Predicting Business Failures in Canada*

Empirical researchers and practitioners frequently use the bankruptcy prediction models developed by Altman (1968) and Ohlson (1980). This poses a potential problem for practitioners in Canada and researchers working with Canadian data because the Altman and Ohlson models were developed using U.S. data. We compare Canadian bankruptcy prediction models developed by Springate (1978), Altman and Levallee (1980), and Legault and Véronneau (1986) against the Altman and Ohlson models using recent data to determine the robustness of all models over time and the applicability of the Altman and Ohlson models to the Canadian environment. Our results indicate that the models developed by Springate (1978) and Legault and Véronneau (1986) yield similar results to the Ohlson (1980) model while being simpler and requiring less data. The Altman (1968) and Altman and Levallee (1980) models generally have lower performance than the other models. All models have stronger performance with the original coefficients than with re‐estimated coefficients. Our results regarding the Altman and Ohlson models are consistent with Begley, Ming, and Watts (1996), who found that the original version of the Ohlson model is superior to the Altman model and is robust over time. Les chercheurs empiriques et les praticiens ont souvent recours aux modèles de prédiction des faillites élaborés par Altman (1968) et Ohlson (1980). Or, le fait que ces auteurs aient utilisé des données des États‐Unis dans l'élaboration de leurs modèles soulève un problème particulier pour les praticiens canadiens et les chercheurs qui traitent des données canadiennes. Les auteurs comparent les modèles canadiens de prédiction des faillites mis au point par Springate (1978), Altman et Levallée (1980) et Legault et Véronneau (1986) aux modèles proposés par Altman et Ohlson, en se servant de données récentes pour évaluer la robustesse de tous ces modèles dans le temps et l'applicabilité des modèles d'Altman et Ohlson au contexte canadien. L'analyse révèle que les modèles de Springate (1978) et de Legault et Véronneau (1986) produisent des résultats similaires à ceux du modèle d'Ohlson (1980), bien qu'ils soient plus simples et exigent moins de données. De façon générale, les modèles d'Altman (1968) et d'Altman et Levallee (1980) sont moins performants que les autres modèles. Tous les modèles sont plus efficaces lorsqu'ils font usage des coefficients initiaux que lorsqu'ils sont appliqués à de nouvelles estimations des coefficients. Les résultats obtenus en ce qui a trait aux modèles d'Altman et d'Ohlson corroborent ceux de Begley, Ming et Watts (1996) qui constatent que la version initiale du modèle d'Ohlson est supérieure au modèle d'Altman et résiste au passage du temps.     

Importance of tourism for the economy of Bermuda

The aim of this paper is to compare the results of three separate input-output studies carried out to measure and monitor the contribution of international tourism to the economy of Bermuda in comparison with the impacts made by other export sectors. The studies are part of the ongoing program of the government of Bermuda. Since the early 90s, the leading generator of foreign currency and income has been international business and finance. The level of employment in the economy, however, depends principally upon tourism, and the Bermudian government and private sector are taking positive measures to address the downward trend.     

Tracing Knowledge Flows in Innovation Systems—an Informetric Perspective on Future Research Science-based Innovation

This paper gives an overview of informetric approaches to studying the science-technology linkage. Informetrics can be understood as the application of mathematical and statistical methods to the information process in science and technology-oriented activities. A number of theoretical contributions over the past few years in the area of innovation studies emphasize the exchange of actors in innovation systems and a shift in the division of labour between publicly funded research and industrial development of technology. Based on a review of informetric literature in the area, the paper derives a typology of three informetric approaches to study the science/technology linkage - namely analyses of patent citations, industrial publications, and university patenting. For each approach, merits and possible disadvantages are discussed. The results from studies of the Finnish innovation system are used to illustrate advantages and disadvantages of the three approaches.     

Vacation decisions,activities, and satisfactions

Vacations are a major consumer expense category. People devote considerable attention to deciding whether to take one or not (generic decision), to making joint decisions as husband, wife, and children, and to acquiring information from different sources and media. Information functions to sensitize, persuade, heighten appreciation, and legitimize choices. Several vacation types can be distinguished. Life-style, as a broader concept, may server as a good basis of explanation for vacation behavior. Equity and attribution are important concepts in understanding vacationer (dis)satisfaction and complaint behavior.     

Outside Directors,Litigation Environment,and Management Earnings Forecasts

This study examines whether outside directors factor in litigation costs for the firm while monitoring optimal disclosure policy. It investigates the association of management earnings forecast disclosure and the proportion of outside directors across two regimes with unequal litigation costs, the United States and Canada. I find that the positive association between forecast frequency/ precision and the proportion of outside directors is stronger in Canada. This suggests that outside directors are more likely to encourage disclosure in less litigious Canada. I also find that firm‐level governance mechanisms such as outside directors and country‐level litigation environment act as governance substitutes in determining unbiased forecasts. Specifically, the negative association between forecast bias and the proportion of outside directors is stronger in Canada. I also revisit the effect of legal regime on forecast disclosure in a non‐U.S. context. Recent legislation has increased the likelihood of class‐action lawsuits in Canada. The passage of these laws has decreased the precision in forecasts by Canadian firms.     

Liberal Jansenists and interest-bearing loans in eighteenth-century France: a reappraisal

Abstract

This article is an attempt to prove that although the liberal Jansenists – Jansenism being the most powerful Christian protest movement of the seventeenth and eighteenth centuries – were not the first and the only ones to address the prohibition of interest-bearing loans, their writings on the issue shifted and fuelled the debate during the French Enlightenment, especially among the Encyclopédistes and the economists. By refuting the very logic of “extrinsic titles” of the Scholastics and their extension later on by the Jesuits, the liberals Jansenists redefined “interest” as the price to be paid for the use of money.     

The link between product diversification and performance among Spanish manufacturing firms: Analyzing the role of firm size

This study sheds additional light on the product diversification‐performance relationship for firms in a country having recently attained an advanced economy status in our period of analysis. We assume there will be an inverted U‐shaped relationship and use a sample of small, medium, and large Spanish manufacturing firms between 1994 and 2008. Our findings provide solid support for this assumption, and are identical when the sample consists of small, medium, and large firms and of large firms alone. Our results also suggest that the larger the firm, the higher the optimal level of diversification. Panel data models are used to control for unobservable heterogeneity and potential endogeneity problems. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Impact of industry sector on corporate diversification and firm performance: Evidence from Indian business groups

Prior business group (BG) studies implicitly assume that corporate diversification‐firm performance relationships are uniform across industry sectors. This generalization may lead to research implications that are not equally true for BG‐affiliated manufacturing and service firms. Drawing on strategy and marketing literature, this research addresses this scholarly gap. Our empirical analysis of a large sample of BG‐affiliated Indian firms over a five‐year period (2004‐2008) indicates that the influence of corporate diversification on firm performance is greater for affiliated service firms than affiliated manufacturing firms. Results also indicate that the influence of BG size and diversity on diversification‐firm performance relationship varies significantly depending on whether the focal firm belongs to the manufacturing or service sector. Firm's share ownership does not generate similar influence. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

The effects of price and message-sidedness on confidence in product and advertisement with personal involvement as a mediator variable

Attribution of confidence by consumers when the price of the product is known, has already been investigated in previous studies, as has been attribution of confidence from advertisements' sidedness. This study, based on a 2 × 3 × 2 (sidedness × price levels × type of product) factorial design, focuses in the interactive effects of price and message-sidedness, since consumers are rarely exposed to one single variable of the marketing strategy. A model is developped, which is articulated on the central concept of consumer involvement. It is found that under high involvement, high price enhances confidence in the product (but not in the advertisement), two-sided messages increase confidence in the advertisement (but not in the product). It is also shown that two-sided messages bring about higher-confidence in the product when price is at the medium level.