Marc-Arthur Diaye

Variable intervals model

Abstract The variable intervals model is a generalization of Fishburns Intervals model. It fully characterizes the complete acyclic relation when the alternatives set is countable. In the uncountable case, a perfect separability condition has to be added.

Environmental, Social and Governance (ESG) performance and sovereign bond spreads: an empirical analysis of OECD countries

What are the determinants of borrowing cost in international capital markets? Apart from macroeconomic fundamentals, are there any qualitative factors that might capture sovereign bond spreads? In this paper we consider to what extent Environmental, social and governance (ESG) performance can affect sovereign bond spreads. First, countries with good ESG performance tend to have less default risk and thus lower bond spreads. Moreover, the economic impact is stronger in the long-run, suggesting that ESG performance is a long-lasting phenomenon. Second, we examine the financial impact of separate ESG dimensions, and find that the environmental dimension appears to have no financial impact whereas governance weighs more than social factors. Third, we examine cross-countries differences and show that ESG performance has a more significant and stronger impact in the Eurozone than elsewhere in OECD countries. Fourth, we include evidence from the global financial crisis and find stronger influence of country sustainability performance during crisis period.

The Composition of Compensation Policy: From Cash to Fringe Benefits

In this paper, we develop a Principal-Agent model to analyze the optimal composition of the compensation policy with both monetary and nonmonetary incentives. We characterize nonmonetary benefits as symbols to capture a large set of non-wage compensations such as fringe benefits, status, identity (or self-image) or even sanctions. We show that when the agents preference relation over monetary and nonmonetary benefits is common knowledge to both parties, nonmonetary incentives are always more efficient, that is Pareto-dominate, monetary incentives. We also characterize the optimal composition of the compensation policy when the principal imperfectly knows the agents preferences. In particular, we show that a fixed fringe benefits coupled with a variable wage improves profits under this imperfect knowledge structure.

What drives firm's firm’s Corporate Social Responsibility: The role of ownership concentration

The considerable attention given to corporate social responsibility (CSR) could be explained by the fact that CSR has become an essential tool for a firm’s success. Corporate social responsibility refers to socially and environmentally friendly actions not only required by law, but going beyond compliance, privately providing public goods or voluntarily internalizing externalities (Crifo et al., 2014).