Expropriation through loan guarantees to related parties: Evidence from China

We identify and analyze a sample of publicly traded Chinese firms that issued loan guarantees to their related parties (usually the controlling block holders), thereby expropriating wealth from minority shareholders. Our results show that the issuance of related guarantees is less likely at smaller firms, at more profitable firms and at firms with higher growth prospects. We also find that the identity and ownership of block holders affect the likelihood of expropriation. In addition, we use this sample to provide new evidence on the relation between tunneling and proxies for firm value and financial performance. We find that Tobin’s Q, ROA and dividend yield are significantly lower, and that leverage is significantly higher, at firms that issued related guarantees.     

The influence of quality cues and typicality cues on restaurant purchase intention

Prior research on cue management has dominantly focused on cues consumers use to infer product quality. Only a few studies have dealt with cues that allow consumers to infer category typicality. Connecting these research streams we show how different cues affect both product quality and category typicality assessments, how these perceptions interact, and how they influence purchase intention. Results of this conjoint experiment among 113 restaurant patrons indicate that typicality cues can also serve as inferences for quality, and that cues influence purchase intentions via their effect on perceived typicality rather than on perceived quality. Once a consumer has determined the usage situation and his inherent consumption goals, he is much more inclined to search for the cues such as table setting that signal the subcategory that is expected to satisfy these goals, than finding cues such as guidebook rating that are diagnostic of product quality (only). After carefully addressing typicality cues which are instrumental in stressing points of parity, brand managers can use quality cues to show the product's points of difference in a category.     

Performance Management in Universities: Effects of the Transition to More Quantitative Measurement Systems

The measurement of research and teaching performance is increasingly common within universities, driven probably by the rise of New Public Management (NPM). Although changing over time and varying from country to country, NPM involves the use of private sector methods in the public sector. Traditionally, performance measurement in universities has had a developmental role – helping individuals to improve their (future) performance. However, the new systems seem more judgemental – i.e. seeking to quantitatively evaluate (past) performance. We study performance measurement in two Accounting and Finance groups – one in the Netherlands and one in the UK. In both we see an increasing use of judgemental forms of performance evaluation and, in particular, the use of more quantitative performance measures. The use of these more judgemental quantitative systems is seen to have various effects. Although these systems emphasise objective quantitative measures, they relocate subjectivities (usually at a greater distance from the subject), rather than remove them. This creates uncertainty and anxiety about how the systems are used. There is a danger that the new systems could inhibit creativity in teaching and limit contributions to the world outside the university. Furthermore, they could damage creativity and innovation in accounting research – as researchers play safe in getting the publications they need. As we are both researchers and practitioners in this area, we should be challenging these trends and pointing to the dangers for research (and teaching) in our field.     

Performance Implications of IJV Boards: A Contingency Perspective

This study draws from the corporate governance literature to investigate the implications of board involvement for international joint ventures (IJVs). We extend recent corporate governance research on the value of board involvement by investigating unique sources of complexity related to the nature of the IJV. We argue and find that board involvement can enhance the performance of IJVs, particularly for collaborations that are complex in nature due to their broad functional scope as well the level of market overlap between IJV parents. We complement recent research on joint venture control that has focused on the antecedents and types of control, as well as studies on formal (e.g. contractual safeguards and monitoring) and informal governance mechanisms (e.g. trust) by providing empirical evidence that IJV board involvement is valuable when directors undertake their control and coordination responsibilities. We advance corporate governance research by providing evidence that joint ventures possess several unique characteristics that shape the value of board involvement, thereby showing that applications of corporate governance theory to joint ventures are useful, but should be made with care.     

The Accuracy of Price-Earnings and Discounted Cash Flow Methods of IPO Equity Valuation

This paper compares estimates of value derived from conventional discounted cash flow and price earnings valuation methods to the market price. For a sample of 45 firms newly listed on the New Zealand Stock Exchange our results suggest that the best discounted cash flow method and the best price earnings comparable have similar accuracy. The median absolute pricing error is around 20% and the models explain around 70% of the cross-sectional variation in market price scaled by book value. The results serve to corroborate the findings of Kaplan and Ruback (1995).     

Logistics Innovation and Social Sustainability: How to Prevent an Artificial Divide in Human–Computer Interaction

Human–computer interaction (HCI) is a cornerstone for the success of technical innovation in the logistics and supply chain sector. As a major part of social sustainability, this interaction is changing as artificial intelligence applications (Internet of Things, autonomous transport, Physical Internet) are implemented, leading to larger machine autonomy, and hence the transition from a primary executive to a supervisory role of human operators. A fundamental question concerns the level of control transferred to machines, such as autonomous vehicles and automatic materials handling devices. Problems include a lack of human trust toward automatic decision making or an inclination to override the system in case automated decisions are misperceived. This paper outlines a theoretical framework, describing different levels of acceptance and trust as a key HCI element of technology innovation, and points to the possible danger of an artificial divide at both the individual and firm level. Based upon the findings of four benchmark cases, a classification of the roles of human employees in adopting innovations is developed. Measures at operational, tactical, and strategic level are discussed to improve HCI, more in particular the capacity of individuals and firms to apply state‐of‐the‐art techniques and to prevent an artificial divide, thereby increasing social sustainability.     

INTEREST,DISTRIBUTION OF VALUE ADDED AND INFLATION: INFLATION-INDUCED DIFFICULTIES IN THE INTERPRETATION OF DUTCH NATIONAL ACCOUNTS*

The present paper examines the inflationary bias of sectoral income transactions in national accounting data. An inconsistency of these data is pointed out. Alternative income measures are estimated by adjusting the standard national accounting data for inflationary gains and losses. These gains and losses arise from financing by loan capital. Several issues concerning income concepts and alternative methods for the measurement of inflationary gains and losses are discussed. It is concluded that an adjustment of sectoral income data for these gains and losses produces a very different picture of the sectoral distribution of income.     

The global exchange rate system in transition

Summary The aim of this paper is to assess reform proposals allowing a transition from the present international exchange rate mechanism to a more effective successor. Judgments are founded on preventing the drawbacks of the Bretton Woods system, using new theoretical findings, and building on recent international cooperation efforts. Features of an optimal global exchange rate system for the near future are: soft target zones for the major currencies, sterilised exchange market interventions to counter bandwagon effects, and currency blocs around the major currencies. For the longer term, Williamson's extended target zone is a potential candidate, despite missing indispensable information.The author thanks S.K. Kuipers, B. Leeftink and J.K. Martijn for their useful comments on the draft.     

The structure of consumer confidence and real value added growth in retailing in the Netherlands

Consumer confidence is a determinant of the willingness to buy and thus of sales in retailing. The main purpose of this study is to investigate whether the structure of consumer confidence in the period 1987-2000 differs from the 1972-87 period. The main finding is that, in the 1972-87 period saving had a precaution motive and in the 1987-2000 period saving had a transaction motive. In the 1972-87 period, the utility and ability of saving were determined by the development of household wealth; and in the 1987-2000 period, the utility and ability of saving are determined by the level of household wealth. The perceived inflation is related more strongly to the perceived development of the general economic situation in the 1972-87 than in the 1987-2000 period. Empirical evidence is found that consumer confidence also influences real sales of retailers.