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Article
Publication date: 11 March 2014

Irene Comeig, Esther B. Del Brio and Matilde O. Fernandez-Blanco

The current credit rationing strongly influences the viability of SMEs innovation projects. In this context, the practice of screening borrowers by project success probability has…

2629

Abstract

Purpose

The current credit rationing strongly influences the viability of SMEs innovation projects. In this context, the practice of screening borrowers by project success probability has become a paramount consideration for both lenders and firms. The aim of this paper is to test the screening role of loan contracts that consider collateral-interest margins simultaneously.

Design/methodology/approach

This paper presents an empirical analysis that uses a unique data set composed of 323 bank loans granted by 28 banks to SMEs backed by a Spanish Mutual Guarantee Institution.

Findings

The results show that appropriate combinations of collateral and interest rates can distinguish between borrowers with different project success probability: low success probability borrowers finance its projects without collateral and with high interest rates, whereas high success probability borrowers accept loans with real estate collateral and low interest rates.

Practical implications

This screening mechanism reduces credit rationing, thus increasing good projects' access to credit.

Originality/value

This study provides the first empirical evidence on the effectiveness of collateral-interest pairs as a self-selection mechanism.

Details

Management Decision, vol. 52 no. 2
Type: Research Article
ISSN: 0025-1747

Keywords

Open Access
Article
Publication date: 16 August 2022

Juri Matinheikki, Katri Kauppi, Alistair Brandon–Jones and Erik M. van Raaij

Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance…

5170

Abstract

Purpose

Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance mechanisms exist. This review of agency theory (AT), across four distinct fields, explains the connection between governance mechanisms and supply chain relationship types.

Design/methodology/approach

The study uses a systematic literature review (SLR) of articles using AT in a supply chain context from the operations and supply chain management, general management, marketing, and economics fields.

Findings

The authors categorize the governance mechanisms identified to create a typology of agency relationships in supply chains.

Research limitations/implications

The developed typology provides parsimonious theory on different forms of supply chain agency relationships and takes a step towards a “supply chain-oriented agency theory” explaining and predicting relationship types and governance in supply chains. Furthermore, a future research agenda calls for more accurate measuring of agency costs, to examine residual gains alongside residual losses, to take a dual-sided perspective of agency relations and to adopt AT to examine more complex supply networks.

Practical implications

The review provides a menu of governance mechanisms and describes situations under which these mechanisms could be deployed to guide managers when developing their supply chain relationships.

Originality/value

The first review to combine and elaborate views from four major disciplines using AT as a lens to supply chain relationships. Expanding the traditional set of governance mechanisms provides academics and practitioners with a bigger “menu” of options to consider.

Details

International Journal of Operations & Production Management, vol. 42 no. 13
Type: Research Article
ISSN: 0144-3577

Keywords

Content available
Article
Publication date: 1 June 2003

43

Abstract

Details

Pigment & Resin Technology, vol. 32 no. 3
Type: Research Article
ISSN: 0369-9420

Keywords

Article
Publication date: 16 May 2016

Robert D. Hisrich, Saša Petković, Veland Ramadani and Léo-Paul Dana

The purpose of this paper is to focus on the possibilities and limitations of venture capital formation in Bosnia and Herzegovina and Macedonia where there has been a lack of…

Abstract

Purpose

The purpose of this paper is to focus on the possibilities and limitations of venture capital formation in Bosnia and Herzegovina and Macedonia where there has been a lack of success and benefits of small- and medium-sized enterprises (SMEs) from this type of financing.

Design/methodology/approach

The paper provides a rationale for specific methodological choices and justifies its choice. Both quantitative and qualitative methods were employed. The methods section (research design) explains the entry criteria for the study population, specific imaging techniques and methods of data analysis.

Findings

Venture capital invest in companies in the beginning to achieve an above average return on investment. Unfortunately, there are no officially registered venture capital funds in Bosnia and Herzegovina. For the venture capital funds to operate, it is necessary to adopt regulations governing this area, to create a favorable tax system and introduce a cash basis for VAT calculation for SMEs. The majority of respondents in the research believe that in the establishment of venture capital funds would provide one of the greatest supports by the governments of these countries, analyzing the economic situation in these countries, it is apparent that there is an under-developed legal and tax system, which does not support SMEs. In order to attract foreign and domestic investors, and form venture capital funds, it is necessary to create a favorable business environment.

Originality/value

The paper contains novel information and insight into VC funds in two transition economies of Bosnia and Herzegovina and Macedonia.

Details

Journal of Small Business and Enterprise Development, vol. 23 no. 2
Type: Research Article
ISSN: 1462-6004

Keywords

Book part
Publication date: 1 October 2008

Catalina Amuedo-Dorantes and Miguel Á. Malo

Using Spanish establishment-level data on temporary and permanent job and worker flows, we examine firms’ relative usage of fixed-term contracts in response to changes in their…

Abstract

Using Spanish establishment-level data on temporary and permanent job and worker flows, we examine firms’ relative usage of fixed-term contracts in response to changes in their prior net employment expectations for the short-run and the long-run – viewed as proxies of how a wide variety of future shocks are ultimately perceived by establishments. The employment response of establishments to changing net employment expectations for the short-run is, primarily, suggestive of their reliance on fixed-term contracts as a buffer to cushion short-run changes in demand as well as to shield permanent workers from downward workforce adjustments. In contrast, their response to changes in net employment expectations for the long-run mostly hints on the use of fixed-term contracts as a screening device. Therefore, policies providing financial incentives to convert fixed-term into permanent contracts – thus targeting firms’ using fixed-term contracts as a screening device, are likely to only have limited effectiveness.

Details

Work, Earnings and Other Aspects of the Employment Relation
Type: Book
ISBN: 978-1-84950-552-9

Article
Publication date: 8 May 2017

Kening Liu and Huaming Song

This paper focuses on how the producer inspires his cooperative research partner to reduce carbon emission, by developing a menu of incentive contracts both in research and…

2019

Abstract

Purpose

This paper focuses on how the producer inspires his cooperative research partner to reduce carbon emission, by developing a menu of incentive contracts both in research and development (R&D) stage and recycling stage.

Design/methodology/approach

The proposed mechanism combines the researcher with the producer in a two-staged closed-loop system. Based on the concept that the producer takes the environmental responsibility, this paper designs a dynamically updating contract for the producer to encourage low-carbon efforts. Meanwhile, the producer offers a menu of contracts against the asymmetric information, that is, the R&D partner owns private information on his low-carbon R&D capability. According to incentive mechanism, the researcher decides whether to tell the truth and how much effort she would exert in R&D and recycling stages.

Findings

Discriminating between different types of researchers hurts the producer’s profit. But the updated screening contract can inspire researchers to tell the truth and is beneficial in reducing carbon emissions in the two stages. The results give the optimal solutions of the incentive mechanism. The low-type researcher only obtains reservation profit, whereas the high-type is given more to induce the information.

Originality/value

This paper proposes a strategy of updating the contract factors for avoiding adverse selection and moral hazard. Considering the environmental responsibility of waste products, the producer would like to encourage low-carbon designs among the R&D partners in a closed-loop supply chain.

Article
Publication date: 1 October 1998

Michael Kerr

The evidence suggests that the current delivery of primary care to people with a learning disability does not adequately meet their needs. In particular, individuals do not access…

Abstract

The evidence suggests that the current delivery of primary care to people with a learning disability does not adequately meet their needs. In particular, individuals do not access adequate health promotion, are not having treatable illnesses identified and are not having more complex needs addressed. This review examines this evidence, highlights barriers to the effective delivery of health care and assesses these barriers, pilot projects and the few intervention studies published. Effective response to health needs will need a change in the working patterns of primary, secondary and social care providers. The contracting system and the move to locality‐based purchasing may be the ideal catalysts for these changes.

Details

Tizard Learning Disability Review, vol. 3 no. 4
Type: Research Article
ISSN: 1359-5474

Article
Publication date: 13 April 2012

Luisa Rosti and Francesco Chelli

The purpose of this paper is to verify whether higher education increases the likelihood of young Italian workers moving from non‐standard to standard wage contracts.

520

Abstract

Purpose

The purpose of this paper is to verify whether higher education increases the likelihood of young Italian workers moving from non‐standard to standard wage contracts.

Design/methodology/approach

The authors exploit a data set on labour market flows, produced by the Italian National Statistical Office, by interviewing about 85,000 graduate and non‐graduate individuals aged 15‐29 in transition between five labour market states: standard wage employment; non‐standard wage employment; self‐employment; unemployment; inactivity. From these data, an average six‐year transition matrix was constructed whose coefficients can be interpreted as probabilities of moving from one state to another over time.

Findings

As the authors find evidence for the so‐called stepping stone hypothesis (that is, a higher probability of moving to a permanent job for individuals starting from a temporary job), the authors expect graduates to be more likely to pass from non‐standard to standard wage contracts than non‐graduates, because the signalling effect of education is enhanced by the stepping stone effect of non‐standard wage contracts. Nevertheless, the authors find that non‐standard wage contracts of graduates are more likely to be terminated as bad job/worker matches.

Originality/value

This paper adds to the empirical literature on the probability of young workers moving from non‐standard wage contracts to a permanent job. By separating graduates from non‐graduates, it was found that education reduces the likelihood of passing from non‐standard to standard wage contracts. The authors interpret this result as evidence of the changing labour market that makes it more difficult to infer the productivity of graduates as opposed to non‐graduates.

Article
Publication date: 21 November 2016

Jin Xue and Yiwen Fei

In the practice of venture capital investment, the venture capital will not only claim the share of the enterprise’s future output, but also a certain amount of fixed income. The…

Abstract

Purpose

In the practice of venture capital investment, the venture capital will not only claim the share of the enterprise’s future output, but also a certain amount of fixed income. The purpose of this paper is to examine the optimal contract which blends the variable ownership income and the fixed income theoretically so as to provide a keen insight into the venture capital practice.

Design/methodology/approach

This paper establishes an extended principal-agent model and researches on the design of optimal contract dominated by venture capital with double-sided moral hazard and information screening.

Findings

By establishing theoretical models, the main findings are: first, high-quality enterprise tends to relinquish less ownership but give more fixed return to the venture capital as compensation in order to obtain the venture capital financing; second, low-quality enterprise is willing to relinquish more ownership but give less fixed return to the venture capital for financing; third, due to the existence of double-sided moral hazard, neither of the venture capital and the enterprise will exert their best effort.

Originality/value

This paper furthers the application of principal-agent model in the field of venture capital investment and researches on the optimal contract, considering double-sided moral hazard and adverse selection at the same time originally.

Details

China Finance Review International, vol. 6 no. 4
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 28 June 2022

Belkacem Athamena, Zina Houhamdi and Ghaleb A. ElRefae

This paper aims to focus on the utilization of retention contracts to screen and discipline managers in a context in which the council, board of directors, possesses incomplete…

Abstract

Purpose

This paper aims to focus on the utilization of retention contracts to screen and discipline managers in a context in which the council, board of directors, possesses incomplete information about the consequences of managers’ decisions. The analysis enlightens us on empire building, on the slight connection between achievement and firing, and describes concerns about the belief that low achievements result from bad managers.

Design/methodology/approach

This paper analyzes a basic model to show the resulting dilemmas. The desire to screen managers to enhance the organization's future well-being motivates managers to show their credentials by becoming excessively active. The council can address this bias by firing a manager whose project is proven to ruin value. Moreover, the council can replace the manager if he has implemented a project but its outcomes remain unobservable. Both decisions decrease the attraction to develop loss-generating projects. However, the dismissing decision on either ground will affect the council deduction that the expected competence of the incoming manager is lower than that of the dismissed manager.

Findings

This study shows in which situation the selection option is preferred over the disciplining option using two different retention contracts: optimistic contract and pessimistic contract.

Originality/value

This study shows in which situation the selection option is preferred over the disciplining option using two different retention contracts: optimistic contract and pessimistic contract.

Details

Journal of Financial Reporting and Accounting, vol. 21 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

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