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Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity
Journal of Business Ethics,
This study treats firm productivity as an accumulation of productive intangibles and posits that stakeholder engagement associated with better corporate social performance helps develop such intangibles. We hypothesize that because shareholders factor improved productive efficiency into stock price, productivity mediates the relationship between corporate social and financial performance. Furthermore, we argue that key stakeholders’ social considerations are more valuable for firms with higher levels of discretionary cash and income stream uncertainty. Therefore, we hypothesize that those two contingencies moderate the mediated process of corporate social performance with financial performance. Our analysis, based on a comprehensive longitudinal dataset of the U.S. manufacturing firms from 1992 to 2009, lends strong support for these hypotheses. In short, this paper uncovers a productivity-based, context-dependent mechanism underlying the relationship between corporate social performance and financial performance.
19.04.2018 • 7/2018
Joint Economic Forecast Spring 2018: Germany’s Economic Experts Raise Forecast Slightly
Berlin, 19 April – Germany’s leading economic experts raised their forecasts for 2018 and 2019 slightly in their Spring Joint Economic Forecast released on Thursday in Berlin. They now expect economic growth of 2.2 percent for this year and 2.0 percent for 2019, versus 2.0 percent and 1.8 percent respectively in their autumn forecast. “The German economy is still booming, but the air is getting thinner as unused capacities are shrinking“, notes Timo Wollmershaeuser, ifo Head of Economic Forecasting. Commenting on the new German government’s economic policy, he adds: “It is precisely when the government’s coffers are full that fiscal policy should reflect the implications of its actions for overall economic stability and the sustainability of public finances. The extension of statutory pension benefits outlined in the coalition agreement runs counter to the idea of sustainability.”
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Produktivitätsunterschiede zwischen West- und Ostdeutschland und mögliche Erklärungsfaktoren. Ergebnisse aus dem IAB-Betriebspanel 2016
After several years of prosperity, the economic situation of German establishments improved further in 2016. Though the productivity in East German establishments converged slightly to the West German level, a significant productivity gap between both parts of Germany still remains. Differences in the economic structure can only explain a small part of this persistent gap: a Blinder-Oaxaca decomposition suggests that the different sector composition, lower exports and lower capital intensity of East German establishments explain only about one-fifth of the backlog. The observed positive economic development is associated with a further increase in firm profitability and total employment in the establishments in both parts of Germany. It is reflected also in a further increase in the demand for skilled personnel. Even though the majority of the demand could be met in 2016, one-third of all offered jobs remained vacant. As in the past, especially establishments in construction and business services as well as very small establishments, particularly in East Germany, faced considerable recruitment problems. The occupational skill requirements increased slightly over time. The proportion of jobs for skilled workers is on average higher in East German establishments than in West Germany, suggesting a higher formal qualification level of employees in East Germany. Looking at the personnel structure, a significant increase in the share of atypical employment, particularly part-time jobs and marginal employment, over the last years become visible. The participation of establishments in vocational training remains relatively stable: about half of the enterprises that are authorized to provide vocational training do actually train apprentices. However, the corresponding fraction in East Germany is significantly lower since the economic crisis. In contrast, the share of vacant apprenticeship positions there is much higher than in West German establishments, pointing to major problems in finding suitable applicants. The share of employees participating in further training is about one third for several years. As in the past workers in low-skilled occupations participate only about half as often in training as employees in qualified jobs.
Bank Financing, Institutions and Regional Entrepreneurial Activities: Evidence from China
International Review of Economics & Finance,
We investigate the effects of bank financing on regional entrepreneurial activities in China. We present contrasting findings on the role of quantity vs. quality of bank financing on small business formation in China: while we document a consistent, significantly positive relationship between the quality of bank financing and new venture formation, we find that the quantity of supplied credit is insignificant. We report that formal institutions are positively correlated to regional entrepreneurial activities, and informal institutions substitute formal institutions. Our findings also reveal that the institutional environment tends to supplement bank financing in promoting regional entrepreneurial activities.
Does Social Capital Matter in Corporate Decisions? Evidence from Corporate Tax Avoidance
Journal of Accounting Research,
We investigate whether the levels of social capital in U.S. counties, as captured by strength of civic norms and density of social networks in the counties, are systematically related to tax avoidance activities of corporations with headquarters located in the counties. We find strong negative associations between social capital and corporate tax avoidance, as captured by effective tax rates and book-tax differences. These results are incremental to the effects of local religiosity and firm culture toward socially irresponsible activities. They are robust to using organ donation as an alternative social capital proxy and fixed effect regressions. They extend to aggressive tax avoidance practices. Additionally, we provide corroborating evidence using firms with headquarters relocation that changes the exposure to social capital. We conclude that social capital surrounding corporate headquarters provides environmental influences constraining corporate tax avoidance.
15.03.2017 • 13/2017
The German Economy: Employment Boom in Germany, but no Overheating of the Economy
Employment in Germany continues to increase healthily, and private consumption expands due to rising real incomes. Investment in equipment, however, remains modest. Overall, economic demand is expanding at roughly the growth rate of potential Gross Domestic Product (GDP), and the output gap is nearly closed. “In 2017, GDP will increase by 1.3% and thus at a lower rate than in the previous year, but this is only due to fewer working days and not to sliding demand,” says Oliver Holtemoeller, Head of the Department Macroeconomics and IWH vice president.
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