Dynamic modelling of agroforestry and soil fertility interactions: implications for multi-disciplinary research policy

This paper attempts to contribute to one of the major aspects of international research agenda in agroforestry. A general framework is developed in this paper to capture the dynamic interactions of various components of agroforestry system. Using a multi-seasonal model of agroforestry, the competition among the system components in resource and input use and the trade-offs between different outputs of agroforestry system are analyzed. Policy implications for multi-disciplinary research are derived. It is argued that quantifying the potential benefits of agroforestry system requires reformulation of existing economic methods of analyzing agroforestry technology to contribute to the fuller understanding of the dynamic interactions among its various components.     

Holliston Helping Hands

This case focuses on fraud investigation in a not‐for‐profit organization, along with an examination of governance and management control practices. The student assumes the role of an accountant investigating a possible fraud. The student is first presented with sample invoices paid by the organization that are fraught with irregularities and red flags of potential fraud. Drawing on the student's knowledge of control systems and corporate governance, the student's task is to identify suspicions of possible fraudulent transactions, identify key suspects, and develop an investigative plan. The class can also discuss recommendations to improve governance and control mechanisms to avoid future occurrences of fraud. The case is presented in three parts, and closely parallels a fraud investigation as additional information is revealed in each successive part of the case. This is much like peeling the layers of an onion which is a common way to describe the evolution of a fraud investigation. This case is based on a real fraud investigation conducted by one of the authors who was engaged by the province's Ministry of Health. Students who express disbelief about issues portrayed in the case can be reassured that these faithfully represent actual events.     

Is Financial Flexibility a Priced Factor in the Stock Market?

This paper develops a factor analysis–based measure for shifts in corporate financial flexibility (FFLEX) that can be observed from public accounting information. Companies that experience positive shifts in FFLEX are associated with higher future investment growth opportunities. We show that FFLEX is a robust determinant of future stock returns. Firms that have increased their financial flexibility are associated with lower stock returns in the subsequent period. A zero‐cost return portfolio produces a significant positive monthly premium of 0.69%, which is driven by covariance (risk). Risk inherent in the flexibility factor is not explained away by either prominent pricing characteristics or factors.     

Accrual quality,skill, and the cross-section of mutual fund returns

We use returns of actively managed mutual funds to document the link between accrual quality (AQ) and systematic (priced) risk. Despite compelling theoretical arguments, prior research finds no evidence that poor AQ commands a risk premium in the cross-section of realized stock returns. We argue that the previously obtained premium estimates are biased downward because, for a large portion of poor AQ stocks, higher expected returns are offset by the news of deteriorating fundamentals. We suggest that skilled mutual fund managers should be able to either avoid investing in stocks with deteriorating fundamentals or assign them lower portfolio weights. As a consequence, returns on their portfolios should better reflect the expected AQ risk premium. Our empirical evidence is consistent with these predictions.     

The control dynamics of outsourcing involving an early-stage firm

Firms in the early stage of their organisational lifecycle experience challenges that shape the adoption of management controls. They are also recognised for their use of outsourcing. However, the accounting research has provided limited insight on how these control challenges and inter-organisational control concerns interact to influence the adoption of specific controls within an outsourcing relationship involving an early-stage firm. Exploration of this gap provides a key motivation for this paper. Contrary to existing management control and organisational science literature, we find a strong preference for new or enhanced action controls. Conversely, we find low levels of interest in result controls by managers within the buyer but not the supplier firm. These preferences influence inter-organisational control adoption within the frame of an incomplete outsourcing contract that emphasises flexibility in terms of relationship exit. Within the limits of a case study methodology, we argue that adoption of inter-organisational controls is shaped by tensions between the control challenges of early-stage firms, the control preferences of managers within these firms and inter-organisational control concerns. These findings have theoretical implications, expanding the Davila et al. [2009. Reasons for management control systems adoption: insights from product development systems choice by early-stage entrepreneurial companies. Accounting, Organizations and Society, 34 (3–4), 322–347] framework and the Merchant [1985. Control in Business Organizations. Boston, MA: Pitman] control typology into an ESF inter-organisational control context.     

The organizational antecedents of a firm’s supply chain agility for risk mitigation and response

Today’s marketplace is characterized by intense competitive pressures as well as high levels of turbulence and uncertainty. Organizations require agility in their supply chains to provide superior value as well as to manage disruption risks and ensure uninterrupted service to customers. Thus the cultivation of agility is approached as a risk management initiative that enables a firm to respond rapidly to marketplace changes, as well as anticipated and actual disruptions in the supply chain. Agility is of value for both risk mitigation and response.     

Discrete forecast horizons for two-product variants of the dynamic lot-size problem

Motivated by the recent success of integer programming based procedures for computing discrete forecast horizons, we consider two-product variants of the classical dynamic lot-size model. In the first variant, we impose a warehouse capacity constraint on the total ending inventory of the two products in any period. In the second variant, the two products have both individual and joint setup costs for production. To our knowledge, there are no known procedures for computing forecast horizons for these variants.Under the assumption that future demands are discrete, we characterize forecast horizons for these two variants as feasibility/optimality questions in 0–1 mixed integer programs. A detailed computational study establishes the effectiveness of our approach and enables us to gain valuable insights into the behavior of minimal forecast horizons.     

Linking green purchasing capabilities to environmental and economic performance: The moderating role of firm size

This study identifies firms’ green purchasing capabilities, classified into operational capabilities and dynamic capabilities, and measures their effects on the environmental and economic performance of a firm. We developed instruments to measure operational green purchasing capabilities and dynamic green purchasing capabilities. This study also investigates the moderating effect of firm size on the relationship between green purchasing capabilities and firm performance. The structural equation model (SEM) is used to analyse 239 responses from Japanese manufacturing companies. The results indicate that their green purchasing capabilities positively affect environmental and economic performance. Operational capabilities and dynamic capabilities have different levels of effects on green purchasing performance. A further analysis of the moderating effect of firm size shows that the high economic performance of green purchasing relies on the level of dynamic capabilities rather than firm size.     

TRADE LIBERALIZATION AND PRICE‐COST MARGIN IN INDIAN INDUSTRIES

Using panel data for 137 three‐digit industries for 1980/81 to 1997/98, the paper examines the effect of trade liberalization on price‐cost margins in Indian industries. An econometric model is estimated to explain variations in price‐cost margins, taking tariff and nontariff barriers among the explanatory variables. The results indicate that the lowering of tariffs and removal of quantitative restrictions on imports of manufactures in the 1990s had a significant pro‐competitive effect on Indian industries, particularly concentrated industries, tending to reduce the price‐cost margins. The paper notes that despite the pro‐competitive effects of trade liberalization reinforced by domestic industrial deregulation, the price‐cost margin increased in the post‐reform period in most industries and aggregate manufacturing, which is attributed to a marked fall in the growth rate of real wages and a significant reduction in labor's income share in value added in the post‐reform period, reflecting perhaps a weakening of industrial labor's bargaining power.     

A Structural VAR (SVAR) analysis of fiscal shocks on current accounts in India

The stimulus packages announced to deal with the economic slowdown has increased the fiscal deficit of many countries and it spurred the debate on the possible effect of these fiscal shocks on other economic variable especially the current account. In this study, we examine the effect of fiscal deficit on current account of India using the VAR as well as the Structural VAR (SVAR) analysis. Our analysis indicates that the fiscal deficit is positively affecting the current account deficit in India, as predicted by the twin deficit hypothesis. Therefore, the historical data indicates the presence of the twin deficits phenomenon in Indian context.