Value relevance of proportionate consolidation versus the equity method: Evidence from Hong Kong

Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements is a controversial issue. This study uses data from listed companies in Hong Kong to investigate the value relevance of the EM compared with PC during 2005–2008 when the local word-for-word equivalent HKAS 31 offered the same options. The results of this study provide evidence that PC does not offer higher value relevance than the EM. PC’s horizontal aggregation of a portion of the operations, assets and liabilities of the jointly controlled entities with those of the venturer is less informative to investors than the EM’s vertical aggregation.     

International spillovers of China's structural reforms

This paper sheds light on the international spillovers of China's reforms in upgrading industrial capabilities, liberalizing capital account, internationalizing the renminbi, and transition to flexible exchange rates. Drawing on two-country New Keynesian model of endogenous entry and portfolio adjustment, we find that China's industrial upgrading that peddles on yuan appreciation lifts all boats through global production network irrespective of capital account convertibility, degree of renminbi internationalization, and exchange rate reform. Feasibility of appreciation-driven upgrading is called into question, however, when renminbi reform and capital account liberalization go in parallel. We also show that international spillovers disappear once renminbi internationalization is associated with liberalized capital account and flexible renminbi exchange rates.     

EXPORT AND HEDGING DECISIONS UNDER CORRELATED REVENUE AND EXCHANGE RATE RISK

This paper examines the behaviour of a competitive exporting firm under joint revenue and exchange rate risk. The firm can trade unbiased currency futures contracts for hedging purposes. We show that neither the separation theorem nor the full‐hedging theorem holds when the revenue shock prevails. If the correlation between the revenue shock and the random spot exchange rate is non‐positive, the firm optimally produces less than the benchmark level when the revenue shock is absent. If, in addition, the firm is prudent, the optimal futures position is an under‐hedge. Finally, we derive sufficient conditions under which the firm's optimal output level is higher in the presence than in the absence of the revenue shock. Operational hedging and financial hedging as such interact in a complicated way to better cope with the multiple sources of uncertainty faced by the firm.     

Competencies of training professionals in the Hong Kong hotel industry

ABSTRACT

This study aims to investigate the competencies of training professionals in the hotel industry in Hong Kong. A survey questionnaire was adopted. Seventeen competencies were derived by factor analysis. Six essential competencies are identified, whereas “people skills and commitment” and “awareness of quality” are the most important competencies, while another 11 competencies are highly preferred. This study provides original criteria for hoteliers and human resources professionals to facilitate the recruitment process and aid training professionals in developing core competencies in hotel industry employees. Theoretical and practical implications of the findings are presented.     

FDI Location and the Relevance of Spatial Linkages: Evidence from Provincial and Industry FDI in China

In this study both aggregate and industry‐level foreign direct investment (FDI) data are employed to investigate the spatial dependence of FDI hosts. The analysis contributes to the existing literature by focusing on the heterogeneous spatial correlation of FDI in different industries. Using more comprehensive FDI data across multiple industries and multiple provinces in China from 1999 to 2007, the results show a significant spatial correlation among provinces. Aggregate FDI tends to be regional trade platform oriented indicating neighboring provinces become competitors for FDI. In contrast, results based on industry‐level provincial FDI show stronger support for vertical or complex vertical FDI.     

Advancing tourism research through multilevel methods: research problem and agenda

Tourism research often encounters social phenomena and research problems that involve multiple levels. However, most researchers assume that the phenomena exist in a single level and perform analyses that do not reflect the hierarchical nature of social dynamics. This article heeds the call from Current Issues in Tourism by illustrating multilevel methods and proposing an agenda for multilevel research. In particular, this article seeks to reconcile the limitations of single-level analysis and to delineate how multilevel methods could be applied in tourism research. It further seeks to advance tourism theories by introducing more complex multilevel design with broader applications in various tourism settings. This article presents two common tourism research scenarios, critiques their limitations, and proposes how multilevel methods could not only address these limitations, but also how they could advance tourism theories. An empirical study is offered to demonstrate multilevel design and analytical techniques.     

The impact of earnings pressure on exploratory innovation

While earnings expectation has been shown to determine a firm’s investment decisions, the knowledge about how such expectation influences a firm’s investment horizon for innovation is still blurred. This study therefore addresses this research issue by examining the relationship between earnings pressure and exploratory innovation while investigating the moderating effects of cross‐rival effect and resource availability. By examining high‐tech industrial firms in S&P 1500 from 2000 to 2012, the results indicate that stock analysts, as information intermediaries between innovation firms and the capital market, impose pressure through earnings forecasts on firms’ exploratory innovation. Our findings also reveal that the earnings pressure‐exploratory innovation relationship can be mitigated when its competitors encounter a higher level of earnings pressure. However, a firm’s financial slack shows less significant association to moderate the earnings pressure‐exploratory innovation relationship. Possible explanations for the results in regard to their theoretical and practical implications are discussed in this study.