Technical efficiency in the Chinese banking sector

This paper applies an innovative DEA (Data Envelopment Analysis) model, the Inverse B-convex model, in order to investigate the technical efficiency of a representative sample of Chinese banks. The banks are ranked according to their efficiency over the period 1998-2008. The results paint a mixed picture of the Chinese banks' performance. The influence of firm size and ownership on bank efficiency is not observed. However, the study shows that overall efficiency improved over time, especially after the entry of China into the WTO. Policy implications are derived.     

Testing for Zipf’s law: A common pitfall

It is noted that the regression procedure commonly used when testing for Zipf’s law is erroneous.     

Entrepreneurship research in service industries: a literature classification and trend analysis

In this paper, the influence of entrepreneurship on service management research is examined. Entrepreneurship research occupies a central place in organizational theory and strategic thinking, but its theories and models have little influence on business management. Entrepreneurship research can have a better integration with other areas of management, but there is still certain isolation. This article reviews the emerging areas in entrepreneurship research that provides complementary theoretical framework to service business models. In order to determine the areas in service management research in which entrepreneurship theories can be useful, a classification of the papers published in the last 2 years in the JCR service management journals is carried out. The study concludes that innovation is the most outstanding priority in service management research that can be enriched by entrepreneurial theories. The entrepreneurial approach to networks and institutional environment are the theoretical frameworks that better suit to introduce entrepreneurship variables as antecedents in business innovation models.     

Factors affecting entrepreneurial intention levels: a role for education

A considerable agreement exists about the importance of promoting entrepreneurship to stimulate economic development and employment generation. In particular, entrepreneurship education has been considered one of the key instruments to increase the entrepreneurial attitudes of both potential and nascent entrepreneurs. Nevertheless, the factors that determine the individual’s decision to start a venture are still not completely clear. Cognitive approaches have attracted considerable interest recently. But the explaining capacity of personality traits or demographic characteristics is still considered. Therefore, there is a need to clarify which elements play the most influential role in shaping the personal decision to start a firm. This paper tries to contribute to filling this gap by providing empirically-based suggestions for the design of improved entrepreneurship education initiatives. The empirical analysis is based on two essential elements: firstly, an already validated instrument (EIQ); secondly, a statistical method (factor-regression procedure) which is not dependent on any theoretical approach. It uses all the information collected through the questionnaire items, selecting them solely based on their capacity to explain the dependent variable. Results will allow the design of more effective education initiatives. They suggest that personal attitude and perceived behavioural control are the most relevant factors explaining entrepreneurial intentions. Thus, based on these results, a number of considerations about the most effective role of education in promoting and developing attitudes and intentions towards entrepreneurship are considered. Besides, the EIQ could be used as an evaluation instrument for entrepreneurial education programmes.     

The persistent effects of a false news shock

In September 2008, a six-year-old article about the 2002 bankruptcy of United Airlines' parent company resurfaced on the Internet and was mistakenly believed to be reporting a new bankruptcy filing by the company. This episode caused the company's stock price to drop by as much as 76% in just a few minutes, before NASDAQ halted trading. After the “news” had been identified as false, the stock price rebounded, but still ended the day 11.2% below the previous close. We explore this natural experiment by using a simple asset-pricing model to study the aftermath of this false news shock. We find that, after three trading sessions, the company's stock was still trading below the two-standard-deviation band implied by the model and that it returned to within one standard deviation only during the sixth trading session. On the seventh day after the episode, the stock was trading at the level predicted by the asset-pricing model. We investigate several potential explanations for this finding, but fail to find empirical evidence supporting any of them. We also document that the false news shock had a persistent negative effect on the stock prices of other major airline companies. This is consistent with the view that contagion effects would have dominated competitive effects had the bankruptcy actually taken place.     

Structural Breaks and Spatial Linkages in FDI: Further Evidence in OECD Countries

This paper evaluates the knowledge–capital model (KCM) of foreign direct investment (FDI) as defined by Braconier et al. (Rev Int Econ 13(4):770-786, 2005). The model predicts that there are both horizontal and vertical motivations for engaging in FDI. The horizontal motives regard access to new markets in the case of trade frictions, whereas the vertical motivations imply that multinational enterprises seek to take advantage of relative skill differences in different countries. The impact of the vertical component in the KCM has been largely debated and thereby is of the greatest interest. Another issue addressed in the study is the relevance of spatial interdependencies in FDI flow. To check for these kinds of FDI determinants the KCM model is augmented with a surrounding market potential and a spatial lag term. By using large data sets for FDI stocks among OECD countries from 1982 to 2003 along with structural breaks and spatial econometric techniques, the paper evaluates the significance of traditional and spatial FDI determinants. The results show that the vertical component is indeed important, even for FDI among OECD countries, but that this importance is clearly decreasing over time. The findings point towards the existence of spatial linkages that are also compatible with export-platform motivations.     

Conformity and diversity of accounting and financial reporting practices in Portuguese local government

Portuguese governmental accounting has evolved from essentially a cash‐based budgetary accounting system to an accrual‐based financial and cost accounting system. Evidence from financial reports shows a great level of diversity amongst municipalities' voluntary compliance with the new accounting rules. Using a sample of Portuguese municipalities in the year 2003 we calculate and analyse the levels of compliance with the practices required by law and document the diversity in compliance across municipalities. The differences across municipalities are explained by some fundamental factors: size, financial conditions, urban characteristics, and diffusion across neighbouring municipalities. We show an unexpected effect of size. Larger municipalities comply less with accounting standards. Organizational complexity, conservative practices, and aversion to change may explain this result. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.     

The Real Options Component of Firm Market Value: The Case of the Technological Corporation

Abstract:   This paper tests whether stock prices reflect investor's expectations regarding the value of real options. The analysis is implemented based on a sample of 391 high‐tech companies listed on main OECD stock markets during the period December 1994 through December 2000. Results confirm the predicted relation between the fraction of a firm's market value not accounted for by its assets‐in‐place, and a series of variables that are assumed to disclose its real options value, variables such as research and development activity, risk and skewness of stock returns, and size. The results are robust even after controlling for valuation date, sub‐industry, country, and alternative measures of risk.