BANK DEBT AND MARKET DEBT: AN EMPIRICAL ANALYSIS FOR SPANISH FRIMS

This paper examines the effect on the firm’s banking cost of the issue of debt securities. We argue over the existence of a positive relationship between the issue of market debt and the reduction of firm’s banking cost. This idea relies on three main arguments: i) Banks can delegate to investors the supervision task, a feature that makes bank supervision less costly. ii) The issue of public debt increases firms’ bargaining power in front of the banks, as the former can get funds through non-bank financing ch annels. iii) Banks with no prior information on the issuing firm may interpret the issue of debt securities as a positive signal of firm’s quality. Additionally, we argue that the previous effects are less important for non-first issues and are sensible to the maturity of the bond issued. We empirically test these and other related theoretical results making use of a database of Spanish non-financial firms during the 1993-1998 period. We find empirical support for our theoretical contentions.

Corporate ethical identity as a determinant of firm performance : a test of the mediating role of stakeholder satisfaction

In this article, we empirically assess the impact of corporate ethical identity (CEI) on a firm’s financial performance. Drawing on formulations of normative and instrumental stakeholder theory, we argue that firms with a strong ethical identity achieve a greater degree of stakeholder satisfaction (SS), which, in turn, positively influences a firm’s financial performance. We analyze two dimensions of the CEI of firms: corporate revealed ethics and corporate applied ethics. Our results indicate that revealed ethics has informational worth and enhances shareholder value, whereas applied ethics has a positive impact through the improvement of SS. However, revealed ethics by itself (i.e. decoupled from ethical initiatives) is not sufficient to boost economic performance.Publicad

Monitoring, Operational Manager Efforts and Inventory Policy.

Operations managers are becoming more important in modern corporations. They do not only care on firms’ inventory management but also they are involved in firms’ strategic decisions. Within this setting we ask about the consequences in the inventory policy of this new role undertaken by these managers. To do so, we develop a model where a firm’s Operations Manager can devote some efforts to develop non-inventory related activities. These efforts, although non-verifiable, may be known with a certain probability if the owner monitors them. Interestingly, by monitoring these efforts, a firm’s owner may end up stimulating Operations Manager to achieve steep inventory cost reductions in the short-term. Basic idea is that Operations Manager, in general, avoids reducing inventory costs significantly in one period because this makes additional cost cuts difficult which, in turn, reduce expected future inventory-related retribution. However, by compensating those non-inventory-related efforts may offset these losses. Thus, although Operations Managers in modern corporations carry out non-inventory related responsibilities, this may bring about some benefits on inventory costs reduction