Accounting for Flexibility and Efficiency: A Field Study of Management Control Systems in a Restaurant Chain*

While some field studies have suggested that management control systems can be used simultaneously to make organizations more efficient and more flexible, the contingency literature has found it difficult to address this issue in the absence of a clear and comprehensive typology for analyzing more processual uses of management control systems. This paper distinguishes between enabling and coercive (Adler and Borys 1996) uses of management control systems. Coercive use refers to the stereotypical top‐down control approach that emphasizes centralization and preplanning. In contrast, enabling use seeks to put employees in a position to deal directly with the inevitable contingencies in their work. The design principles that underlie the enabling use of management control systems are repair, internal transparency, global transparency, and flexibility. Through a detailed analysis of a single‐case field study carried out over a two‐year period, we illustrate how management pursued the objectives of efficiency and flexibility by using management control systems in enabling ways. We suggest that the four design principles of enabling use can facilitate field studies of management control systems, but that they can also be used to define an enabling typology for contingency researchers to analyze the ways in which organizations simultaneously pursue efficiency and flexibility through their management control systems.     

基于交易价值视角的供应链联盟模式研究

作为一种兼具企业组织方式和市场交易方式各自优点的独特双元组织形式,供应链联盟已经成为学者和企业界关注的热点。目前,供应链联盟的研究主要采用基于企业内在运作的交易成本理论和资源观念理论,交易成本理论从最小化内部交易成本出发,资源观念理论从最大化内部价值出发,忽略了供应链联盟中的内部化成本和交易价值。同时,供应链联盟的研究也没有同时兼顾企业内部和企业之间两个方面。因此,从交易价值的视角对供应链联盟进行了探讨,提出了兼顾供应链联盟企业内部和企业之间的供应链联盟独特双元模式。     

供应链战略联盟关系研究

企业之间的竞争从某种程度上已经转化戍供应链之间的竞争。关于战略联盟产生的原因，不同的理论从不同的角度进行了阐述。企业战略联盟从总体上看有三个层次。在战略联盟实施的实践中，在什么情况下企业应该与对方建立供应链战略联盟?选择战略伙伴应该依据什么样的原则?影响供应链战略联盟发展的障碍有那些?如何减少这些障碍?本文拟对这些问题给以一定程度的回答。     

The Value of Political Ties Versus Market Credibility: Evidence from Corporate Scandals in China

This paper compares the value of political ties and market credibility in China by examining the consequence of corporate scandals. We categorize Chinese corporate scandals by whether the scandal is primarily associated with the destruction of (i) the firm's political networks (political scandals), (ii) the firm's market credibility (market scandals), or (iii) both (mixed scandals). Consistent with our hypothesis that scandals signaling the destruction of political ties are associated with greater losses in firm value than scandals signaling the destruction of market credibility, we find that the stock market reacts more negatively to political and mixed scandals than to market scandals. In addition, the greater negative market reactions associated with political and mixed scandals are primarily driven by firms that rely more on political networks. We also find that, compared to market scandals, political and mixed scandals lead to larger decreases in operating performance, greater reduction in loans from state‐owned banks, and higher departure of political directors.     

Supply Chains in Times of Crisis: Evidence from Kenya’s Production Network

Trading relationships between suppliers and buyers play a key role in transmitting both local and international shocks. We use transaction-level data from Kenya to study the relevance of a firm’s domestic network position and links to international supply chains in determining its trajectory during the COVID-19 crisis. We document that firms with high exposure to import and export markets tend to be larger, older, and employ more workers. The specialisation of direct importers, often intermediaries, on international markets made them very vulnerable to the initial COVID-19 shock. Exporters, one-third of whom operate in primary sectors, experienced a less severe decline in sales. We find that both importers and exporters adjust their domestic supply chains in response to international trade shocks — before and during the crisis alike. Sourcing from international markets does not crowd out domestic purchases, while sales abroad and at home can act as substitutes. Diversified domestic supply chains helped firms to mitigate the impact of the COVID-19 crisis and recover more strongly.     

Foreign Currency Accounting Policy: The Impact of Asset Specificity*

Abstract. Before 1986 Australian companies' unregulated foreign currency accounting practices were diverse. Firms variously recognised exchange rate gains or losses on foreign currency long-term debt (1) as the exchange rate moved, (2) when the debt was settled, or (3) progressively over the term of the debt. This study tests empirically whether the voluntary accounting policy choices were endogenous to contractual equilibria between claimants against the firm and management. Managers' choices are explained as an efficient means to report the impact on debt and equity values from exchange rate movement effects on the value of investments in foreign currency earning assets domiciled in Australia. The study finds that asset specificity and the ratio of firms' investments in assets in place to growth options are significant in explaining the accounting policy choice. Firms used accounting methods that provided accounting exchange rate hedges concurrent with their economic exchange rate hedges of specialised assets in place. Résumé. Les méthodes de comptabilisation des opérations en devises — qui ne faisaient l'objet d'aucune réglementation— variaient dans les sociétés australiennes. Les entreprises constataient de différentes manières les gains ou les pertes de change sur les dettes à long terme libellées en devises, soit (1) à mesure que le taux de change évoluait, soit (2) lorsque la dette était réglée, soit (3) progressivement pendant la durée de la dette. L'auteur vérifie au moyen d'un test empirique si les choix volontaires de politique comptable étaient endogènes aux équilibres contractuels entre les parties par rapport à l'entreprise et à la direction. Les choix des gestionnaires sont, explique-t-il, un moyen efficient de faire état de l'incidence sur la valeur de la dette et des capitaux propres des effets des mouvements du taux de change sur la valeur des placements que possèdent les entreprises australiennes dans des éléments d'actif rapportant des bénéfices en monnaie étrangère. L'auteur constate que la spécificité des éléments d'actif et le rapport entre les placements en immobilisations et les options de croissance sont déterminants du choix de politique comptable. Les entreprises, observe-t-il, utilisaient des méthodes comptables offrant une couverture comptable des taux de change concurremment à la couverture économique des éléments d'actif spécialisés qu'elles possédaient.     

Noisy Accounting Earnings Signals and Earnings Response Coefficients: The Case of Foreign Currency Accounting*

Abstract. This paper extends the growing literature on factors affecting cross-sectional and intertemporal variation in earnings response coefficients. It tests the empirical implications of recent theoretical work by Choi and Salamon (1989) and Holthausen and Verrecchia (1988), who model the degree of price adjustment associated with earnings announcements as a function of the amount of noise or garbling in the accounting earnings signal relative to valuation-relevant cash flows or dividends. The particular earnings measurements considered relate to U.S. multinational companies and to the differences in income determination under Statement of Financial Accounting Standards (SFAS) No. 8 and SFAS No. 52. The study finds a modestly smaller relative price adjustment for a given amount of unexpected earnings for multinational firms than for nonmultinationals during the SFAS No. 8 period. This finding is consistent with multinationals producing “noisier” earnings signals during this time period. However, several indirect measures suggest that there was greater prior probability uncertainty associated with the future cash flows or dividends of the nonmultinational sample. Accordingly, this cannot be ruled out as a competing explanation for the observed differences in the market's response to earnings signals during the SFAS No. 8 period. Following the implementation of SFAS No. 52, the earnings response coefficient increased substantively for firms whose accounting for translation gains or losses was most affected by this standard. These results suggest that the earnings measurements produced under SFAS No. 52 were perceived by market participants to be of higher quality (less noisy) than those produced under SFAS No. 8. The framework and analysis in this paper hold promise for investigating the relative informativeness of earnings signals produced under alternative income determination rules. Résumé. Les auteurs apportent leur contribution personnelle aux publications de plus en plus nombreuses portant sur les facteurs qui touchent la variation transversale et temporelle des coefficients de réaction aux bénéfices. Ils vérifient les conséquences empiriques des travaux théoriques récents de Choi et Salamon (1989) et de Holthausen et Verrecchia (1988), qui modélisent le degré d'ajustement du cours des valeurs associé aux annonces de bénéfices comme étant fonction de la quantité de parasites ou de l'importance du brouillage dans le signal que constituent des bénéfices comptables par rapport aux flux monétaires ou aux dividendes pertinents à l'évaluation. Les mesures particulières des bénéfices auxquelles s'intéressent les auteurs sont celles de multinationales des États-Unis et font état de la variation des bénéfices, selon qu'ils sont évalués conformément au SFAS no 8 ou au SFAS no 52. Pour un montant donné de bénéfices inattendus, les auteurs constatent un ajustement relatif du cours des valeurs légèrement plus faible dans le cas des multinationales que dans celui des entreprises d'envergure plus modeste, au cours de la période d'application du SFAS no 8. Cette constatation est conforme à l'hypothèse voulant que les multinationales aient produit des indicateurs de bénéfices plus « brouillés » au cours de cette période. Toutefois, plusieurs mesures indirectes donnent à penser qu'il existait une incertitude plus grande quant à la probabilité a priori des flux monétaires ou des dividendes futurs dans l'échantillon des entreprises d'envergure plus modeste. Les auteurs ne peuvent donc écarter cette hypothèse à titre d'explication concurrente des différences observées dans la réaction du marché aux indicateurs de bénéfices, au cours de la période d'application du SFAS no 8. À la suite de l'instauration du SFAS no 52, le coefficient de réaction aux bénéfices a sensiblement augmenté dans le cas des entreprises dont la méthode comptable relative à la conversion des gains et des pertes était davantage touchée par cette norme. Ces résultats laissent croire que les mesures des bénéfices conformes au SFAS no 52 ont été perçues par les intéressés comme étant de plus grande qualité (c'est-à-dire moins brouillées) que les mesures conformes au SFAS no 8. Le cadre de référence et l'analyse contenus dans cet article sont prometteurs pour l'analyse de la qualité relative de l'information livrée par les indicateurs de bénéfices conformes à d'autres règles d'évaluation des bénéfices.     

The Wage Elasticity of Informal Care Supply: Evidence from the Health and Retirement Study

This article focuses on the wage elasticity of informal care supply to elderly parents employing an instrumental variable approach to account for the fact that the wage rate is likely to be correlated with omitted variables. Using the 1998 wave of the 1998 ), the wage elasticity of informal care supply is estimated to be negative and larger in magnitude than found previously. The lower bound of this elasticity is estimated to be ?1.8 for males and ?3.6 for females. Additional findings suggest that this wage elasticity differs by the type of care provided to elderly parents and that it is larger in magnitude among individuals with siblings and those with independently living parents. Overall the reductions in the informal care constitute about 18% of the labor supply response for men and about 56% of the labor supply response for women, which are not compensated by monetary transfers.     

Avoiding Accounting Fixation: Determinants of Cognitive Adaptation to Differences in Accounting Method*

Much research over the last 30 years has provided evidence that individuals display accounting fixation; that is, their cognitive process does not appropriately adapt to cross‐sectional or temporal differences in an accounting method. This paper presents the results of a quasi‐experimental test of the hypothesis that cognitive adaptation to a change in accounting method is an ordinal interactive function of three person characteristics: relevant accounting knowledge, general problem‐solving ability, and intrinsic motivation to appropriately engage in the decision task. Based on a product‐pricing decision task in which participants are provided with product costs reported by two generally employed product‐costing methods (activity‐based costing [ABC] and volume‐based costing), the results show that the majority of participants did not change their cognitive behavior when there was a change in the costing method. Further, those participants who did adapt to the change in accounting method, and thus avoided accounting fixation, did so by debiasing costs reported by volume‐based costing but not by ABC. Finally, these adapters generally exhibited high values for all three of the person characteristics compared with those who did not adapt.     

The Materiality of Accounting Errors: Evidence from SEC Comment Letters

We gain unique insights into materiality judgments about accounting errors by examining SEC comment letter correspondence. We document that managers typically use multiple quantitative benchmarks in their materiality analyses, with earnings being the most common benchmark. In most of the cases we review, managers deem the error immaterial despite its exceeding the traditional “5 percent of earnings” rule of thumb, often in multiple periods and by a large degree. Instead of attempting to conceal these overages, managers tend to forthrightly acknowledge them, often asserting that the benchmark is abnormally low during the violation period. We find that 17–26 percent of these “low benchmark” assertions are suspect (although none of these “low benchmark” assertions are challenged by the SEC). We also document substantial variation in the extent to which qualitative factors are mentioned as considerations. The SEC generally is deferential toward managers' arguments and judgments but is more likely to challenge immateriality claims when managers admit there are qualitative factors that indicate errors are material.     

The Effect of Limited Liability on the Informativeness of Earnings: Evidence from the Stock and Bond Markets*

Previous empirical research on the informativeness of earnings has focused on stockholders, and has not examined differences in earnings' informativeness for stockholders and bondholders. Because stockholders are residual claimants and bondholders are fixed claimants, the informativeness of earnings should differ for these two types of investors. When a firm's default risk is low, changes in its financial condition should be of limited relevance to bondholders, but should be relevant to stockholders. In contrast, as the likelihood of financial distress increases, stockholders' limited liability allows them to abandon the firm to the bondholders (Fischer and Verrecchia 1997). Accordingly, as a firm's default risk increases, changes in its financial condition should be increasingly important to bondholders and less important to shareholders. Because earnings provide information on firm value, the stock return-earnings association should decrease as the firm's financial strength declines, while the bond return-earnings association should increase. We use two measures of a firm's financial strength: the firm's bond rating and its reporting of a loss. Consistent with our hypotheses, we find that the association between stock returns and changes in annual earnings decreases as bond ratings decline, while the association between bond returns and changes in annual earnings increases. These results suggest that as the company's financial condition deteriorates, earnings become less relevant for stock valuation and more relevant for bond valuation. When we partition firms based on their loss status, we find a stronger association between stock returns and annual earnings changes for firms with positive earnings (profit firms) than for firms with losses, consistent with earlier studies. In contrast, we find that the association between bond returns and earnings changes is greater for loss firms than for profit firms. These results suggest that losses reduce the informativeness of earnings for stockholders but increase informativeness for bondholders, suggesting that investors view losses as indicating increased credit risk.     

基于社会网络视角的国际新创企业战略联盟分析

近年来,学者们对从创建之初就积极走国际化道路的国际新创企业的研究增多。为了进入新的国外市场,国际新创企业倾向于通过构建战略联盟提升竞争优势,利用联盟网络资源,扩大和深化国外市场。对战略联盟、国际新创企业和社会网络的研究发展进行了概述,并运用经济学的方法对社会网络下国际新创企业维持联盟稳定性的条件进行了分析,探讨了嵌入在社会网络中的社会资本对联盟企业收益决策的影响,希望能够为国际新创企业维持战略联盟提供一定的借鉴。     

The Effects of Secondary School Accounting Education on University Accounting Performance—A Canadian Experience*

Abstract. This study examined the impact of high school accounting education on students' performance in the first financial accounting course at a Canadian university, specifically the differential impact of different degrees of exposure to high school accounting (i.e., number of courses taken) and the type of courses (i.e., OAC) versus non-OAC courses) on the students' performance. The results strongly suggest that previous experience in accounting has a significantly positive relationship with students' performance in the first university accounting course. Although the results show that there is a significant positive correlation between performance and the number of accounting courses taken in high school, the results also indicate no significant difference in performance between students who have taken one or two courses. When controlling for the type of courses taken in high school, the results suggest that OAC students perform significantly better than non-OAC students. The results reported in this study may have important implications for university curricula policy makers. Résumé. Les auteurs examinent l'incidence de la formation en comptabilité des étudiants de niveau collégial sur leur succès dans le premier cours de comptabilité financière qu'ils suivent dans une université canadienne, et plus précisément la variation de cette incidence selon la mesure dans laquelle ils sont exposés à la comptabilité dans leurs études collégiales (en termes de nombre de cours suivis) et la nature des cours qu'ils suivent (selon que ces cours appartiennent ou non à la catégorie des Ontario Academic Courses (OAC)). Les résultats donnent toutes les raisons de croire que l'expérience préalable en comptabilité a une relation positive significative avec le succès des étudiants dans leur premier cours universitaire de comptabilité. Bien que l'étude aboutisse à la conclusion qu'il existe une corrélation positive significative entre le succès et le nombre de cours de comptabilité suivis au niveau collégial, les résultats n'indiquent aucune différence significative dans le succès des étudiants, selon qu'ils ont suivi un ou deux cours. Selon les résultats de l'analyse, les étudiants ayant suivi des cours appartenant à la catégorie des OAC réussissent beaucoup mieux que ceux qui ont suivi des cours n'appartenant pas à cette catégorie. Les constatations des auteurs pourraient avoir des répercussions majeures sur la conception des programmes universitaires.     

Sources of Long-Run Economic Growth In Nigeria: A Study In Growth Accounting*

Abstract: Growth accounting provides a convenient framework for decomposing the structure of economic growth and, hence, interpreting the underlying factors shaping long-run growth performance. The present study attempts to analyse the sources of Nigerian economic growth performance, using data from the period 1950–1991. The results conform generally with the ‘stylized’ facts of economic growth in less developed countries (LDCs), namely: that labour-force expansion and capital accumulation provide the motor of long-run growth in GDP, with improvement in ‘total factor productivity’ (TFP) playing at best a marginal role. Another important element in the Nigerian experience, however, is that deteriorating capacity utilization constitutes a key drag on capital productivity growth and, hence, economic growth. The collapse in capital investment from the early 1980s, coupled with deterioration in capacity utilization, and a virtual lack of efficiency gains in the economy constitute the major source of long-run decline in GDP growth rates. Policy-wise, these results suggest that given slow growth in TFP, strategies to sustain Nigerian economic growth must rely on rapid accumulation of factor inputs, particularly, capital expansion. Résumé: La comptabilisation de la croissance est un cadre d'analyse judicieux qui permet de décomposer la structure de la croissance économique et, partant, d'interpréter les facteurs sous-jacents qui façonnet les résultats en termes de croissance à long terme. La présente étude analyse les sources de la croissance économique au Nigéria, en se fondant sur les données relatives à la période 1950–1991. Les résultats de cette analyse corroborent, d'une manière générate, les faits “stylisés” de la croissance économique dans les pays en développement, à savoir: que l'expansion de la main-d'oeuvre et l'accumulation de capital constituent le moteur de la croissance à long terme du PIB, et que l'amélioration de la “productivité totale des facteurs” (PTF) ne joue, au mieux, qu'un rôle marginal. L'expérience nigériane dégage toutefois un autre enseignement, à savoir que la baisse d'utilisation des capacités est une entrave majeur à la croissance dc la productivité du capital et, corollairement, à la croissance économique. La chute brutale des investissements au début des années 1980, conjuguée à la baisse d'utilisation des capacités et à la quasi-absence de gains d'efficacité au sein de l‘économie, est la cause prépondérate du ralentissement à long terme de la croissance du PIB. Au chapitre des politiques, les resultats de l'analyse incitent à penser qu'en raison de la faible croissance de la PTF, les stratégies visant à soutenir la croissance de l’économie nigériane doivent tabler sur une rapid accumulation des facteurs, et en particulier sur une expansion du capital.