THE ROLE OF INFORMATION AND THE TIME BETWEEN TRADES: AN EMPIRICAL INVESTIGATION

Previous studies propose that the time between trades is a measure of the existence of information and a manifestation of the demand and supply of liquidity. I find evidence that the time between trades is a measure of the existence of information. However, the evidence does not imply that liquidity constraints are an unimportant determinant of price changes. Further investigation indicates that price changes are partially related to liquidity constraints, when the liquidity constraint is measured by the availability of multiple counterparties. Finally, I find some evidence that information about trades, not necessarily related to information about the underlying asset, also affects price changes.     

AN EMPIRICAL INVESTIGATION OF THE EXTENT AND NATURE OF BRAND VALUATION ACTIVITY IN NEW ZEALAND

An empirical study concerned with investigating the prevalence and nature of brand valuation activity in strongly-branded New Zealand based companies is reported. Analysis of data provided by 60 companies responding to a questionnaire mailed to all New Zealand companies identified as owning recognisable brand names revealed that 15 (25%) had been involved in brand valuation activity. Support for a hypothesised relationship between the acquisitive orientation of companies and the propensity to value brands has been provided. The extent to which brand valuation is conducted as an information service to management suggests that the financial accounting orientation that has characterised much of the brand valuation debate may be somewhat inappropriate.     

PHYSICIANS AND RESOURCE MANAGEMENT IN HOSPITALS: AN EMPIRICAL INVESTIGATION

Recent concern has been expressed over the reluctance of physicians in hospitals to take 'resource management to their hearts' (Pollitt et al. 1988, p. 232). This is important as physicians are increasingly becoming organization members with considerable economic and managerial involvement in hospitals. This paper provides some empirical evidence of differences which occur in physician behaviour once they become integrated into hospital management structures. Differences in physician managers' orientations to goals which focus on the organization as a system are compared to senior physicians in the same setting. In addition, a comparison is made between the attitudes and use of budgeting systems, a resource management strategy. The results indicate that changes in physician managers' orientation to management-related goals and organization obligations are reflected in their budgeting behaviour.     

DECENTRALIZATION, ACCOUNTING CONTROLS AND PERFORMANCE OF GOVERNMENT ORGANIZATIONS: A NEW ZEALAND EMPIRICAL STUDY

This paper reports the results of a study which was conducted in five departments of the New Zealand Government and investigated the relationships between (a) decentralization and the use of accounting control systems, (b) the use of accounting control systems and district office performance, and (c) the decentralization and district ofice performance. The performance was assessed using the managers' perception of their district office (unit's) performance. Data for the study were collected from 59 district office managers using a structured questionnaire. The results indicate that an increased decentralization is associated with a greater managerial use of accounting control systems which, in turn, is associated with improved district office performance.     

MARKET COMPETITION,COMPUTER-AIDED MANUFACTURING AND USE OF MULTIPLE PERFORMANCE MEASURES: AN EMPIRICAL STUDY

This paper reports the results of an empirical investigation into use of multiple measures of performance in manufacturing organisations. More specifically, it examines how a multiple performance measurement system is associated with the intensity of market competition and the application of computer-aided manufacturing processes. To test this association, data were collected from 71 New Zealand-based manufacturing units. The results suggest that greater emphasis on multiple measures for performance evaluation is associated with businesses facing high competition and making greater use of computer-aided manufacturing processes.     

INTERNALIZATION AND MARKET QUALITY: AN EMPIRICAL INVESTIGATION

We explore the relation between market quality and internalization through a pre- and postenactment analysis of the implementation of the Toronto Stock Exchange (TSE) Price Improvement Rule on October 26, 1998. We find that the rule revision is accompanied by falls in the bid–ask spread and the variance of the pricing error and by rising internalization rates. This study informs proponents of market concentration, brokers, dealers, exchange administrators, and market regulators that a judicious regime of regulated internalization may be associated with superior market effectiveness.     

THE ELIMINATION OF DIRECTOR LIABILITY AND STOCKHOLDER RETURNS: AN EMPIRICAL INVESTIGATION

In this paper, the performance of the common stock of Delaware and non-Delaware firms is examined during the Delaware legislature's debate and approval of an amendment to the Delaware General Corporation Law permitting the elimination of director liability. In addition, stockholder returns surrounding the proxy and meeting dates for certain Delaware firms are examined. Results indicate that Delaware firms performed worse than non-Delaware firms during the legislative period; however, strong differences between the two groups are not documented.     

ACCOUNTING FOR THE COST OF CAPITAL: AN EMPIRICAL EXAMINATION

One of accounting's oldest issues, accounting for interest costs, has become a subject of increased concern in recent years. This study empirically addresses the issue of whether the cost of equity capital should be charged against income. Fourteen measures of the cost of equity capital are examined. The empirical tests involve contemporaneous correlation of accounting betas for each income measure with market betas for a sample of 200 companies. The results of these association tests indicate that income measures, net of the cost of equity capital, may have greater information content than income as presently reported.     

SPAN OF CONTROL, TASK INTERDEPENDENCE AND USEFULNESS OF MAS INFORMATION IN NOT-FOR-PROFIT GOVERNMENT ORGANIZATIONS

This study examines the relationships between subunit supervisors' span of control, their perceived task interdependence, and their perceived usefulness of MAS (management accounting systems) information in not-for-profit government organizations. One hundred and forty-nine subunit supervisors/managers working in twenty-one public hospitals in New Zealand participated in the study. The study used structured questionnaires for data collection. The results suggest that supervisors' perceived task interdependence intervenes in the relationship between their span of control and their perceived usefulness of MA information for decision making. The types of MAS information considered were broad in scope, timely available, aggregated and integrated. A path analytic technique was applied to test the model used in the study.     

THE RELATIONSHIP BETWEEN THE VARIABILITY OF INFLATION AND STOCK RETURNS: AN EMPIRICAL INVESTIGATION

Several researchers find a negative correlation between the rate of inflation and stock returns. This phenomenon may be explained by the variability hypothesis, which posits that the negative correlation is caused by the combination of a positive relation between the rate of inflation and the variability of inflation and a negative relation between the variability of inflation and stock returns. An autoregressive conditional heteroscedastic model of inflation is used to measure the variability of inflation. Empirical results do not support the ability of the variability hypothesis to explain the negative correlation between stock returns and inflation.     

THE ROLE OF INFLATION-ADJUSTED ACCOUNTING DATA IN CORPORATE RISK ANALYSIS: AN EMPIRICAL INVESTIGATION*

Both in the U.S. and abroad, certain large companies are required to report accounting data adjusted for the effect of changing prices. This study investigated the role of such adjusted accounting data in corporate risk analysis. Loan decision situations were constructed for a firm whose income from continuing operations reported in accordance with Statement of Financial Accounting Standard No. 33 (SFAS 33) was drastically reduced. Questionnaires were mailed to 1,050 randomly selected bank lending officers (BLOs) in 240 banks in 40 states and the District of Columbia. A group of BLOs received no SFAS 33 data and served as a control. While most of the responding BLOs did not seem to use SFAS 33 data in making their decisions, those who reported that they used such data reached significantly different decisions from those of the control group. More specifically, the users evaluated the firm twice as risky and recommended significantly lower loans than the control group with respect to both short-term and long-term loans. Furthermore, the users spent significantly more time in data analysis and decision making than the control group.