control and performance of international joint ventures control is a critical concept for successful management and performance of international joint ventures ijvs this paper reviews and synthesizes prior studies addressing the conceptualization and operationalization of control within ijvs as well as the ijv control performance relationship the paper also presents a new conceptualization of ijv control as well as a conceptual frame work for studying control of ijvs

ownership based entry mode strategies and international performance this study examines the relationship between ownership entry modes and performance the ownership entry modes examined are the wholly owned modes of acquisition and new venture entry and the non wholly owned mode of joint venture entry a theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors this model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands the theoretical model although developed using the eclectic theoretical approach is based largely on concepts and relationships previously delineated in contingency theory our hypotheses suggest that new ventures should outperform joint ventures and joint ventures should outperform acquisitions an empirical test using a sample of 321 japanese firms entering the north american market provides supporting evidence

changes in the value relevance of earnings and book values over the past forty years this paper investigates systematic changes in the value relevance of earnings and book values over time we report three primary findings first contrary to claims in the professional literature the combined value relevance of earnings and book values has not declined over the past forty years and in fact appears to have increased slightly second while the incremental value relevance of bottom line earnings has declined it has been replaced by increasing value relevance of book values finally much of the shift in value relevance fiom earnings to book values can be explained by the increasing frequency and magnitude of one time items the increasing frequency of negative earnings and changes in average firm size and intangible intensity across time

accounting conservatism and firm investment efficiency abstract we argue that conservatism improves investment efficiency in particular we predict that it resolves debt equity conflicts facilitating a firm s access to debt financing and limiting underinvestment this permits the financing of prudent investments that otherwise might not be pursued our empirical results confirm these predictions we find that more conservative firms invest more and issue more debt in settings prone to underinvestment and that these effects are more pronounced in firms characterized by greater information asymmetries we also find that conservatism is associated with reduced overinvestment even for opaque investments such as research and development

country of origin effects for uni national and bi national products this study examines the effects of country of origin and brand name cues on consumer evaluations of uni national and bi national products and estimates the perceived values of such cues from personal interviews with a regional quota sample of household residents the study found the salience of country of origin in product evaluations under within subject experimental design finally managerial implications are discussed in regards to international branding and sourcing strategies

earnings quality in uk private firms comparative loss recognition timeliness abstract uk private and public companies face substantially equivalent regulation on auditing accounting standards and taxes we hypothesize that private company financial reporting nevertheless is of lower quality due to different market demand regulation notwithstanding a large uk sample supports this hypothesis quality is operationalized using basu s 1997 time series measure of timely loss recognition and a new accruals based method the result is not affected by controls for size leverage industry membership and auditor size or by allowing endogenous listing choice the result enhances understanding of private companies which are predominant in the economy it also provides insight into the economics of accounting standards

agency problems auditing and the theory of the firm some evidence agency problems auditing and the theory of the firm some evidenceauthor s ross l watts and jerold l zimmermansource journal of law and economics vol 26 no 3 oct 1983 pp 613 633published by the university of chicago pressstable url http www jstor org stable 725039accessed 29 06 2008 23 14

cultural friction in leadership beliefs and foreign invested enterprise survival cultural friction posits that cultural differences may be either synergistic or disruptive but does not specify when or how synergies or disruptions emerge we theorize that synergies will emerge in foreign invested enterprises fies when cultural differences in leadership beliefs are less central to the host nation s cultural identity while disruption will occur when differences are in more culturally central leadership beliefs analyzing survival data from 274 fies in china we found support for these hypotheses with five of the six globe leadership dimensions as predicted differences in the participative and team oriented dimensions were associated with higher firm death while differences in the charismatic autonomous and self protective dimensions were associated with firm survival our results indicate that while there are areas where differences may indeed need to be accepted or minimized there are other areas where differences can be beneficial this requires that managers identify more central aspects of local culture to determine whether to minimize differences or to leverage their synergistic potential

debtholders demand for conservatism evidence from changes in directors fiduciary duties debtholders demand has been widely discussed as a key determinant of conservatism but clear causal evidence is not yet established using a natural experiment setting wherein a delaware court ruled that the fiduciary duties of directors in near insolvent delaware companies extend to creditors we predict and find that firms subject to the ruling significantly increased their accounting conservatism in addition our results suggest that the increase in conservatism is more pronounced in near insolvent delaware firms with stronger boards confirming that the court ruling takes effect through the channel of the board of directors our results are robust to using alternative measures of conservatism and near insolvency status and controlling for potential confounding factors and other stakeholders demand for conservatism overall our study provides empirical evidence to support the causal relation between debtholders demand and accounting conservatism previously suggested in the literature and offers some insights into the role of the board of directors in financial reporting

the information content of losses abstract this study hypothesizes that because shareholders have a liquidation option losses are not expected to perpetuate they are thus less informative than profits about the firm s future prospects the results are consistent with the hypothesis they also show that the documented increase in the earnings response coefficent as the cumulation period increases appears to be due exclusively to the effect of losses the liquidation option effect extends to profitable cases where earnings are low enough to make the option attractive alternating explanations for the low informativeness of losses such as mean reversal of earnings are not supported by the tests

the role of accruals in asymmetrically timely gain and loss recognition we investigate the role of accrual accounting in the asymmetrically timely recognition incorporation in reported earnings of gains and losses timely recognition requires accruals when it precedes complete realization of the gains and losses in cash we show that nonlinear accruals models incorporating the asymmetry in gain and loss recognition timelier loss recognition or conditional conservatism offer a substantial specification improvement explaining substantially more variation in accruals than equivalent linear specifications conversely conventional linear accruals models by omitting the loss recognition asymmetry exhibit substantial attenuation bias and offer a comparatively poor specification of the accounting accrual process linear specifications also understate the ability of current earnings to predict future cash flows these findings have implications for our understanding of accrual accounting and conservatism as well as for researchers estimating discretionary accruals earnings management and earnings quality

do firms learn to create value the case of alliances we investigate whether firms learn to manage interfirm alliances as experience accumulates we use contract specific experience measures in a data set of over 2000 joint ventures and licensing agreements and value creation measures derived from the abnormal stock returns surrounding alliance announcements learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities we find evidence of large learning effects in managing joint ventures but no such evidence for licensing contracts the effects of learning on value creation are strongest for research joint ventures and weakest for marketing joint ventures these results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity copyright 2000 john wiley sons ltd

the trap of continual ownership change in international equity joint ventures this article examines how multiple ownership changes unfold in international equity joint venture iejv evolution and how such repeated changes impact short term performance and long term survival by theorizing a new concept the trap of continual change in the iejv context we challenge the adaptive viewpoint assumed in alliance dynamics research we propose that partners sometimes respond to an initial dissatisfaction with the venture result with a dysfunctional repetition of rearranging the ownership control structure this continual change locks the organization into bad choices and sends it into a downward spiral acknowledging the mixed motive nature of inter partner relationships we incorporate cooperative versus competitive dynamics manifested in shared control arrangements we propose that shared ownership control lends stability to the iejv until the initial iejv agreement is renegotiated this stability is a result of the cooperative forces of mutual interdependence and mutual forbearance between the partners however when the power balance breaks down the potential for inter partner conflict increases when the ownership control structure of the iejv is restructured especially multiple times shared control arrangements become increasingly unstable as behavioral cultural and managerial differences are amplified

explaining ijv survival in a transitional economy through social exchange and knowledge based perspectives in this study we combine social exchange and knowledge based perspectives to develop a general path model of ijv survival we further refine our expectations by considering the transitional economic context of our study and the somewhat unique managerial values resulting from the legacy of marxist ideology results from structural equation modeling suggest that an imbalance in the management control structure between the parents leads to parental conflict and an increased likelihood of ijv failure an imbalance in the ownership control structure however had no influence on conflict or survival in general support from the foreign parent is positively related to ijv learning and ijv survival however higher levels of technical support provided by the foreign parent to the ijv reduced the level of parental conflict whereas management support had no effect on conflict our results suggest some dilemmas for firms pursuing ijvs in transitional economies although the foreign parent often contributes critical resources to the ijv providing it with bargaining power and a high level of influence an imbalance in management control between the partners may ultimately be detrimental to ijv survival copyright 2000 john wiley sons ltd

the utility of annual reports an international study this article reports on a major study which is part of ongoing international research into the use and usefulness of financial statements for investment decisions the survey reported covered 4 000 individual investors 900 institutional investors and 900 financial analysts in 3 countries it was found that the 3 groups in all 3 countries revealed a strong belief in the importance of financial statements for investment decisions whether buy or hold sell it was also found that the individual investor group was far less homogeneous than previous research has assumed and that cultural or social differences between countries do exist in this field

is the market surprised by poor earnings realizations following seasoned equity offerings we examine the stock price reaction to earnings announcements in the five years following seasoned equity offerings seos on average post seo earnings announcements are met with a significantly negative abnormal stock price reaction although this negative reaction accounts for a disproportionately large portion of long run post seo abnormal stock returns on average abnormal stock price reactions to post seo earnings announcements are reliably negative only within the smallest quartile of equity issuers for small firms therefore these findings are broadly consistent with the hypothesis that firms issue equity when the market overestimates the firm s future earnings perfomance

accounting conservatism and the efficiency of debt contracts in this paper we examine how accounting conservatism affects the efficiency of debt contracting we develop the statistical and informational properties of accounting reports under varying degrees of conditional and unconditional accounting conservatism consistent with basu s 1997 description of differ ential verifiability standards optimal debt covenants and interest rates on debt are derived from a natural tension between debt holders and equity claimants we show how optimal covenants vary with the degree of conservatism and de rive an efficiency metric that depends on the degree of conservatism we find that accounting conservatism actually decreases the efficiency of debt contracts contrary to the suggestions of watts 2003 and contrary to the hypothesis in numerous empirical studies

control and performance in international joint ventures the authors examine the meaning of control in international joint ventures ijvs and the relationships of potential means of control in such organizations to the performance satisfaction of the foreign partner they propose a conceptual model that provides both a traditional ownership focused internalization perspective on those issues and an integrated approach combining a broader transaction cost interpretation of control with a resource input based bargaining power model a set of simultaneous structural equations with endogenous explanatory variables provides multiple possible paths from various resource and power inputs through different means of control to perceived performance satisfaction in such a model intermediate variables act both as dependent and independent variables thus the complex theoretical interactions of the variables are modeled more comprehensively and realistically than in single equation models to test the model and compare the theoretical relationships the authors used dat

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

fit misfit and beyond fit relational metaphors and semantic fit in international joint ventures we propose that metaphorical descriptions of newly formed international joint ventures ijvs contain important diagnostic information regarding the way these cross border alliances are managed and perform in three studies we examine how relational metaphors reflect semantic fit or the ijv partners cognitive match of managerial schemas and their capability to recontextualize communications regarding alliance operations we find ijv partners that share relational metaphors achieve superior outcomes reflecting aligned managerial approaches to controlling shared resources and joint activities further formal ownership as equity share moderates the impact managerial schemas implied by metaphors have on subjective time lagged performance of ijvs our analysis of metaphorical language not only reveals the way newly formed ijvs are managed but also highlights performance variations associated with complex patterns of ijv controls

on the future of international joint venture research international joint ventures ijvs are an important type of international strategic alliance isa and have been studied by scholars for decades resulting in a plethora of empirical studies publications and reviews yet an inadequate accumulation of knowledge exists as a closer look reveals much more than providing a summary and critical assessment of past contributions this paper develops an expansive research agenda based upon a deep understanding of past research and comprehensive frameworks that distill this research we identify a number of research opportunities that would not only advance ijv research but also closely related literatures and disciplines such as isas theories of the multinational firm international business research and strategic management

earnings management behaviors under different monitoring mechanisms the case of islamic and conventional banks abstract we investigate the impact of organizational religiosity on the earnings quality of listed banks in the middle east and north africa region we analyze islamic banking institutions which operate within strict religious norms and extended accountability constraints and compare them with their conventional counterparts during 2008 2013 we find that islamic banks are less likely to manage earnings and that they adopt more conservative accounting policies based on these findings we argue that religious norms and moral accountability constraints in these organizations have a significant impact on financial reporting quality and agency costs which have implications for both regulators and market participants

earnings quality evidence from the field abstract we provide insights into earnings quality from a survey of 169 cfos of public companies and in depth interviews of 12 cfos and two standard setters cfos believe that i above all high quality earnings are sustainable and repeatable specific characteristics include consistent reporting choices backing by actual cash flows and absence of one time items and long term estimates ii about 50 of earnings quality is driven by non discretionary factors such as industry and macro economic conditions iii in any given period about 20 of firms manage earnings to misrepresent economic performance and for such firms 10 of eps is typically managed iv earnings manipulation is hard to unravel from the outside but peer comparisons and lack of correspondence between earnings and cash flows provide helpful red flags in addition cfos disagree with current standard setting on a number of issues including the sheer number of promulgated rules the top down approach to rule making the neglect of the matching principle and the emphasis on fair value accounting they indicate that a rules based culture makes the audit function centralized and mechanical and hinders the development of audit professionals a summary impression from our work is that cfos view earnings quality as more of a single and unconditional characteristic in contrast to current research where measures of earnings quality are strongly conditional on the decision setting this cfo view is related to their idea of one number a single earnings metric that shapes both their interactions with external stakeholders and internal decision making

control cooperation interfaces in global strategic alliances a situational typology and strategic responses this article applies the dialectical logic of loose coupling to interpartner exchanges in order to analyze the dynamics of global strategic alliances we develop a typology of control and cooperation that defines alliance states or situations according to their level of cooperation under private and collective control in the private control cooperation interplay contending honeymoon and coopetition situations arise depending on the levels of private control and cooperation in the collective control cooperation interplay the loosely connected the equity hostage the tightly integrated and the trusting states emerge according to the levels of collective control and cooperation we illustrate how an individual partner strategically responds to the control cooperation interplay under each situation or state and develop hypotheses explicating how these strategic responses are influenced by relational characteristics such as goal congruity resource complementarity and bargaining asymmetry between foreign and local partners

how did the notional interest deduction affect belgian smes capital structure the recently introduced risk capital allowance in belgium which allows a notional interest deduction to be denoted nid hereafter on a firm s adjusted equity for tax purposes has mitigated the tax discrepancy between equity and debt financing to our knowledge we provide the first empirical study of the extent to which this regulation has resulted in a strengthening of small and medium sized enterprises to be denoted smes hereafter solvency which was one of its most prominent objectives results from logit regressions reveal that the probability of adopting the nid is higher for lowly leveraged smes smes without experience with the tax exempt investment reserve and smes with a sound knowledge of the notional interest deduction regulation results on the impact of the nid on the capital structure of smes based on panel and first differences regressions reveal that this measure did not result in a significant change of smes leverage in view of the discussion regarding the optimal tax and legislative framework that governments should put in place poutziouris et al j small bus enterp dev 6 1 7 25 1999 these results cast doubt on the risk capital allowance as it stands now being the right government instrument to contribute at least in the short term to creating a pro enterprising tax and legislative climate for smes we conclude by providing some general suggestions for improving the effectiveness of the risk capital allowance

investment dynamics and earnings return properties a structural approach we propose the standard neoclassical model of investment under uncertainty with short run adjustment frictions as a benchmark for earnings return patterns absent accounting influences we show that our proposed benchmark generates a wide range of earnings return patterns documented in accounting research notably our model generates a concave earnings return relation similar to that of basu 1997 and predicts that the earnings return concavity increases with the volatility of firms underlying shock processes and decreases with the level of firms investments we find strong empirical support for these predictions overall our evidence suggests that our proposed benchmark is useful for understanding the joint dynamics of variables of interest to accounting research e g earnings returns investment market to book absent accounting influences a necessary precondition for inferring the effects of accounting from these dynamics

risks and redistribution an individual level analysis much of the disagreement in the debate about globalization and its present or absent effects on the welfare state stems from competing assumptions about the individual level determinants of redistributional preferences this article calls for and provides testing of these causal mechanisms at the individual level traditional accounts suggest that risks at the industry level are important determinants of redistributional preferences this article argues that risks at the occupational level should also be considered a comprehensive new data set is used to test whether and what types of risks in the labor market play an important role in shaping preferences statistical analyses of public opinion surveys european social survey show strong evidence for the assumed causal mechanism contrary to much of the literature but in line with this article s claims it is the occupational rather than the industry level that is most important the article lays out implications of these findings

measuring performance of international joint ventures international joint ventures ijvs are increasing in frequency and strategic importance however efforts to identify variables associated with ijv performance have been constrained by disagreements regarding the comparability and reliability of alternative performance measures and methods this study tests several hypotheses regarding the reliability and comparability of a range of objective and subjective measures of ijv performance as well as evaluating the relative utility of different data collection approaches

international joint venture instability a critique of previous research a reconceptualization and directions for future research this paper conducts an in depth critique of previous research on international joint venture instability by pointing out its major limitations lack of clear conceptualizations and consistent operationalizations lack of clarity in the relationship with performance static focus on the eventual destination rather than developmental processes and lack of managerial relevance to overcome these deficiencies we propose a significant reconceptualization in which instability is defined as a neutral dynamic process based and multifaceted phenomenon directions for future research are provided

earnings management to avoid earnings decreases and losses this paper provides evidence that firms manage reported earnings to avoid earnings decreases and losses specifically in cross sectional distributions of earnings changes and earnings we lind unusually low frequencies of small decreases in earnings and small losscs and unusually high frequencies of small increases in earnings and small positive income we find evidence that two components of earnings cash flow from operations and changes in working capital are used to achieve increases in earnings we present two theories based on stakeholder use of information processing heuristics and prospect theory about the motivation for avoidance of earnings decreases and losses

factors influencing voluntary annual report disclosures by u s u k and continental european multinational corporations this study examines factors influencing the voluntary disclosures of three types of information strategic nonfinancial financial contained in the annual reports of mncs from the u s u k and continental europe while company size country region listing status and to a lesser extent industry are the most important factors explaining voluntary disclosures overall the importance of the factors varies by information type

the relation between earnings and cash flows abstract a model of earnings cash flows and accruals is developed assuming a random walk sales process variable and fixed costs and that the only accruals are accounts receivable and payable and inventory the model implies earnings better predict future operating cash flows than current operating cash flows and the difference varies with the operating cash cycle also the model is used to predict serial and cross correlations of each firm s series the implications and predictions are tested on a 1337 firm sample over 1963 1992 both earnings and cash flow forecast implications and correlation predictions are generally consistent with the data

the allowance for uncollectible accounts conservatism and earnings management we study the interrelation between conservatism and earnings management by examining the allowance for uncollectible accounts and its income statement counterpart bad debt expense we find that the allowance is conservative and that it has become more conservative over time conservatism may however facilitate earnings management we find that firms manage bad debt expense downward and even record income increasing bad debt expense to meet or beat analysts earnings forecasts and that conservatism accentuates the extent to which firms manage bad debt expense further we find that firms manage bad debt expense downward by drawing down previously recorded over accruals of bad debt expense that have accumulated on the balance sheet an implication of our study is that tighter limits on the amount by which firms are permitted to understate net assets may reduce their ability to manage earnings

international differences in the timeliness conservatism and classification of earnings in this paper we analyze differences in the timeliness of income recognition between the u s and u k gaap financial reporting regimes building on previous work in the area we focus on the links between current reported earnings and current and past changes in market value in the light of basu 1997 we present a formal model in which the response of reported earnings to changes in market value varies according to whether the value change is good news or bad this model yields a number of insights with regard to the definition and measurement of earnings conservatism we also report evidence indicating that controlling for cross jurisdictional classification differences affects comparisons of earnings timeliness and earnings conservatism specifically we find that apparent differences in conservatism between the u s and u k accounting regimes are sensitive to the inclusion or exclusion of extraordinary items in u k accounting earnings recent research documents significant variation in the information content of earnings across international gaap regimes e g alford et al tlancaster university tuniversity of manchester the research support of the eco

structural stability and reconfiguration of international joint ventures previous research suggests that international joint ventures ijvs are inherently unstable and fragile this view has failed however to explain why many ijvs have an extended longevity and stability this paper draws on two contrasting perspectives from organization theory structural instability and structural inertia to trace both the destabilizing and stabilizing forces in ijvs and argues that a complete understanding of an ijv s dynamic evolution requires consideration of both forces