Legal Liabilities, Audit Accuracy and the Market for Audit Services

In quality-differentiated audit markets with client-firms of unknown types, insider-managers of client firms strategically select auditors who respond to legal liabilities to decide their care level. In this signaling game, uninformed-investors use the audit report and the auditors' identity for firm valuation. The analysis shows that increased legal liability increases the auditor's effort and audit accuracy but reduces the demand for high quality auditing because, apart from the increased audit costs, the adverse selection benefit of the worse type reduces with increased accuracy. Furthermore, alternative legal regimes and damage allocation rules alter informational efficiency of the financial market.     

Using an Electronic Bulletin Board in Teaching Business Ethics: En route to a virtual agora

In this article the experiences of teachingbusiness ethics using electronic bulletinboards are described and discussed with a viewto developing useful guidelines andconsideration of best practice. The focus is onan electronic bulletin board on anundergraduate eCommerce degree for teaching amodule called `eCommerce in Legal and EthicalContext'. The issues of computer-mediatedcommunication (CMC) in the context of aBusiness Ethics course are discussed. Thepreconditions for its successful use includeability to use the technology, requiredparticipation in the use of the board, and theproper use of the board for pedagogic purposes.We conclude that electronic bulletin boards arewell suited to complementing other learning andteaching media on business ethics courses, andat best could create a virtual meeting ormarket place; an agora for businessethics debate.     

Imoannatori and business angels: two models of informal capital provision

This article compares the role and objectives of informal capital provision in a trust‐based context (such as in industrial districts) and in a market‐based context. An example of the former is given by the activities of impannatori in the Prato (Florence, Tuscany) textile district, while the latter is associated with the activities of business angels. Impannatori are ‘pure entrepreneurs’ acting as final firms; they have two main functions: liaising with the final market and coordinating subcontracting activities. Another typical function of impannatori is to provide informal finance to subcontractors. Pure entrepreneurs, like impannatori in Prato, are typical of industrial districts in general. The article compares impannatori with business angels as both act as informal capital providers to small firms and start‐ups, often replacing and offering finance in parallel to the banking system. Despite the large number of studies on Italian industrial districts, informal capital provision within them has often been neglected. The novelty of the article is therefore to explore the role of impannatori as providers of informal credit to subcontractors for the functioning and the success of the textile district in Prato. It will be argued that a trust‐based context enables credit providers to reduce transaction costs and information asymmetry, therefore reducing the risk associated with informal lending. To do this we compare the impannatori model with business angels, highlighting differences and similarities. In order to assess the importance of impannatori within Prato we draw on ecological theories of organizations and investigate the co‐evolution of impannatori and subcontractors' populations. The empirical evidence we provide is consistent with the hypothesis that the two populations have evolved in symbiosis and that the informal credit provided by impannatori has been crucial for the economic development of Prato. Cet article compare le rôle et les objectifs d'une mise à disposition informelle de capitaux basée sur la confiance (comme dans les districts industriels) et sur le marché. Le premier cas est illustré par les activités des impannatori dans le secteur textile de Prato (près de Florence, Toscane), et le second est associé aux activités des business angels, investisseurs individuels fortunés. Les impannatori sont de véritables chefs d'entreprises du marché; leurs deux fonctions principales sont le lien avec le marché final et la coordination des activités de sous‐traitance. Un autre de leur rôle consiste à financer les sous‐traitants de manière informelle. Les vrais chefs d'entreprise, tels les impannatori de Prato, sont caractéristiques des districts industriels en général. L'article les compare aux business angels, car tous sont des fournisseurs de capitaux non‐institutionnels auprès de petites entreprises et start‐ups, remplaçant souvent le système bancaire ou offrant un financement parallèle. Malgré les multiples études sur les districts industriels italiens, la mise à disposition informelle de capitaux qui y existe a souvent été négligée. L'originalité de l'article est donc d'explorer le rôle des impannatori en tant que fournisseurs de crédit non‐institutionnels auprès des sous‐traitants en vue du fonctionnement et du succès du secteur textile de Prato. Un contexte de confiance permet aux fournisseurs de crédit de réduire le coût des transactions et l'asymétrie de l'information, limitant ainsi le risque associé au prêt informel. C'est pourquoi l'article compare le modèle des impannatori aux business angels, soulignant différences et similitudes. Afin d'évaluer la place des premiers à Prato, il s'inspire des théories écologiques des organisations et examine l'évolution conjointe des impannatori et des sous‐traitants. L'indice empirique ainsi obtenu corrobore l'hypothèse que les deux populations ont évolué en symbiose et que le crédit informel procuré par les impannatori a été essentiel à l'essor économique de Prato.     

Capital Controls, Risk, and Liberalization Cycles

The paper presents an overlapping‐generations model where agents vote on whether to open or close the economy to international capital flows. Political decisions are shaped by the risk over capital and labor returns. In an open economy, the capitalists (old) completely hedge their savings income. In contrast, in a closed economy, the workers (young) partially insulate wages from the productivity shocks. There are three possible equilibrium outcomes: economies that eventually remain open; those that eventually remain closed; and those that cycle between open and closed. In line with the stylized facts, cycles are more common in economies with intermediate development levels.     

Can price regulation increase cost-efficiency?

This paper examines the possibility that price regulation increases a monopolist's cost-efficiency. When the firm's choice of cost-reducing effort depends on the output supplied, a binding price-cap, by compelling the monopolist to produce more, results in lower costs. On the basis of a two-period asymmetric information model, the paper demonstrates that price regulation increases efficiency when the elasticity of demand is sufficiently low, even assuming very conservative preferences of the regulator and asymmetric information. Moreover, contrary to previous findings and conventional wisdom, we find that a periodical rate base review may increase productive efficiency through the positive effect on future cost-reducing effort, counterbalancing its well known adverse effect on the current level of effort.     

Unravelling the HRM–Performance Link: Value‐Creating and Cost‐Increasing Effects of Small Business HRM*

abstract The majority of empirical studies on the HRM–performance link report a positive story. The costs associated with the productivity rise due to high performance work practices (HPWP) have been largely neglected. The purpose of this study is to develop a conceptual framework that maps both the value‐enhancing and cost‐raising impact of HPWP. In addition, we want to pronounce upon their overall effect on financial performance. To test our model, we rely on a sample of small businesses. Understanding both performance and cost‐related effects of the implementation of HPWP is particularly valuable for small businesses since they often lack financial resources to implement HPWP and benefit less from economies of scale compared to their larger counterparts. Study results indicate that although greater use of HPWP is associated with increased productivity, this effect is offset by increased labour costs. However, we find an overall positive effect of HPWP on firm profitability.     

Taking Friedman Seriously: Maximizing Profits and Social Performance*

abstract This paper examines the situation of firms that have two objectives: profit maximization and social performance. By looking comparatively at the cases of altruism, coerced egoism, and strategy, this paper uses the tools of microeconomics to define the optimal level of social output that should be produced in each case. We show that it is wiser for the firm to act strategically than to be coerced into making investments in corporate social responsibility. In addition, we argue that greater overall social output will be achieved by the strategic approach, than by the altruistic approach.     

Creating a profession ‘out of nothing’? The case of the Belgian auditing profession

This paper presents the results of a study on the emergence and development of an auditing profession in Belgium in the late 1940s and 1950s. Recent research on Anglo-Saxon professions stresses the role of the state in their development. In continental European contexts, the state played an even more significant role, and civil servants in public administration often served as a model for professional organization and behaviour. The main parties that were involved in the creation of the Belgian auditing profession were the state, the employers and the unions. The state maintained a separation between the Belgian profession of independent auditors, the reviseurs d'entreprises, and the associations of accounting professionals, the experts comptables, who tried first to prevent the creation of an auditing profession and then to obtain control over it. This paper demonstrates that the parties in the debate supported different professional models, depending on what they considered the main role of the auditors to be. The debates preceding and following the introduction of the profession focused on the autonomy and structure of the profession, the services to be provided by the auditors, and access to the profession.     

中国制造业发展与制造技能人才培养研究

根据我国制造业发展的现况及其国际定位,本文探讨了我国制造业发展对制造技能人才提出的现实要求以及影响,并结合我国实际提出了我国培养制造技能人才的对策。     

我国旅游企业人才需求状况调研分析及对策

本文分别在北京、上海、广州、香港和黄山等地选择18家酒店和旅行社的企业经营者和人力资源部主管进行问卷调查,重点调查旅游企业对毕业生素质需求和旅游市场供求状况。在此基础上,进行了数据分析和提出人才培养对策。