LOCAL ECONOMIC REVITALIZATION OR NATIONAL INDUSTRIAL GROWTH? A COMPARATIVE OVERVIEW OF SMALL BUSINESS POLICY IN JAPAN AND THE U.S.

Contrasts in small business policy are examined for Japan and the United States. The author argues that Japan's small business policy has been part of an industrial growth-oriented policy, while comparatively the U.S. small business policy has been mainly part of locally-based economic revitalization schemes. Recent trends in policy development indicate that the policies in the two countries are converging. The U.S. policymakers have become increasingly concerned with the small business sector becoming competitive in global markets, while widespread offshoring of large firms have prompted Japanese policymakers to focus on supporting small businesses in order to prevent further loss of manufacturing jobs.     

Executive Compensation in Japan: Estimating Levels and Determinants from Tax Records

Most studies of executive compensation have data on pay but not total income. Because exchange‐listed Japanese firms (unlike exchange‐listed U.S. firms) need not disclose executive compensation figures in their securities filings, most studies on Japan lack even good data on pay. Through 2004, however, the Japanese tax office disclosed the tax liabilities of the 73,000 Japanese with the highest incomes. We obtained this data, and match the high‐tax list against the list of CEOs of the firms listed in Section 1 of the Tokyo Stock Exchange. We thus estimate salaries and risk exposure in a new way. We confirm survey and anecdotal evidence that Japanese executives earn less than American—about one‐fifth the pay, adjusting for firm size and outside income. Tobit regressions show that pay in Japan depends heavily on firm size (a .22 elasticity) and on accounting profitability, but not on stock returns. Additionally, family owned firms and those with large lead shareholders pay less to employee CEOs not in the family or with large shareholdings, as do firms whose directors have less tenure on the board.     

Economic Determinants of Multiple Accounting Method Choices in a Swiss Context

This article investigates economic determinants that may affect multiple accounting method choices made by Swiss listed companies. It intends to make a contribution to the accounting choice literature for at least four reasons. This is, to our knowledge, the first study to investigate the economic determinants of Swiss accounting method choices. Second, Swiss firms provide an interesting sample for testing accounting method choices because they can choose from a much wider range of accounting methods than their American counterparts. Third, this study examines the balance sheet effect as well as the income statement effect. Lastly, multiple accounting methods are used instead of individual choices. The empirical results exhibit that income‐accelerating accounting method choices is positively associated with the recourse to bank and private loans, the extent of assets specificity and the ownership dilution of the firm and negatively with labour force. Additionally, firms that select leverage‐ratios decreasing accounting methods, make higher recourse to debt and especially bank loans to finance their activities and exhibit a higher proportion of specific assets than other corporations. Overall, this result suggests that in a Swiss context, managers may select accounting methods to decrease both debt and political costs as well as to increase their own compensation to some extent.     

Japanese Corporate Groupings (Keiretsu) and the Informativeness of Earnings

This paper examines the effect of Japanese corporate groupings, keiretsu , on the informativeness of earnings. Keiretsu firms maintain close financial and personal ties through cross-shareholding, credit holding, interlocking corporate directorates, and various business transactions. We propose that the strong interrelations of the keiretsu ownership structure enhance the informativeness of earnings through efficient monitoring of managerial performance. Our empirical results show that keiretsu firms have higher earnings response coefficients than those of non- keiretsu firms, the earnings response coefficient increases as the strength of the keiretsu relationship increases, and discretionary accruals by keiretsu firms are smaller than discretionary accruals of non- keiretsu firms. All of these results suggest that the monitoring ability of the keiretsu improves the informativeness of earnings.     

存货会计政策与成本流动假设的经济学分析

存货是大多数企业的重要流动资产,基于不同的成本流转假设理论,存货计价方法一般可划分为具体辨认法、平均成本法、先进先出法、基本存货法、后进先出法等。存货会计政策选择具有广泛的经济后果,影响企业的财务状况、收益质量、税收成本、现金流量、经营者业绩与其报酬、公司股票价格及报表使用者理解会计信息等。本文认为,各种存货计价政策对企业净利润产生的差异均属于“时间性差异“,在若干个会计期间内,企业无论选择何种会计政策,产生的净利润和经营性现金流量都应该是相等的,企业之所以进行会计政策选择是为了取得上述会计数据不同时间分布带来的各种可能的经济利益。     

实时财务报告技术采纳与资本成本——基于“创新接受”视角的理论模

在资本市场中,公司与其对手为获得更低的资本成本展开竞争。为了达成目标,公司都尝试采用新的信息技术来提高信息披露的透明度。扩展组织"创新接受"理论的内容并整合影响实时财务报告技术采纳和资本成本的主要因素,利用数学模型建构两者之间的约束关系,结果发现,资本成本的节省、不确定性、风险规避、交易、转换成本以及公司治理政策等都对公司何时以及是否采纳实时财务报告技术产生影响。     

National policies towards biotechnology

The ‘new biotechnology’ is still a very young technology - half-in, half-out of the research laboratory. This paper surveys the policies that have been emerging towards this new technology from six governments - those of the United States, Japan, the United Kingdom, France, West Germany and the Netherlands. It suggests that the publicity ‘hype’ associated with the new biotechnology firms of the U.S., and the naming of biotechnology as a ‘next generation base technology’ by the Japanese government, together played a seminal role in pressurising governments into a positive policy stance. Looking across national policies, eight common characteristics of policy are identified: substantial support for basic research; increasing emphasis on applied research; expansion of traditional policies for supporting R & D; a new emphasis on linkage between academic and industrial research; gradual convergence towards corporatist or quasi-corporatist policies; the popularity of the collaborative approach; the promotion of small firms and the venture capital market; concern with the regulatory environment.     

Capital Market Reactions to Accounting Earnings Announcements in an International Context

This study examines the association of four factors with U.S. securities market reactions to annual earnings announcements by non-U.S. multinational corporations and by a control sample of U.S. firms. The four factors examined are firm size, the magnitude of earnings change, timeliness, and the presence or absence of a concurrent dividend announcement. The non-U.S. corporations are from five countries - Israel, Japan, Netherlands, Philippines, and United Kingdom. Results for the group of non-U.S. firms indicate that firm size and timeliness are significant explanatory variables. For the control sample of U.S. firms, only size is significant.     

The Fable of the Keiretsu

Central to so many accounts of post-war Japan, the keiretsu corporate groups lacked economic substance from the start. Conceived by Marxists committed to locating "domination" by "monopoly capital," they found an early audience among western scholars searching for evidence of culture-specific group behavior in Japan. By the 1990s, they had moved into mainstream economic studies, and keiretsu dummies appeared in virtually all econometric regressions of Japanese industrial or financial structure. Yet the keiretsu began as a figment of the academic imagination, and they remain that today. Regardless of the keiretsu definition used, cross-shareholdings within the "groups" were trivial, even during the years when keiretsu ties were supposedly strongest. Neither does membership proxy for "main bank" ties. Econometric studies basing "keiretsu dummies" on the available rosters produce predictably haphazard and unstable results. In the end, the only reliably robust results are the artifacts of the sample biases created by the definitions themselves.     

The Influence of the Keiretsu on Japanese Corporate Disclosure

This paper represents a contribution to testing whether the extent of disclosure in Japanese corporate annual reports varies according to group structure. Consideration is given to keiretsu (group interfirm networks) classification and the mechanism for monitoring by a main bank or main company. This topic is of interest because the Japanese system of corporate governance is fundamentally different from those prevailing in Anglo-Saxon countries and this distinction may impact on corporate disclosure policy. Attention is focused on the exclusionary theory of corporate disclosure in which information is disseminated within group members but specifically excludes others. Regression analysis is undertaken to assess the importance of group structure in explaining variability in the extent of disclosure after controlling for known factors such as size, stock market listing, industry, borrowings, and type of business. The results suggest that companies within a keiretsu with a main-bank or main-company monitor and which are therefore less subject to capital market discipline do not disclose less information than other companies in their annual reports. It appears that whatever type of corporate governance mechanism is adopted in Japan there exists a monitor that places approximately equal demands on information disclosure in corporate annual reports.     

Training and organisational innovations in a local industrial system: empirical evidence from Emilia‐Romagna1

The article studies the driving forces of firm training using a survey‐based dataset of manufacturing firms in the Emilia‐Romagna region, Northern Italy. The data are derived from the responses to a structured questionnaire administered in 2002 to the management of a representative sample of firms with more than 50 employees in the highly industrialised province of Reggio Emilia. Firms’ training choices are analysed using a theoretical/conceptual framework based on the notion of complementarity among productive factors. Training is provided as long as it favours the establishment of complementary relationships among the skills it develops and other inputs. The main factors associated with training include structural characteristics, HRM practices, workforce features, labour management and performance of the firm. Training activities emerge as being positively associated with organisational practices that affect the whole firm: workforce skill level, firm size, firm productivity and labour flexibility. The role of HRM practices in driving training is brought into question. These are key issues for the current debate on the development of local systems in the European and Italian context. The high and joint relevance of structural variables and labour demand‐related factors shows that regional industrial policies must support labour policies within an integrated policy effort aimed at increasing potential firm productivity.     

Changing employment relation systems in Japan: cases of the Mitsubishi Chemical Group and the Federation of Shinkin Banks

Over the past decade or so a number of changes have been observed in traditional Japanese employment relations (ERs) systems such as an increase in non-regular workers, a move towards performance-based systems and a continuous decline in union membership. There is a large body of Anglo-Saxon and Japanese literature providing evidence that national factors such as national institutions, national culture, and the business and economic environment have significantly influenced what were hitherto three ‘sacred’ aspects of Japanese ERs systems (ERSs). However, no research has been undertaken until now at the firm level regarding the extent to which changes in national factors influence ERSs across firms. This article develops a model to examine the impact of national factors on ER systems; and analyses the impact of national factors at the firm level ER systems. Based on information collected from two different groups of companies, namely Mitsubishi Chemical Group (MCG) and Federation of Shinkin Bank (FSB) the research finds that except for a few similarities, the impact of national factors is different on Japanese ER systems at the firm level. This indicates that the impact of national factors varies in the implementation of employment relations factors. In the case of MCG, national culture has less to do with seniority-based system. Study also reveals that the national culture factors have also less influence on an enterprise-based system in the case of FSB. This analysis is useful for domestic and international organizations as it helps to better understand the role of national factors in determining Japanese ERSs.     

政策不确定与审计师选择——基于省委书记更替的经验证据

考察省委书记更替带来的政策不确定性对审计师选择的影响。研究发现，省委书记更替时，事务所会提高审计质量，倾向于委派经验更丰富的审计师，尤其是拥有合伙人身份和执业经验丰富的审计师。省委书记更替对审计师选择的影响在国有企业、低市场化进程以及高盈余操纵的公司更为显著。进一步研究发现，事务所更可能对省级国有企业委派经验丰富的审计师，尤其是第一顺位的签字审计师。     

Cross listing,disclosure regimes,and trading volume sensitivity to stock returns

In this paper, we propose that investors of cross-listed firms use trading volume to revise their perception of firms’ value. We further propose that firms that cross list from low-disclosure regimes (usually from emerging economies) have higher trading volume sensitivity to returns than those that cross list from high-disclosure regimes (usually from developed economies), as those from low-disclosure regimes have relatively lax and less stringent disclosure requirements. We use a sample of foreign firms that are cross listed in the U.S. as exchange-listed American Depositary Receipts, adopted the international financial reporting standards (formerly international accounting standards), and filed Form 20-F reconciliation with the U.S. Securities and Exchanges Commission during the period of 1994–2005. Using these firms and a matched-sample of U.S. firms based on exchange, industry and firm size, we document results supporting our hypotheses. Our results have implications for policy makers, regulators and academics.     

Theoretical implications from the case of performance-based human resource management practices in Japan: management fashion,institutionalization and strategic human resource management perspectives

In Japan, a new type of human resource management (HRM) practices called ‘performance-based HRM practices’ (seika-shugi in Japanese) emerged in the 1990s, and has been adopted by many Japanese firms. In this paper, I illustrate how these type of practices emerged as a management fashion, diffused across a large number of Japanese firms, and became institutionalized in the Japanese business context; and discuss the relationship between performance-based HRM practices and firm performance. This illustration is used to develop a theoretical framework to better understand the relationship between HRM practices and firm performance by integrating theories of management fashions, institutionalization and strategic HRM. Suggestions for future research are also discussed.     

Japanese,German, and American Global Business Leadership

Abstract

Even though the issue of global business leadership has been intensively debated, few attempts have been made to investigate it from the perspective of international executives. This study is designed to address the issue of the national environments of Japan, Germany, and the U.S. and the prospect of global leadership for each nation. Seventy-four top Saudi Arabian firms participated. The results indicate that Japan is perceived to offer the most conducive business environment for effective global competition. In addition, participants believe that Japan and Germany will surpass the U.S. economically and technologically in the near future.     

The Effect of Aggregation of Accounting Information via Segment Reporting on Accounting Conservatism

In a sample of U.S. multiple-segment firms, we document a negative association between aggregation via segment reporting and timely loss recognition. A higher level of aggregation, as reflected in a firm’s reported organizational structure (the definition and characteristics of its segments), causes a multiple-segment firm to exhibit less cross-segment variation in profitability than a matched control portfolio of single-segment firms. We find that firms that engage in more aggregation report accounting numbers that provide less timely information about economic losses. We also observe that firms that provide more disaggregated segment data subsequent to adopting SFAS 131 experienced an increase in timely loss recognition. This result implies that higher quality segment reporting leads to an increase in timely loss recognition, which, per extant research, is associated with better governance. Our results complement results in Berger and Hann [2003. The impact of SFAS No. 131 on information and monitoring. Journal of Accounting Research, 41, 163–223] that show a decline in inefficient internal-capital-market transfers subsequent to the adoption of SFAS 131. Overall, we provide evidence supporting Beyer, Cohen, Lys, and Walther’s [2010. The financial reporting environment: Review of the recent literature. Journal of Accounting and Economics, 50, 296–343] contention that accounting conservatism is, in part, a function of managers’ aggregation choices.     

Management Accounting Practices in the U.S. and Japan: Comparative Survey Findings and Research Implications*

In recent years, the success of Japanese firms in the global market has prompted efforts to understand the sources of their competitive advantage. It has been suggested that one such source is the Japanese firms' management accounting systems, and a number of articles have claimed that important differences do exist between U.S. and Japanese firms in this area. However, these claims have tended to be supported by anecdotal, rather than systematic, evidence. The objective of this article is to contribute further insights into similarities and differences between U.S. and Japanese firms' management accounting practices. Exhaustive searches of published surveys in the U.S. and Japanese literatures (much of which is in Japanese) provided the basis for U.S.-Japan comparisons on six aspects of management accounting practices. In turn, these comparisons were used for deriving implications for future research. Two major limitations of extant research and, thus, directions for future research are identified. First, future research needs to go beyond the simple use or non-use of techniques to investigate more detailed aspects of technique use. Second, since management accounting is only one component of a firm's total management system, attention also needs to be devoted to the organizational context, process, and goals of a firm's management accounting practices.     

Earnings Management to Influence Tax Policy: Evidence from Large Malaysian Firms

This study investigates the link between effective tax rates (ETR) and earnings management in a non‐Western context. It examines the use of accounting choice by Malaysian firms in response to an anticipated change in tax policy. We predict and find that large Malaysian firms with low effective tax rates decrease book income prior to a reduction in corporate tax in order to influence tax policy. Our empirical results are consistent with prior evidence in the US, that firms use accounting choice to realize economic objectives. The Malaysian evidence suggests that the result of a positive association between ETR and earnings management can be generalized outside the US context.     

Verifying the state of financing constraints: Evidence from U.S. business credit contracts

Many policymakers are concerned that tight financing constraints for small businesses are stalling the recovery from the Great Recession. This paper empirically assesses two agency problems that induce such financing constraints—one resulting in a “firm balance sheet channel” and one resulting in a “bank balance sheet channel”. Evaluating specific models of these two agency problems against a comprehensive data set of U.S. small business credit contracts, I find strong support for the firm balance sheet channel but only weak support for the bank balance sheet channel. A complementary regression analysis confirms this result. Hence, policies seeking to improve firms’ balance sheets may be desirable to support small business lending in the recovery from the Great Recession.