Using the Life Course Paradigm to Explain Mechanisms That Link Family Disruptions to Compulsive Buying

This research examines compulsive buying as an impulse‐control disorder, a form of maladaptive behavior believed to have its roots in early‐in‐life experiences of family adversities. Unlike previous research that has typically studied only the effects of family divorce on compulsive buying, this study examines the effects of disruptive family events within the broader multitheoretical life course framework. A sample of 327 young adults is used to test the hypothesized relationships derived from the main life course perspectives. The results show alternate paths leading to compulsive buying, beyond those uncovered in previous studies. By offering a broader overarching framework, the article shows how previous efforts to study compulsive buying can be improved, pointing to the value of the multitheoretical life course approach in understanding consumption phenomena .     

A Two‐Step Estimation of Consumer Adoption of Technology‐Based Service Innovations

Firms initially offer new technology‐based services to a limited number of customers to reduce risks and maximize their returns on the investments in the new technology. Consequently, consumers’ adoption of new technology‐based services is restricted by the limited access provided by the businesses. A model of consumer adoption was developed and estimated via a two‐step procedure. A significant sample selection bias was found with regard to access when estimating consumer adoption of a relatively new innovation, computer banking, but no such bias was found for a mature innovation, ATMs.     

The Difference between Earnings and Operating Cash Flow as an Indicator of Financial Reporting Fraud*

This paper examines the relation between earnings and operating cash flow to derive and test an indicator of financial statement fraud. Accrual measurement concepts indicate that financial statement fraud should be associated with high levels of earnings relative to operating cash flow. We demonstrate that the excess of earnings over operating cash flow is extreme in most fraud cases in years immediately prior to the fraud discovery based on a sample of 56 fraud cases from 1978 to 1991. We compare the distribution of the earnings minus operating cash flow variable for fraud firms with that for a sample of 60,453 firm-years for firms listed on COMPUSTAT. We test a logistic regression model in which the discovery/nondiscovery of fraud is the dependent variable, and earnings minus operating cash flow is the explanatory variable. Other control variables are included in the model based on prior studies. Results are consistent with expectations derived from accrual measurement theory. We then examine the predictive ability of the model using our sample of fraud firms and a sample of nonfraud firms in the same four-digit SIC code industries. Observations for the fraud firms are for the fiscal year prior to the discovery of fraud. Observations for the nonfraud firms are for the same fiscal years as the fraud firms in the same industries. The predictive ability of the model, including the excess of earnings over operating cash flow, is substantially higher than the predictive ability of the model omitting this variable. We conclude that the earnings-operating cash flow relation provides important information for those interested in identifying financial statement fraud, especially when considered in conjunction with other factors associated with fraud risk.     

Profit Sharing and Productivity: Further Evidence from the Chemicals Industry

Profit sharing potentially augments productivity by affecting motivational variables that promote group norms favoring effort. A factor augmentation model of production is developed to measure the impact of profit sharing on productivity using a test industry in U.S. manufacturing. The model is applied using alternative exogenous and endogenous specifications for the profit-sharing incentive variable. The results are consistent with those obtained in other recent studies and suggest that profit sharing results in improvements in productivity.