The effects of corporate social performance on the cost of corporate debt and credit ratings

This study investigates the differential impact that various dimensions of corporate social performance have on the pricing of corporate debt as well as the assessment of the credit quality of specific bond issues. The empirical analysis, based on an extensive longitudinal data set, suggests that overall, good performance is rewarded and corporate social transgressions are penalized through lower and higher corporate bond yield spreads, respectively. Similar conclusions can be drawn when focusing on either the bond rating assigned to a specific debt issue or the probability of it being considered to be an asset of speculative grade.

The option market reaction to bank loan announcements

In this study, we examine the options market reaction to bank loan announcements for the population of US firms with traded options and loan announcements during 1996-2010. We get evidence on a significant options market reaction to bank loan announcements in terms of levels and changes in short-term implied volatility and its term structure, and observe significant decreases in short-term implied volatility, and significant increases in the slope of its term structure as a result of loan announcements. Our findings appear to be more pronounced for firms with more information asymmetry, lower credit ratings and loans with longer maturities and higher spreads. Evidence is consistent with loan announcements providing reassurance for investors in the short-term, however, over longer time horizons, the increase in the TSIV slope indicates that investors become increasingly unsure over the potential risks of loan repayment or uses of the proceeds.

Drivers' ratings of different components of their own driving skill: a greater illusion of superiority for skills that relate to accident involvement

Different components of driving skill relate to accident involvement in different ways. For instance, while hazard-perception skill has been found to predict accident involvement, vehicle-control skill has not. We found that drivers rated themselves superior to both their peers and the average driver on 18 components of driving skill (N = 181 respondents). These biases were greater for hazard-perception skills than for either vehicle-control skills or driving skill in general. Also, ratings of hazard-perception skill related to self-perceived safety after overall skill was controlled for. We suggest that although drivers appear to appreciate the role of hazard perception in safe driving, any safety benefit to be derived from this appreciation may be undermined by drivers' inflated opinions of their own hazard-perception skill. We also tested the relationship between illusory beliefs about driving skill and risk taking and looked at ways of manipulating drivers' illusory beliefs.

Credit flow [poetry]

A poem within the Alhambra Poetry Calendar 2011, a desk calendar and poetry anthology in one.

Stakeholder-defined corporate responsibility for a pre-credit-crunch financial service company: lessons for how good reputations are won and lost

This paper presents a study that identifies a stakeholder-defined concept of Corporate Responsibility (CR) in the context of a UK financial service organisation in the immediate pre-credit crunch era. From qualitative analysis of interviews and focus groups with employees and customers, we identify, in a wide-ranging stakeholder-defined concept of CR, six themes that together imply two necessary conditions for a firm to be regarded as responsible— both corporate actions and character must be consonant with CR. This provides both empirical support for a notable, recent theoretical contribution by Godfrey (in Acad Manag Rev 30:777–798, 2005) and novel lessons for reputation management practice.