Information Consequences of Accounting Conservatism

Abstract

We study the information consequences of conservatism in accounting. Prior research shows that information asymmetries in capital markets lead to firm-level increases in conservatism. In this paper, we further argue that increases in conservatism improve the firm information environment and lead to subsequent decreases in information asymmetries between firm insiders and outsiders. We predict and test if this decrease in information asymmetries manifests itself through: (a) a decrease in the bid–ask spread and in stock-returns volatility, and (b) an improved information environment for financial analysts, leading to more precise and less dispersed forecasts, and to more analysts following the firm. Using a large US sample for the period 1977–2007 and several proxies for conservatism we find robust evidence consistent with our expectations. Our results are in line with conservatism being useful not only for debt-holders, but also for equity-holders.     

Proposal of a model to measure competitiveness through factor analysis

This article presents a proposal for a simultaneous competitiveness measurement model for the three geographical levels: country, states, and municipalities. For this, a multivariate factor analysis method is used to help identify five factors, seven sub-factors, and thirty variables, which will be used for the measurement and to present the results of an empirical study on eleven entities: the country, the State of Sonora, and nine municipalities, which represent 80% of the population and 80% of their TGP. The results indicate that, in 2010, the municipality of Hermosillo was the most competitive.     

All in a day's work,at home: teleworkers’ management of micro role transitions and the work–home boundary

Based on boundary theory, this study analysed the cues and rituals home‐based teleworkers use to facilitate transitions between work and home roles. Qualitative findings revealed that teleworkers primarily engage in strategies aimed at segmenting work from home roles, although some utilise cues to integrate work and home. Teleworkers used time, space, technology and communication as cues to aid role transitions and manage the work–home boundary. Overall, teleworkers appeared to grapple with the tension between the desire for flexibility and the need for structure, and use cues and rites of passage in order to facilitate this balance. Female teleworkers were more likely to use segmenting cues relative to male teleworkers. Teleworkers with children living in the home were less likely to integrate work and home roles. Extensive teleworkers used space more frequently than less extensive teleworkers, but otherwise, both groups reported similar use of cues.     

Physicians’ use of medical technology: an analysis of the introduction and subsequent failure of drug-eluting stents

Using data on cardiac patients in Florida hospitals from 2003 to 2007, we analyse the adoption and deadoption of a major new medical technology, drug-eluting stents (DESs). The Food and Drug Administration approved DESs in April 2003 and physicians rapidly adopted the new technology. In March 2006, a presentation was made at the American Cardiology Conference which showed that patients receiving DES in real-world settings suffered higher rates of mortality and myocardial infarction than those receiving stents without drugs. We examine the utilization of DES from April 2003 to the end of 2007. Using a hospital fixed-effects model, we find that board-certified and top-trained physicians were initially quicker to adopt DES. Over time, this effect dissipated and top-trained physicians were less likely to use DES by the time new clinical trials indicated they could be problematic. After the news, board-certified and top-ranked physicians were less likely to change their behaviour. Physicians’ own experience also contributes to the use of technology and the effects are stronger for non-board-certified physicians. We conclude that even within hospitals, physician training and experience play an important role in explaining differences in rates of technology use.     

Unleashing proactive low-carbon strategies through behavioral factors in biodiversity-intensive sustainable supply chains: Mixed methodology

The aim of this research is to understand the complex and relatively understudied relationship between human and behavioral factors and low-carbon management practices from the perspective of the resource-based view (RBV). Research application is in the “biodiversity sector” and consists of a survey and multiple-case study in Brazil, the richest country globally in terms of biodiversity but a country that also faces challenges in protecting biodiversity. The research problem considers the relationship between human critical success factors and the adoption of low-carbon management practices. Quantitative analysis through structural equation modeling shows the three branches of hypothesis to be accepted—the first with a higher coefficient than the second and the second with a higher coefficient than the third. It was observed that human factors influence low-carbon product management practices the most, followed by process practices and finally logistics practices. Qualitative multiple-case study research shows that companies are at different stages of maturity in relation to low-carbon management organizational practices, ranging from the highest stage to the lowest. It was found that the intensity of the presence of human critical success factors was higher where organizations had greater adoption of low-carbon management practices.     

Evolution of state clusters related with technological capability in Mexico: Application of a multivariate statistical analysis of cluster

The objective of this work is to analyze how the technological capability is distributed between the Mexican states and to examine their evolution. To this end, an empirical study was developed using the cluster multivariate statistical analysis technique, based on the set of indicators proposed by Cepal (2007), and gathering the data from various public sources in the country during years 2006 and 2012. This was done to study the evolution of said conglomerates, trying to see which states have been able to move to a conglomerate located in more advanced positions and which have retreated within said period. The results show the existence of 7 groups of states characterized by different levels of technological capability. Furthermore, 3 entities that evolved into a more advanced conglomerate – regarding absorption and innovation capability, as well as infrastructure technological capability – are also detected.     

Why the Doctor Will NOT See You Now: The Ethics of Enforcing Covenants Not to Compete in Physician Employment Contracts

When a physician employment relationship terminates, the physician–patient relationship may also be terminated by enforcement of a covenant not to compete, which typically forces the physician to leave the geographic area for a period of time. This gives rise to several ethical dilemmas. The public interest is compromised when enforcement of these covenants contributes to the shortage of physicians in the community, and individual patients are harmed when their physicians are no longer available. The authors undertook a unique study to explore physician perspectives concerning the ethics of banning a physician from practice and the impact of the ban on both the physician and the physician’s patients. The results identified harmful effects that have not been raised in prior scholarly articles or reported court opinions. After reviewing the legal background of covenants not to compete, this paper presents the results of that study and concludes that resorting to the legal system for enforcement of covenants not to compete is not always the ethical course of action.