Entry and capital structure mimicking in concentrated markets: The role of incumbents’ financial disclosures

We examine whether the public availability of product market incumbents' financial disclosures leads to greater capital structure mimicking of incumbents by entrants. Exploiting a change in disclosure enforcement for German private firms in the mid-2000s, we find entrant-incumbent mimicking rises substantially in concentrated markets once incumbents' financial statements are publicly available. Additional tests exploring potential mechanisms are more consistent with interfirm learning underlying the effect than alternative channels. Our findings shed light on the effects of competitor financial statement disclosure on private firms’ initial financing decisions and highlight how capital structure dependencies among peer firms arise.     

Semi-analytical prices for lookback and barrier options under the Heston model

Decisions in Economics and Finance - Under the Heston stochastic volatility model, we derive semi-analytical formulas for the prices of path-dependent options with payoffs linked to the maximum or...     

Policy implications of research on non-GAAP reporting

Over the past two decades, the regulatory landscape for non-GAAP reporting has evolved significantly. Despite a temporary decline in the frequency of non-GAAP reporting following Regulation G, the incidence of non-GAAP disclosure has continued to increase steadily, leading to a current all-time high in reporting activity. This proliferation of non-GAAP disclosure has captured the attention of standard setters and regulators in recent years. This paper provides an academic perspective on policy implications for both regulation and standard setting. We contend that current Compliance and Disclosure Interpretations (C&DIs) of the SEC staff may perhaps have gone too far in restricting certain types of non-GAAP disclosures. As a result, we advocate a slight relaxation of the current enforcement of Regulation G. We agree with FASB proposals for greater disaggregation in the income statement to allow for more transparency in non-GAAP reporting. Finally, we believe the PCAOB should consider requiring auditors to take a more direct role with respect to non-GAAP disclosures.     

Competitive and Comparative Advantage: Towards a Unified Theory of International Trade

The field of international business/economics is largely dualistic in nature. On one hand is the economics literature which has, for two centuries, focused on the notion of comparative advantage (technology, factor proportions) while on the other is the business literature which has recently developed the concept of competitive advantage. This paper presents a reconciliation of the two based on global value chain/supply chain analysis and the concept of vertical comparative advantage. It is shown that the theory of competitive advantage's epistemological comparative advantage lies with its ‘how to’ approach to developing an advantage, while the theory of comparative advantage's epistemological comparative advantage lies with its account of ‘what is’ and that both are complementary. However, it is also argued that the failure to recognize this complementarity as well as the shortcomings of each have prevented and continue to prevent the emergence of an integrated, empirically-consistent theory of international trade – in short, prevented us from taking advantage of the gains from epistemological trade.     

The Global Financial Crisis and Its Impact on Australian Bank Risk

This paper examines the global financial crisis (GFC) and its impact on Australian banking risk. An augmented market model is developed to identify changes in listed Australian bank systematic risk in relation to three key events: the GFC's start in August 2007, the market downturn in Australian and global share markets in January 2008, and the announcement of Australia's Deposit and Wholesale Funding Guarantee (DWFG) scheme on 12 October 2008. The study also examines changes in bank systemic risk during these event periods. The Australian market offers a unique opportunity to observe the impact of the introduction of the DWFG in that it lacked any explicit deposit insurance prior to the crisis. Initially, the crisis period had little impact on bank systematic risk while bank systemic risk increased considerably. The share market downturn caused a marked increase in both systematic and systemic risks for Australia's major internationally connected banks followed by a reduction in both systematic and systemic risks with the introduction of the guarantee scheme for all Australian banks.     

Re-branding brand genericide

Genericide refers to situations where brands lose their legal protections due to the fact that their original name has become the generic term for a new category of products in the market that the brand first helped to create. Despite notorious instances of brands falling prey to this curse, marketing specialists—unlike lawyers—generally do not consider that the widespread use of a brand name represents any real danger and instead view it as a sign of brand strength. Herein, we take a new look at this debate, using a case study of Google to re-investigate the phenomenon of genericide. The article also offers managerial guidance on the most effective ways of developing genericization and avoiding genericide. It concludes by pointing out the need for brand managers to precisely differentiate between different types of brands and markets when deciding whether they should protect themselves from the risk of genericide or else encourage the genericization of their brand.     

Mobilizing consent: paternalism and cellular manufacturing

In this paper we explore the dynamics of the introduction of New Systems and Structures of Work Organization (NSSWO) in the context of the forces impacting upon organizational change in the unionized sector of manufacturing industry throughout the Thatcher period. This we do by way of a detailed case study of a major UK auto-components manufacturer. We explore a number of changes in work organization, including the introduction of a cellular-based system of manufacturing, from its initial strategic conception through to its implementation; the delegation of responsibility for quality to shop-floor operators and the use of more flexible working practices. In doing so, we reconsider the context of change, the detailed processes of change and the pattern of accommodation between labour and management. Drawing upon our previous work on the nature of paternalism (Ackers,and Black, 1991), we explore its significance in terms of management’s constant drive for more economic work practices and patterns of organization. Specifically we explore the significance of paternalism as a relevant concept in interpreting the case, and hence, also, as a relevant concept in understanding HRM. The case challenges the prevailing ideology that the ‘successful’

economic organization requires (a) a de-regulated labour market and (b)

a trade union free environment, or, failing this, that management needs to

develop an individualistic approach towards the work-force, moving from the

more pluralist‘industrial relations’approach towards an essentially ‘unitarist framework, as found in certain interpretations of ‘uman resource management’(Guest, 1987)

The paper is thus a contribution to the continuing analysis of those ‘tensions and struggles through which the open ended potential of labour power have been managed, through shifting patterns of coercion, accommodation and compliance into profitable forms of production’(Elger and Smith, 1994: 12; Thompson, 1990). By means of this case we attempt to explore this issue with respect to three interconnected

themes:

The place of paternalism as a relevant concept in the age of HRM.

The extent to which organizations may be better advised to look towards ways

to build upon their existing organization culture, rather than seeking solutions

from overseas models.

Linking with previous work on the ‘Joint Process’in the US (Black and Ackers, 1994), the paper raises issues concerning the ‘strategic issue . . . which managers have to face . . . the balance between joint regulation and joint consultation’(Storey and Sissons, 1993: 221), and hence the role of trades unions in organizational change programmes.