The cultural legacy of historical ethnic violence:The impact on access to finance and innovation

Using the case of the pogroms that took place in the historical region of the 'Pale of Settlement' in Eastern Europe, this paper analyzes the cultural legacy of ethnic violence and its long-term economic impact on access to finance and on corporate innovation. We find that firms in regions with a higher historical intensity of ethnic persecution face greater financial constraints, relying more on internal finance and experiencing reduced access to external finance. These financial limitations are linked to sluggish innovation activities among present-day firms. We propose that a mechanism of financial antipathy, rooted in a persistent anti-market culture fostered by historical ethnic animosity, explains these effects and reflects a long-term degradation of local social capital. Our results are supported by causal evidence using instrumental variables based on the precursors of historical inter-ethnic violence. The animosity and discrimination against the minority group appear to transfer to the broader economic activities in which that group was involved, creating lasting economic consequences for the majority population – consequences that continue to affect financial development and innovation to the present day.</p

CEO pay, shareholder returns, and accounting profits

We assess the impact on CEO pay (including salary, cash bonus, and benefits in kind) of changes in both accounting and shareholder returns in 99 British companies in the years 1972-89. After correcting for heterogeneity biases inherent in the standard specifications of the problem, we find a strong positive relationship between CEO pay and within-company changes in shareholder returns, and no statistically significant relationship between CEO pay and within-company changes in accounting returns. Differences between firms in long-term average profitability do appear to have a substantial effect on CEO pay, while differences between firms in shareholder returns add nothing to the within-firm pay dynamics.These findings call into question the rationale for explicitly share-based incentive schemes

Appointments, pay and performance in UK boardrooms by gender

This article uses UK data to examine issues regarding the scarcity of women in boardroom positions. The article examines appointments, pay and any associated productivity effects deriving from increased diversity. Evidence of gender-bias in the appointment of women as non-executive directors is found together with mixed evidence of discrimination in wages or fees paid. However, the article finds no support for the argument that gender diverse boards enhance corporate performance. Proposals in favour of greater board diversity may be best structured around the moral value of diversity, rather than with reference to an expectation of improved company performance

Excess executive compensation and corporate governance in the United Kingdom and Spain: a comparative analysis

Literature on executive compensation has relatively neglected the impact of institutional governance contexts. Regarding filling this gap, this study examines the influence of governance mechanisms on excess executive compensation comparing a set of listed UK and Spanish firms on an 8-year panel data. Findings indicate that Spanish firms are characterized by higher excess executive compensation than UK firms because of the less effectiveness of ownership structure and board of directors. Differences in concentration and structure of ownership as well as in composition and size of boards result in more aligned executive compensation design in the UK firms.Ministerio de Ciencia, Innovación y Universidade

Gender diversity and the spillover effects of women on boards

Research Question/Issue: This study seeks to understand the circumstances under which board behavior is affected by gender diversity. The ‘Reasoned Action Approach’ (Fishbein&amp; Ajzen, 2010) is used as a lens through which to assess the extent that the behavior of the board varies with its gender diversity.Research Findings/Insights: The study uses archival data from a panel sample of 80,395 directorships observed between 1998 and 2012. Boardroom gender diversity is significantly related to director personal responsibility (board attendance), CEO accountability, and risk taking. Our findings highlight the key importance of the exposure of male directors to women directors on boards beyond the focal board. This suggests a positive externality, or a spillover effect.Theoretical/Academic Implications: The empirical findings of this study highlight the importance of allowing for the operation of social norms when studying boardroom decision making. Experience gained by male directors of working with women directors on other boards, beyond the focal board, is shown to enable women directors to contribute more effectively.Practitioner/Policy Implications: This study offers encouragement to policy makers intent on increasing the presence of women on corporate boards. These results point to a spillover effect: there is an observed impact of women on boards that acts not only directly on the board on which they sit but also through the network of boards on which their male counterparts sit.</p

An experiment with two-way offers into court: restoring the balance in pre-trial negotiation

Defendant offers into court is common procedural device aimed at increasing the probability that pre-trial negotiations will lead to out of court settlement. Both in the UK following the Woolf Report and the Cullen Report and in the USA, the idea of extending the arrangement to plaintiff offers into court has been suggested. This paper presents an extension of the theoretical work by Chung on defendant offers into court under the US rule to cover the English rule and to extend to two-way offers into court. It also reports on experiments conducted to measure the effect of moving to two-way offers into court. The results suggest no impact on the propensity to settle and a statistically significant but empirically modest movement of settlement in favour of the plaintiff.Bargaining, Costs, Management, Negotiating, United Kingdom, USA