Value Relevance of Comprehensive Income for the Canadian Market*

The value relevance of comprehensive income (CI) compared to net income (NI) remains unresolved. We look at this issue in the Canadian market, using association methods to determine the value relevance of reporting CI and other comprehensive income (OCI) components for stock prices and returns. The sample consists of all the firms in the S&P/TSX Composite Index that prepared their financial statements according to Canadian standards or International Financial Reporting Standards (IFRS) over the 2008–2016 period. Although we find no evidence that CI is more value relevant than NI for stock prices and returns, we note that some OCI components are incrementally value relevant beyond NI for both amounts. In addition, financial services firms differ from other companies in terms of the relationships between some of their OCI components and prices or returns, with such firms even driving some relationships. Relationships between OCI components and prices or returns are also affected when data from the financial crisis period are excluded, with some relationships even changing after IFRS adoption. These results inform Canadian standard setters and financial statement users that OCI components are decision useful for the Canadian market.     

Brexit: How Will UK Agriculture Fare?

There is little doubt that Brexit would have significant implications for UK agriculture, a sector with strong trade links to the EU and strong reliance on CAP income support. This article reports preliminary results from employing a Computable General Equilibrium Model, a Partial Equilibrium Model and Farm Level Models to explore selected trade and domestic policy scenarios post‐Brexit. These allow for the estimation of changes in producer prices, production and farm incomes against a baseline scenario of continued EU membership. Under a Free Trade Agreement with the EU, agricultural impacts are relatively modest. By contrast, unilateral removal of import tariffs has significant negative impacts on prices, production and incomes. Adoption of the EU's WTO tariff schedule for all imports favours net importers (e.g. dairy) and harms net exporters (e.g. sheep). Given the strong dependence of most UK farms on direct payments, their removal worsens negative impacts of new trade arrangements and offsets positive impacts. Impacts vary across different types and sizes of farm, but also regionally. However, the period of adjustment to new trade and domestic policy conditions may prove very challenging for a large number of farm businesses.     

Structural production layer decomposition: a new method to measure differences between MRIO databases for footprint assessments

Recent empirical assessments revealed that footprint indicators calculated with various multi-regional input–output (MRIO) databases deliver deviating results. In this paper, we propose a new method, called structural production layer decomposition (SPLD), which complements existing structural decomposition approaches. SPLD enables differentiating between effects stemming from specific parts in the technology matrix, e.g. trade blocks vs. domestic blocks, while still allowing to link the various effects to the total region footprint. Using the carbon footprint of the EU-28 in 2011 as an example, we analyse the differences between EXIOBASE, Eora, GTAP and WIOD. Identical environmental data are used across all MRIO databases. In all model comparisons, variations in domestic blocks have a more significant impact on the carbon footprint than variations in trade blocks. The results provide a wealth of information for MRIO developers and are relevant for policy makers designing climate policy measures targeted to specific stages along product supply chains.     

What Do Deviations from Covered Interest Parity and Higher FX Hedging Costs Mean for Asia?

Open Economies Review - Asian countries have high demand for US dollars and are sensitive to US dollar funding costs. An important, but often overlooked, component of these costs is the basis...     

Revisiting the expatriate failure concept: A qualitative study of Scandinavian expatriates in Hong Kong

This article advances the understanding of expatriate failure, which remains a contested social phenomenon in international work life as well as scholarly research. The study challenges the definition of expatriate failure and its inherent biases, i.e., the epistemological primacy of the firm level and the failure/success binary. We argue that this qualitative study of 51 Scandinavian expatriates in Hong Kong can contribute to advancing theory on the expatriate failure concept by asking individual expatriates what constitutes failure to them. By applying social constructionist and social anthropological ideas to the expatriate failure concept debate, we develop the internationality thesis which demonstrates a discrepancy between the expatriates’ perceptions of successful international assignments and the actual nature of their lived lives; many expatriates desire to enrich their lives through experiencing an international/intercultural and adventurous lifestyle, but, in fact, living lives with limited intercultural exposure and interaction. We conclude by proposing a reconceptualisation of expatriate failure in terms of offering both a new definition and approach to researching expatriate failure in which time/duration, context, and geographical location need to be taken into account. We believe the new approach can overcome some of the empirical unsoundness of mainstream definitions.     

It's about our values: How founder's stories influence brand authenticity

Companies increasingly share the stories behind their brand's founding to engage consumers. The current studies explore how the motives that underlie business formation in founder's stories influence consumer brand perceptions. Specifically, stories that highlight self‐transcendence (vs. self‐enhancement) founder values enhance the perceived authenticity of the focal brand. We examine narrative co fidelity as a mechanism of narrative persuasion through which the audience judges whether the motives underlying character actions represent “good reasons” for action. Across three studies, we show that the values underlying a founder's motivation to start a business influence the perceived authenticity of the associated brand, and this relationship is mediated by narrative fidelity. Further, reader's personal values moderate the influence of founder's values on narrative fidelity judgments, and the relationship between narrative fidelity and brand authenticity is attenuated by a merger between the original company and another company, demonstrating a boundary condition of the observed relationships.     

Measuring poverty and income distribution in Southeast Asia

The paper surveys the extensive research on the measurement of poverty and inequality in Southeast Asia over the last five decades. It examines the work carried out by both independent scholars and international agencies including the World Bank and the Asian Development Bank. The paper argues that the household surveys carried out by national statistical agencies across the region, and used by most researchers, are often flawed. These flaws have led to rather misleading results both for individual countries and for cross‐country comparisons. Further problems have been found in the data on purchasing power parities (PPP) which have been used by the World Bank to estimate poverty both in Southeast Asia and in other developing countries. The paper also points out that estimates of poverty and inequality are often politically sensitive, and argues that a more accurate understanding of the estimation problems will only emerge if governments support rather than suppress open debate over measurement problems.     

An Exploratory Study of Regulatory Failure in the Australian Home Mortgage Market

Regulators have long been interested in protecting consumers borrowing for a home as it is likely the single greatest financial obligation they will undertake. In this paper we examine the approach taken in Australia to mandating the disclosure of simple comparison data to reduce the complexity involved in the home loan decision. This article highlights that while the form of the legislated disclosure significantly improves decision accuracy, the failure of the regulator to account for the consumer's purchase behavior and lenders' motivations has undermined its effectiveness. We provide a number of recommendations for how to rectify these failings, principally that regulators need to consider the role of borrower information search and lender motivation as part of any regulatory reform.     

Unconscious Processes of Organizing: Intergroup Conflict in Mental Health Care

A critical but overlooked issue in Weick’s seminal work, The Social Psychology of Organizing (1969/1979), concerns ‘the heat’ of organizing processes, namely, the underground emotional processes underpinning the organizing of conflictual work relationships. We present a qualitative case study of psychiatric agencies mandated by public policy to collaborate but instead engaged in persistent conflict despite its deleterious effects on their working relationship and on the wellbeing of the clients they intended to serve. To explain these conflictual features of organizing, we integrate Weick’s organizing theory with systems psychodynamics to deepen the understanding of emotions in organizing, specifically the motivational forces underpinning sensemaking and actions between interacting psychiatric agencies. This integration of theories reveals a critical feature of the relationship between the conscious and unconscious organizing processes: When a threat is involved, sensemaking and action are overtaken by social defences, resulting in dysfunctional organizing of the primary task. Drawing on these findings, we enrich Weick’s seminal work by developing a model that portrays organizing as the ritualized interaction of emotions, sensemaking and behavioural responses.