How does investing in cheap labour countries affect performance at home? Firm-level evidence from France and Italy

Transferring low tech manufacturing jobs to cheap labour countries is often seen by part of the general public and policy makers as a step into the de-industrialization of the European economies. However, recent contributions have shown that the effects on home economies are rarely negative. Our paper contributes to this literature by examining how outward investments to developing and less developed countries (LDCs) affect home activities of French and Italian firms that turn multinational in the period analysed. The effects of these investments are also compared to the effects of investments to developed economies (DCs). The analysis is carried out by using propensity score matching. We find no evidence of a negative effect of outward investments to LDCs. In Italy they have a positive long term effect on value added and employment. For France we find a positive effect on the size of domestic output and employment.

Reliable but not home free? What framing effects mean for moral intuitions

Various studies show moral intuitions to be susceptible to framing effects. Many have argued that this susceptibility is a sign of unreliability and that this poses a methodological challenge for moral philosophy. Recently, doubt has been cast on this idea. It has been argued that extant evidence of framing effects does not show that moral intuitions have a unreliability problem. I argue that, even if the extant evidence suggests that moral intuitions are fairly stable with respect to what intuitions we have, the effect of framing on the strength of those intuitions still needs to be taken into account. I argue that this by itself poses a methodological challenge for moral philosophy.

Effect of temperature and strain rate on the compressive behaviour of supramolecular polyurethane

Supramolecular polyurethanes (SPUs) possess thermoresponsive and thermoreversible properties, and those characteristics are highly desirable in both bulk commodity and value-added applications such as adhesives, shape-memory materials, healable coatings and lightweight, impact-resistant structures (e.g. protection for mobile electronics). A better understanding of the mechanical properties, especially the rate and temperature sensitivity, of these materials are required to assess their suitability for different applications. In this paper, a newly developed SPU with tuneable thermal properties was studied, and the response of this SPU to compressive loading over strain rates from 10−3 to 104 s−1 was presented. Furthermore, the effect of temperature on the mechanical response was also demonstrated. The sample was tested using an Instron mechanical testing machine for quasi-static loading, a home-made hydraulic system for moderate rates and a traditional split Hopkinson pressure bars (SHPBs) for high strain rates. Results showed that the compression stress-strain behaviour was affected significantly by the thermoresponsive nature of SPU, but that, as expected for polymeric materials, the general trends of the temperature and the rate dependence mirror each other. However, this behaviour is more complicated than observed for many other polymeric materials, as a result of the richer range of transitions that influence the behaviour over the range of temperatures and strain rates tested.

The effect of financial leverage on real and accrual-based earnings management

Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility—and subsequent costs—of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnings targets. Furthermore, we document that equity investors exhibit a significantly stronger penalising reaction to AM vs. RM, indicating that leverage-induced RM is not as easily detectable by market participants as debt-induced AM, despite the fact that the former could imply deviation from optimal business practices.