Search results

This chapter introduces empirical studies of firm performance and related risk outcomes conducted in the management and finance fields presenting underlying theoretical rationales as they have evolved over time. Early finance studies of market-based returns predominantly found positively skewed return distributions that conform to assumptions about higher returns associated with more risky investments. Subsequent studies found that performance outcomes measured as accounting-based financial returns generally display left-skewed distributions that reflect negative risk-return relationships. This artifact was first observed by Bowman (1980), thus often referred to as the “Bowman paradox” because it contravened the conventional assumptions in finance. The management studies have largely confirmed the inverse risk-return observations but often following rather confined research streams. A contingency perspective inspired by prospect theory and behavioral rationales have investigated the lagged effects of performance on risk outcomes and vice versa. Another stream has focused on the spurious relationships between negatively skewed performance distributions and the inverse risk-return associations. A third approach considered the performance and risk outcomes as deriving from the firms responding in distinct ways to exogenous changes. These studies reach comparable results but underpinned by very different rationales. The finance studies observe deviations from the pure doctrine of positive risk-return associations embedded in the widely adopted capital asset pricing model (CAPM) and note deficiencies with alternative interpretations that even question the validity of CAPM. A more recent strain of studies in behavioral finance observes how many (even professional) investment managers have biases that lead to inverse relationships between perceived risk and return outcomes. While these diverse fields of study have different starting points, they uncover an increasing number of interesting commonalities that can inspire the ongoing search for explanations to observed left-skewed financial returns and negative risk-return correlations across firms.

This study aims to contribute novel insights into understanding and mitigating the harmful consequences of abusive supervision (AS) by examining the association between AS experiences, revenge, forgiveness, and the moderating role of emotional intelligence (EI). The key argument is that employees' EI can influence the AS experience through affective processes, countering supervisors' abusive behaviors.

A between-person scenario-based experiment was conducted with 366 participants divided into AS and control groups. The study explored the association between AS experience and revenge/forgiveness, mediated by core affect (valence and activation). EI abilities were measured as a moderator. Data analysis examined the relationships and interactions among AS, revenge/forgiveness, EI, and affective experiences.

The study reveals significant findings indicating that AS experiences were positively associated with revenge and negatively associated with forgiveness. The mediation analysis confirmed the role of core affect in these relationships. EI emerged as a moderator, shaping the association between AS experiences and revenge/forgiveness. Importantly, participants with higher EI exhibited lower revenge intentions, demonstrating the potential of EI to mitigate the adverse effects of AS. Unexpectedly, individuals with high EI also expressed fewer forgiveness intentions.

This study provides a comprehensive understanding of how employees can effectively counterbalance the impact of AS through higher levels of strategic EI. Examining core affect as a mediator offers novel insights into coping mechanisms in response to AS experiences and their consequences.

The study acknowledges several limitations, as the scenarios may only partially capture the complexities of real-life AS situations. The focus on a specific context and the sample characteristics limit the generalizability of the findings. Future research should explore diverse organizational contexts and employ longitudinal designs.

The findings have practical implications for organizations as enhancing employees' EI skills through training programs interventions and integrating EI into organizational culture and leadership conduct.

Introduction: In the context of Sri Lanka, this study compares how institutions and financial development (FD) affect economic growth (EG) and inclusive growth (IG).

Purpose: The well-structured administration and judicial system at the provincial level have been established against the socioeconomic vulnerabilities in the country for an extended period. Still, the country as a whole and provincial level is experiencing huge income and social inequality, though there are required provisions for enhancing the well-being of the people.

Methodology: The study consists of data from the nine provinces from 2013 to 2019. The analysis used the Dynamic Spatial Durbin Model (D-SDM) to explore the spatial dependencies between the provinces. Two models were developed: the interaction of the financial service activities (FSA) and insurance, reinsurance, and pension (INPEN), representing the FD with the EG and IG with and without. The IG index was estimated by principal component analysis (PCA) using indicators of the four dimensions. The results indicated spatial dependency among FD’s interaction with EG when provincial tax (PROTAX) and provincial expenses (PROEXP) are the provincial institutions.

Findings: The IG model results showed the IG’s spatial dependency moderated by the FD and only the IG model between the provinces. PROEXP showed a significant positive spillover impact among provinces towards the IG.

Practical Implications: The finding inform economic policy making while identifying weaknesses in existing local governments. Attention must be given to how poverty can be reduced, enhancing the well-being of the people with the proper channelling of finance and government institutional mechanisms.

The role of financial institutions and financial intermediaries in fostering economic growth (ECO) by improving the efficiency of capital accumulation, encouraging savings, and ultimately improving the productivity of the economy has been well established by the researchers. The reforms in the financial sector worldwide during the 1980s and 1990s were aimed at ushering in greater efficiency and more competitiveness.

The impact of financial market freedom (MF) on the overall development of the financial sector and thereby the growth in an economy is one of the most important considerations for policymakers over the years. This chapter aims to examine the causal relationship between financial MF and ECO in the Indian economy in the post-reform period.

Issues related to economic development and growth are oft discussed to illustrate the health of a nation. However, such development is constrained by the inequality parameter of the representative society. Again, economic fluctuations arising from several crises may hinder the representative nation from getting on a smooth path to development. Now, augmentation of crises along with the presence of inequality may trigger economic vulnerabilities, leading to unsustainable economic development. Against this backdrop, we initially frame a theoretical model to capture the above-mentioned issues and try to derive plausible economic interpretations for the same. To verify the same in a more robust manner, we consider a panel of 30 developing countries from Africa, spanning the time period 1980–2020. Both the health status and the education status of our panel of countries are used to explore the sustainability issue in the presence of income inequality. All data have been collected from the World Development Indicators (WDI) and Standardized World Income Inequality Database (SWIID) (Table 21.1

Variables Description.

Drawing insights from Piaget's theory of cognitive development and exploring their applicability to working adults while assessing the role of tenure, as appreciated by multiple studies associated with adaptability and openness, the current study examines the influence of work experience in the relationship between an individual's adaptability and openness to people's ideas in the context of the Indian workplace. The study followed a cross-sectional survey-based design, and data were gathered from 202 junior, middle and senior executives from Indian manufacturing and service organizations. Using PROCESS macro in SPSS, the moderating effect of work experience on the linkage between adaptability to situations and openness to people's ideas was examined. The study results depicted that adaptability to situations is positively associated with a person's openness to people's ideas. Such a result indicates that promoting adaptability among employees could lead to openness in behaviour towards ideas of their colleagues and other people, which may promote team cohesiveness and learning in the long run. Also, the work experience of employees was found to be moderating the relation between adaptability and openness such that the increasing years of work experience tend to enhance the positive relationship between adaptability and openness. These results suggest that as the work experience increases, the positive association between adaptability and tendency to be open towards people's ideas strengthens. Further, the implications for the domains of research and practice, limitations of the study and directions for future studies have been discussed.

Little is known about what emotionally un(intelligent) CEOs really say to their close collaborators within the boardroom. Would the rhetoric content differ between an emotionally intelligent and an emotionally unintelligent CEO, especially during a crisis? This chapter aims to answer this question.

40 CEOs of large corporations were asked to deliver a verbal address to their board members in reaction to a vignette describing a critical situation for the company. Participants were provided with the Schutte self-report emotional intelligence (EI) test. The verbal content of CEOs' closed-door discourses was analyzed using Cognitive-Discursive Analysis (CDA) and, subsequently, Geometric Data Analysis (GDA).

The results revealed that CEOs with low EI tend to evoke unpleasant emotions, talk about competition, and often blame some – or all – of the board members for their (poor) actions in comparison to CEOs with high or medium EI. In contrast, CEOs with high EI tend to use terms in relation to decision or realization and appear to be more cooperative than those with lower EI and were also ready to make decisions on behalf of team.

Previous research has mainly focused on CEOs' public speeches. But the content of CEOs' speeches within the boardroom might noticeably differ from what they would say in a public address. The results of our exploratory study can serve CEOs as a basis toward improving their closed-door rhetoric during a crisis.

It would be interesting to enlarge the size of our population in order to strengthen our statistical analyses as well as explore other cultural and linguistic environments and other channels through which emotions can be expressed (e.g., human face, gesture, vocal tone).

There are two important determinants in the banking system which directly affect the number of credit deliveries to the economy in the first round and impact the growth and developmental status of the economies in the second round. They are the amount of non-performing assets (NPA) and the number of banking funds invested in the governments’ securities. The present chapter, thus, focuses on the trends of these two and their associations with the credit, GDP and human development of the countries. First, it develops a basic theoretical structure of credit creation in the banking system and then develops theoretical linkages among the two lead variables, NPA and investment, in relation to the rest of the economy. Then, it goes for empirical exercises from the perspectives of the descriptive statistical analysis. The trends of NPA and investment show rising trends in almost all countries. Furthermore, it is found that the signs of correlation coefficients between the two with credit, GDP and HDI are positive in most cases of the list of developing countries and negative in some cases of the list of developed countries.

This chapter applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory factor of the productivity performance of local private sector firms. Applying structural equation models, the geographic concentration of sectoral economic activity is found to have a positive and statistically significant effect on labor productivity. The transmission mechanism is conjectured to be the positive spillovers that are created, which local firms can tap into. In contrast, a higher concentration of skilled workers in an industrial sector in a region is associated with lower levels of labor productivity – a finding that suggests there may be structural deficiencies in the allocation of skilled workers. Regional policy should focus on net investments in gross capital formation throughout the country, for which the national and regional governments should improve how public investments are managed and the institutional framework – including the rule of law, bureaucracy and red tape, conflict of interest, transparency, and governance – so that private investment (both local and foreign) may substantially increase.