bluuebunny/crossref_metadata_2025_split huggingface dataset:
Information and decision making: A search for method and understanding
Authors: Moon Philip , Keasey Kevin 
Published: June 2007

AbstractDespite the emphasis during the 1980s on value for money and the need to increase business efficiency in order to face competitive world markets, exactly how managers search for information for business decisions remains a neglected topic of academic inquiry. In response to this situation, the paper has two purposes. The first is to develop an initial understanding of how information is searched and used in business contexts; the paper describes how participants searched and used accounting information in a relatively unstructured competitive tendering task. Second, it shares the experiences gained from trying to research the topic. A number of experimental design and analysis issues are raised and discussed.
Extent of diversification and company performance: The New Zealand evidence
Authors: Hamilton R. T. , Shergill G. S. 
Published: June 2007

AbstractThis paper confirms the relative superiority of related‐diversification in terms of the financial performance of New Zealand companies, companies which are much smaller and less diverse than those which normally feature in this literature. To facilitate comparisons with other studies, financial performance is measured in three ways: return on equity; return on assets; and sales growth. Other independent variables controlled for are company size; risk; leverage; technological opportunity; and industry concentration. The effective rates of protection afforded manufacturing industries (export subsidies and import tariffs) are also confirmed as having had some positive bearing on company performance.
An impulse‐control method for investment decisions in dynamic technology
Authors: Bar‐Han Avner , Maimon Oded 
Published: June 2007

AbstractThis paper presents a new framework to augment standard methods in evaluating profitability of investments, especially those involved in dynamic technology. In this case there is a possibility that although a certain investment is profitable using standard methods, it should not be undertaken because it precludes a more profitable investment later on, when more advanced equipment will be available. The investment decision faced by a firm is presented here as an impulse‐control problem, where the process of technological progress is modelled explicitly. The outcome of the optimization yields, in addition to investment expenditures, the expected time period between consecutive investments. A simple example demonstrates the use of the technique in actual investment decisions.
Risk‐return measures of hedging effectiveness: The case of multiple cash and futures markets
Authors: Lien Da‐Hsiang Donald 
Published: June 2007

AbstractIn this article we consider the measure of hedging effectiveness proposed by Howard and D' Antonio (HD) when there are multiple cash and futures markets. It is found that the HD measure can be decomposed into two components: one solely determined by the futures market conditions, the other affected by both cash and futures markets as well as the hedger's cash portfolio. We then analyze the impacts of optimal cash portfolios on the HD measure. Although the Ederington hedging effectiveness is bounded over all cash portfolios, the conclusion does not apply to the HD measure.
Horizontal mergers and the balance of trade
Authors: Kaserman David L. , Melese Francois 
Published: June 2007

AbstractThis paper explores the relationship between market structure and the balance of trade in a dominant firm/competitive fringe model. It is shown that, absent efficiency effects, a horizontal merger between the dominant producer and a domestic fringe firm leads to a deterioration in the balance of trade, but, where efficiencies arise, this effect may be reversed. A sufficient condition for such reversal to occur is derived.
Equilibrium pricing and advertising strategies for nondurable experience products in a dynamic duopoly
Authors: Chintagunta Pradeep K. , Rao Vithala R. , Vilcassim Naufel J. 
Published: June 2007

AbstractThe quality of many consumer nondurable goods or services is sufficiently complex or obscure that consumers cannot completely verify the true quality in a single usage. For such ‘experience’ products or services, the accumulated consumer consumption experience of a brand is an important determinant of its sales or market share. The market share of a brand is in turn directly influenced by its own and the competitive price and advertising strategies, given the different levels of quality (among other factors). In this paper, we investigate the impact of the aggregate consumption experience on the firm's dynamic pricing and advertising strategies by developing a formal game‐theoretic model of a dynamic duopoly. The model of competition does not yield explicit closed‐form expressions for the dynamic price and advertising paths of the two firms. Hence, we simulate the equilibrium paths using a discrete‐time algorithm. Our simulation results provide interesting insights into the dynamic equilibrium price and advertising paths, under a variety of realistic competitive scenarios.
The stock market response to changing drug patent legislation: The case of compulsory licensing in Canada
Authors: Shapiro Daniel M. , Switzer Lorne N. 
Published: June 2007

AbstractBetween 1969 and 1987 pharmaceutical companies holding patents in Canada were subject to immediate compulsory licensing. This study evaluates the stock market response to both the imposition of immediate compulsory licensing in 1969 as well as its subsequent revocation in 1987. Since the affected companies were multinational enterprises, we analyse the movement of share prices on the New York Stock Exchange. The results indicate that patent protection is viewed positively by the stock market, but only when measured with hindsight (in 1987). Our results are consistent with other studies that suggest that patent protection does allow the appropriation of gains from knowledge by firms in the pharmaceutical industry. Thus, pharmaceutical companies would benefit from international agreements to provide more stringent levels of patent protection.
A sequential selectivity model of the decisions of arbitrators
Authors: Caudill Steven B. , Oswald Sharon L. 
Published: June 2007

AbstractThe study investigates arbitrator gender and grievant gender effects on the decisions of 146 arbitrators rendered on a hypothetical drug‐testing case. The effects are estimated using a sequential selectivity model. This approach takes into account the sequential and conditional nature of arbitrators' decisions. The results indicate that arbitrators are more likely to overturn terminations when the grievant is female, and that female arbitrators are less likely to fully reinstate grievants when the termination is overturned. Other results include the finding that older arbitrators treated grievants more harshly by more often awarding only partial reinstatements. When suspensions are given, however, we find that older arbitrators award shorter suspensions than do younger arbitrators. It is also found that more experienced arbitrators awarded longer suspensions than less experienced arbitrators.
More on knight and the theory of the firm
Authors: Foss Nicolai Juul 
Published: June 2007

AbstractThis article argues that Boudreaux and Holcombe (1989) misrepresented at least some contemporary theories of the firm when they claimed that these theories were constructed on a rigid general equilibrium basis, and contrasted them unfavorably with Frank Knight's theory of the firm. While nexus of contract theories may partially fit this description, this is not the case with the theorizing represented by the work of Oliver Williamson. Boudreaux and Holcombe are also criticized for failing to see that Knight's theory of the firm is in fact consistent with much contemporary theorizing on the firm.
On the determinants of foreign ownership shares: Evidence from US firms' joint ventures in Japan
Authors: Nakamura Masao , Yeung Bernard 
Published: June 2007

AbstractIt is often argued that firms' foreign expansion is motivated by economies of scale in information‐based intangible assets. Since these assets are combined with local factors in real production, their owner often has to deal with local factor owners' opportunistic behavior such as siphoning of skills which reduces the return on intangibles to the original owner. Local factor owners' agency behavior can also reduce a subsidiary's profit. Maintaining ownership mitigates the former type of opportunistic behavior, while ceding ownership reduces the latter type. Hence there is a non‐linear relationship between ownership and the cost of control. In this paper we present a model that incorporates these aspects of a joint venture ownership. In our model the share in a joint venture of a foreign parent firm with a superior technology is determined such that its marginal cost of control is set equal to the marginal benefit it derives from a joint venture. We assume that, because of the uniqueness and mobility of its intangible factor, the foreign partner has more bargaining power than its local counterpart regarding the ownership of their joint venture and that the local partner is less concerned than its foreign counterpart about the problems of agency and property rights protection because of its geographic and cultural proximity to the joint venture. As a consequence, the foreign partner is able to exert its preference for its ownership share in the joint venture. Our theoretical results allow a decomposition of ownership share into components explained by the cost of control and by the profitability of a joint venture. Our empirical results using data on technology‐based US firms' subsidiaries in Japan are consistent with our model predictions. In particular, the fraction of ownership share explained by the cost of control relative to the fraction explained by intrinsic profitability is higher for industries that rely more heavily on intangible assets, as expected from the model.
Time‐series properties and predictability of Greek exchange rates
Authors: Koutmos Gregory , Theodossiou Panayiotis 
Published: June 2007

AbstractThis paper explores the time‐series properties and predictability of weekly percentage changes in the Greek drachma exchange rates with respect to the currencies of major trading‐partner countries, such as the USA, Germany, the UK, France, Italy and Japan. The analysis is carried out using the EGARCH‐M model along with the power exponential distribution. Percentage changes in the Greek drachma with respect to the German mark, the French franc, the Italian lira and Japanese yen are predictable using past information. The volatility of Greek exchange rates is best represented by an EGARCH process and as such is predictable using past volatility measures. Moreover, volatility of the Greek drachma with respect to the German mark and Italian lira positively influences future movements in these exchange rates. The hypothesis that volatility is an asymmetric function of past innovations is rejected in all cases. Following the inclusion of the Greek drachma in the ECU currency basket, its value has been depreciating at a higher rate with respect to the German mark and Italian lira and at a lower rate with respect to the US dollar. Also, its volatility with respect to the German mark, the French franc, and the Italian lira has decreased, whereas its volatility with respect to the US dollar has increased.
Case study: Targeting demand‐side management for electricity transmission and distribution benefits
Authors: Orans Ren , Woo Chi‐Keung , Horii Brian K. 
Published: June 2007

AbstractThis paper shows how a vertically integrated utility develops a least‐cost transmission and distribution (T&D) plan that considers demand‐side management (DSM) to defer capacity expansion necessary for serving growing demand. The plan is the result of applying dynamic optimization techniques to a T&D planning area in the service territory of Pacific Gas and Electric Company (PG&E), the largest privately owned utility in the USA. In the case study area alone, DSM enables PG&E to reduce the present value of its planned investment in local T&D from $112.3 million to $77.3 million over a 20‐year period.
Evidence on the motivation for management forecasts of corporate earnings
Authors: Kross William J. , Lewellen Wilbur G. , Ro Byung T. 
Published: June 2007

AbstractA multivariate model of the process by which managers decide to release public forecasts of their firms' earnings is developed, based on factors that are hypothesized to affect the demand for and the willingness to supply such forecasts. We test the model on data from a comprehensive sample of earnings forecasts, and find support for our hypotheses about the likely joint influence of those factors. Larger firm size, greater leverage, higher and more stable earnings rates and less rapid growth rates are found to be associated with an increased propensity for management to provide earnings forecasts for their firms.
Ownership effects on operating strategies: Evidence of expense‐preference behavior in the hospital industry
Authors: Oswald Sharon L. , Gardiner Lorraine R. , Jahera John S. 
Published: June 2007

AbstractExpense preference offers an alternative to profit‐maximization theory in explaining firms' operating strategies (Williamson, 1963; Rees, 1974). Expense‐preference theory suggests that when disctretionary behavior is allowed, corporate managers may choose to maximize individual utility instead of corporate profit. Expense‐preference behavior tends to be evidenced by higher expenditures on items for which managers have a positive personal preference than would be justified by profit maximization. Conditions under which significant managerial discretion can emerge include weak competition, strictly controlled entry, a high degree of regulation, separation of ownership and control, and existence of a strong public interest character for the firm or industry (Awh and Primeaux, 1985; Edwards, 1977). The hospital industry may be characterized as operating under all the above conditions. Hospital ownership can be classified as being either not‐for‐profit or proprietary. Profit‐maximization influences are generally not present in not‐for‐profit hospitals, thus further increasing managerial discretion with respect to operating expenses. This study provides support for the contention that expense‐preference behavior exists in not‐for‐profit hospitals as compared to proprietary hospitals. Specifically, we present evidence of considerable managerial discretion in the allocation of resources in not‐for‐profit hospitals.
Paying for performance: Efficiency wages and mutuality
Authors: Ingham Hilary , Thompson Steve 
Published: June 2007

AbstractThe motivation of individuals lies at the core of corporate governance. For CEOs much research has been directed at the linkage between pay and enterprise performance. The results, however, provide only weak support for the efficacy of profit‐related pay. Herein we adopt a different perspective and test for the existence of efficiency wages in a mutual sector wherein the use of traditional control mechanisms is particularly problematic. Our empirical results support the hypothesis that efficiency wages do yield superior performance. We therefore conclude that efficiency wages are a much‐needed tool of corporate governance in the mutual sector. Furthermore, as an incentive mechanism, efficiency wages do not require the observability of individual effort, thus they potentially provide an equitable incentive mechanism for all organizations.
Firm performance and board composition: Some new evidence
Authors: Barnhart Scott W. , Marr M. Wayne , Rosenstein Stuart 
Published: June 2007

AbstractWe investigate the effect of board composition on overall corporate performance while controlling for managerial ownership and other key variables. We recognize that both managerial ownership and board composition may be endogenous to performance, but our work differs from previous in two important respects. First, we measure performance using the market value to book value ratio of common stock equity rather than the more commonly used Tobin's q. Second, recognizing that overall estimates from the IV approach depend greatly on the choice of instruments, we perform sensitivity analysis by using a variety of instruments to proxy for board composition and managerial ownership. Both our OLS and IV estimates indicate a significant curvilinear relation between board composition and performance. However, we find that moderate differences in first‐stage regressions, resulting in small changes to first‐stage R2s, lead to widely differing overall results. Our results suggest that findings of studies using IV and similar techniques (e.g. two‐ and three‐stage least squares) must be interpreted cautiously.
Analysis of divisional profitability using the residual income profile
Authors: Frigo Mark L. , Ciecka James E. 
Published: June 2007

AbstractThis paper describes the residual income profile which is a graphical method that summarizes the profitability characteristics of a division of a firm and illustrates the relationship between return on investment and residual income. In addition, the residual income profile shows the sensitivity of residual income to changes in interest rates.
Debt finance and the cost of management ownership: Some elementary results
Authors: Garvey Gerald T. 
Published: June 2007

AbstractIncreased debt reduces a company's equity base, which reduces the dollar investment a manager must make to hold a given proportion of stock. Therefore, it is often argued, managers' effort incentives are improved by high leverage. This paper shows that while risky debt reduces the cost of providing managers with substantial equity ownership, the cheaper equity captures less of the fruits of the manager's effort. Managers' effort incentives are improved by high debt levels only under quite restrictive conditions. These conditions are more plausible when agency problems are due to a managerial propensity to expand size by investing in negative net present value projects. The results also imply that when debt is increased to reduce the agency costs of free cash flow, the accompanying covenants should allow for substantial cash distributions to shareholders even before bondholder claims are satisfied.
The determinants of board composition: An agency theory perspective
Authors: Bathala Chenchuramaiah T. , Rao Ramesh P. 
Published: June 2007

AbstractThis study examines the interrelation between board composition and variables that capture various agency and financial dimensions of the firm. The agency literature suggests that outside directors on the board provide important monitoring functions in an attempt to resolve, or at least mitigate, agency conflicts between management and shareholders. The agency literature indicates that other mechanisms such as managerial equity ownership, dividend payments, and debt leverage also serve as important devices in reducing agency conflicts in firms. This study argues and documents that an inverse relationship exists between the proportion of external members on the board and managerial stock ownership, dividend payout, and debt leverage. This is consistent with the hypothesis that individual firms choose an optimal board composition depending upon alternative mechanisms employed by the firm to control agency conflicts. Board composition is also found to be systematically related to a number of other variables including institutional holdings, growth, volatility, and CEO tenure.
Sibling rivalry: The emergence of competition among the baby bells
Authors: Shughart William F. 
Published: June 2007

AbstractThe Modification of Final Judgment (MFJ) prohibits the seven regional Bell operating companies (RBOCs) spun off by AT&T from competing with one another in various markets ‘adjacent’ to the local telephone exchange. I have examined the competitiveness of three of these adjacent markets (cellular telephone, paging services, and yellow pages publishing) since divestiture in order to assess the likelihood of collusion among the RBOCs. On the basis of a decade of post‐divestiture experience, I find the prospect of collusion to be remote and, hence, the probability of anticompetitive effects from lifting the MFJ to be vanishingly small.
International stock exchange listing and the reduction of political risk
Authors: Cheung Yan‐Leung , Shum Chi‐Kuen 
Published: June 2007

AbstractThe impending 1997 assimilation into the People's Republic of China made the 1980s a challenging period for Hong Kong, one in which Kong Kong‐based companies relocated their corporate domiciles to other countries as political insurance. International listing, however, is another way for companies to reduce political risk. This paper examines the post‐1985 effects of Hong Kong‐based company stocks being quoted on London's International Stock Exchange. We document that there is no price effect for these companies after the first trading day and a significant increase in the average trading volume surrounding the event day. This may be attributed to the London market makers who build up their stakes before the listing and who unwind their positions in the Hong Kong market after the event day. We also find that there is, on average, a decrease in systematic risk of these companies after being traded on the London market. Furthermore, the evidence shows that there is an increase in systematic risk for companies that are not listed in London after 4 June 1989, however, not for those London‐listed Hong Kong companies. The results constitute evidence to support the inference that there is a reduction of local political risk for internationally listed companies.
Changing industrial structure and competitive patterns of manufacturing and non‐manufacturing in a small open economy: An entropy measurement
Authors: Ng Linda Fung‐Yee 
Published: June 2007

AbstractThis paper studies the industrial concentration and competitive patterns of Hong Kong, a typical small open economy, via an entropy measurement. A relatively low degree of concentration was found to exist. Manufacturing showed decreasing concentration for 1976‐81 and increasing concentration after 1987. Non‐manufacturing had decreasing concentration since 1982. A structural change between the sectors had occurred. The size of the domestic market seemed unimportant in determining the level of concentration in a small open economy with free trade. The open‐door policy of the PRC which facilitated free resource mobility and outward investment between the two regions should be important to contribute such patterns.
Technological development and cooperation in Greater China
Authors: Chen E. Yegin 
Published: June 2007

AbstractThe three Chinese economies of Hong Kong, China and Taiwan (‘Greater China’) will continue to undergo dramatic change in productivity and technology in the coming decades. While they previously depended upon technology transfer and imitation, they now pursue strategies based on technological cooperation in selected areas and on indigenous technological development. This paper describes the potential for the three economies, with their complementary capabilities, to develop mutually beneficial technological cooperation, and highlights initial cases of cooperative efforts. Finally, the paper points out the extent to which the economies of Greater China have begun significant initiatives to develop technology indigenously.