Uncertainty, hiring and firing costs, and the determinants of profit‐sharing rules

2020 ◽  
Vol 42 (1) ◽  
pp. 185-197
Author(s):  
Jyh‐Bang Jou ◽  
Tan (Charlene) Lee
Keyword(s):  
Profit Sharing ◽  
Firing Costs ◽  
Sharing Rules ◽  
Hiring And Firing

Profit Sharing in an Auditing Oligopoly

2005 ◽  
Vol 80 (2) ◽  
pp. 677-702 ◽  
Author(s):  
Xiaohong Liu ◽  
Dan A. Simunic
Keyword(s):  
Profit Sharing ◽  
Point Of View ◽  
Pricing Strategies ◽  
Compensation Plans ◽  
Audit Firm ◽  
Strategic Competition ◽  
Sharing Rules ◽  
Audit Firms ◽  
Different Types ◽  
Partner Collaboration

This paper examines how partners in an audit firm can use profit-sharing rules to induce optimal partner behavior from the firm's point of view, taking into account the strategic competition of firms in an auditing oligopoly. We use a linear contracting framework to investigate the effects of profit-sharing rules on individual partners' various decisions, including their pricing strategies and effort choices.We assume that efficient audits of different types of clients require different effort profiles with respect to degree of partner cooperation. For example, the audit of a complex company requires different amounts of partner collaboration than does the audit of a simple company. Moreover, since it is too costly for an enforcement party, such as the head office of an audit firm or a court, to verify each client's type in order to resolve compensation disputes among the firm's partners, it is reasonable to assume that client type cannot be contracted upon for partner compensation purposes. Given this assumption, we derive conditions under which there exists an equilibrium in which audit firms strategically choose different profit-sharing rules to specialize in different types of clients, thereby earning positive economic profits. Our analysis provides insights into the strategic competition among the big audit firms, and helps to explain the observed differences in the compensation plans of these firms and in the nature of their client portfolios.

scholarly journals Real Options Effects on Employment: Does Exchange Rate Uncertainty Matter for Aggregation?

2005 ◽  
Vol 6 (2) ◽  
pp. 185-203 ◽  
Author(s):  
Ansgar Belke ◽  
Matthias Göcke
Keyword(s):  
Exchange Rate ◽  
Real Options ◽  
General Interest ◽  
Option Value ◽  
Micro Model ◽  
Exchange Rate Uncertainty ◽  
Firing Costs ◽  
Weak Response ◽  
Band Of Inaction ◽  
Hiring And Firing

Abstract In a baseline micro model a band of inaction due to hiring and firing costs is widened by option value effects of exchange rate uncertainty. Based on this micro foundation, an aggregation approach is presented. Under uncertainty, intervals of weak response to exchange rate reversals (called ‘play’ areas) are introduced on the macro level. ‘Spurts’ in new employment or firing may occur after an initially weak response. Since these mechanisms may apply to other ‘investment’ cases where the aggregation of microeconomic real options effects under uncertainty are relevant, they may even be of a more general interest.

scholarly journals Incentive profit-sharing rules joined with open-book accounting in SME networks

2008 ◽  
Vol 19 (5) ◽  
pp. 508-517 ◽  
Author(s):  
T. Jarimo ◽  
H.I. Kulmala
Keyword(s):  
Profit Sharing ◽  
Open Book ◽  
Sharing Rules

scholarly journals Employment protection legislation and SME performance

2016 ◽  
Vol 35 (3) ◽  
pp. 306-326 ◽  
Author(s):  
Yannick Van Landuyt ◽  
Nico Dewaelheyns ◽  
Cynthia Van Hulle
Keyword(s):  
Employment Protection ◽  
Blue Collar ◽  
Employment Protection Legislation ◽  
Temporary Workers ◽  
Firing Costs ◽  
Protection Legislation ◽  
Labour Contracts ◽  
Improved Performance ◽  
Hiring And Firing ◽  
Country Specific

This article examines the effect of employment protection legislation (EPL) on small and medium-sized enterprise (SME) performance. Rather than relying on country-specific proxies for EPL, as is common in the literature, we compute firm-specific measures of a firm’s exposure to EPL by using a panel dataset of 13,112 Belgian SMEs for the period between 2000 and 2009. The empirical results show that firms perform better when faced with lower hiring and firing costs through the use of more blue-collar labour contracts. The evidence showing improved performance by firms that attempt to achieve greater flexibility by hiring more temporary workers is limited.

Unemployment

2020 ◽  
pp. 161-218
Author(s):  
Christopher Tsoukis
Keyword(s):  
Wage Inequality ◽  
Trade Unions ◽  
Job Creation ◽  
Efficiency Wages ◽  
Recent Theory ◽  
Price Setting ◽  
Firing Costs ◽  
Job Polarization ◽  
Hiring And Firing ◽  
Job Creation And Destruction

This chapter offers a wide-ranging review of the macroeconomics of unemployment and related issues. Setting the scene with definitions, motivation, and facts, the discussion proceeds to a baseline wage and price setting model, which offers some first key insights. Formal models of trade unions and efficiency wages, and of the less standard, but topical, dual labour markets, are developed next. Dynamic issues, such as hysteresis and its underpinning factors, are also discussed. A major subsequent theme is the flows and search-based recent theory, emphasizing job creation and destruction, hiring and firing costs, and the Beveridge Curve. Additionally, the effects of technical progress on unemployment, wage inequality, and job polarization are discussed. The chapter concludes with a review of the high European unemployment of the 1980s and 1990s and the ‘shocks versus institutions’ debates on its causes.

Trade, Wages and Unemployment in the Presence of Hiring and Firing Costs

2002 ◽  
Vol 78 (241) ◽  
pp. 195-206 ◽  
Author(s):  
Paul Oslington
Keyword(s):  
Firing Costs ◽  
Hiring And Firing

scholarly journals Profit-Sharing Rules and the Taxation of Multinational Internet Platforms

2019 ◽  
Author(s):  
Francis Bloch ◽  
Gabrielle Demange
Keyword(s):  
Profit Sharing ◽  
Sharing Rules

The Effects of Employment Protection legislationon Personnel Policies: A Review of Theoretical Modelsand Empirical results

2014 ◽  
pp. 126-140
Author(s):  
O. Mironenko
Keyword(s):  
Personnel Selection ◽  
Selection Criteria ◽  
Theoretical Models ◽  
Employment Protection ◽  
Empirical Results ◽  
Protection Legislation ◽  
Labour Contracts ◽  
Hiring And Firing ◽  
The Impact ◽  
Personnel Policies

Employers incur costs while fulfilling the requirements of employment protection legislation. The article contains a review of the core theoretical models and empirical results concerning the impact of these costs on firms’ practices in hiring, firing, training and remuneration. Overall, if wages are flexible or enforcement is weak, employment protection does not significantly influence employers’ behavior. Otherwise, stringent employment protection results in the reduction of hiring and firing rates, changes in personnel selection criteria, types of labour contracts and dismissal procedures, and, in some cases, it may lead to the growth of wages and firms’ investments to human capital.

Lifting the Veil

2014 ◽  
Vol 91 (4) ◽  
pp. 43-55
Author(s):  
Scott Pittman
Keyword(s):  
Los Angeles ◽  
State Government ◽  
The State ◽  
University Of California ◽  
Red Scare ◽  
National Archives ◽  
The Veil ◽  
Hiring And Firing ◽  
And Control ◽  
California Schools

The story of anti-communism in California schools is a tale well and often told. But few scholars have appreciated the important role played by private surveillance networks. This article examines how privately funded and run investigations shaped the state government’s pursuit of leftist educators. The previously-secret papers of Major General Ralph H. Van Deman, which were opened to researchers at the National Archives in Washington, D.C., only a few years ago, show that the general operated a private spy network out of San Diego and fed information to military, federal, and state government agencies. Moreover, he taught the state government’s chief anti-communist bureaucrat, Richard E. Combs, how to recruit informants and monitor and control subversives. The case of the suspicious death of one University of California, Los Angeles student – a student that the anti-communists claimed had been “scared to death” by the Reds – shows the extent of the collaboration between Combs and Van Deman. It further illustrates how they conspired to promote fear of communism, influence hiring and firing of University of California faculty, and punish those educators who did not support their project. Although it was rarely successful, Combs’ and Van Deman’s coordinated campaign reveals a story of public-private anticommunist collaboration in California that has been largely forgotten. Because Van Deman’s files are now finally open to researchers, Californians can gain a much more complete understanding of their state bureaucracy’s role in the Red Scare purges of California educators.

Civilization stress, cardiovascular risk, evidence based medicine, guideline

2009 ◽  
Vol 150 (19) ◽  
pp. 895-902 ◽  
Author(s):  
Kornél Simon
Keyword(s):  
Cardiovascular Risk ◽  
Cardiovascular Diseases ◽  
Chronic Stress ◽  
Randomized Clinical Trials ◽  
Decisive Role ◽  
Profit Sharing ◽  
Pole Position ◽  
Ethical Question ◽  
Drug Sale ◽  
Target Values

Cardiovascular diseases have the pole-position on the list of morbidity and mortality statistics. Despite the great advances have been made in management of cardiovascular diseases, prevalence of these disorders increases worldwide, and even younger and younger ages are threatened. This phenomenon is strongly related to obesity and type 2 diabetes pandemic, which shows an unequivocal association with expansion of modernized life-style. The pathomechanism proposed to have central role is the chronic stress induced by civilized life-conduct. The authors criticizes the everyday practice suggested for management of cardiovascular diseases, focusing on normalization of cardiovascular risk factors, instead of fighting against the primary cause ie. chronic stress. There is growing evidence, that achieving the target values defined in guide-lines will not necessarily result in improvement of patient related clinical outcomes. The statistical approach generally practiced in randomized clinical trials is primarily striving for the drug-sale, instead of discovering novel pathophysiological relations. Pharmaceutical industry having decisive role in research and patient-care is mainly interested in profit-sharing, therefore patients’ interest can not be optimally realized, and costs are unnecessarily augmented. Separation of patient-, and business-oriented medical care is an ethical question of fundamental importance.

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