Toward a conceptual framework of the harmonization of bank financial reporting standards in transition economies: The case of Mexico

In recent years banks in emerging and transition economies throughout the world have been compelled to change lending and financial reporting practices in response to the economic transition of their countries. Correspondingly, on the basis of the theory of soft budget constraints (SBC), economists have studied the relationship between economic development, banks' lending practices, and banks' penchant to overstate loans. However, very little research has been performed by accounting researchers regarding the nature of bank loan overstatement during times of financial crisis in emerging markets. Accordingly, this paper uses the theory of soft budget constraints to develop a four stage conceptual framework of the harmonization of bank financial reporting standards during times of economic transition. Emphasis is placed on using the theory of soft budget constraints to characterize the harmonization of standards and practices with respect to bank loan overstatement. The framework is applied to the harmonization of Mexican bank financial reporting during the country's economic transition of the late 1990s. The Mexican harmonization process during this period generally followed the framework.     

Examining the behavior of renewable‐energy fund investors

Mutual fund investors could contribute to sustainable development by encouraging fund managers to channel their savings into the funding of sustainable energy projects adopted by firms. This study examines whether renewable‐energy investors take into account financial and/or nonfinancial factors when making the decision to invest in a specific fund, comparing their investment behavior with that of black‐energy and conventional investors. To this end, we have gathered information about 4,368 mutual funds (76 renewable‐energy funds, 109 black‐energy funds, and 4,183 conventional mutual funds) from January 2007 to December 2017. For this sample, we adopt a panel‐data approach with Petersen's standard errors clustered by fund and year. Our results indicate that renewable‐energy fund investors are less sensitive to past financial performance than are black‐energy and conventional fund investors, indicating that the former derive their utility from nonfinancial attributes whereas black‐energy investors derive their utility from a conditional multiattribute and conventional fund investors derive their utility from financial attributes.     

Effects of family control on the degree and type of diversification: Empirical evidence for business groups

This article analyzes the impact of ownership structure on corporate diversification, with reference to large listed family business groups. By considering agency theory and socioemotional wealth, the study examines the relationship between family ownership, concentration of ownership, and degree and type of diversification. The study considers 99 Spanish listed business groups (50 family‐controlled‐ and 49 nonfamily‐controlled groups) and considers diversification of business group as the focus of analysis. The results show how family business groups present a lower preference for unrelated diversification than related diversification. There is also a nonlinear relationship between the concentration of ownership in family groups and the degree of diversification, showing different behaviors in family groups according to shares owned by the family's leading shareholders. This article contributes to the literature by providing a more precise identification of the corporate strategy adopted by business groups and establishing new evidence about the impact of family control on diversification strategies and the differences regarding nonfamily business groups.     

Default, Currency Crises, and Sovereign Credit Ratings

Sovereign credit ratings play an important part in determiningcountries' access to international capital markets and the termsof that access. In principle, there is no reason to expect thatsovereign credit ratings should systematically predict currencycrises. In practice, in emerging market economies there is astrong link between currency crises and default. Hence if creditratings are forward-looking and currency crises in emergingmarket economies are linked to defaults, it follows that downgradesin credit ratings should systematically precede currency crises.This article presents results suggesting that sovereign creditratings systematically fail to predict currency crises but doconsiderably better in predicting defaults. Downgrades in creditratings usually follow currency crises, possibly suggestingthat currency instability increases the risk of default.     

Managing functional diversity, risk taking and incentives for teams to achieve radical innovations

In this study we analyse the effect of team diversity, encouragement to take risks and team incentives on the degree of radicalness of innovation. Empirical research has been conducted with a sample of 95 companies from four innovative industries according to their high number of patents. The results indicate that team diversity and the combined use of long- and short-term incentives are associated with incremental innovation, whereas the development of risk-taking attitudes within the team is associated with radical innovation.     

Are people emotionally aroused by hypothetical medical scenarios in experiments? An eye tracking study with pupil dilation

Background: Many studies on the communication of medical risks use hypothetical medical scenarios. The results of these scenarios should have sufficient predictive accuracy to be generalized to real life; thus, it is important to know whether hypothetical medical scenarios work and whether there is a relationship between risk level and emotional arousal. Methods: In an eye tracking experiment (N = 67), we investigated the influence of a simple hypothetical medical scenario on pupil dilation, a measure of emotional arousal. In this medical scenario, the participants were shown three risk levels (low, middle, and high) and had to estimate the probability that a hypothetical patient has colon cancer. They were also given a non-medical scenario that controlled for changes in illumination and cognitive workload. Therefore, we supposed that the difference in pupil diameter between the medical and the non-medical scenario was due to emotional arousal. Results: We found that our hypothetical medical scenario had a significant effect on pupil diameter. The mean values of the mean pupil diameter in the first fifth of the fixations were higher for all risk levels in the medical scenario than in the non-medical scenario. In a more detailed analysis of the difference in pupil diameters between the two scenarios, we detected that, for the high-risk level, the emotional difference values (between the medical and non-medical scenarios) differed significantly from zero. Furthermore, we found that higher risk levels lead to higher emotional arousal and higher probability estimates. Conclusions: Even simple hypothetical medical scenarios cause emotional arousal. Thus, hypothetical medical scenarios work, and the results of studies not using real patients can be generalized to real medical situations.     

Entrepreneurial orientation, exploitative and explorative capabilities, and performance outcomes in export markets: A resource-based approach

Innovation is critical to the growth and success of a firm. In an attempt to renew themselves and compete effectively in the global marketplace, firms must possess both technical and non-technical capabilities. Yet, the extant literature has mainly focused on technology and product development capabilities, disregarding other possible capability domains. This study investigates the role of market-related exploitative and explorative capabilities, together with product development ones, in the context of exporting. Drawing on the resource-based and organization learning theories, we examine the internal process through which entrepreneurial orientation influences performance in export markets and develop a model of entrepreneurial orientation-exploitative and explorative capabilities-advantage-performance relationships. The results indicate that entrepreneurial orientation is a precursor of exploitative and explorative product development and overseas market-related capabilities. The findings also suggest that product development explorative capabilities and overseas market-related exploitative capabilities have a positive effect on new product differentiation, which in turn enhances market effectiveness. Implications for scholars and practitioners are discussed along with suggestions for future research.     

Improving emergency plans management with SAGA

Emergency plans are the tangible result of the preparedness activities of the emergency management lifecycle. In many countries, public service organizations have the legal obligation to develop and maintain emergency plans covering all possible hazards relative to their areas of operation. However, little support is provided to planners in the development and use of plans. Often, advances in software technology have not been exploited, and plans remain as text documents whose accessibility is very limited. In this paper, we advocate for the definition and implementation of plan management processes as the first step to better produce and manage emergency plans. The main contribution of our work is to raise the need for IT-enabled planning environments, either at the national or organization-specific levels, which can lead to more uniform plans that are easier to evaluate and share, with support to stakeholders other than responders, among other advantages. To illustrate our proposal, we introduce SAGA, a framework that supports the full lifecycle of emergency plan management. SAGA provides all the actors involved in plan management with a number of tools to support all the stages of the plan lifecycle. We outline the architecture of the system, and show with a case study how planning processes can benefit from a system like SAGA.     

Best Practice Marketing for Regional Tourism Destinations

This article reports on destination marketing best practices from 21 regional destinations around Australia. The results advocate an integrative approach to destination marketing that aligns with destination management and development objectives. From this, a framework is developed, within which nine best practice principles are identified as essential to successful and sustainable marketing of regional destinations. The key initiatives used to achieve success are discussed in detail, highlighting the need for destination stakeholders to foster a cooperative and strategic approach and ensure consistent design and delivery of a destination brand and image which is supported by tactical advertising and promotional strategies, effective visitor information services, and events to support the destination brand and image to target appropriate visitor markets.     

Good or bad? The influence of FDI on productivity growth. An industry-level analysis

This paper attempts to reconcile the often inconclusive evidence on the role of FDI in the process of economic development by taking into account the heterogeneity both among industries and among countries. Using a comparable database at the industry level for 35 countries in the OECD, Asia and Eastern Europe from 1987 to 2002, we test for the influence of both stage of development and sectoral FDI patterns in the relationship between FDI and productivity growth. In certain industries and for the catching-up countries, a significant and positive relationship emerges when FDI coincides with high investment or export orientation.