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Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

ABSTRACT: Objective:This article aims to answer whether increased securitization and/or increased shareholder value pressures at commercial banks have led to higher levels of risk. Methods:Using data on large U.S. commercial banks from several sources, I estimate linear partial-adjustment models to predict the effects of securitization, as well as CEO incentives to increase shareholder value, on leverage. Results:These models provide evidence that increases in the relative size of trading securities at a commercial bank are significantly associated with increases in leverage. Meanwhile, the relative size of total securities and CEO incentives to increase shareholder value do not appear to affect leverage. Conclusion:These findings suggest that limiting commercial bank speculation in securities markets may reduce the likelihood that commercial banks face large losses or become insolvent in financial downturns.

SUBMITTER: LaBriola J

PROVIDER: S-EPMC6788859 | biostudies-literature | 2019 Feb

REPOSITORIES: biostudies-literature

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Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

LaBriola Joe J

Social science quarterly 20181125 1

<h4>Objective</h4>This article aims to answer whether increased securitization and/or increased shareholder value pressures at commercial banks have led to higher levels of risk.<h4>Methods</h4>Using data on large U.S. commercial banks from several sources, I estimate linear partial-adjustment models to predict the effects of securitization, as well as CEO incentives to increase shareholder value, on leverage.<h4>Results</h4>These models provide evidence that increases in the relative size of tr ...[more]

PMID: 31607760

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Project description:Small-scale farming of meat chicken flocks using local native breeds contributes to the economy of many rural livelihoods in Vietnam and many other low- and middle-income countries (LMICs). These systems are also the target of high levels of antimicrobial use (AMU); however, little is known about the profitability and sustainability of such systems. Since small-scale farms are commercial enterprises, this knowledge is essential to develop successful strategies to curb excessive AMU. Using longitudinal data from 203 small-scale (100-2,000 heads) native chicken flocks raised in 102 randomly selected farms in Dong Thap province (Mekong Delta, Vietnam), we investigated the financial and economic parameters of such systems and the main constraints to their sustainability. Feed accounted for the largest financial cost (flock median 49.5 % [Inter-quartile range (IQR) 41.5-61.8 %]) of total costs, followed by day-old-chicks (DOCs) (median 30.3 % [IQR 23.2-38.4 %]), non-antimicrobial health-supporting products (median 7.1 % [IQR 4.7-10.5 %]), vaccines (median 3.1 % [IQR 2.2-4.8 %]), equipment (median 1.9 % [IQR 0.0-4.9 %]) and antimicrobials (median 1.9 % [IQR 0.7-3.6 %]). Excluding labor costs, farmers achieved a positive return on investment (ROI) from 120 (59.1 %) flocks, the remainder generating a loss (median ROI 124 % [IQR 36-206 %]). Higher ROI was associated with higher flock size and low mortality. There was no statistical association between use of medicated feed and flock mortality or chicken bodyweight. The median daily income per person dedicated to raising chickens was 202,100 VND, lower than alternative rural labor activities in the Mekong Delta. In a large proportion of farms (33.4 %), farmers decided to stop raising chickens after completing one cycle. Farmers who dropped off chicken production purchased more expensive feed (in 1000 VND per kg): 11.1 [10.6-11.5] vs. 10.8 [10.4-11.3] for farms that continued production (p = 0.039), and experienced higher chicken mortality (28.5 % [12.0-79.0 %] vs. 16 [7.5-33.0 %]; p = 0.004). The rapid turnover of farmers raising chickens in such systems represents a challenge to the uptake of messages on appropriate AMU and chicken health. To ensure sustainability of small-scale commercial systems, advisory services need to be available to farmers as they initiate new flocks, and support them in the early stages to help overcome their limited experience and skills. This targeted approach would support profitability whilst reducing risk of emergence of AMR and infectious disease from these systems.

Project description:BackgroundHealthcare purchasers such as health insurers and governmental bodies are expected to strategically manage chronic care chains. In doing so, purchasers can contribute to the goal of improving task division and collaboration between chronic care providers as has been recommended by numerous studies. However, healthcare purchasing research indicates that, in most countries, purchasers still struggle to fulfil a proactive, strategic approach. Consequently, a typical pattern occurs in which care improvement initiatives are instigated, but not transformed into regular care. By acknowledging that healthcare purchasers are embedded in a care chain of stakeholders who have different, sometimes conflicting, interests and, by taking an institutional logics lens, we seek to explain why achieving strategic purchasing and sustainable improvement is so elusive.Method and findingsWe present a longitudinal case study in which we follow a health insurer and care providers aiming to improve the care of patients with Chronic Obstructive Pulmonary Disease (COPD) in a region of the Netherlands. Taking a theoretical lens of institutional logics, our aim was to answer 'how stakeholder pressures influence a purchaser's use of institutional logics when pursuing the right care at the right place'. The insurer by default predominantly expressed a bookkeeper's logic, reflecting a focus on controlling short-term care costs by managing individual providers. Over time, a contrasting orchestrator's logic emerged in an attempt to achieve chain-wide improvement, striving for better health outcomes and lower long-term costs. We established five types of stakeholder pressure to explain the shift in logic adoption: relationship pressures, cost pressures, medical demands, public health demands and uncertainty. Linking the changes in logic over time with stakeholder pressures showed that, firstly, the different pressures interact in influencing the purchaser. Secondly, we saw that the lack of intra-organisational alignment affects how the purchaser deals with the different stakeholder pressures.ConclusionsBy highlighting the purchaser's difficult position in the care chain and the consequences of their own internal responses, we now better understand why the intended orchestrator's logic and thereby a strategic approach to purchasing chronic care proves unsustainable within the Dutch healthcare system of managed competition.

Dataset Information

Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

Publications

Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

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