Hungary's Bankruptcy Experience, 1992-93

Policymakers working on enterprise restructuring should takea close look at Hungary's experience with bankruptcy reformsince 1992. This article provides detailed data on a randomlyselected stratified sample of actual cases filed in the firsttwo years after the enactment of the law. These data are supplementedwith information obtained from interviews with judges, liquidators,and firms involved in the bankruptcy process to give an overallpicture of the process in the first two years of its implementation.The bankruptcy process in Hungary has indisputably spurred institutionbuilding in the courts, the trustee profession, and the banks.It may also have succeeded broadly in separating viable fromunviable firms. It did little, however, to further either deeprestructuring or the exit of ailing firms. The changes in incentivesand institutions that are needed to make bankruptcy work intransition economies invariably take time. Hungary's initiative,albeit imperfect, was a bold start toward reform.     

A MULTIFACTOR ANALYSIS OF COUNTRY FUND RETURNS

Previous closed‐end country fund research concludes that returns behave more like the U.S. market than like their target markets. We argue this finding may be biased by model misspecification and inappropriate estimation techniques. We propose a single‐equation model containing five hypothesized factors of fund returns. We estimate this model for nineteen pooled seasoned funds using a time‐series cross‐section regression that corrects for two types of autocorrelation. We show that returns are strongly related to target markets. Returns are also related to changes in discounts, exchange rates, and other countries' markets, but are only weakly related to the U.S. market. JEL classification: G10, G12     

When Is a Disruptive Innovation Disruptive?*

A disruptive innovation (i.e., one that dramatically disrupts the current market) is not necessarily a disruptive innovation (as Clayton Christensen defines this term). To aid in understanding why some innovations are more (or less) disruptive to the long‐term health of incumbents, this article offers terminology and a framework complementary to Christensen's work, focusing on the diffusion pattern of the new product. The framework and model presented herein suggest that when an innovation diffuses from the low end upward toward the high end, a pattern called low‐end encroachment, the incumbent may be tempted to overlook its potential impact. Three possible types of low‐end encroachment are illustrated: the fringe‐market, detached‐market, and immediate scenarios. Conversely, when the pattern is one of high‐end encroachment, the impact on the current market is immediate and striking. A three‐step framework is identified to assess the potential diffusion pattern and impact of an innovation, thereby helping a firm determine the threat or opportunity that an innovation represents.     

Self-service technology effectiveness: the role of design features and individual traits

Self-service technologies (SSTs), such as in-store kiosks, are increasingly prevalent and becoming a critical component of marketing. Researchers and practitioners alike have recognized the need to understand the effectiveness of these computer-based innovations for self-services—in particular, how to strengthen customers’ perceived control over and evaluations of SSTs. Drawing on the resource-matching theory and the technology-based services and self-services literature, the authors hypothesize the interactive effects of two SST design features—namely, comparative information and interactivity—on customers’ perceived control and interface evaluations. The authors then propose that the interaction pattern is further moderated by two individual traits: prior experience and technology readiness. The hypotheses are tested in two separate computer-based experiments with representative samples of the general U.S. population in a shopping environment. The findings support the hypotheses, enhancing knowledge in this emerging domain and providing important implications for managers and researchers.

Gendered Paths to Asset Accumulation? Markets,Savings, and Credit in Developing Countries

An extensive literature shows how property inheritance is biased against women in many developing countries, yet relatively little attention has been given to gender bias in other means of acquiring physical assets, such as the market. Using individual-level data from Ecuador, Ghana, and Karnataka, India, this study analyzes modes of acquisition and financing of housing, agricultural land, other real estate, and businesses. The findings show that women acquire fewer of their assets through the market than men, and that in asset markets, both men and women are more likely to use their own savings than to use credit. The study also analyzes current loans for asset acquisition and finds that, in general, women tend to be somewhat disadvantaged in securing formal bank loans. The results suggest that financial inclusion to promote more gender equal access to accumulation of assets should focus on both savings and credit, with priority to savings.     

Have ‘European’ and US GAAP measures of income and equity converged under IFRS? Evidence from European companies listed in the US

The EU's adoption of IFRS, combined with the SEC's removal of the US GAAP reconciliation requirement for non‐US registrants reporting under IFRS, signifies a major shift towards the acceptance of global standards. Based on 20‐F reconciliations provided by the population of US listed European companies filing IFRS‐based statements with the SEC in 2005, we examine whether ‘European’ and US GAAP measures of income and equity converged under IFRS. We find that during the period immediately preceding IFRS, for our sample companies, European and US GAAP measures are generally comparable in respect of income and equity. However, as an exception to the latter, we find that UK GAAP yielded significantly lower measures of equity than US GAAP For companies adopting IFRS for the first time in 2005, we find a significant gap between IFRS and US GAAP measures of income, thereby, signifying de facto divergence from US GAAP in regard to income determination. Furthermore, we find that, following IFRS adoption, significant differences with US GAAP equity persisted for companies that previously reported using UK GAAP. Our findings, thus, support critics’ claims that standard‐setters, most notably the IASB and FASB, have more work to do to achieve a sufficient degree of convergence between IFRS and US GAAP that will convince the SEC to require US companies to use IFRS.     

The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies

The existing literature on soft budget constraints suggests that firms may be subsidized for political reasons or because of the creditors' desire to recover a part of the sunk cost invested in an earlier period. In all these models hard budget constraints are viewed as being, in principle, capable of inducing the necessary restructuring behaviour on the level of the firm. This paper argues that the imposition of financial discipline is not sufficient to remedy ownership and governance-related deficiencies of corporate performance. Using evidence from the post-communist transition economies, the paper shows that a policy of hard budget constraints cannot induce successful revenue restructuring, which requires entrepreneurial incentives inherent in certain ownership types (most notably, outside investors). The paper also shows that the policy of hard budget constraints falters when state firms, because of inferior revenue performance and less willingness to meet payment obligations, continue to pose a higher credit risk than privatized firms. The brunt of state firms' lower creditworthiness falls on state creditors. But the 'softness' of these creditors, while harmful in many ways, is not necessarily irrational, if it prevents the demise of firms that are in principle capable of successful restructuring through ownership changes.     

Final Exam Scores in Introductory Economics Courses: Effect of Course Delivery Method and Proctoring

Student performances on the final exam in introductory economics courses taught online and in the classroom were compared to consider the effect of proctoring the final exam. Students who took a course in the classroom did better on a proctored final exam than those taking the course online. Students in an online class taking a nonproctored final exam online scored more than one full letter grade higher than those taking a proctored final.     

Integrating marketing and information services functions: a complementarity and competence perspective

Integrating two disparate functions in organizations—marketing and information services (IS)—has become a critical business concern due to the increasing use of information technology (IT) to find and open new markets, deliver improved services to customers, and streamline internal marketing processes. This study appears to be the first to empirically examine the dynamics of bringing these distinct groups of specialists together. We investigate potential antecedents, consequences, and contingencies of IS-marketing integration, drawing on theories of complementarity and competence. Through a survey of IS and marketing executives, we learn that integration is facilitated by trust between the two functions and the interaction between IT strategic intent and customer orientation; it is impeded by a gap in top management knowledge of IT versus marketing. We also find that integration fosters the much-coveted capabilities of developing and introducing innovations (innovativeness) as well as responding flexibly, swiftly, and adroitly to opportunities (strategic responsiveness). Additionally, we determine integration is bounded by market dynamism. In sum, integration between marketing and IS can be enhanced via managerial efforts, and the relationship is profoundly beneficial to businesses.     

Employee affective and behavioral reactions to the spatial density of physical work environments

This field study of a medical clinic found that employees in spatially dense work areas (i.e., those with little space available per person) experienced higher levels of perceived crowding, transfer intentions, and tardiness, as well as lower work area satisfaction, than employees in low‐density areas. Crowding perceptions explained the relations between spatial density and the measures of work area satisfaction and tardiness. Finally, when employees had high workloads and their jobs required physical movement, spatial density had weaker relations to crowding perceptions and area satisfaction than in other conditions. Implications of these findings for human resource practitioners are discussed. © 2005 Wiley Periodicals, Inc.