Nyonho Oh and Kevin Nooree Kim
The survivorship of firms under extreme weather poses an essential question about the local economy's health. Over 90% of agricultural banks are categorized as community banks…
Abstract
Purpose
The survivorship of firms under extreme weather poses an essential question about the local economy's health. Over 90% of agricultural banks are categorized as community banks, which are important financial institutions promoting local growth. While previous studies suggest that climate change and weather shocks adversely impact community banks' resiliency, studies on whether these institutions engage in risk-reducing management strategies have been limited. In this study, the authors examine strategic choices of local community banks when facing flood events which include (1) safety net increase, (2) portfolio diversification, and (3) branch opening. These strategic choices are the coping mechanisms banks can take to survive while affecting the local competitive lending market.
Design/methodology/approach
The authors use panel-fixed effect regressions based on the storm data from National Oceanic and Atmospheric Administration (NOAA)'s National Weather Service (NWS) and the call reports from the Federal Deposit Insurance Corporation (FDIC). The authors focus on community banks' account variable characteristics and the number of offices to examine whether community banks take an active role in managing flood risk.
Findings
Results suggest that community banks do employ the selected strategic choices to a certain degree, as it is found that there is an increase in the core capital that absorbs shocks and portfolio diversification. However, the magnitudes of these activities are rather small and not large enough to fully mitigate the climate risk. Also, the authors do not find any evidence of branch expansion associated with local floods.
Originality/value
This study contributes to the literature by examining different strategic choices of community banks in the face of natural uncertainty. Even though concerns of climate risk have been raised in the regulatory setting, a lack of guidance or assessment tools could contribute to the passive action of these community banks, even though climate risks can have a significant economic impact. Thus, the evidence documented from this study calls for further guidelines and the importance of highlighting climate risks on community banks so that they can actively engage in risk-reducing strategies.
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Kevin Nooree Kim and Ani L. Katchova
Following the recent global financial crisis, US regulatory agencies issued laws to implement the Basel III accords to ensure the resiliency of the US banking sector. Theories…
Abstract
Purpose
Following the recent global financial crisis, US regulatory agencies issued laws to implement the Basel III accords to ensure the resiliency of the US banking sector. Theories predict that enhanced regulations may alter credit issuance of the regulated banks due to increased capital requirements, but the direction of changes might not be straightforward especially with respect to the agricultural loans. A decrease in credit availability from banks might pose a serious problem for farmers who rely on bank credit especially during economic recessions. The paper aims to discuss these issues.
Design/methodology/approach
In this study, the impact of Basel III regulatory framework implementation on agricultural lending in the USA is examined. Using panel data of FDIC-insured banks from 2008 to 2017, the agricultural loan volume and growth rates are examined for agricultural banks and all US banks.
Findings
The results show that agricultural loan growth rates have slowed down, but the amount of agricultural loan volume issuance still remained positive. More detailed examination finds that regulated agricultural banks have decreased both the agricultural loan volume and their loan exposure to the agricultural sector, showing a possible sign of credit crunch.
Originality/value
This study examines whether the implementation of the Basel III regulation has resulted in changes in agricultural loan issuance by US banks as predicted by the lending channel theory.
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Daniel Ames, Joshua Coyne and Kevin Kim
The purpose of the authors’ research study is to identify the impact of life cycle stage on firm acquisitions.
Abstract
Purpose
The purpose of the authors’ research study is to identify the impact of life cycle stage on firm acquisitions.
Design/methodology/approach
The authors use a series of empirical databases to identify characteristics of acquirers and their targets. The authors then use logistic regressions and joint tests to identify significant differences between declining and non-declining acquirers.
Findings
The authors find that declining acquirers are more likely to pursue diversifying acquisitions and to pay for the acquisition with stock considerations. Acquisitions by declining acquirers result in positive abnormal returns initially, but post-acquisition returns are negative.
Research limitations/implications
The authors’ primary limitation is their data, which only includes public acquirers and targets, and runs from January 1, 1988 to December 31, 2010.
Practical implications
The authors’ research suggests that regulators, stakeholders and prospective stakeholders should consider the life cycle stage of an acquiring firm in setting expectations about motivations for and likely performance subsequent to the acquisition.
Originality/value
The authors’ paper is the first to consider the effect of firm life cycle stage on the motivation and subsequent success of an acquisition. Given the tremendous impact to shareholders of such significant transactions, understanding the acquisition process more completely is important to capital markets participants.
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Peter BeomCheol Kim and Kevin D. Carlson
The purpose of this paper is to examine whether agreement between frontline employee self-ratings and supervisory ratings of service performance functions as an indicator of…
Abstract
Purpose
The purpose of this paper is to examine whether agreement between frontline employee self-ratings and supervisory ratings of service performance functions as an indicator of healthy supervisor-subordination relationships above and beyond what might be indicated simply by either supervisory ratings or self-ratings.
Design/methodology/approach
Research hypotheses were tested using a sample of 220 matched pairs of frontline service workers and their immediate supervisors from nine full service hotels in the USA.
Findings
The results show that higher levels of agreement in service performance ratings between employees and supervisors is associated with higher levels of leader-member exchange (LMX) and organizational commitment.
Practical implications
Senior managers can refer to the level of performance rating agreement between customer service employees and their supervisors in assessing supervisors’ competency to manage their work relationship with their subordinates.
Originality/value
This study examined rating agreement in a service performance context and found rating agreement between subordinates and their supervisor may have a unique effect on service worker effectiveness, producing a unique incremental effect on LMX and organizational commitment. This is important given that few attempts have been made to examine service performance from both subordinates’ and supervisors’ perspectives and the implication that rating agreement may have for improving employee service performance.
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In the next decade, over 500,000 students with autism spectrum disorder will graduate high school, over 60% with average to above-average IQs (Institutional Center for Special…
Abstract
In the next decade, over 500,000 students with autism spectrum disorder will graduate high school, over 60% with average to above-average IQs (Institutional Center for Special Education Research, 2011). Attention is rightfully drawn to the potent challenge of optimizing lifespan outcomes for Generation A. The Workforce Innovation and Opportunity Act (WIOA) passed in 2014 calls for a unified and social model supports structure to help the education to pre-employment transition through “Required Activities.” This includes job exploration counseling, integrated work-based learning experiences, postsecondary educational programs at institutions of higher education, social skills, and self-advocacy training. WIOA aims to streamline Pre-Employment Transition Services and end the medical model, deficits-based approach from education to integrated, paid employment.
The authors of the bill realized the necessity to achieve its goals through “Authorized Activities” encompassing the implementation of effective strategies for integrated work and independent living, the dissemination of information and knowledge across multistate partnerships, and learning new skills to support students in vocational rehabilitation (VR) and educational settings. The 2019 interpretation of WIOA states the educational and VR systems cannot draw funding from “Authorized Activities” and must instead focus on “Required Activities” leaving a gaping hole in the provision of services through lack of training and partnerships.
Despite billions in government funding, systems remain siloed. Over 50% of autistic adults remain in segregated, subminimum wage jobs, and the 85% underemployment or unemployment rate for autistic graduates, with and without college degrees, remains. Generation A calls for the effective delivery of WIOA to enjoy integrated, meaningful employment and financial independence.
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Raja Irfan Sabir and Raja Moazzam Sabir
The aim of this paper is to highlight the importance of industrialization and its role in realizing technological innovation leading towards economic development. China has made a…
Abstract
Purpose
The aim of this paper is to highlight the importance of industrialization and its role in realizing technological innovation leading towards economic development. China has made a 15‐year plan to develop an innovation driven economy, for which it requires a strong and a structured industrial base. An overview of China's industrial strategy has been provided, followed by the challenges and the possible measures needed to be taken in order to achieve its long‐term goals.
Design/methodology/approach
Phenomenology, exploratory research and inductive approach for analysing management of technological innovation, industrial clusters and economic development, and, China's innovation plan.
Findings
China has emerged as the fastest developing economy and is currently in the transition stage from factor driven to investment driven. In order to stabilize and move towards the investment driven and then to the innovation‐driven stage, China requires a strong industrial base. In order to do so, China needs to cope with the challenges of: a weak system of intellectual property management: lack of skilled and technical labour and adequate financial resources: slow pace in competence and competitiveness upgrading: a weak educational system: industrial pollution; and, lack of basic research.
Originality/value
The paper serves as a guide to students and researchers by presenting a summary of global trends regarding technological innovation, industrial clusters, and China's industrial policies to develop an innovation driven economy.
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Norman Gemmell and John Hasseldine
The global economic crisis has highlighted the continuing problem of tax evasion. For tax agencies to respond, an important antecedent necessitates knowing the extent of the…
Abstract
The global economic crisis has highlighted the continuing problem of tax evasion. For tax agencies to respond, an important antecedent necessitates knowing the extent of the problem. This study is the first to comprehensively review recent research on the tax gap. Our primary contributions are twofold. First, we argue that the tax gap, as conventionally defined, is conceptually flawed because it fails to capture behavioral responses by taxpayers adequately. Our second contribution is to review methods for measuring the tax gap and compare empirical estimates. We suggest that many of the most trenchant criticisms of conventional tax gap measurement (and the “hidden economy” measures that underlie them) leave only microdata-based measures of tax noncompliance as likely to deliver more reliable tax gap estimates. Even here, however, further work is required, on both conceptual and empirical aspects, before researchers are likely to deliver tax gap estimates suitable for policy analysis (e.g., implications for enforcement policy).
Hélène Flore Nguemgaing and Ana Claudia Sant’Anna
How has COVID-19 impacted meat processors' stock returns? The authors evaluate the effects of supply chain disruptions (e.g. lockdowns and COVID-19 incidences among workers) on…
Abstract
Purpose
How has COVID-19 impacted meat processors' stock returns? The authors evaluate the effects of supply chain disruptions (e.g. lockdowns and COVID-19 incidences among workers) on stock market prices of meat processors during the COVID-19 pandemic.
Design/methodology/approach
This study uses an event study approach to examine the disruptions from COVID-19 through events such as plant shutdowns, the pandemic announcement, lockdown dates and the first case of COVID-19 outbreaks in meat processing plants. The dataset includes S&P 500, Google Trends, financial beta and data collected for 14 US publicly traded meat processing companies.
Findings
Results show that nationwide events (e.g. announcement of the pandemic) had no statistically significant impact on average abnormal returns of meat processing companies. Individually, however, firms experienced negative abnormal returns. COVID-19-related events in individual meat processing companies had a temporary negative abnormal return in the days prior to the event.
Originality/value
This study has two main contributions. First, the authors estimate the effect of COVID-19 on the returns of meat processors. Second, the authors use Google Trends to estimate the expected stock markets returns of meat processing companies. This study provides insight to investors on the behavior of industry returns from events such as outbreaks that affect human health.