I develop an analytically tractable model that integrates the risk-shifting problem between bondholders and shareholders with the moral-hazard problem between shareholders and the manager. An optimal contract binds shareholders and the manager, and this contract’s flexibility allows shareholders to relax the manager’s incentive constraint following a “good” profitability shock. Thus, the optimal contract amplifies the upside and thereby increases shareholder appetite for risk shifting. Whereas some empirical studies find a positive relation between risk shifting and leverage, others find a negative relation. This model predicts a non-monotonic relation between risk shifting and leverage and can reconcile these contradictory empirical findings.

Over the last decades, encouragement of business engagement with environmental and socio-economic development has gained prominence due to the perceived weakening of states and multilateral institutions against the forces of global capitalism. Different ways of encouraging changes in business behavior have been promoted, such as the formation of public/private partnerships, corporate social responsibility initiatives, and other forms of non-binding organizational arrangements. However, there is no real consensus on the desired role of business in development, what the best policies for global development are, or what “development” itself is and should be defined as. Indeed, precisely as a formal consensus has been reached on the broad agenda of the United Nations Sustainable Development Goals, a narrower agenda focusing on industrialization, modernization, and economic growth is promoted by new actors, many originating in the Global South. This special issue asks how the emergence of new actors and the adaptation by global institutions affect the ways in which business engages with development. This introductory article positions the issue's contributions into three discussions: exploring issues of global coherence and division on key debates; understanding how new actors are reshaping the public-private divide; and assessing how disconnects within discourse on business and development can amplify negative societal consequences in fragile settings of weak governance.

Drawing on social exchange and emotional regulation perspectives, this study investigates the role of emotional suppression in reducing the detrimental effects of workplace ostracism on organizational learning. Based on the responses of 162 participants from the financial industry, and with the application of moderated mediation analysis, the findings demonstrate that workplace ostracism is mediated by employee silence, which has a negative effect on organizational learning. Interestingly, however, the results exhibit that emotional suppression operates as a buffer between workplace ostracism, employee silence and organizational learning, which leads to the achievement of organizational learning motives. Therefore, the silent employees, who experience workplace ostracism, may still be contributing toward organizational learning, if they are proficient in suppressing their emotions. Given that, the study implies that emotional suppression is fundamentally important to reduce the injurious outcomes of workplace ostracism, in the contemporary organizational settings, particularly with regard to organizational learning.

Following the 2007–9 financial crisis, the EU strengthened its institutional apparatus for bank regulation, creating a trio of sectoral bodies, including the European Banking Authority (EBA). Various aspects of this new system have been studied, but to date, little is known about how banks engage with their new supranational regulator. We argue that such engagement fosters an interdependence between banks and regulators, thus contributing to the efficiency and robustness of the overall regulatory regime; but also that it is contingent on the regulator exhibiting the qualities of credibility, legitimacy, and transparency. These qualities are grounded in the domestic regulatory governance literature, but we suggest that they are rendered problematic by the complexities of the EU's multilevel system and, in particular, the overlap in competences between the EBA and the European Central Bank. We examine the EBA in the light of these criteria and find that banks’ engagement remains pitched towards established national regulators and the EU's legislative arena. This poses concerns for the efficacy of agency governance in the EU's regulatory regime for banking.