Innovation Leaders: How Senior Executives Stimulate, Steer, and Sustain Innovation by Jean-Philippe Deschamps

I am honored to have been chosen as the Journal of Product Innovation Management's ( JPIM 's) new book review editor. First and foremost, I want to thank Preston Smith for making the transition an easy one. Preston's experience and insights have helped bring me up the learning curve. His patience was much appreciated.
Second, managing the book review process is certainly more complicated than I had imagined but is fascinating nonetheless. As in the development of any product or service there are many people involved in the creation process, and considerable planning takes place prior to actual publication.
Last but not least is my admiration for our JPIM book reviewers. The care and effort taken to create the quality book reviews that meet JPIM 's high standards requires critical thought and experience in new product development. We will continue to make our book reviews insightful, critical, and practical for you, our readers.
Books reviewed in this issue:

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  Innovation Leaders: How Senior Executives Stimulate, Steer, and Sustain Innovation
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  Understanding A3 Thinking: A Critical Component of Toyota's PDCA Management System
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  Value Merchants: Demonstrating and Documenting Superior Value in Business Markets

     

Valuation Implications of Investment Opportunities and Earnings Permanence

This study investigates the value-relevance of accounting earnings in the presence of investment (growth) opportunities after making two theoretical and methodological research design refinements. First, we test for the incremental effect of growth on firms earnings response coefficients after controlling for the extent of transitory earnings under the assumption that the value-relevance of earnings with respect to growth should be stronger when earnings are more permanent. Second, we perform comprehensive factor analysis using market-based and accounting-based measures to construct a composite proxy for investment opportunities. We find that firms investment opportunities and the relative permanence of current earnings affect the value-relevance of those earnings. Additionally, we find that the interaction between permanent earnings and investment opportunities produces an even stronger price response to earnings.     

Simple binomial processes as diffusion approximations in financial models

A binomial approximation to a diffusion is defined as 'computationallysimple' if the number of nodes grows at most linearly in thenumber of time intervals. It is shown how to construct computationallysimple binomial processes that converge weakly to commonly employeddiffusions in financial models. The convergence of the sequenceof bond and European option prices from these processes to thecorresponding values in the diffusion limit is also demonstrated.Numerical examples from the constant elasticity of variancestock price and the Cox, Ingersoll, and Ross (1985) discountbond price are provided.