Showing papers on "Negative relationship published in 2011"

Do Natural Resources Fuel Authoritarianism? A Reappraisal of the Resource Curse

Abstract: A large body of scholarship finds a negative relationship between natural resources and democracy. Extant cross-country regressions, however, assume random effects and are run on panel datasets with relatively short time dimensions. Because natural resource reliance is not an exogenous variable, this is not an effective strategy for uncovering causal relationships. Numerous sources of bias may be driving the results, the most serious of which is omitted variable bias induced by unobserved country-specific and time-invariant heterogeneity. To address these problems, we develop unique historical datasets, employ time-series centric techniques, and operationalize explicitly specified counterfactuals. We test to see if there is a long-run relationship between resource reliance and regime type within countries over time, both on a country-by-country basis and across several different panels. We find that increases in resource reliance are not associated with authoritarianism. In fact, in many specifications we generate results that suggest a resource blessing.

The relationship between Facebook and the well-being of undergraduate college students.

Abstract: We investigated how Facebook use and attitudes relate to self-esteem and college adjustment, and expected to find a positive relationship between Facebook and social adjustment, and a negative relationship between Facebook, self-esteem, and emotional adjustment. We examined these relationships in first-year and upper-class students and expected to find differences between the groups. Seventy undergraduate students completed Facebook measures (time, number of friends, emotional and social connection to Facebook), the Rosenberg Self-Esteem Scale, and the Student Adaptation to College Scale. First-year students had a stronger emotional connection to and spent more time on Facebook while they reported fewer friends than upper-class students did. The groups did not differ in the adjustment scores. The number of Facebook friends potentially hinders academic adjustment, and spending a lot of time on Facebook is related to low self-esteem. The number of Facebook friends was negatively associated with emo...

Investment, Idiosyncratic Risk, and Ownership

Abstract: We find a significant negative effect of idiosyncratic stock-return volatility on investment. We address the endogeneity problem of stock return volatility by instrumenting for volatility with a measure of a firm's customer base concentration. We propose that the negative effect of idiosyncratic risk on investment is partly due to managerial risk aversion, and find that the negative relationship between idiosyncratic uncertainty and investment is stronger for firms with high levels of insider ownership. Several mecha nisms can mitigate this effect namely the use of option-based compensation and shareholder monitoring. We find that the investment-idiosyncratic relationship is weaker for firms that make use of option-based compensation, and insider ownership does not matter for firms primarily held by institutional investors.

Do small businesses create more jobs? new evidence for the united states from the national establishment time series

Abstract: We use a new database, the National Establishment Time Series (NETS), to revisit the debate about the role of small businesses in job creation. Birch (e.g., 1987) argued that small firms are the most important source of job creation in the U.S. economy. But Davis et al. (1996a) argued that this conclusion was flawed, and based on improved methods and using data for the manufacturing sector, they concluded that there was no relationship between establishment size and net job creation. Using the NETS data, we examine evidence for the overall economy, as well as for different sectors. The results indicate that small firms and small establishments create more jobs, on net, although the difference is much smaller than what is suggested by Birch’s methods. Moreover, in the recent period we study, a negative relationship between establishment size and job creation holds for both the manufacturing and services sectors.

The Effect of Ethnic Diversity and Community Disadvantage on Social Cohesion: A Multi-Level Analysis of Social Capital and Interethnic Relations in UK Communities

Abstract: A number of studies have found a negative relationship between ethnic diversity and social capital and assumed from this a harmful effect of diversity on social cohesion. This article suggests that social cohesion must be treated as a multifaceted concept and any analysis into the relationship between diversity and social capital needs to be complemented by an analysis of diversity?s effect on ?relations between ethnic groups?. Our results show that while increasing diversity does have a negative impact on social capital, it simultaneously improves perceptions of, and relations between, ethnic groups. Furthermore, we find that forming ?bridging? ties in diverse environments plays a significant role in the positive relationship between diversity and tolerance, and that the presence of ?bridging? ties can also reduce the negative impact of diversity on social capital. However, while our results show that diversity has both positive and negative effects on social cohesion, we find that it is disadvantage which has the most detrimental impact, undermining both social capital and interethnic relations. We also find evidence that using a more sensitive measure of diversity (creating an area typology based on the proportional size, number, and type of ethnic groups in an area) reveals that living in different structures of diversity may lead to different social cohesion outcomes.

Capital structure and corporate performance of Malaysian construction sector

Abstract: This paper investigates the relationship of capital structure and corporate performance of firm before and during crisis (2007). This study focuses on construction com panies which are listed in Main Board of Bursa Malaysia from 2005 to 2008. All the 49 construction companies are divided into big, medium and small sizes,based on the paid - up capital. The result shows that there is relationship between capital structure a nd corporate performance and there is also evidence shows that no relationship between the variables investigated. For big companies, ROC with DEMV and EPS with LDC have a positive relationship whereas EPS with DC is negatively related. In the interim, only OM with LDCE has positive relationship in medium companies and EPS with DC has a negative relationship in small companies. In sum, the outcome reveals that the relationship exists between capital structure and corporate performance in selected proxies.

A contingency model of conflict and team effectiveness.

Abstract: The authors develop and test theoretical extensions of the relationships of task conflict, relationship conflict, and 2 dimensions of team effectiveness (performance and team-member satisfaction) among 2 samples of work teams in Taiwan and Indonesia. Findings show that relationship conflict moderates the task conflict-team performance relationship. Specifically, the relationship is curvilinear in the shape of an inverted U when relationship conflict is low, but the relationship is linear and negative when relationship conflict is high. The results for team-member satisfaction are more equivocal, but the findings provide some evidence that relationship conflict exacerbates the negative relationship between task conflict and team-member satisfaction.

Is the importance of religion in daily life related to social trust? Cross-country and cross-state comparisons

Abstract: We look at the effect of importance of religion in daily life on social trust, defined as the share of a population that thinks that people in general can be trusted. We make use of new data from the Gallup World Poll for 109 countries and 43 U.S. states. Our empirical results indicate a robust, negative relationship between this measure of religiosity and trust, both internationally and within the U.S. The size of this association increases with the degree of religious diversity.

Economic drivers of migration and climate change in LDCs

Abstract: Environmental migration is a topic which has given rise to widespread debate and gloomy predictions about the state of the world in 2050, but where rigorous research and empirical evidence are unfortunately in short supply. In this paper, we review the existing research on and empirical evidence of how climate change and climate variability in Less Developed Countries (LDCs) affects two main drivers of migration identified by migration models in the economic literature, namely income level differentials between origin and destination areas and income variability in origin areas, and how they in turn affect migration. We find that there are serious gaps in both the economic and the environmental literature that render it impossible to make sound and robust predictions of how climate change and increased climate variability will affect the economic migration drivers, and of how these in turn may change existing migration patterns. There are some empirical indications that income differentials may increase due to lower income levels in the origin areas of LDCs, but virtually no evidence exists of the effects of climate change or increased climate variability on income variability. Furthermore, although a negative relationship between migration and rainfall has been established by many researchers, there is only very limited evidence as to what drives it. A clearer picture of the driving force behind the link between rainfall and migration would greatly benefit policymaking in this area.

Tax avoidance, cost of debt and shareholder activism: Evidence from Korea.

Abstract: This paper examines the impact of tax avoidance on the cost of debt and its interaction effect with shareholder activism. Using Korean firms, I find a negative relationship between tax avoidance and the cost of debt, supporting the trade-off theory. Further tests reveal that the negative relationship becomes stronger when the level of institutional ownership is high. It becomes even stronger after 1998, when the shareholder rights of institutional investors were strengthened. It suggests that the managerial opportunism theory has an additional explanation for tax avoidance activities. My findings indicate that tax avoidance reduces the cost of debt through trade-offs and creates a managerial rent diversion, which is mitigated in firms with larger institutional holdings.

An empirical investigation of the relationship of IS strategy with firm performance

Abstract: Given the important impact that an IS strategy has on the potential value IS brings to an organization, we develop and test a model of IS Strategy and Firm Performance. Our survey-based study provides strong evidence that firms with defined IS strategies (either IS Innovator or IS Conservative) perform better than those without defined IS strategies. Organizations without a clearly defined IS strategy actually experienced a negative relationship with firm performance. These organizations should realize the potentially negative outcomes of such a lack of strategy and work to extricate themselves before a consistent pattern of investing in IS without clear organizational benefit develops. Furthermore, the study suggests that the IS Innovator strategy is, in particular, associated with more superior firm performance than the IS Conservative strategy under conditions of environmental dynamism. Organizational leaders need to consider the external environments under which their organizations are operating and evaluate the influence those environments may have on their IS strategy's ability to impact performance. Post hoc analysis results also reveal a fourth potential IS strategy, one that strives for ambidexterity. Ambidextrous firms were found to be associated with the most superior performance, leading to a potential extension of the existing IS strategy typology and a call for future research.

The changing relationship between education and marriage in the United States, 1940-2000.

Abstract: In 1940, when gender specialization was high, there was a negative relationship between education and marriage for women. College-educated women were least likely to be currently married and most likely to be never married. Declines in specialization were accompanied by a transition in this relationship. By 2000, when gender specialization was low, there was a positive relationship between education and marriage for women. College-educated women were most likely to be currently married, in part because they were more likely to stay married or remarry after divorce or widowhood. This transition occurred earlier and more completely for black women than for white women. These changes suggest that the relationship between education and marriage is shaped in part by the gender-role context.

Welfare spending and ethnic heterogeneity: evidence from a massive immigration wave *

Abstract: The aim of this paper is to examine the relationship between ethnic heterogeneity and redistribution, by using the recent and massive arrival of immigrants in Spain. Specifically, we focus on the effect of changes in immigrant density, recorded between 1998 and 2006, on contemporaneous changes in municipal welfare spending. We instrument for immigrant density using established settlement patterns per country of origin so as to assign predicted flows of immigrants to municipalities. We find that welfare spending increased less in those municipalities that recorded the largest increases in immigrant density. We also provide evidence of a positive relationship between immigrant density and the vote share accruing to right-wing parties. Hence, our results are consistent with theories that predict a negative relationship between ethnic heterogeneity and redistribution.

Capital structure of government-linked companies in malaysia

Abstract: This study investigates the cross-sectional variation in leverage among publicly listed Government Linked Companies (GLCs) and non-GLCs (NGLCs) in Malaysia for the period from 1997 to 2008. The study uses balanced panel data with multivariate regression as the method of analysis. Results reveal that the GLCs are consistently more heavily leveraged than NGLCs. The findings indicate a significantly positive association between debt ratio (DR) and tangible assets but a negative relationship between DR and profitability for both GLCs and NGLCs. However, firm size is significantly negatively related to DR for GLCs and significantly positively related to DR for NGLCs. The study also finds that tangible assets and profitability have an inverse relationship with longterm debt. There is a significant negative association between asset structure, profitability and short-term debt. However, firm growth and cash flow have no influence on the determination of short-term and long-term debt.

Stock Market Reaction to Unexpected Growth in Marketing Expenditure: Negative for Sales Force, Contingent on Spending Level for Advertising

Abstract: Because firms do not publicly report marketing expenditures, most studies of the link between firm value and marketing consider advertising (which is publicly reported for many firms) a proxy for marketing. The authors extend those studies in two ways. First, they broaden the proxy for marketing by considering both advertising and sales force. Second, they offer an explanation for the fact that some studies linking advertising to firm value find a positive relationship, whereas others find a negative relationship. The accounting literature suggests that the link to firm value for both unexpected growth in sales force expenditures and unexpected growth in advertising expenditures should be negative. The authors confirm the hypothesized accounting relationship for sales force expenditures but find a contingent relationship for advertising expenditures. Firm value and unexpected growth in advertising expenditures are negatively related for firms that advertise below the advertising response threshol...

Perceptions of Status Consumption and the Economy

Abstract: This paper looks at the relationship between status consumption, economic perceptions, price consciousness, brand consciousness, and value consciousness. Based on a convenience online sample of adults in the Southeast USA, most consumers are not motivated by status. There was a significant negative relationship between the level of status consumption and levels of price consciousness and value consciousness. Additionally, there was a significant negative relationship between level of status consumption and the view that it is frivolous to buy status products in an economic downturn. There was a significant positive relationship between status consumption and brand consciousness, indicating that those more motivated to consume for status are both more brand-name conscious and more likely to see a higher price as indicative of higher quality. For managers of luxury brands in this economy, the results suggest that although the status market may be smaller, status consumers are brand conscious and not price conscious. Consumers, however, may also feel that inexpensive products and discount stores can meet their status needs.

Do Donors Penalize Nonprofit Organizations with Accumulated Wealth

Abstract: Does current accumulated wealth by nonprofit organizations influence contributions from individuals? Existing research demonstrates that financial reserves aid program continuity during economic downturns. Yet donors, charity watchdogs, and policy makers voice concern about accumulated wealth in nonprofits. This empirical analysis examines whether the expected negative relationship occurs when donors perceive accumulated wealth as excessive. The results support the conclusion that future contributions are negatively affected when wealth levels are deemed excessive. Nonprofit managers concerned that accumulated wealth will diminish donations should consider financial strategies that will allow their organizations to build modest—but not excessive—reserves.

Ethnic Heterogeneity and Public Support for Welfare: Is the American Experience Replicated in Britain, Sweden and Denmark?

Abstract: The link between ethnic heterogeneity and public support for welfare policy is debated. The thesis of a negative relationship is supported by much American research. Historically the race issue has blocked a number of American welfare schemes; across the United States ethnically heterogeneous states have less generous benefits, and citizens having negative attitudes towards blacks often oppose welfare. The research question is: To what extent will increased ethnic heterogeneity in European countries establish the same mechanisms? Three theoretical positions are discussed: the position that the American experience is unique; the position that it is generalisable; and a middle position of it being contingent on institutional settings. The latter position predicts that the American experience can be avoided, especially in social democratic welfare regimes where the ethnicity issue has not been politicised. Empirically the article is based on survey data from the United Kingdom, Sweden and Denmark, in which a number of American items were directly replicated. Despite indications of American uniqueness and welfare-regime effects, the findings support the position that the in-group/out-group mechanisms found in the United States are being replicated in Europe.

The Impact of Immigration on the Size of Government : Empirical Evidence from Danish Municipalities

Abstract: Several studies have reported a negative relationship between ethnic heterogeneity and the size of the public sector One problem with this literature is that ethnic composition is hardly exogenous

Inflation, Output, And Stock Prices: Evidence From Brazil

Abstract: Research in economics and finance documents a puzzling negative relationship between stock returns and inflation rates in markets of industrialized economies. The present study investigates this relationship for Brazil. We show that the negative relationship between the real stock returns and unexpected inflation persists after purging inflation of the effects of the real economic activity. The Johansen and Juselius cointegration tests verify a long-run equilibrium between stock prices, general price levels, and the real economic activity. Furthermore, stock prices and general price levels also show a strong long-run equilibrium with the real economic activity and each other. The findings lend support to Fama’s proxy hypothesis in the long-run.

The effect of ownership structure on leverage decision: new evidence from Chinese listed firms

Abstract: This paper examines the effect of state control and ownership structure on the leverage decision of firms listed in the Chinese stock market. Our results show that state-owned enterprises (SOEs) have higher leverage ratios than non-SOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (the percentage of shares held by the largest shareholder) in the SOEs has a negative relationship with the leverage ratio, while the largest shareholding in non-SOEs has a non-linear relationship with the short-term and long-term debt ratios. Finally, this study also shows that the share split reform and the improvement of institutional environment both weaken the negative relationship and strengthen the positive relationship between largest shareholding and leverage of SOEs and non-SOEs to some extent. This paper documents how the financing behaviour of SOEs is more influenced by government intervention, while th...

Employment and Economic Growth Nexus in Nigeria

Abstract: This paper examines the employment and economic growth relationships in the Nigerian economy. A simple model of employment was formulated and estimated using the Ordinary Least Squares technique before and after the time series data used for the study were corrected for non-stationarity using Hodrick-Prescott filter. The result of our econometric analysis shows that a positive and statistically significant relationship exists between employment level and economic growth in Nigeria while a negative relationship was observed between employment growth rate and the GDP growth rate in the economy. We concluded the paper by advocating for increased labour-promoting investment strategies that will help to reduce the high current open unemployment in Nigeria.

Continuance commitment and turnover: Examining the moderating role of negative affectivity and risk aversion

Abstract: This paper examines the moderating role of negative affectivity and risk aversion in the relationships of two bases of continuance organizational commitment (continuance–sacrifices and continuance–alternatives) to turnover, within a stress–coping perspective. More specifically, we propose that (a) the perspective of leaving is a source of stress for those who stay due to the fear of losing valued advantages (i.e. high continuance–sacrifices commitment) and (b) staying is perceived to be stressful by individuals who remain based on a lack of employment alternatives (i.e. high continuance–alternatives commitment). We argue that these perceptions are magnified by negative affectivity and risk aversion, resulting in individuals who present these traits to use avoidance–withdrawal strategies in coping with these situations. Accordingly, based on a sample of 509 human resource management professionals, we found (a) negative affectivity and risk aversion to strengthen the negative relationship of continuance–sacrifices commitment to turnover and (b) continuance–alternatives commitment to relate positively to turnover among individuals with high negative affectivity. We discuss the implications of these findings for our understanding of how commitment mindsets and personality traits affect turnover decisions.

High Idiosyncratic Volatility and Low Returns: A Prospect Theory Explanation

Abstract: The well-documented negative relationship between idiosyncratic volatility and stock returns is puzzling if investors are risk-averse. However, under prospect theory, while investors are risk-averse in the domain of gains, they exhibit risk-seeking behavior in the domain of losses. Consistent with risk-seeking investors’ preference for high volatility stocks in the loss domain, we find that the negative relationship between idiosyncratic volatility and stock returns is concentrated in stocks with unrealized capital losses, but is non-existent in stocks with unrealized capital gains. This finding is robust to control for short-term return reversals and maximum daily return, among other variables.

Corruption, Development and the Curse of Natural Resources

Abstract: In 1995, Jeffrey Sachs and Andrew Warner found a negative relationship between natural resources and economic growth, and claimed that natural resources are a curse. Their work has been widely cited, with many economists now accepting the curse of natural resources as a welldocumented explanation of poor economic growth in some economies (e.g., Papyrakis and Gerlagh, 2004; Kronenberg, 2004). In this paper, we provide an alternative econometric framework for evaluating this claim, although we begin with a discussion of possible explanations for the curse and a critical assessment of the extant theory underlying the curse. Our approach is to identify natural resources that have the greatest rents and potential for exploitation through rent-seeking agents. The transmission mechanism that we specify works through the effect that rent seeking has on corruption and how that, in turn, impacts wellbeing. Our measure of wellbeing is the Human Development Index, although we find similar results for per capita GDP. While we find that resource abundance does not directly impact economic development, we do find that petroleum resources are associated with rent-seeking behavior that negatively affects wellbeing. Our regression results are robust to various model specifications and sensitivity analyses.

When Bank Loans Are Bad News: Evidence From Market Reactions to Loan Announcements Under the Risk of Expropriation

Abstract: In this paper we investigate whether inefficient bank loans can reduce the value of borrowing firms when expropriation of the stock of minority shareholders by controlling shareholders is a major concern. Using data from Chinese banks, we find that bank loan announcements generate significantly negative abnormal returns for the borrowing firms. In line with this expropriation view, negative stock price reactions following bank loan announcements are concentrated in firms that are perceived to be more vulnerable to expropriation by controlling shareholders. Finally, we find evidence that a negative relationship between market reactions and firm vulnerability to expropriation exists only when firms borrow from the least efficient banks.