scholarly journals An Austrian Take on ESG

2021 ◽  
Vol 9 ◽  
Author(s):  
Henrique Schneider
Keyword(s):  
Information Asymmetry ◽  
Research Program ◽  
Agency Problems ◽  
Austrian Economics ◽  
Economic Calculation ◽  
Contemporary Debate ◽  
Mainstream Economics ◽  
Social Governance ◽  
Special Case

This paper analyzes the contemporary debate about ESG – Environment, Social, Governance – using economic insights from Austrian Economics; particularly, on entrepreneurship, agency, and information asymmetry. These insights are contrasted to similar concepts in “mainstream” economics suggesting that the Austrian insight goes beyond them, first by stressing effectiveness in addition to efficiency and institutions in addition to law-likeliness. When applied to ESG, the Austrian insight portraits ESG as a special case of the socialist, or economic calculation debate causing misalignments between inter- and intrafirm goals, exacerbates agency problems and suffers from serious flaws in its conceptualization as well as methodology. Relying on entrepreneurship, however, could make ESG work. This paper, thus, applies Austrian economics to contemporary debates claiming that its insights provide a unique perspective but at the same time updating its research program.

Technical or political? The socialist economic calculation debate

2021 ◽  
Author(s):  
Tiago Camarinha Lopes
Keyword(s):  
Economic Theory ◽  
Historical Context ◽  
Austrian School ◽  
Economic Calculation ◽  
Standard Interpretation ◽  
Economic Interests ◽  
Mainstream Economics ◽  
Political Position ◽  
Socialist Economic ◽  
Technical Terms

Abstract The paper presents both the key arguments and the historical context of the socialist economic calculation debate. I argue that Oskar Lange presented the most developed strategy to deal with bourgeois economics, decisively helping to create the scientific consensus that rational economic calculation under socialism is possible. Lange’s arguments based on standard economic theory reveal that the most ardent defenders of capitalism cannot reject socialism on technical terms and that, as a consequence, the Austrian School was left with no choice but to diverge from mainstream economics in its search to develop a framework that could support its political position. This shows that Mises’ challenge from 1920 was solved and has been replaced by a political posture developed by Hayek and leading Austrians economists, who have been struggling since the 1980s to revise the standard interpretation of the socialist economic calculation debate. I argue that this revision should not be uncritically accepted and conclude that socialism cannot be scientifically rejected; it can only be politically rejected, by those whose economic interests it opposes.

scholarly journals Mainstream economics and the Austrian school: toward reunification

2017 ◽  
Vol 10 (1) ◽  
pp. 41-63 ◽  
Author(s):  
Adam K. Pham
Keyword(s):  
Research Program ◽  
Empirical Work ◽  
Revealed Preference ◽  
Austrian School ◽  
Philosophical Foundation ◽  
Mainstream Economics ◽  
Research Paradigms

In this paper, I compare the methodology of the Austrian school to two alternative methodologies from the economic mainstream: the 'orthodox' and revealed preference methodologies. I argue that Austrian school theorists should stop describing themselves as 'extreme apriorists' (or writing suggestively to that effect), and should start giving greater acknowledgement to the importance of empirical work within their research program. The motivation for this dialectical shift is threefold: the approach is more faithful to their actual practices, it better illustrates the underlying similarities between the mainstream and Austrian research paradigms, and it provides a philosophical foundation that is much more plausible in itself.

Economic Calculation and the Productivity of Investment

2017 ◽  
Vol 12 (s1) ◽  
Author(s):  
Benjamin Powell ◽  
Gonzalo Macera
Keyword(s):  
Economic Growth ◽  
Institutional Quality ◽  
Theoretical Explanation ◽  
Austrian Economics ◽  
Empirical Literature ◽  
Economic Calculation ◽  
Investment Opportunities ◽  
Associated Knowledge

AbstractThis paper explains why institutional quality impacts the productivity of investment. The existing empirical literature finds that a given level of investment creates more economic growth in more economically free countries. We draw on insights from Austrian economics, particularly the economic calculation debate and associated knowledge problems, to provide a theoretical explanation for why entrepreneurs are able to better value investment opportunities in more economically free countries which, in turn, leads to higher economic growth.

Book Reviews

2015 ◽  
Vol 53 (1) ◽  
pp. 119-121
Keyword(s):  
Business Cycles ◽  
Austrian Economics ◽  
Austrian School ◽  
Market Process ◽  
Florida State University ◽  
State University ◽  
Economic Calculation ◽  
The Core

Roger W. Garrison of Auburn University reviews “Advanced Introduction to the Austrian School of Economics”, by Randall G. Holcombe. The Econlit abstract of this book begins: “Provides an introduction and summary of the core principles, ideas, and diversity of modern Austrian economics. Discusses the market process; decentralized knowledge—the role of firms and markets; economic calculation; money, banking, and business cycles; and the resurgence of the Austrian school. Holcombe is DeVoe Moore Professor of Economics at Florida State University.”

Comment on Horwitz's Article

1996 ◽  
Vol 18 (2) ◽  
pp. 308-313 ◽  
Author(s):  
Allin Cottrell
Keyword(s):  
Government Intervention ◽  
Austrian Economics ◽  
Neoclassical Economics ◽  
Economic Calculation ◽  
Market System ◽  
Neoclassical Theory ◽  
Ludwig Von Mises ◽  
Alternative Approaches ◽  
Von Mises ◽  
Friedrich Hayek

Austrian economics is arousing increasing interest, not to say enthusiasm, these days. No doubt this is in part due to the collapse of the planned economies of the Soviet type, which has lent credibility to the claims of Ludwig von Mises and Friedrich Hayek regarding the impossibility of rational economic calculation under socialism-claims which were disputed by the mainstream neoclassical economists of a generation ago. The phenomenon also reflects a relatively long-standing dissatisfaction with neoclassical economics. For many years it was the radical critics of capitalism who felt most keenly the attractions of alternative approaches in economics. Now, increasingly, champions of the market are coming to believe that neoclassical theory does not offer a deep and firm enough basis for asserting the virtues of the market system, and the counterproductive effects of government intervention therein.

The Effect of Auditor Characteristics on the Value of Diversification

2017 ◽  
Vol 37 (1) ◽  
pp. 115-137 ◽  
Author(s):  
Shu-Miao Lai ◽  
Chih-Liang Liu
Keyword(s):  
Information Asymmetry ◽  
Financial Reporting ◽  
Agency Problems ◽  
Market Value ◽  
Disclosure Quality ◽  
Diversification Discount ◽  
Industry Specialization ◽  
Diversified Firms ◽  
Auditor Characteristics

SUMMARY This paper examines how auditor characteristics (size, tenure, and industry specialization) affect the valuation of diversification. As expected, we find that diversified firms have lower market value than single-segment firms, and the diversification discount is smaller when firms employ Big N auditors and auditors with longer tenure. We also find that the diversification discount is larger when companies hire auditors with industry specialization and speculate that an industry focus may limit auditors' ability to detect misreporting in diversified firms. Also, diversified firms have higher financial reporting and disclosure quality when they employ Big N auditors and auditors with longer tenure, but lower financial reporting and disclosure quality when they employ industry specialist auditors. Overall, our findings suggest that auditor characteristics matter to investors in diversified firms because they contribute to the quality of financial reporting and disclosure, which can mitigate agency problems and the information asymmetry associated with diversification.

Shifting Our Lenses to Behavioral Finance Paradigm

2021 ◽  
pp. 174-202
Author(s):  
Sibel Dinç Aydemir
Keyword(s):  
Information Asymmetry ◽  
Organizational Performance ◽  
Behavioral Finance ◽  
Stakeholder Engagement ◽  
Agency Problems ◽  
Past Research ◽  
Management Control ◽  
Normative Structure ◽  
Financial Outcomes ◽  
Reputation Concern

Recent crisis periods have shown how corporate communication could contribute to organizational performance regarding financial outcomes, reputation concern, etc. The efforts to reduce information asymmetry, deal with agency problems, improve stakeholder engagement have brought it to the fore. Past research on reporting mechanisms has overly focused on its normative structure and manifested ethical or problematic issues. Some research has argued credibility of both reporters and assurance providers of this information. Although some limited research on management control over reporting mechanisms and on some weaknesses of assurance providers' verification statements, this research doesn't explain enough why this manipulative control occurs. Shifting our lenses to behavioral finance paradigm, it's understood that judgmental decision making seems to be exposed to diverse systematical biases and fallacies. Amidst them, inopportune optimism, alias overconfidence, stands for one of the most serious biases.

Information Asymmetry and Levels of Agency Relationships

1998 ◽  
Vol 35 (3) ◽  
pp. 277-295 ◽  
Author(s):  
Debi Prasad Mishra ◽  
Jan B. Heide ◽  
Stanton G. Cort
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Ownership Structure ◽  
Agency Problems ◽  
Customer Relationship ◽  
Price Premiums ◽  
Agency Relationships ◽  
Institutional Differences ◽  
Service Managers

Many marketing exchanges are characterized by an information asymmetry between suppliers and customers. Specifically, customers are faced with both adverse selection and moral hazard problems that involve, respectively, uncertainty about supplier characteristics and the risk of quality cheating. Drawing on prior research, the authors propose that agency problems in a customer relationship can be resolved by means of customer bonds and price premiums, which serve as signals and supplier incentives, respectively. The authors also propose that adverse selection and moral hazard problems exist in relationships between suppliers and their employees. Similar to the customer relationship, these problems can be addressed with signals and incentives of various kinds. The authors present hypotheses regarding the agency problems in both of these relationships and test them empirically in the context of automotive service purchases. Data obtained from 287 service managers support the hypotheses. The data also suggest that institutional differences across service outlets (e.g., ownership structure and size) influence how the two types of agency problems are managed.

scholarly journals Family ownership, information problem and firm performance

2021 ◽  
Vol 10 (6) ◽  
pp. 73-82
Author(s):  
Reajmin Sultana
Keyword(s):  
Information Asymmetry ◽  
Empirical Evidence ◽  
Family Business ◽  
Family Firms ◽  
Agency Problems ◽  
Family Ownership ◽  
Research Papers ◽  
Future Directions ◽  
Research Gap ◽  
Information Problem

This paper reviews recent corporate financial literature dealing with family business issues. It discusses research papers that explain the nature and type of agency problems in family firms. It provides empirical evidence of the association of family ownership with information asymmetry. It also portrays the influence of family firms over corporate disclosures. We have analyzed literature to explain the empirical association between family ownership, and so ownership control, and firm performances. This paper also attempts to find out the research gap based on reviewed papers and tries to give the future directions of research in this regard.

Sign in / Sign up

Export Citation Format

Share Document