THE IMPACT OF THE INSIDER TRADING SCANDAL ON THE INFORMATION CONTENT OF THE WALL STREET JOURNAL'S “HEARD ON THE STREET” COLUMN

We examine the impact of a scandal on the information content in the “Heard on the Street” column of the Wall Street Journal. Following the scandal in 1984, the column is found to have a reduced impact on stock prices for both buy and sell recommendations. However, the stock price response to information later published in the column before the publication day is smaller for the post-scandal period. This result suggests that after the scandal, editors and authors may have become more cautious in guarding against information leaks in the column. The scandal does not appear to have changed the impact of the column on trading volume.     

Overreaction to stock market news and misevaluation of stock prices by unsophisticated investors: Evidence from the option market

This paper examines investors' option activity on value and growth stocks before earnings announcements. The main finding is that unsophisticated investors enter option positions that load up on growth stocks relative to value stocks in the days leading up to earnings announcements. This occurs despite the fact that at earnings announcements value stocks outperform growth stocks by a wide margin. The paper's results provide evidence that unsophisticated option market investors (1) overreact to past news on underlying stocks and (2) mistakenly believe that mispriced stocks will move even further away from fundamentals at impending scheduled news releases.     

Political institutions and government spending behavior: theory and evidence from Iran

This study examines how the quality of political institutions affects the distribution of the government budget in Iran. We first introduce a mechanism through which democracy can shift government expenditure from national defense (military) to productivity-enhancing public spending (e.g., education). Using impulse response functions and a variance decomposition analysis on the basis of a vector autoregressive (VAR) model, our results imply that the response of military spending to an improvement (a deterioration) of democratic institutions is negative (positive) and statistically significant, whereas that of education spending is positive (negative) and significant. Our results are robust to other indicators of political institutions, different orderings of variables in the VAR, and alternative specifications of government spending categories.     

Misalignment of the Baht and its Trade Balance Consequences for Thailand in the 1980s and 1990s

This paper examines Thailand's pre‐crisis exchange rate policy, focusing on the degree of the country's real exchange rate misalignment pre‐crisis and its consequent effects on Thailand's trade balance with its two large trading partners, the US and Japan, in the 1980s and 1990s. Defining misalignment as the difference between actual and ‘equilibrium’ exchange rates, we estimate three key ‘equilibrium’ exchange rates of the Thai baht: (a) the real effective equilibrium exchange rate of the Thai baht against its twenty‐two major trading partners; (b) the bilateral real equilibrium exchange rates of the baht against the US dollar; and (c) the bilateral real equilibrium exchange rate of the baht against the Japanese yen.     

A contextual study of female-leader role stereotypes in the hotel sector

Guided by the role congruity theory (RCT), this paper examines the mismatch in female-leader role stereotypes and how this mismatch may lead to prejudicial evaluations against female leaders. It also tests how gender equality practices and leadership development programmes (LDPs) may mitigate prejudicial evaluations against female leaders. Following a quantitative approach, this study uses a paired sample t-test and linear approach (i.e. multiple regression) to model the relationships and test the hypotheses formulated. Drawing on a survey of 392 employees working in 4- and 5-star hotels in Jordan, the study shows that employees stereotype successful leaders to be more masculine than feminine while they attribute both feminine and masculine stereotypes to women. There is, thus, an element of congruity in female-leader role stereotypes which reduces prejudicial evaluations against female leaders. Moreover, the results indicate that gender equality practices and LDPs significantly enhance the emergence and effectiveness of women leaders. The importance of this study derives from extending the RCT through a contextual investigation in the hotel sector in Jordan. This was done by considering two additional constructs, i.e. gender equality practices and LDPs that mitigate prejudice against female leaders.     

Hospitalized fall-related injury trends in Sweden between 2001 and 2010

Previous studies have indicated increasing trends of hospitalized fall-related injuries amongst elderly. Whether this is true also in Sweden is unknown though it is important to study considering the potential societal impact. Data were obtained regarding hospitalized injuries with falls as external cause among those aged 65 years and above with information on injury type, gender and age, on a yearly basis, from 2001 to 2010. Age- and sex-specific incidence rates were calculated (per 100,000 population) for all fall-related injuries, and for each injury type and trend lines were drawn. Linear regression analyses and percentage change were calculated for the types of fall-related injuries. A decreasing incidence was observed in the younger age groups (65–79 years) with greater decreases amongst women (women: ?14.6%, men 65–79 years: ?10.5%). However, increasing rates were observed in the older age group (80 years and above), with greater increases amongst men (women: 4.3%, men: 11.4%). Superficial injuries showed greater increases than fractures amongst those aged 80 years and above. This study indicates that older elderly in Sweden are increasingly being hospitalized for less serious injuries. This changing injury panorama is important to include in the future planning of both health care and fall-related prevention.     

Akbar's multiculturalism: lessons for diversity management in the 21st century

This paper challenges the hegemony of US‐centric perspectives in the diversity management literature by explaining how non‐Western histories and cultures may provide alternative contexts for understanding and managing diversity. In pursuit of this, the paper describes how Muslim ruler Jalaluddin Muhammad Akbar conceptualized multiculturalism in 16th century India, and how his principles of sulh‐i‐kul, rah‐i‐aql, and rawa‐i‐rozi may be adopted to develop a sociopolitical environment conducive to managing cultural diversity in organizations, an environment currently lacking even in the majority of democratic countries in the world today. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

Organizational context and human resource management strategy: a structural equation analysis of Hong Kong firms

Previous studies to explain why companies utilize particular human resource management (HRM) strategies have not adequately addressed the influence of contextual variables such as size, location, ownership, competitive pressure, technological change, age and growth. In this study, we investigate the extent to which these contextual variables are related to HRM strategy in seventy-six private-sector firms located in Hong Kong. Our analysis uses structural equations to examine the relationships among contextual variables and HRM strategy to develop and retain managers. The results show that contextual variables have both direct and indirect effects on an organization's HRM strategy. The indirect effects occur through the top management involvement of the HR function within an organization. Use of a human capital development HRM strategy reduces organizational uncertainty about having an adequate supply of managers to meet firm objectives. Contrary to our expectation, in Hong Kong firms, greater reliance on internal development and promotion tends to increase uncertainty and greater competition tends to reduce training investment. Both of these unanticipated relationships may reflect the high mobility of managers peculiar to the Hong Kong labour market.     

Success in failure? Reflections on the changing Spanish audit environment

The 1990s in Spain have witnessed a significant shift in attitudes towards the role of auditing, with promises of more transparent reporting being replaced by talk of audit expectations gaps. This paper explores the changing atmosphere, both through an analysis of one of the most notorious scandals of recent times - involving the Banco Español de Credito (‘Banesto’) - and a more general review of the way the Spanish profession has responded to such downturns in public expectations of auditing. While at first sight, the profession appears to have become more defensive and the audit environment more competitive, the multinational accounting firms do appear to have strengthened their position in the Spanish audit market. Intriguingly, despite public expressions of concern with the quality and capabilities of auditing and the imposition of large fines on audit firms for inadequate audit work, proposed ‘solutions’ for improving audit quality include the establishment of a self-regulated audit regime and reductions in auditor liability. The Spanish experience allows for some timely reflections on the significance of an audit expectations gap and highlights the importance of viewing the audit function from an international perspective.