Showing papers on "Negative relationship published in 2014"
TL;DR: This paper examined the relationship between competition and the absolute level of risk of individual banks and found that greater competition encourages banks to take on more diversified risks, making the banking system less fragile to shocks.
383 citations
TL;DR: This article found a negative relationship between bank distress and the level, quality and trajectory of firm-level innovation during the Great Depression, particularly for R&D firms operating in capital intensive industries.
177 citations
TL;DR: In this article, the relationship between working capital efficiency and corporate profitability is examined and a negative relationship between profitability, measured through net operating profit, and cash conversion cycles across different industrialisation typologies is found.
147 citations
TL;DR: In this paper, the authors study the effect of corporate culture on the relationship between firm performance and CEO turnover and demonstrate that the probability of a CEO change, on average, is positively influenced by the competition-and creation-oriented cultures.
147 citations
TL;DR: Andrews et al. as discussed by the authors examined the extent to which these differences depend on regulations affecting product, labour and credit markets, and assessed their relevance for aggregate productivity, finding that there is an economically and statistically robust negative relationship between policy-induced frictions and productivity, though the specific channel depends on the policy considered.
Abstract: The relationship between a firm's size and its productivity level varies considerably across OECD countries, suggesting that some countries are more successful at channelling resources to high productivity firms than others. In this paper, we examine the extent to which these differences depend on regulations affecting product, labour and credit markets, and assess their relevance for aggregate productivity. To this purpose, we exploit a decomposition of industry productivity into a moment of the firm productivity distribution (the unweighted mean), and a moment of the joint distribution with firm size (the covariance between productivity and market shares – allocative efficiency). We apply such decomposition to a cross section of more than 800 country-industry cells and estimate the relevance of regulation policies for each of the two terms exploiting cross-industry differences in exposure to the policy. Our results suggest that there is an economically and statistically robust negative relationship between policy-induced frictions and productivity, though the specific channel depends on the policy considered. In the case of employment protection legislation, product market regulations (including barriers to entry and bankruptcy legislation) and restrictions on foreign direct investment, this is largely traceable to the worsening of allocative efficiency (i.e. a lower correspondence between a firm's size and its productivity level). By contrast, the adverse impact of financial market under-development on aggregate productivity tends to arise through shifts in the firm productivity distribution (i.e. a lower unweighted mean). Furthermore, stringent regulations are more disruptive to resource allocation in more innovative sectors.
— Dan Andrews and Federico Cingano
142 citations
TL;DR: In this paper, the authors developed a structural model for estimating the impact of population density on input and output prices, farm size, and ultimately on smallholder behavior and agricultural intensification.
141 citations
TL;DR: In this paper, the authors examined potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector.
Abstract: Whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in Africa is of considerable policy relevance. This paper revisits this issue and examines potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector. Nationwide plot-level data from Rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications. The inverse relationship continues to hold if profits with family labor valued at shadow wages are used, but disappears if family labor is rather valued at village-level market wage rates. These findings imply that, in Rwanda, labor market imperfections, rather than other unobserved factors, seem to be a key reason for the inverse farm-size productivity relationship.
130 citations
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TL;DR: In this article, the authors used a newly constructed revenue dataset of 35 resource-rich countries for the period 1992-2009 to analyze the impact of expanding resource revenues on different types of domestic (non-resource) tax revenues.
Abstract: This paper uses a newly constructed revenue dataset of 35 resource-rich countries for the period 1992-2009 to analyze the impact of expanding resource revenues on different types of domestic (non resource) tax revenues. Overall, we find a statistically significant negative relationship between resource revenues and total domestic (non resource) revenues, including for the major tax components. For each additional percentage point of GDP in resource revenues, there is a reduction in domestic (non resource) revenues of about 0.3 percentage points of GDP. We find this primarily occurs through reduced effort on taxes on goods and services—in particular, the VAT— followed by a smaller negative impact on corporate income and trade taxes.
109 citations
TL;DR: In this article, the authors used a newly constructed revenue dataset of 35 resource-rich countries for the period 1992-2009 to analyze the impact of expanding resource revenues on different types of domestic (non-resource) tax revenues.
95 citations
TL;DR: This article investigated whether households are aware of the basic features of U.S. monetary policy and found evidence that some households form their expectations in a way that is consistent with a Taylor (1993) -type rule.
80 citations
TL;DR: Gupta et al. as discussed by the authors showed that an increase in public spending leads to greater corruption, and consequently harms economic growth, due to the social losses and government inefficiency caused by corruption.
Abstract: The existing empirical evidence suggests that in low-income economies, an increase in government spending leads to a reduction of growth. This article aims to explain this empirical fact by considering a growth model that incorporates a two-way relationship between corruption and government spending. That is, government spending gives rise to corruption and rent seeking, which feeds back by distorting the structure and size of government spending. In addition, the cost of corruption depends on the wage rate. Therefore, in low-income economies, increases in government spending tend to generate larger social losses caused by a higher level of rent dissipation and a concomitant rise in corruption and government inefficiency. Consequently, in such economies, an increase in government spending is more likely to result in a decline of economic growth. (JEL H3, 011, 041) I. INTRODUCTION This study aims to clarify whether, in less developed economies, an increase in public spending leads to greater corruption, and consequently harms economic growth, due to the social losses and government inefficiency caused by corruption. By establishing this two-way relationship, this article seeks to put forward an analytical explanation for the existing empirical evidence which proposes that in poor economies an increase in government spending has a negative effect on growth (see, e.g., Baldacci, Hillman, and Kojoa 2004; Gupta et al. 2005; Park, Philippopoulos, and Vassilatos 2005). Additional evidence of a negative relationship between government spending and growth in low-income economies is provided through a correlation analysis. Namely, based on data for countries with a gross domestic product (GDP) per capita of less than $1,000 in constant prices spanning over 2000-2009, the correlation coefficient between growth rates and budget deficit/surplus in first differences is equal to 0.176. This implies that budget surpluses, and hence, reductions in government spending are associated with accelerated growth. On the other hand, the correlation coefficient between growth rates and government expenditures for the same sample of low-income countries is equal to--0.086. If one uses the values of government expenditures with a one-period lag instead of the current values, then, the negative correlation is even stronger and is equal to--0.115. These statistical results are also confirmed by rank-based correlation coefficients (see Table 1), which show the existence of a statistically significant negative relationship between government spending and growth rates in low-income economies. The empirical studies by Gupta et al. (2005), Park, Philippopoulos, and Vassilatos (2005). and Baldacci, Hillman, and Kojoa (2004) argue that the negative correlation between government spending and growth is due to corruption that leads to larger economic inefficiencies as the size of the public sector increases. Yet, in the literature, there is no formal explanation of how corruption relates to the size of the public sector, and moreover, how fiscal policy impacts growth in such an environment. To establish this link, this article develops a theoretical model where corruption affects both taxation and government spending; in particular, the model considers private agents who may under-report their true income and thereby evade taxes, and tax inspectors who are commissioned to audit these taxpayers and may collude with them to conceal the non-compliance in return for bribes. In addition, in this model, public spending is subject to corruption through rent extraction of bureaucrats and rent seeking of private agents. (1) The literature demonstrates that bureaucratic corruption distorts the effectiveness of public spending mainly by altering the structure of the public budget to create and extract rents (see, e.g., Blackburn. Bose, and Hague 2006; Delavallade 2006; Del Monte and Papagni 2001; Gupta, de Mello, and Sharan 2001; Keefer and Knack 2002; Mauro 1998). …
TL;DR: Delfmann et al. as discussed by the authors examined the relationship between new firm formation and population change and found that the relationship depends heavily on the regional context and the intensity of population change.
Abstract: Delfmann H., Koster S., McCann P. and van Dijk J. Population change and new firm formation in urban and rural regions, Regional Studies. Many regions across the European Union, including regions in the Netherlands, face population decline, entailing changing demographics and related social and economic implications. This paper looks into the connection between population change and structure, and rates of new firm formation. Although it is clear that fewer people will eventually lead to fewer firms, as well as fewer new firms, it is assessed whether this negative relationship differs with the intensity of population change and across regional contexts. In order to establish the impact of population change on new firm formation, this paper examines data on population density, size, growth and decline, together with firm dynamics for the period 2003–09. The results show that the relationship between new firm formation and population change depends heavily on the regional context. The results indicate that n...
TL;DR: This article examined the mediational effect of Twitter-related conflict on the relationship between active Twitter use and negative relationship outcomes, and how this mechanism may be contingent on the length of the romantic relationship.
Abstract: The purpose of this study was to examine how social networking site (SNS) use, specifically Twitter use, influences negative interpersonal relationship outcomes. This study specifically examined the mediational effect of Twitter-related conflict on the relationship between active Twitter use and negative relationship outcomes, and how this mechanism may be contingent on the length of the romantic relationship. A total of 581 Twitter users aged 18 to 67 years (Mage=29, SDage=8.9) completed an online survey questionnaire. Moderation–mediation regression analyses using bootstrapping methods indicated that Twitter-related conflict mediated the relationship between active Twitter use and negative relationship outcomes. The length of the romantic relationship, however, did not moderate the indirect effect on the relationship between active Twitter use and negative relationship outcomes. The results from this study suggest that active Twitter use leads to greater amounts of Twitter-related conflict amon...
TL;DR: It is shown that the empirically well-established negative relationship between residential diversity and trust in neighbors holds for the case of Germany, and the role of interethnic contact in mediating the relationship between Diversity and trust is explored in a degree of detail unmatched by earlier studies.
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TL;DR: In this paper, a theoretical model that considers the relationship between the strength of investor power and dividends in an agency cost/free cashflow framework is proposed. But the authors do not consider the effect of ownership and ownership on dividend changes in an emerging market.
Abstract: This paper examines dividend changes in an emerging market: Thailand. We begin by considering the possible effects of the Thai corporate environment on dividend policy. We develop a theoretical model that considers the relationship between the strength of investor power and dividends in an agency cost/free cashflow framework. This allows us to consider the conditions for the outcome (positive relationship) or substitute (negative relationship) models, as discussed by La Porta et al. (2000). Our model also allows us to consider the expropriation hypothesis, in which the presence of large controlling shareholders may actually reduce outside investor power, leading to lower dividends. We then turn to our empirical analysis. Employing a large sample of companies that changed dividends in Thailand during the period 1996-2009, we test for the signalling, free cashflow and life-cycle hypotheses. A further contribution of our analysis is that we consider the impact of investor power and ownership on dividends in Thailand. Overall, we find little support for the signalling hypothesis, but we find considerable support for the free cashflow and life-cycle hypotheses. Our analysis of ownership variables suggest that increasing investor power (for example, high ownership concentration together with the presence of domestic institutional ownership) results in higher dividends, in support of the outcome model, rather than the substitution or expropriation models.
TL;DR: In this article, the mediating role of affective and continuance commitment in the relationship between pay satisfaction and voluntary turnover was examined, and they found that affective commitment mediated the negative relationship of pay satisfaction to turnover.
Abstract: This study examines the mediating role of affective and continuance commitment in the relationship between pay satisfaction and voluntary turnover, and the moderating role of negative affectivity. Drawing from data collected at two points in time from a sample of human resource management professionals (N = 509), we found that affective and continuance commitment mediated the negative relationship of pay satisfaction to turnover. Moreover, pay satisfaction’s indirect negative relationship with turnover via affective commitment was weaker among respondents high in negative affectivity, while its indirect negative relationship with turnover via continuance commitment was stronger among those with high negative affectivity. Finally, the residual negative relationship of pay satisfaction to turnover was stronger at high levels of negative affectivity. We discuss the implications of this study for our understanding of the role of affective commitment, continuance commitment and negative affectivity in the pay ...
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TL;DR: In this article, the authors used a newly constructed revenue dataset of 35 resource-rich countries for the period 1992-2009 to analyze the impact of expanding resource revenues on different types of domestic (non-resource) tax revenues.
Abstract: This paper uses a newly constructed revenue dataset of 35 resource-rich countries for the period 1992-2009 to analyze the impact of expanding resource revenues on different types of domestic (non resource) tax revenues. Overall, we find a statistically significant negative relationship between resource revenues and total domestic (non resource) revenues, including for the major tax components. For each additional percentage point of GDP in resource revenues, there is a reduction in domestic (non resource) revenues of about 0.3 percentage points of GDP. We find this primarily occurs through reduced effort on taxes on goods and services - in particular, the VAT - followed by a smaller negative impact on corporate income and trade taxes.
TL;DR: In this article, the authors argue that the key task for future work is not to address why the relationship is negative, but to study under what conditions such direction holds true, and the mechanisms that underlie a diversity dividend.
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TL;DR: In this article, the authors examined the impact of corporate governance on financial performance of Lebanese banks during five years (from 2006 to 2010) based on 182 observations, a quantitative method of data analysis was employed to investigate the relevance of Corporate governance mechanisms.
Abstract: This study examines the impact of corporate governance on financial performance of Lebanese banks during five years (from 2006 to 2010). Based on 182 observations, a quantitative method of data analysis was employed to investigate the relevance of corporate governance mechanisms. The first finding reveals a positive impact of independent boards on the performance of Lebanese banks. The research also finds a significant and negative relationship between CEO duality and bank performance. Finally, the paper reveals a positive impact of insider ownership concentration on the return of Lebanese banks indicating the more shares held by insiders, the better the performance. The weaknesses of corporate governance in some Lebanese banks might be compensated by higher insider ownership concentration.
TL;DR: This paper explored the effects of family ownership on the corporate misconduct of small firms in the United States and found that small family-owned firms are less likely to commit misconduct than small non-family owned firms.
Abstract: This study adds to the theory of family business management by exploring the effects of family ownership on the corporate misconduct of small firms in the United States. The empirical findings indicate that small family-owned firms are less likely to commit misconduct than small non-family-owned firms. We interpret this finding as family firms aiming to achieve the trans-generational succession of moral capital. Further investigation shows a nonlinear family-ownership–misconduct relationship. A negative relationship between them only appears in mature firms. We further show that for relatively mature firms, only family firms with older owners are less likely to commit corporate misconduct.
TL;DR: This article examined the relationship between macro-level supports for child rearing and individual-level fertility outcomes using data from two recent waves of the European Social Survey and found significant relationships between family support environment indicators and second or higher order births.
Abstract: Using data from two recent waves of the European Social Survey, we examine the relationship between macro-level supports for child rearing and individual-level fertility outcomes. We characterize country-level support environments across a broader set of domains than is typical, including supports from institutions, labor markets, extended families, and male partners. With rare exceptions, we find significant relationships between family support environment indicators and second or higher order births. In contrast, the relationship between family support environment indicators and first births is weaker and less often significant. This pattern accords with theory that practical considerations are more important for the second and subsequent births than for the transition to parenthood. Although most forms of support are positively related to fertility, we document a negative relationship between intergenerational exchange of support and higher order fertility. Our analyses also reveal that macro-level support environments are related to childbearing plans in much the same way as they are related to having a child, buttressing the argument that understanding the determinants of childbearing plans can help us to understand childbearing behavior.
TL;DR: In this paper, the effects of corporate sustainability and industry-related exposure to environmental and social risks on the market value of MSCI World firms were investigated using a unique dataset provided by the international rating agency GES.
Abstract: Using a unique dataset provided by the international rating agency GES®, we investigate the effects of corporate sustainability and industry-related exposure to environmental and social risks on the market value of MSCI World firms. The results show a negative relationship in the earlier years of our sample period. However, the analysis reveals that the capital market perception of sustainability has changed owing to the financial crisis. Looking at the height of the crisis in September 2008, the month in which Lehman Brothers shocked the world’s capital markets by filing for Chapter 11 bankruptcy protection, we find that the previously negative perception of corporate sustainability across its various dimensions was positively affected and offset. In addition, as a moderated regression analysis shows, the crisis led to a positive perception of corporate sustainability in industries that are exposed to higher environmental and social risks. Our study has the practical implication that executives, in particular in industries with high environmental and social risks, should increase their commitment to corporate sustainability due to the changes in the institutional setting triggered by the financial crisis.
TL;DR: The authors found strong evidence of a negative relationship between income inequality and economic growth in low-income developing countries (LIDC) to be in stark contrast with a positive inequality-growth relationship for HIDC.
Abstract: There is mixed evidence in the literature of a clear relationship between income inequality and economic growth. Most of that work has focused almost exclusively on developed economies. In what we believe to be a first effort, our emphasis is solely on developing economics, which we classify as high-income and low-income developing countries (HIDC and LIDC). We make such distinction on theoretical and empirical grounds. Empirically, the World Bank has classified developing economies in this manner since 1978. The data in our sample are also supportive of such classifications. We provide theoretical scaffolding that uses asymmetric credit constraints as a premise for separating developing economies in such a way. We find strong evidence of a negative relationship between income inequality and economic growth in LIDC to be in stark contrast with a positive inequality–growth relationship for HIDC. Both correlations are statistically significant across multiple econometric specifications. Using international ...
TL;DR: In this paper, the authors investigated the association between women's and their partners' educational attainment and transition to second births comparatively in regions and sub-regions of Europe, using data from the 2005 and 2011 waves of the EU Statistics on Income and Living Conditions (EU-SILC).
Abstract: Background: Previous research has shown considerable variation in the relationship between women’s educational attainment and second births in contemporary Europe. A negative association is found in some countries, while a positive or non-negative relationship is reported in others. Existing studies come mainly from single-country perspectives, which renders the results not strictly comparable. Objective: We investigate the association between women’s and their partners’ educational attainment and transition to second births comparatively in regions and sub-regions of Europe. Methods: The data come from the 2005 and 2011 waves of the EU Statistics on Income and Living Conditions (EU-SILC). We estimate separate discrete-time event history models for regions and sub-regions and multilevel models for all EU-SILC countries. Results: Northern Europe exhibits a positive association between women’s and their partners’ education and second childbearing. Western Europe features a positive relationship among partners but demonstrates a U-shaped pattern among women. This pattern occurs due to German-speaking countries where women’s educational attainment appears inversely related to second births. A negative relationship between women’s education and second childbearing also prevails in Eastern Europe; in some sub-regions it extends to male partners. Except for in Eastern Europe, the time-squeeze adds to the positive effect of women’s high education. In Northern Europe it enables highly educated women to wholly catch up with their counterparts with medium and low education as regards the proportion having second births. In Southern Europe, by contrast, the educational gradient turns negative following the consideration of the time-squeeze effect. Conclusions: We conclude that the relationship between educational attainment and second births varies not only by individual country but also by larger geographical area in Europe. Although smaller in scale than among women, the variation also extends to male partners.
TL;DR: In this article, secondary data is used for analysis of working capital on profitability and a significant negative relationship between net operating profitability and the average collection period, inventory turnover in days, average payment period and cash conversion cycle for a sample of Pakistani firms listed on Karachi stock exchange.
Abstract: In this paper secondary data is used for analysis of working capital on profitability. In this research paper we take working capital as independent variable and net operating profit as dependent variable. We have found a significant negative relationship between net operating profitability and the average collection period, inventory turnover in days, average payment period and cash conversion cycle for a sample of Pakistani firms listed on Karachi stock exchange. Previous theoretical research predicts negative relationship between cash conversion cycle and corporate profitability. The results of regression indicate that the coefficient of account receivable is negative; that is, the increase or decrease in average collection period wills significantly affect the profitability of the firm. According to inter-item correlation matrix the relationship of account receivables, account payables and inventory with profit shows positive relationship but cash conversion cycle, financial debt and financial assets shows negative relationship with profitability. Inventory shows the positive relationship with dependent variable which proves that working capital management has a positive effect on firm’s probability.
TL;DR: In this paper, the authors examined the interrelationship among managerial ownership, leverage and dividend policies using three-stage least squares (3SLS) estimation on a sample of 81 listed firms on HCM City Stock Exchange (HOSE) during the period 2007-2012.
Abstract: The purpose of this paper is to examine the interrelationship among managerial ownership, leverage and dividend policies. The analysis is performed using three-stage least squares (3SLS) estimation on a sample of 81 listed firms on HCM City Stock Exchange (HOSE) during the period 2007–2012. The empirical results indicate that managerial ownership has a negative relationship with leverage. This finfing is supported by Agency Theory. Also, the results provide strong support for Pecking Order Theory, which suggests that there is a negative relationship between leverage and dividend. However, contrary to expectations, managerial ownership is found to have positive impact on dividend. It means that companies with higher levels of managerial holdings are consciously choosing higher level of dividends.
TL;DR: In this paper, the authors studied the relationship between the agency problem, financial performance and corruption from country, industry and firm level perspectives, and found that companies operating in countries with a high level of corruption tend to display relatively low returns.
Abstract: This paper studies the relationship between the agency problem, financial performance and corruption from country, industry and firm level perspectives. First, we observe that companies operating in countries with a high level of corruption tend to display relatively low returns. Second, in an industry-by-industry context, we find that the negative relationship between corruption and average stock returns is stronger in specific industries, which we define as ‘corruption sensitive’. Third, at the firm level, we show that agency problems are exacerbated in corruption-sensitive industries. Our study builds on the existing literature in three main areas. First, it proposes a novel macro-based approach aimed at identifying corruption-sensitive industries. Second, it provides evidence supporting that corruption exacerbates agency conflicts. Third, it provides evidence on the generalizability of standard corporate governance predictions to companies operating in corruption-sensitive industries.
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TL;DR: The authors examine the impact of political connections and accounting quality among Venezuelan industrial firms, which face one of the highest levels of expropriation risk worldwide, and find that politically connected firms have higher accounting quality than non-connected firms.
Abstract: We examine the impact of political connections and accounting quality among Venezuelan industrial firms, which face one of the highest levels of expropriation risk worldwide. Based on prior literature, we expect a negative relationship between expropriation risk and accounting quality as firms manage earnings to avoid 'benign' state intervention. We find that politically connected firms have higher accounting quality than non-connected firms, which is consistent with connected firms' lower risk of expropriation due to connections with high-level government officials or ruling party members. The relationship between accounting quality and political connections appears to be strongly moderated by institutional features like expropriation risk.
TL;DR: In this article, the authors used parametric survival analysis to test the effects of regional innovation on exit likelihood in the US computer and electronic product manufacturing during the 1992-2008 period.
Abstract: This paper contributes to the growing body of business survival literature that focuses on regional determinants of the hazard faced by firms. Using parametric survival analysis, we test the effects of regional innovation on exit likelihood in the US computer and electronic product manufacturing during the 1992–2008 period. The novelty of our approach is in conditioning the effects of metropolitan innovation on firm size. Estimation results suggest a negative relationship between metropolitan patenting activity and survival of firms that started with 1–3 employees. This effect decreases if companies grow. Establishments with more than 4 employees at start-up are insensitive to metropolitan innovation, although size of firms that started with 4–9 employees improves their survival chances. These findings indicate that local knowledge spillovers do not translate into lower hazard. The negative relationship indicates either a creative destruction regime or decisions of entrepreneurs to shut down existing ventures in order to pursue other opportunities.
TL;DR: In this article, the effect of working capital management on company profitability was examined using Pearson's correlation and regression analysis (Ordinary Least Square) for a period of ten years (2002-2012).
Abstract: The purpose of this study is to find out the effect of working capital management on company profitability. The study aims at examining the statistical significance between company’s working capital management and profitability. In light of this objective the study adopts quantitative approaches to test a series of research hypotheses. A sample of three (3) manufacturing companies listed on the Dar es Salaam Stock Exchange (DSE) is used for a period of ten years (2002-2012) with the total of 30 observations. Data is analyzed on quantitative basis using Pearson’s correlation and Regression analysis (Ordinary Least Square). The key findings from the study are; Firstly, there exists a positive relationship between cash conversion cycle and profitability of the firm. This means that as the cash conversion cycle increases it will lead to an increase in profitability of the firm, and managers can create a positive value for the shareholders by increasing the cash conversion cycle to a reasonable level; Secondly, there is a negative relationship between liquidity and profitability showing that as liquidity decreases, the profitability also increases; Thirdly, there exists a highly significant negative relationship between average collection period and profitability indicating that a decrease in the number of days a firm receives payment from sales affects the profitability of the firm positively; Fourthly, there is a highly significant positive relationship between average payment period and profitability. This implies that the longer a firm takes to pay its creditors, the more profitable it is.; and Fifthly, there exists a highly significant negative relationship between inventory turnover in days and profitability hinting that firms which maintain sufficiently low inventory levels reduce the cost of storing the inventory which results to higher profitability.