Accounting for regional variance heterogeneity of growth

This article explores heterogeneous behaviour in the conditional variance of growth. We find that regional effects account for a good part of this behaviour when modelled alone; however, regional effects themselves have no particular meaning. To this end, we try to empirically account for the regional effects using a large set of economic, political and demographic variables. Our results indicate that countries with past high levels of both investment and inflation cause growth to be less volatile today. Countries that have a greater number of changes in heads of government tend to experience lower growth volatility except in parliamentary democracies where the relationship reverses. The greater the number of effective parties the lower the volatility for all regime types. More strikes have no effect on volatility except for presidential democracies where volatility actually increases, while more open economies that share presidential and legislative powers also have more volatile growth rates.     

WILLINGNESS‐TO‐PAY FOR SPORTING SUCCESS OF FOOTBALL BUNDESLIGA TEAMS

This study shows that fans and people living in the region of 28 Football Bundesliga teams from all three divisions are willing to support their team financially. Survey respondents were asked for their willingness‐to‐pay to avoid a negative outcome (e.g., relegation) and to achieve a positive outcome (e.g., promotion). Fan bonds are applied as an alternative payment vehicle within the contingent valuation method. The results show that different factors affect the decision to support the team and the actual amount of willingness‐to‐pay—for attendees and nonattendees. Public goods are particularly relevant for reporting a positive willingness‐to‐pay. (JEL Z23, L83, H41)     

Corrections for coarsely categorized measures: LISREL's polyserial and polychoric correlations

Versions 5 and 6 of LISREL (Joreskog and Sorbom, 1981) contain procedures that estimate the underlying correlation between continuous variables on the basis of crude rank category measures. The procedures assume that the distribution of the measured variables would have been bivariate normal if they had not been categorized. Using survey data and simulations, the accuracy of these polyserial/polychoric (P/P) based estimates of the underlying correlations are compared with those based on simple equal distance scoring of the categories. The results indicate that under some conditions, e.g., nearly normally distributed variables and moderate to high correlations, the polyserial/polychoric based estimates are better. Under other conditions, e.g., a moderate to high degree of skew and kurtosis and low correlations, the equal distance score based estimates are better. Under all conditions, the amount of error decreases fairly rapidly as the number of categories is increased from two to five.     

To Thine Shareholders Be True? Linking Large Corporate Ownership to Firms’ Use of Commitment Human Resource Practices

Human resource practitioners and academics have increasingly realized the importance of corporate governance for firm human resource activities. This study investigates how one important form of corporate governance, namely, ownership within large, publicly traded firms, is associated with a firm's use of commitment human resource practices (CHRPs), specifically, the use of incentive compensation, profit sharing, and participative decision making. Our findings indicate that the types of large investor, namely, family and institutional, are differentially associated with the likelihood of the firm using these CHRPs. Specifically, family owners with their long‐term investment horizon, as well as their stakeholder orientation, increase the likelihood of the firm using these practices. In contrast, large institutional owners with their shorter‐term investment horizon, as well as their investor orientation, decrease the likelihood of the firm using these practices. Furthermore, among institutional investors, transient institutional investors are negatively associated with these practices, while dedicated institutional investors are not associated with these practices. Taken together, our results regarding the positive association of family ownership and this subset of CHRPs and the negative association of transient institutional investors and this set of practices, have important implications for human resource professionals who not only need to understand how ownership affects HR practices but also how to articulate the value of these investments in order to attract investors. © 2015 Wiley Periodicals, Inc.     

Owners on both sides of the deal: mergers and acquisitions and overlapping institutional ownership

Using a corporate governance lens, this study considers owners with a stake in both the acquiring and the target firms in the context of mergers and acquisitions. A possible agency problem arises with regard to monitoring implications as managers may be able to take advantage of compromised monitoring because overlapping owners may focus on the aggregate value for both the acquiring and the target firms and nonoverlapping owners may be interested only in the acquirer's side of the deal. The results suggest that when more owners overlap in their ownership of both the acquiring and target firms, the acquiring firms are more likely to experience decreased shareholder value through merger and acquisition deals. This effect, however, can be constrained by stronger board control. Copyright © 2010 John Wiley & Sons, Ltd.     

Accounting for Fair Competition between Private and Public Sector Armaments Manufacturers in Victorian Britain

Failures in rifle supply during the Crimean War (1853–56) caused the British government to seek a more reliable method for procuring weapons for military use. Fact‐finding missions to US rifle manufacturers led to the introduction of the ‘American system of manufacturing’ at a purpose‐built factory in north London. The extension of gun‐making facilities at the Royal Small Arms Factory, Enfield Lock, was accompanied by major accounting innovations driven by society's desire for ‘cheap and efficient’ government and, within a laissez‐faire environment, the need to ensure fair competition between private and public suppliers of military goods. Accounting practices based on ‘strictly commercial principles’ were then disseminated to other government military manufacturing establishments located at the Woolwich Arsenal. The historical knowledge revealed in this paper adds a new dimension to existing accounting historiography, which focuses principally on the business sector as the driving force for accounting change in Britain.