AbstractAsymmetric information and lack of collateral creates a suboptimal allocation of financial resources to those in most need. When uncollateralised borrowers approach financial institutions, the presence of moral hazard and adverse selection results in no lending. Conversely, group‐lending contracts—joint liability, dynamic lending, and social cost for defaulting—control for information asymmetries and create a co‐operative trust game between borrowers leading to an undominated optimal strategy to repay, and therefore, for the lender to Give. Group lending proves superior to typical individual borrowing and lending when no collateral is available. Social collateral and trust are fundamental pieces of the successful work of MicroFinance. Resulting contracts and correspondent payoffs are Pareto efficient.
PurposeThis paper's main objective is to expand the demand-driven strategic field by developing a model where endogenization of consumers' preferences for clean(er) products becomes the driver of the firm green corporate social responsible (GCSR) profit maximization behavior.Design/methodology/approachThe model proposes that in undifferentiated markets, firms using a conventional technology manage production-related negative externalities via information asymmetries. In turn, when consumer socially responsible individuals (CnSR) discover the nature of the information asymmetries, they then reveal their preferences. The building block of the model is that CnSR derive value both from intrinsic as well as extrinsic product features, and derive negative satisfaction from the production negative externalities. In turn, CnSR preferences offer a higher willingness to pay for a combined intrinsic (private good and direct utility) and extrinsic (public good and feel good–do good utility) product.FindingsThe model demonstrates that the firm's GCSR behavior is a technological-driven process directly affecting the extrinsic component of the product through the development of a safe technology, and exclusively targeting CnSR type of consumers. The corollary of the model is that for the firm pursuing a GCSR behavior, the development of a competitive advantage with higher firm performance leads to profit maximization when exclusively serving the GCSR segment of the market. Thus, GCSR is the result of unusual innovation efforts.Originality/valueThis paper presents a model that expands the field of strategic management through the demand-driven incorporation and respective modeling. To the best of the author's knowledge, this is the first model to explicitly develop this relationship in this format.
Procrastinating the repayment in full on a month‐to‐month balance in credit card debt is a problem affecting a large segment of the population. This paper studies the role that present‐biased preferences and impatience play in the repayment behaviour of consumers. Evidence from a field study using a sample of 380 college students provides empirical support to the hypothesis that individuals with present‐biased preferences tend to adopt a strategic procrastination repayment behaviour that is not optimal to accomplish repayment in full. More specifically, individuals suffering from self control issues and using credit cards to bridge unexpected shortage of income are more likely to fail to repay credit cards in full in the period after the purchase was completed, therefore, carrying over a month‐to‐month balance. In addition, people with a simple present‐biased revealed effect are also more likely to fall behind on credit card repayment, vis‐à‐vis those that have a higher marginal propensity to save. By the same token, we find that individuals consistently behave inconsistently, that is evidence from our sample indicates the predominance of dynamically inconsistent preferences, in opposition to the prescriptions of the neoclassical theory. In this regard, the naïve type of individuals with present‐bias preferences consume beyond their income capabilities and are much more likely to carry over credit card debt into the next period, vis‐à‐vis individuals that are more sophisticated.
Introducción
La movilidad urbana es uno de los fenómenos sociales que ha ganado mayor relevancia en las últimas décadas, principalmente desde que el eje de la planificación de las ciudades se ha centrado en el automóvil, lo cual ha generado importantes transformaciones en la urbanidad a nivel global.
Objetivo
El presente artículo tiene como objetivo aproximarse a algunas particularidades para el estudio de las implicaciones sociales que tiene la generación de infraestructura para la movilidad urbana. Pretende mostrar algunas de las características en que han sido planificadas las ciudades occidentales bajo la modernidad, y cómo dicha lógica ha promovido formas particulares de transporte masivo y el triunfo del automóvil. Además, se aborda el impacto que está planificación ha tenido sobre la movilidad no motorizada, así como los problemas y oportunidades que se presentan cuando las infraestructuras para la movilidad fallan o se abandonan.
Método
El estudio es una aproximación teórica y conceptual del fenómeno de la movilidad, que busca ayudar a posicionar futuras investigaciones empíricas desde las ciencias sociales.
Resultados
Como principal hallazgo se encuentra que es sumamente delicado el planificar grandes proyectos urbanísticos sin tomar en cuenta los impactos diferenciados que puedan tener sobre las sociedades en las que se insertan.
Conclusiones
En las conclusiones se invita a pensar desde un enfoque interdisciplinario y participativo la manera en que se planifican las infraestructuras de movilidad para el caso costarricense.
Micro credit programs provide institutional arrangements for low‐income people to transit from nonmarket to market‐oriented settings. This article develops a data set of payment records to determine micro credit participants' behavior on repayment performance. The findings shed new light strongly supporting micro credit as a feasible alternative to successfully provide financial resources to the poor, when controlling for asymmetric information. The empirical evidence indicates that learning by association through peer mentoring is a significant determinant in explaining high repayment rates, whereas peer monitoring is not. (JEL O1, O17, L31, J15)
Free trade reform promotes and consolidates businesses' orientation to international markets. Using a sample of twenty Latin American countries, this study finds support for the hypothesis that higher revealed trade openness implies faster economic growth. However, at low output growth levels, increased revealed trade openness does not translate to faster output growth. Why more trade does not necessarily imply faster growth at all levels of revealed trade openness growth remains a conundrum. Failure to derive faster economic growth may compromise the prospects for sustainable trade reforms and thus the consolidation of new business ventures as engines for further growth.
Purpose The purpose of this paper is to model the role that stakeholders, and especially social responsible consumers play in the process of finding a win–win solution to control production related negative externalities. In this regard, when information asymmetries are present and consumers become knowledgeable about them, consumers with d-preferences for corporate social responsibility (CSR) type of products becomes the driver of the firm strategy.
Design/methodology/approach To accomplish the goals of this paper, the authors proceed to develop a series of theoretical models wherein the social gains and costs of alternative modes of intervention are illustrated. The authors begin with a standard Pigouvian tax model and construct a stakeholder equivalent tax model and finalize the analysis with consumers acting in a shared social responsible behavior with firms as the optimal solution model.
Findings The authors show that proactive disclosure of information asymmetries regarding negative externalities develops a shared social responsibility between consumers and firms. Market-based solutions to the externality problem are achieved under this setting. This solution is preferred to a Pigouvian tax and to a stakeholder equivalent tax. It is concluded that shared social responsibility is the result of the interaction of consumers with d-preferences and the reaction of a socially responsible "firm" willing, and the authors are able to incorporate these preferences as drivers for its strategy.
Research limitations/implications The main limitation of this paper is in its theoretical nature and specific applications to one case, that of negative externalities in production processes. The implication of this is that the model herein developed needs to be put to the empirical test.
Social implications The overall social implications indicate that active reduction of information asymmetries is welfare improving and preferred to government intervention.
Originality/value This paper is original as it makes use of economic principles to develop a parsimonious model to demonstrate that proactive actions of a firm in response to consumers and stakeholders demands leads to an overall social welfare improvement when negative externalities deriving from production are incorporated into the decision making process of both consumers and firms. These decisions prove superior to government regulations.
AbstractThree highly cited studies with over 6000 citations collectively report a negative relationship between the market value of the firm and leverage. Such empirical findings clearly contradict the hypothesis of leverage adding value to the firm and an optimal capital structure that maximizes firm value—these findings have yet to be resolved. Employing a sample of 3,768 firms consisting of 39,015 observations, a stochastic frontier analysis was used to assess the relationship of leverage among other capital structure factors with firm value. It was found that in general the use of leverage promotes firm value, consistent with the trade‐off theory and that the inverse relationship between leverage and firm value was a temporary occurrence and is likely attributable to firms employing tax loss carrybacks in response to the 1986 Tax Reform Act. The estimates of technical efficiency indicate that many firms can do more to increase their value, the sample as a whole improves efficiency (value) over the sample period. The findings reconcile the reports of leverage decreasing firm value as reported in Baker and Wurgler, Fama and French, and Habib and Ljungqvist. The empirical findings suggest prior observation was a due to a decline in the value of the tax shield generated by leverage after the Tax Reform Act of 1986. Specifically, tax carrybacks extended the pre‐Tax Reform Act of 1986 tax shield value to 1991 and after 1991 the tax shield value declined.
AbstractThis paper studies the determinants of technological catch‐up considering spatial and sectoral aggregation of industries. We investigate how geographical and technological proximity to the technology leader impact regional employment growth. We model technological progress by means of a hierarchical process of catch‐up to the technology leader. We also incorporate measures for knowledge spillover effects to test the roles of competition, specialisation, and diversity at the industry level. Empirical results using data at the county level for different economic sectors (2‐dig NAICS) for the United States indicate that human capital plays a crucial role in promoting sectoral employment growth. The association between technological/geographical distance to the technology leader and employment growth varies across sectors.
