John Nofsinger, Fernando M. Patterson and Corey Shank
The authors examine how local firms, regardless of industry, influence each other's corporate policies. The authors argue that there are two motives for why local firms may have…
Abstract
Purpose
The authors examine how local firms, regardless of industry, influence each other's corporate policies. The authors argue that there are two motives for why local firms may have similar corporate social responsibility (CSR) policies. First, the peer effect argues that a firm's chief executive officer (CEO) will likely interact regularly with fellow CEOs of local firms, especially those of similar size, influencing each other's firm to make similar decisions. Second, firms may believe that CSR policies can be used to attract local talent. That is, if there are many firms in the area, employees may elect to work for the firm that treats their employees better or shares their values. Thus, to compete for labor resources, local firms will herd in similar CSR policies.
Design/methodology/approach
Through regression analysis, the authors compare a firm's CSR policies to the policies of other firms in the geographic area (within 100 miles).
Findings
The authors find support for the peer effect hypothesis, as local firms of the same size positively and significantly affect a firm's own CSR score. In contrast, local firms of different sizes have a negative relationship. The combination of CSR scores being related to the CSR scores of similar sized firms and not to other size firms suggest that the peer effect dominates the labor pool effect.
Originality/value
Through regression analysis, the authors compare a firm's CSR policies to the policies of other firms in the geographic area.
Details
Keywords
Raymond Cox, Ajit Dayanandan, Han Donker and John R. Nofsinger
Financial analysts have been found to be overconfident. The purpose of this paper is to study the ramifications of that overconfidence on the dispersion of earnings estimates as a…
Abstract
Purpose
Financial analysts have been found to be overconfident. The purpose of this paper is to study the ramifications of that overconfidence on the dispersion of earnings estimates as a predictor of the US business cycle.
Design/methodology/approach
Whether aggregate analyst forecast dispersion contains information about turning points in business cycles, especially downturns, is examined by utilizing the analyst earnings forecast dispersion metric. The primary analysis derives from logit regression and Markov switching models. The analysis controls for sentiment (consumer confidence), output (industrial production), and financial indicators (stock returns and turnover). Analyst data come from Institutional Brokers Estimate System, while the economic data are available at the Federal Reserve Bank of St Louis Economic Data site.
Findings
A rise in the dispersion of analyst forecasts is a significant predictor of turning points in the US business cycle. Financial analyst uncertainty of earnings estimate contains crucial information about the risks of US business cycle turning points. The results are consistent with some analysts becoming overconfident during the expansion period and misjudging the precision of their information, thus over or under weighting various sources of information. This causes the disagreement among analysts measured as dispersion.
Originality/value
This is the first study to show that analyst forecast dispersion contributions valuable information to predictions of economic downturns. In addition, that dispersion can be attributed to analyst overconfidence.
Details
Keywords
Saif AlZahir, Han Donker and John Nofsinger
This paper scrutinizes the impact of socioeconomic, political, legal and religious factors on the internal ethical values of human rights organizations (HROs) worldwide. The…
Abstract
Purpose
This paper scrutinizes the impact of socioeconomic, political, legal and religious factors on the internal ethical values of human rights organizations (HROs) worldwide. The authors aim to examine the Code of Ethics for 279 HROs in 67 countries and the social and legal settings in which they operate.
Design/methodology/approach
Using the framework of protect, respect and remedy, the authors look for keywords that represent the human rights lexicon in these three areas. In the protection of human rights, the authors select the terms: peace, transparency, freedom and security. For the respect of humans, the authors use the terms: dignity, equality, respect and rights. Sources of remedies come from justice and ethics. The analysis seeks to determine what political economy settings drive the ethical value choices of the organizations. Those choices are proxied by those keywords they mention in their Code of Ethics.
Findings
The analysis show that the scope of ethical values mentioned are higher when the HRO is in a country with more domestic violence, lower income inequality, French civil or Islamic legal origin and higher trust in politicians. In regard to the determinants of the ten keywords individually, the authors conclude that the status of the socioeconomic, political, religious and legal settings impact with local HROs mention each of the keywords: peace, justice, transparency, dignity, equality, ethics, respect, freedom, security and rights.
Research limitations/implications
The analysis is based on HROs that have a webpage in English and list the employee Code of Conduct.
Originality/value
This study is the first to examine the Code of Ethics for HROs. The authors demonstrate that country-specific characteristics help to drive their internal ethical values.