KBS 2022 Spring Seminar Series

​Seminar by Darren Shannon of the Emerging Risk Group Cluster.  The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.   The title and abstract are below: 

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How do Equity Investors React to Green Bond Announcements? A Deep Learning Application to Abnormal Returns

Investors have developed a strong appetite for investments in environmental sustainability, and publicly traded firms have been happy to oblige. ‘Green Bonds’ have emerged as a popular fixed income solution to fulfil green investing demands, where the proceeds from the bond are used to fund climate-related or environmental initiatives. Since the first release of a ‘Green Bond’ by a publicly traded firm in 2013, issuance volumes have amassed $611bn, with $230bn of Green Bonds being issued by publicly traded firms in 2021 alone.  Studies have highlighted that announcements of upcoming green bond issuances have produced abnormal returns for the issuing firms, or returns in excess of the underlying index. However, relatively little is known about the mechanics of equity market reactions to the announcements of Green Bonds. Understanding equity market reactions can explain how investors perceive these bonds. This study investigates the sentiment of equity markets toward Green Bond issuers by exploring the predictability of market-beating returns using Artificial Neural Networks. I gather bond, accounting, and ESG data relating to all 1,760 publicly traded firms who have announced Green Bonds over the course of 2013-2021, and perform an event study on the predictability of abnormal returns over a 2-day window. I find that trading on the basis of a subset of financial strength and ESG indicators produced significant returns in out of sample testing, with bond characteristics playing a minimal role in predicting excess returns.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below.

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The Application of Commitment Trust Theory to a Tax Domain

This paper explores power and trust in tax client relationships through the lens of Commitment Trust Theory, and the perceptions of tax practitioners is a wide range of contexts. Tax impacts inequality, both within and between countries. Tax practitioners, as intermediaries, have a significant impact on tax compliance levels (Kirchler et al. 2008; Sikka and Willmott 2010; Alm et al. 1992; Cooper et al. 2013; Pickhardt and Prinz 2014; Kanagaretnam et al. 2018). Tax practitioners also face considerable commercial pressures within tax practices (Malsch and Gendron 2013; Spence and Carter 2014; Spence et al. 2017). Unpicking the client relationship in the light of increased concern about aggressive tax practices has both societal and practice significance. Using Commitment Trust Theory as a lens (Morgan & Hunt 1994), in this paper, I focus on how practitioners build long term trusting relationships with their tax clients, and the benefits and limitations of such close relationships as it pertains taxpayer compliance. Commercial imperatives drive tax practitioners to ensure long-term relational success with their clients, and I find that tax practitioners aim to work with clients with a similar propensity for risk. The findings support the importance for tax practitioners of nurturing their client relationships over the long term (Ravald and Grönroos 1996; Migdadi 2020). My findings should empower regulators to act in a targeted way in individual jurisdictions by emphasizing different elements of governance, and through leveraging the strength of long-term tax client relationships to encourage taxpayer compliance.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below.

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Market Intelligence provision to Small Agri-food Businesses: A Social Capital Perspective 

The provision of MI to SMEs, by publicly funded support agencies, is forward thinking and can provide a stimulus for the enhancement of a firm’s marketing capabilities (Carson, 2021). From a social capital perspective, the interaction between organisations is highly valuable in the coordination of networks and serves as a bonding mechanism that facilitates the pursuit of collective goals among actors (Adler and Kwon, 2002). Kelly et al. (2021) attests that social capital can increase the knowledge capacity of SMEs through support programmes that provide access to, and training on, new technologies. However, Hughes et al. (2013) finds that the nature and quality of the relationship between organisations, and thus, the level of social capital emerging from relationships, may vary significantly across dyads such as the smaller agri-based firm. Through a longitudinal case-based study this research seeks to explore how supporting agencies deliver MI to SMEs, owner managers response to this delivery and how it may be improved. Early findings suggest that MI cannot be bought and supplied unaided by support networks, with the expectation that the ‘silver bullet’ reputation of big-data will entice business owners (Le-Brun, 2021). 

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below.

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Seeking Safe Spaces: Graduate Transitions into a New World of Work

The convergence of the digital and human world created by Industry 4.0 has led to a fundamental shift in how organisations operate. Digital transformation significantly increases the collective dexterity and individual density of skills needed in organisations today (Kieran et al, 2019). This presents challenges for everyone in the organisation as they learn to navigate their new environment. One employee group which emerges as being particularly impacted by the pace and reach of digital transformation are Graduate Entrants - employees entering the organisation directly from college within the previous 5 years. Drawing on data from our research commissioned by ICBE Advanced Productivity Skillnet, we explore key issues in relation to graduates’ experience of employment in the digitally transformed workplace. We examine whether graduates are ‘skill-ready’ for the transition from higher education; what organisations can do to create ‘safe spaces’ for graduate development; the importance of informal learning, coaching and networks in hybrid or virtual work environments and the changing graduate career path. Our findings show that graduates are transitioning quickly into more advanced tasks and activities which demand higher levels of skill in today’s digitally transformed workplace. However, there are some critical skill gaps that need to be addressed as well as concerning findings in relation to burnout and social skills gaps. The study directly responds to higher education, policymakers and businesses seeking to better understand today’s graduate needs as the transition from college into the workplace by providing novel insights into graduates’ own perceptions, experiences, and expectations of work.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below.

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+ Limerick – Implementation of the +CityxChange H2020 Project in Limerick

The Positive City Exchange (+CityxChange) H2020 project explores the development of a structured approach to decarbonising cities through the creation and replication of Positive Energy Blocks (PEBs) and Districts (PEDs). Reflecting the fundamental change in our relationship with energy described in Europe’s Clean Energy Package of Directives, the project places particular emphasis on stakeholder engagement. Six CommunityxChange frameworks to enable top-down and bottom-up processes of engagement are designed to address a range of city contexts, with the objective to enable stakeholders across society, develop the sense of ownership needed to mobilise in support of a city clean energy transition. 

This seminar will first introduce the +CityxChange project and the CommunityxChange frameworks, before sharing some examples of their implementation in Limerick. The Citizen Innovation Lab initiated through the project will then be introduced. 

The seminar will conclude with a discussion exploring “What a Citizen Innovation Lab can do?”.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below.

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High speed, high cost: The problematic procurement of Ireland’s National Broadband Plan

In December 2015 the Irish government launched the tendering process for a National Broadband Plan to deliver high-speed broadband to every premise in the country. The government opted for a gap funding commercial stimulus PPP model for the delivery of the plan.  Under the gap funding approach, the government contracts with a private sector partner to finance, design, build, own and operate the broadband infrastructure, with the government providing the minimum amount necessary in the form of a subsidy to facilitate the delivery of the project. 

The subsequent history of the NBP procurement has been highly controversial as it was beset by a series of issues that led to long delays in the signing of a contract and a massive increase in the size of the government subsidy, which is now estimated to cost at least €2.2 billion (EC 2019).  These events raise important questions that we seek to address in this paper. These cover the rationale for the regulatory choice made by the government (the gap funding model) and whether the chosen model has been workable. We also examine the conduct of the procurement process, the factors (economic, political, and institutional) that contributed to the significant escalation in cost and protracted nature of the procurement process, and the ultimate impact of changes to ownership and competition in the telecommunications market that were instigated over 20 years ago.

To examine these questions, we utilise the transaction cost regulation (TCR) framework based on the contributions of Williamson (1975, 1999) and Spiller (2013), which elucidate the contractual hazards that affect the governance of infrastructure regulation and the interaction between private investors and government.  The principal obstacles to the process have been the opportunistic actions of the incumbent fixed-line operator, the complete absence of competition for the contract after the withdrawal of two bidders for the contract, and the political dynamics that surrounded the procurement process which saw the forced resignation of the Minister with responsibility for the plan, as well as a massive escalation in the cost of subsidy to the government

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below.

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Becoming hybrid in a digitalised world: A study of marketing professionals

Digital technologies are spreading across the marketing discipline and are changing the way marketing gets done (see Brady et al., 2002; Erevelles et al 2016; Cluley 2016, Cluley et al., 2019). Technological tools in social media applications shape the practices of digital marketers (Royle & Lang, 2014) and allow them to manage the increasing consumer and market complexities. Digitalisation has thereby opened up completely new avenues in marketing that enable marketers to direct their resources towards the development of increasingly individualized solutions (Cluley & Brown, 2015). An interesting line of research is opening that focuses on the changing nature of marketing practices in data driven organisations and markets. For example, Cluley, Green and Owen (2019) describe the changing nature of the market researcher role and on successful strategies employed to exploit digital technologies that include roles played across both social scientist and storyteller. What however remains unclear, is how marketing professionals work to develop the necessary skills in the transition from traditional, strategy driven marketing to digital and data driven marketing, while also integrating social and technical capabilities, or how they manage to keep those worlds together. In this presentation this question will be addressed through the lens of hybridity. Drawing on 63 interviews with marketing professionals from a range of contexts (e.g., brand and agencies, multinationals, SMEs and start-ups) multiple sectors (pharmaceutical, hospitality, publishing, the arts), geographical settings (US, Ireland, India) and including those that identify as ‘marketer’ and those that identify as ‘digital marketer’, I consider new hybrid practices that emerge at the boundary between traditional and digital marketing and the effect that the Covid pandemic has played in accelerating digitalised ways of working in marketing

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.  The title and abstract are below. 

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Screening in Digital Insurance Distribution: Theory and Evidence – Wei Xu

We find that digital insurance distribution screens more consumers with lower risk than offline distribution, which is unconditional on policyholder and policy characteristics. For the endowment and disease insurance products sold contemporaneously on both digital and offline distribution channels, after controlling for all observable policyholder and policy level covariables, the average accident rates for the policies purchased through digital distribution channels were over 20% and 40% lower than those purchased offline, respectively. Causal identifications of instrumental variable estimates yield qualitatively consistent results. We theoretically and empirically show that the reduction of search cost lowering consumption threshold explains this screening effect of digital distribution. Other alternative reasons, including information asymmetry, are also discussed. The risk decrease in the policies of digital distribution accounts for a much larger part of the screening effect than the risk increase in the policies of offline distribution relative to the counter fact.

Cyber exclusions: An investigation into the cyber insurance coverage gap – Frank Cremer

The importance of cyber insurance as a tool for financial resilience to mitigate the accelerating corporate losses caused by cybercrime is growing. However, there exists a lack of standardization and mutual understanding in cyber insurance policies. With less than a third of cyber insurance claims paid in 2017 in the U.S., there exists a significant gap between the cyber risks businesses need to cover and those actually covered through their cyber insurance policies. This research uses inductive qualitative content analysis to examine the existing exclusions in the terms and conditions of 40 German cyber insurers and compares the summarized results with existing cyber risk events. We posit that the lack of understanding of cyber policy wordings related to cyber risks is a significant problem for companies that could suffer significant losses. The resulting categorization of 15 exclusions and interrelationships with cyber risk events will support businesses, the insurance industry, and researchers in their efforts to understand, measure, and manage cyber risk.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.   The title and abstract are below: 

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Perceived non-financial constraints to research and innovation: Does public financial support help firms overcome them?

Perceived financial, knowledge and market constraints may curtail  firm-level research and innovation (R&I) and future growth.  Matching administrative and innovation-survey data, our study demonstrates that public financial support for R&I can help firms to overcome perceived financial, knowledge and market constraints at the time of support.  Moreover, by prompting engagement in more resource demanding, and distant R&I activities, the support also results in firms perceiving further constraints in future periods.  Our study offers novel insights regarding the nature of firms’ financial and non-financial constraints to R&I, with important implications for theory and policy.  

This presentation emanates from research conducted with the financial support of Science Foundation Ireland under Grant number 17/SPR/5328.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.   The title and abstract are below: 

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Cost and Allocative Efficiency of Irish Acute Public Hospitals

Understanding resource utilization in the public hospital system has become imperative for academics, healthcare managers and policymakers due to growing healthcare costs and the continuing record numbers of patients being recorded on trolleys. The Irish hospital system presents an interesting case study as Ireland has the second-highest health spending ratio in the OECD area, yet the recent data suggest that the level of public hospital bed occupancy is estimated to be the highest amongst OECD countries at 95%. The aim of this study is to examine to what extent the Irish acute hospital system can reduce its costs whilst maintaining the same level of output. This is achieved by estimating the cost efficiency (CE) which is the product of technical and allocative efficiencies. While technical efficiency (TE) measures the minimum utilisation of inputs given the produced output, the allocative efficiency (AE) shows the optimal (minimal) allocation of inputs given the input prices. The unique dataset contains rich information on outputs (inpatients, outpatients and day case discharges), inputs (beds, doctors, nurses and administration staff) and the respective input prices of 33 Irish acute public hospitals over 12 months from July 2017 until June 2018. A semi-parametric two-stage Data Envelopment Analysis (DEA) is applied which allows for estimating the efficiency using multiple inputs and outputs, and without the requirement to specify the functional form of production technology. Robust CE, AE and TE scores are generated using both the bootstrap and jackstrap algorithms. The findings indicate that Irish hospitals operate with the average CE of 0.80 which is below 1, indicating that they are considerably cost inefficient, while AE is derived at 0.93 and TE is 0.86. Hence, the Irish acute public hospitals could reduce their costs by 20% and still produce the same amount of output. This implies a potential for over €1 billion a year in cost savings in the Irish hospital system. The second stage DEA results present the effects of important efficiency determinants, which reveal issues with both scale and scope economies in Irish hospitals. We find that small hospitals with less than 200 beds are more technically efficient but also more cost efficient than the medium or large hospitals. Moreover, private practice, emergency patients and the hospital groups have no significant impact on cost efficiency but they have a significant effect on technical efficiency. These findings are used to derive some important policy implications for Irish acute public hospital.

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.   The title and abstract are below: 

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Does Ireland Need Stronger Wage Theft Laws? An Assessment of Minimum Wage and Working Time Legislation

Recent scandals internationally have drawn attention to wage theft which refers to the non-payment of wages for work performed. Walmart in the USA has paid more than US$1.4 billion in fines and settlements for wage theft since 2000 while Woolworths in Australia was found to have underpaid staff by $300m, leading to a spate of new employment laws on wage theft in those countries. In Ireland, there have been calls for stronger legal protections for workers who experience wage theft by trade unions and migrant rights organisations. Other than recent debate about tipping practices in hospitality, there has been little policy discussions about the extent of wage theft in Ireland and the effectiveness of existing employment laws in providing remedies for wage theft. This presentation explores if Ireland needs stronger wage theft laws by assessing the effectiveness of minimum wage and working time employment laws in providing a remedy for workers. The findings are based on an analysis of 214 complaints made by workers under the National Minimum Wage Act 2000 and Organisation of Working Time Act 1997 to the Workplace Relations Commission and Labour Court. The analysis reveals that many measures which new wage theft laws have introduced in other countries are already contained in the Irish minimum wage and working time laws suggesting against the need for radically new employment laws. The existing laws however have several significant weaknesses that act as barriers to workers who have been underpaid.  

The seminar format is informal and interactive facilitating discussion and Q&A and will take place on MS Teams.   The title and abstract are below: 

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The Courage to Stretch: Leaders’ Courage as Key to Overcoming the Paradox of Stretch Goals

Human society faces significant challenges. Addressing those challenges to create a greater future for humanity would require a willingness by particular organizations and leaders to aim high with innovative approaches. In many cases, such grand efforts would involve pursuing stretch goals – organizational goals with probabilities of attainment that are unknown but seemingly impossible given current practices and capabilities (See, Anisman-Razin, Miller, & Sitkin, forthcoming; Sitkin et al., 2011). Unfortunately, the individuals and organizations best positioned to successfully pursue stretch goals (i.e., those with slack available resources and strong recent performance) appear to be the most reluctant to use them due to inertia and inherent uncertainty, which has been labeled the ‘paradox of stretch goals’ (Sitkin, et al., 2011). It is thus critically important to encourage the right individuals and organizations to overcome inertia and pursue stretch goals aimed at the grand challenges of our time. Courage can be key to facilitating pursuit of the stretch goals under the right conditions.

This talk will present the concept of everyday courage and examine its role in leaders’ pursuit of stretch goals. Presenting findings from a study exploring stretch goals adoption by military leaders. Findings provide initial support for the role of courage in overcoming the paradox of stretch goals, demonstrating that leaders higher on courage were more likely to pursue stretch goals when appropriate. While this work is not without limitations, it offers initial insight into the important role courage can play in motivating key organizations to overcome inertia and take on the grand challenges of our time by adopting very ambitious goals with no clear path to attainment.