Labor market fluctuations in the small and in the large

Shimer's calibrated version of the Mortensen–Pissarides model generates unemployment fluctuates much smaller than the data. Hagedorn and Manovskii present an alternative calibration that yields fluctuations consistent with the data, but this has been challenged by Costain and Reiter, who say it generates unrealistically big differences in unemployment from the differences in policy we see across countries. We argue this concern might be unwarranted, because one cannot assume that elasticities relevant for small changes work for large changes. Models with fixed factors in market or household production can generate large effects from small changes and reasonable effects from large changes. This is reminiscent of attempts to improve the labor market in the Kydland–Prescott model, especially ones incorporating household production, like Benhabib, Rogerson, and Wright.     

Strategic Trade Policy and Signalling with Unobservable Costs

In an environment in which home firm costs are private information, home firm output can signal these costs to a foreign competitor and a home policymaker. High-cost home firms have an incentive to misrepresent themselves as low-cost. This is understood by the foreign firm and the home policymaker and results in the first-period optimal per-unit output subsidy to the home firm being less than it would be if home firm output was not a signal of home firm costs. These results are extended to the case of simultaneous signalling and signalling through price.     

The importance of advertising skepticism for brand extension appeals

According to existing research, ad persuasiveness decreases as advertising skepticism (i.e., the tendency to disbelieve advertising claims) increases. What remains unclear, however, is whether or not this effect extends to brand extension appeals. We suggest that the effect may vary according to brand extension similarity. Three studies test this assertion while providing process evidence and boundary conditions for the proposed effect. According to the findings, consumers automatically transfer associations from parent brands to highly similar extensions or automatically block these associations in the case of highly dissimilar extensions—reducing the impact of advertising skepticism on ad persuasiveness. At moderate levels, however, extension similarity is less predictive of the transfer process, increasing the negative effect of advertising skepticism on persuasion. Consistent with this account, the results identify brand transfer (i.e., the ability of the parent brand to make the extension) as the underlying mechanism explaining the advertising skepticism effect for moderately similar brand extension appeals. Furthermore, the results show how marketers can reduce these effects, and increase extension success, by emphasizing extension attributes that are shared with the parent brand. Collectively, these results provide a unique theoretical view, improving our understanding of advertising skepticism and the drivers of brand extension success.     

Undergraduate business students’ perceptions about engagement

Student perceived engagement and student perceived learning are important concepts in today’s higher education classroom environment. Examining engagement from the students’ perspective is an important aspect to understand more about this multidimensional construct as a tool for active learning. A survey was administered to undergraduate business students to gain insight into multiple factors influencing perceived engagement. Students felt that engagement was enhanced by discussion of current events, positive instructor demeanor, and putting effort into course content. The survey revealed four groups of variables: student connection, pedagogical methods, classroom environment, and student motivation. Multidimensionality of this construct was supported, as well as the need to understand engagement from the learners’ perspective.     

Resources access needs and capabilities as mediators of the relationship between VC firm size and syndication

Drawing from the resource-based view and transaction costs economics, we develop a theoretical framework to explain why small and large firms face different levels of resource access needs and resource access capabilities, which mediate the relationship between firm size and hybrid governance. Employing a sample of 317 venture capital firms, drawn across six European countries, we empirically assess our framework in the context of venture capital syndication. We estimate a path model using structural equation modeling and find, consistent with our theoretical framework, mediating effects of different types of resource access needs and resource access capabilities between VC firm size and syndication frequency. These findings advance the small business literature by highlighting the trade-offs that size imposes on firms that seek to manage their access to external resources through hybrid governance strategies.     

Developing Accounting Regulations that Reflect Public Viewpoints: The Australian Solution to Differential Reporting

In this paper, we analyse the factors that have shaped the approach taken by the Australian Accounting Standards Board (AASB) in addressing the issue of differential reporting in Australia. In contrast to its early adoption of International Financial Reporting Standards in 2005, the AASB has signalled an independent approach to differential reporting. Still in progress at the time of writing, we show how the AASB's approach has been shaped by feedback from key stakeholder groups, as well as by influential individuals and key events. In the face of strongly held views on both sides of the debate, the Board has moved from reliance on discursive techniques to develop and justify proposed policies to embracing to a greater extent, the use of more objective research evidence to resolve the empirical questions presented in the public debate.     

Evidence of Fraud,Audit Risk and Audit Liability Regimes

We investigate the effectiveness of proportionate liability in reducing the probability of fraud and audit risk relative to joint and several liability in two strategic audit settings: one that provides conclusive evidence of fraud and one that provides inconclusive evidence of fraud. In both settings the auditor makes an audit effort choice, but in the second setting the auditor also evaluates the audit evidence. Our results show that when the auditor chooses only effort, a proportionate liability rule with large marginal liability relief decreases audit risk. However, when the auditor also evaluates the audit evidence this result no longer holds.     

CEO compensation structure and firm performance

The objectives of our study are to estimate a model of ‘efficient’ compensation structure based on firm characteristics and test the performance consequences of deviation from the efficient compensation structure. Our results are based on 3503 firm years for the period from 1999 to 2005. The results suggest that firms whose CEOs receive compensation inconsistent with their firm characteristics have a lower performance compared to those firms whose CEOs’ compensation is consistent with their firms’ characteristics. Our measure of performance is based on both accounting and market‐based performance measures. Overall, our study provides some important new insights into the links between CEO compensation structure and firm performance.     

Expertise and organizational boundaries: the varying roles of Australian management consultants

The diversity of management consulting has long been recognized by mainstream commentators, but the more critical literature often overlooks this feature. This article explores different consulting roles by developing a typology based on two dimensions of consulting work: the nature of the knowledge base that consultants purport to use in their work, and the extent to which the boundaries between consultant and client are permeable. Based on interviews with a cross-section of Australian consultants and clients, features of four main consulting roles are outlined. Key developments that are highlighted include the increasingly structured nature of much consulting work and the growth of client-consultant relationships based on social rather than purely market exchange criteria. It is shown that the diversity of consulting roles has developed over time in response to both client demands and consultant initiatives. The analysis raises questions about the nature of expertise and the structure of organizations.     

The Deadliest of Games: The Institution of Dueling

Recent historical research indicates that ritualistic dueling had a rational basis. Basically, under certain social and economic conditions, individuals must fight in order to maintain their personal credit and social standing. We use a repeated two‐player sequential game with random matching to show how the institution of dueling could have functioned as a costly but incentive‐compatible means by which individuals could demonstrate their good faith dealings by defending their “honor.”