include estimates of the future. Including such estimates is not new, but their use is increasing. This increase results primarily because standard setters believe asset and liability measures that reflect current economic conditions and up-to-date expectations of the future will result in more useful information for making economic decisions, which is the objective of financial reporting. This is why standard setters seem focused on fair value accounting. How estimates of the future are incorporated in financial statements depends on the asset and liability measurement attribute, and on financial reporting definitions of assets and liabilities. The present definitions depend on identifying past transactions or events that give rise to expected inflows or outflows of economic benefits and, for inflows, control over the expected benefits. Thus, not all expected inflows or outflows of economic benefits are recognised. Note disclosures can help users understand recognised estimates, and can provide information about unrecognised estimates. Including more estimates of the future in today's financial statements would result in an income measure that differs from today's income, but arguably provides better information for making economic decisions.
    Keywords: financial statements, fair value, financial reporting
    JEL: E58 G15 M41
    Date: 2006–08
  9. By: Namkee Ahn
    Abstract: Using the data from the Spanish survey on life quality at work, we examine the importance of intangible job characteristics in workers’ job and life satisfaction. Our analysis shows that on both job and life satisfaction, the combined monetary value of intangible job characteristics such as flexibility, independence, social usefulness, pleasant work environment, pride, stress and the perception of receiving an adequate wage, is several times more worthy than that of objective job characteristics such as wage, sector and hours of work. Furthermore, we find that some intangible job characteristics such as flexibility, work environment and stress affect directly workers’ life satisfaction rather than indirectly through their effects on job satisfaction.
  10. By: Møller, Charles (Department of Management Science and Logistics, Aarhus School of Business)
    Abstract: This paper proposes a research program on Business Process Innovation: Towards Global Supply Chain Intelligence. Few words are more ubiquitous in business or society today than "innovation". This reflects that businesses are striving for ways to survive and thrive in an increasingly complex and connected world (IBM 2006). <p> Most industrial supply chains today are globally scattered and nearly all organizations rely on their Enterprise Information Systems (ES) for integration and coordination of their activities. In this context innovation inevitably is driven by advanced information technology. <p> Organizations today are required not only to operate effective business processes but they also need to accommodate to changing business conditions at an increasing rate. Consequently the ability to develop and implement new processes driven by the Enterprise Information Systems is a central competence in most industries, and furthermore it is a critical practice for a global enterprise. <p> The next practice in Global Supply Chain Management is Business Process Innovation. Business Process Innovation is the transformation of a global supply chain driven by a new advanced Enterprise Information Systems technology. This technology holds the potential to "close the control loop", but until now few organizations have managed to unleash the full potential of global supply chain intelligence. Thus, there is an emerging need for managing the transformation and for new approaches that will lead to robust global supply chains. <p> This paper presents a conceptual framework for Business Process Innovation. A research proposal based on five interrelated topics is derived from the framework. The research program is intended to establish and to develop the conceptual framework for business process innovation and to apply this framework in a global supply chain context. These topics are presented in the following sections, but first the background for the program is discussed.
    Keywords: No keywords;
    Date: 2006–07–24
  11. By: Bowen, H.P.
    Abstract: The relationship between a firm’s degree of multinationality and its performance is perhaps the most studied relationship in the field of international business. In this paper I address issues concerning the empirical estimation of this relationship. I argue for greater delineation of the underlying nature of firms’ multinationality and I point to several statistical issues regarding estimation that appear to need resolution, but which appear to have been largely neglected in the international business literature. Among these are endogeneity of the multinationality construct in the performance relationship and the likelihood that the multinationality-performance relationship is heterogeneous across firms.
    Date: 2007–06–14
  12. By: Rikhardsson, Pall (Department of Management Science and Logistics, Aarhus School of Business); Best, Peter (Faculty of Business); Green, Peter (The University of Queensland Business School); Rosemann, Michael (Faculty of Information Technology)
    Abstract: Integration of risk management and management control is emerging as an important area in the wake of the Sarbanes-Oxley Act and with ongoing development of frameworks such as the Enterprise Risk Management (ERM) framework from the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on an inductive methodological approach using literature review and interviews with managers engaged in risk management and internal control projects, this paper identifies three main areas that currently have management attention. These are business process risk management, compliance management and internal control development. This paper discusses these areas and identifies a series of research questions regarding these critical issues
    Keywords: Risk management; Internal control; Business processes; Compliance; Sarbanes-Oxley Act; ERP systems; COSO; COBIT
    Date: 2006–09–18

This nep-bec issue is ©2007 by Christian Calmes. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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