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1 – 10 of 192Mirza Muhammad Naseer and Tanveer Bagh
Corporate social responsibility (CSR) promotes society, reduces risk, and encourages ethical business practices. Due to its relevance, we study how CSR influences firms'…
Abstract
Corporate social responsibility (CSR) promotes society, reduces risk, and encourages ethical business practices. Due to its relevance, we study how CSR influences firms' sustainable development. We analyze data from 427 New York Stock Exchange (NYSE)-listed firms from 2008 to 2022. The Refinitiv environmental and social score is used to measure CSR, whereas for firms' sustainable development we rely on corporate sustainable growth rate (SGR) and market-based metrics. The analysis employs various econometric techniques, including ordinary least square, fixed effect regression, two-stage least square, generalized method of moment, and simultaneous quantile regression. The results indicate that CSR has a positive and significant effect on firms' sustainable development across all models. This relationship supports the notion that socially responsible business can contribute to long-term financial sustainability in line with “stakeholder theory”, indicating that companies should accommodate the concerns of various stakeholders, including society and the environment, to achieve sustainable development. We evaluate how the conditional distributions of SGR and firms’ value are affected by CSR, categorizing them into high, moderate, and low regimes. The quantile regression estimates indicate that the effect of CSR is more pronounced at upper quantiles, followed by moderate and low regimes. These findings underscore the importance of considering CSR in assessing the SGR and enterprises market value. We also confirm that our results are robust under range of different econometrics' methods. Finally, we enlighten current literature, and our research has useful policy implications for management and investors.
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Cristian Angelo Guevara and Moshe Ben-Akiva
Endogeneity or nonorthogonality in discrete choice models occurs when the systematic part of the utility is correlated with the error term. Under this misspecification, the…
Abstract
Endogeneity or nonorthogonality in discrete choice models occurs when the systematic part of the utility is correlated with the error term. Under this misspecification, the model's estimators are inconsistent. When endogeneity occurs at the level of each observation, the principal technique used to treat for it is the control-function method, where a function that accounts for the endogenous part of the error term is constructed and is then included as an additional variable in the choice model. Alternatively, the latent-variable method can also address endogeneity. In this case, the omitted quality attribute is considered as a latent variable and modeled as a function of observed variables and/or measured through indicators. The link between the controlfunction and the latent-variable methods in the correction for endogeneity has not been established in previous work. This paper analyzes the similarities and differences between a set of variations of both methods, establishes the formal link between them in the correction for endogeneity, and illustrates their properties using a Monte Carlo experiment. The paper concludes with suggestions for future lines of research in this area.
St. Ibrah Mustafa Kamal and Eduardus Tandelilin
The first alternative is to enrich shareholding by management. The basic theory of this research is the agency theory. This study aims to examine the institutional ownership…
Abstract
The first alternative is to enrich shareholding by management. The basic theory of this research is the agency theory. This study aims to examine the institutional ownership, dividend policy, debt policy, and risk that are interconnected directly or indirectly. The research sample was a non-financial company from 2010 to 2014. Four variables will be tested using Two-stage Least Square (2SLS) in the SPSS application. The result of this study represents the overall interdependency relationship among institutional ownership, dividend policy, debt policy, and risk. The research outcome signifies an interdependency relation for endogenous variables, even if some exogenous variables have no significant relation. In addition, the effects of substitution between institutional ownership and dividend policy, debt policy and dividend policy, and institutional ownership and risk. Meanwhile, institutional ownership and dividend policy, risk and dividend policy, and risk and debt policy have no substitution effect.
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Arto Luoma and Jani Luoto
In this paper, we expand Kleibergen and Zivot's (2003) Bayesian two-stage (B2S) model by allowing for unequal variances. Our choice for modeling heteroscedasticity is a fully…
Abstract
In this paper, we expand Kleibergen and Zivot's (2003) Bayesian two-stage (B2S) model by allowing for unequal variances. Our choice for modeling heteroscedasticity is a fully Bayesian parametric approach. As an application, we present a cross-country Cobb–Douglas production function estimation.
Hild Marte Bjørnsen and Ashok K. Mishra
The objective of this study is to investigate the simultaneity between farm couples’ decisions on labor allocation and production efficiency. Using an unbalanced panel data set of…
Abstract
The objective of this study is to investigate the simultaneity between farm couples’ decisions on labor allocation and production efficiency. Using an unbalanced panel data set of Norwegian farm households (1989–2008), we estimate off-farm labor supply of married farm couples and farm efficiency in a three-equation system of jointly determined endogenous variables. We address the issue of latent heterogeneity between households. We solve the problem by two-stage OLS and GLS estimation where state dependence is accounted for in the reduced form equations. We compare the results against simpler model specifications where we suppress censoring of off-farm labor hours and endogeneity of regressors, respectively. In the reduced form specification, a considerably large number of parameters are statistically significant. Davidson–McKinnon test of exogeneity confirms that both operator and spouse's off-farm labor supply should be treated as endogenous in estimating farming efficiency. The parameter estimates seem robust across model specifications. Off-farm labor supply of farm operators and spouses is jointly determined. Off-farm work by farm operator and spouses positively affects farming efficiency. Farming efficiency increases with operator's age, farm size, agricultural subsidises, and share of current investment to total farm capital stock.
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Thomas L. Marsh and Ron C. Mittelhammer
We formulate generalized maximum entropy estimators for the general linear model and the censored regression model when there is first order spatial autoregression in the…
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We formulate generalized maximum entropy estimators for the general linear model and the censored regression model when there is first order spatial autoregression in the dependent variable. Monte Carlo experiments are provided to compare the performance of spatial entropy estimators relative to classical estimators. Finally, the estimators are applied to an illustrative model allocating agricultural disaster payments.
Jean-Marie Dufour and Vinh Nguyen
The authors propose inference methods for endogeneity parameters in linear simultaneous equation models allowing for weak identification and missing instruments. Endogeneity…
Abstract
The authors propose inference methods for endogeneity parameters in linear simultaneous equation models allowing for weak identification and missing instruments. Endogeneity parameters measure the impact of unobserved variables which may be correlated with observed explanatory variables, and play a central role in determining the “bias” associated with endogeneity and measurement errors in structural equations. These results expand, in several ways, the finite-sample theory in Doko Tchatoka and Dufour (2014) for this problem. The latter theory relies on relatively restrictive assumptions, in particular the hypothesis that the reduced form is complete (e.g., contains all the relevant instruments), which is questionable in many practical situations. While the new proposed inference methods retain identification robustness, they also allow the reduced form to be incomplete, for example, due to missing instruments. The authors propose easily applicable inference methods for endogeneity parameters – in particular, two-stage procedures (similar to those in Dufour, 1990). An application to a model of returns to schooling is presented.
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This chapter used empirical data from five developed markets and five emerging markets to perform an examination of anomalies using common financial economic approaches along with…
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This chapter used empirical data from five developed markets and five emerging markets to perform an examination of anomalies using common financial economic approaches along with more innovative econometric models. Of the methodologies used to test for anomalies, the data-driven panel and quantile regressions were empirically found to be better suited over the traditionally common approaches to describe the non-linear, switching behavior of the anomalies. In the developed markets, the statistically significant small firms (size) had the highest average returns. In the developing markets, the lower price-to-earnings (P/E) ratios (value) had the highest average returns. In addition, the research found (1) a small country effect, (2) sales had a negative relationship with returns, and (3) a lower (higher) book-to-market (B/M) was associated with higher returns in the developed (developing) markets, indicating investors received a higher premium for growth (value) equities. The semi-strong form of the efficient market hypothesis was also found to be violated. The anomalies’ behavior varied between sorted portfolios, industries, and developed to emerging markets; though it was found to be consistent through time (not disrupted by bear or bull markets).
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Karl Aschenbrücker and Tobias Kretschmer
The authors examine how firms can achieve organizational ambidexterity, that is, how they can successfully engage in concurrent exploitation of existing competencies and…
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The authors examine how firms can achieve organizational ambidexterity, that is, how they can successfully engage in concurrent exploitation of existing competencies and exploration of new competencies in their search for new products. Existing research has identified three enablers to manage these fundamentally different activities: temporal separation, structural separation, and the creation of context. Studying the strategic orientation, organization design, and performance of a unique sample of mid-sized German manufacturing firms, the authors find that the controlled interplay of decentralized decision making and formalized processes and goals is another effective means to manage the challenges of pursuing an innovation strategy balancing both exploitative and exploratory activities. The findings of this study suggest that this balanced control constitutes a fourth enabler of ambidexterity.
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