Measuring Vertical Specialization: The Case of China

The explosive growth of Chinese trade may be due to international production fragmentation, but few have assessed these phenomena together, in part, because it is difficult to measure the vertical specialization (VS) of China's trade. Unique features of China's processing trade cause both identification of imported inputs and their allocation across sectors to vary by trade regime. This paper estimates the VS of Chinese merchandise exports, addressing these two challenges. A new method to identify Chinese imported inputs is developed, and used to calculate VS by sector and destination. VS estimates based on the official Chinese input–output table are contrasted with those based on a split table, capturing processing and normal exports separately. Last, the paper tests whether Chinese “export sophistication” can be explained by VS.     

Project failure from corporate entrepreneurship: Managing the grief process

In this paper, we complement social cognitive theory with psychological theories on grief in our discussion of two approaches to grief management – grief regulation and grief normalization – that hold promise for enabling corporate entrepreneurs to cope with negative emotions induced by project failure. We propose that to the extent that organizational members have high self-efficacy for recovering from grief over project failure, or this coping self-efficacy can be built through the social support offered by the organizational environment, regulating rather than eliminating, grief via normalization processes will explain superior learning and motivational outcomes.     

Is Financial Reporting Still Useful? Australian Evidence

There has been recent and growing criticism of the usefulness of financial reporting for investors, particularly the annual financial statements. In response, the IASB is pursuing several projects aimed at improving the relevance of financial information. To inform the IASB’s work, we investigate, using a mixed-method approach, the extent and nature of the use of annual financial statements by equity investors. We examine the relevance of financial reporting for equity valuation in Australia across time. We find that financial reporting (specifically, reported net income, shareholders’ equity, and operating cash flows) remains relevant for investment decisions. We further support this finding with evidence from field interviews that provide insight into how and why financial statements are used by equity investors. The field evidence also demonstrates that no one financial statement dominates in investor decision making. Given the increasing availability of more timely, forward-looking information from alternative sources, we examine the relevance of non-GAAP financial information and other non-financial information for investor decision making. We find that non-GAAP financial information (as proxied by EBIT and EBITDA) is more value relevant than statutory measures. We further find a broad range of non-financial information is utilized by investors in making investment decisions both as a ‘screen’ and for valuation purposes. Our findings inform regulators and other stakeholders as we provide evidence of the continuing relevance of financial statements and the complementary role of non-GAAP financial and other information. Our evidence provides a rebuttal to the recent criticism.     

Facilitation Methods for Collaborative Modeling Tools

This paper presents results of an ongoing research effort to support effective user involvement during modeling and analysis meetings. Productivity and user participation of traditional group meetings have been limitations imposed by chauffeured facilitation and single-user tools. These tools have been designed for analysts rather than for direct use by non-analyst users. Recently, electronic meeting systems (EMS) modeling tools that allow users to work in parallel to contribute directly during meetings have been developed. Such tools allow more domain experts to participate directly and productively during model development meetings than is possible using the traditional approach. Although previous research has demonstrated that EMS modeling tools may be used to develop some model content, little research had been done on collaborative facilitation methods that employ these tools. This paper presents a comparison of modeling approaches for use with EMS modeling tools and proposes an approach that overcomes significant problems inherent in other approaches. It leverages the productivity enhancement afforded by direct group access and still results in production of complete, integrated, high quality models. This approach allows models to be developed two to four times faster than with traditional modeling support and yet avoids model ambiguities and inconsistencies.     

Project Failures Arising from Corporate Entrepreneurship: Impact of Multiple Project Failures on Employees' Accumulated Emotions,Learning, and Motivation

In this paper, we consider an organizational paradox inherent to corporate entrepreneurship; that is, the pursuit of entrepreneurial projects is necessary for organizational rejuvenation, renewal, and/or organic growth; however, the high failure rate of entrepreneurial projects likely has enduring implications for the project team members and, by extension, the organization. Drawing on the psychology and emotion literatures, we model the human capital costs of corporate entrepreneurship arising from the multiple failures of entrepreneurial projects. Specifically, we explore how and with what consequence negative emotions can accumulate across multiple failures; when this accumulation is most likely to occur; and what the nature of this accumulation is across organizational contexts, employee differences, and time. This theorizing complements extant scholarship focused on the financial benefits and costs of corporate entrepreneurship by investigating the negative impact of multiple project failures on employees.