Career growth opportunities and employee turnover intentions in public accounting firms

This study examines the role of career growth opportunities in explaining turnover intentions of junior auditors in public accounting firms via a survey of them. Prior studies in applied psychology and organisational behaviour argue that employees and their organisations have a social exchange relationship in which employees and organisations provide reciprocal benefits to each other. Extending this research, this paper proposes that career growth opportunities represent a critical benefit to lower level employees in accounting firms. When these employees believe that their firm provides this benefit, they reciprocate with stronger commitment to the firm which, in turn, leads to lower turnover intentions. This study also seeks to identify the causes or antecedents of employee beliefs about career growth opportunities. Two antecedents are proposed: the effectiveness of the firm's training programmes; and, the organisational prestige of the firm. Results of path analysis suggest that both training effectiveness and organisational prestige enhance employee beliefs about the career growth opportunities offered by the public accounting firms, which, in turn lead to higher commitment and lower turnover intentions.     

Reducing managers’ incentives to cannibalize: Managerial stock options when shareholders are diversified

We analyze the relative advantage of option grants compared to stock compensation when shareholders are diversified. Our analysis recognizes a conflict that is largely neglected in the corporate finance literature. Shareholders want to maximize their portfolio value while capital budgeting rules direct managers to choose projects that maximize firm (equity) value. Options can reduce this conflict by motivating managers to avoid projects that enhance the value of one firm at the expense of another firm. Also, in our framework, relative performance evaluation destroys value for shareholders as it encourages firms to engage in cannibalistic activity. Consistent with the predictions of our model we find that firms with lower insider ownership, higher institutional ownership, and lower leverage tend to provide more option grants as compensation to their executives.     

Rallying competencies in virtual communities: A study of core processes and user interest in open source software projects

Managing work practices has become one of the key challenges facing virtual communities. This paper seeks to broaden the research on virtual communities by applying the theory of competency rallying (TCR) in a longitudinal manner to examine the impact of task identification, task assignment, task execution and task management on user interest in open source software (OSS) projects defined by popularity and communication. The aim of this paper is: (1) re-conceptualizing the concept of user interest and broadening our understanding of user interest by incorporating users' post-usage behaviors, (2) examining the effect of various tasks involved in an OSS project's key processes of defect-fixing and feature-enhancement on user interest. The current study found that project popularity is positively influenced by task assignment, task execution and task management. Additionally, user communication was found to be positively impacted by task identification and task execution. The data collected from 1178 OSS projects in a longitudinal manner (at 3 time points over a period of 16 months) confirmed the expectations from TCR and also demonstrated that over time the effects that development of competencies and managing short term cooperative work have on project success might increase, while the impact of identifying market needs and marshalling competencies may not significantly change.     

Equilibrium play in matches: Binary Markov games

We study two-person extensive form games, or “matches,” in which the only possible outcomes (if the game terminates) are that one player or the other is declared the winner. The winner of the match is determined by the winning of points, in “point games.” We call these matches binary Markov games. We show that if a simple monotonicity condition is satisfied, then (a) it is a Nash equilibrium of the match for the players, at each point, to play a Nash equilibrium of the point game; (b) it is a minimax behavior strategy in the match for a player to play minimax in each point game; and (c) when the point games all have unique Nash equilibria, the only Nash equilibrium of the binary Markov game consists of minimax play at each point. An application to tennis is provided.     

The Association of R&D and Capital Expenditures with Subsequent Earnings Variability

Abstract:  We estimate the association of investments in R&D and in physical assets (CAPEX) with subsequent earnings variability. We estimate these relations in different time periods and across industries. We find that R&D contributes to subsequent earnings variability more than CAPEX only in relative R&D-intensive industries – industries in which R&D is relatively more intensive than physical capital. In physical assets-intensive industries, we do not find similar relations. The findings suggest that with respect to subsequent earnings variability, fundamental differences between investment information about R&D and CAPEX exist. However, they are mainly noticeable in firms that operate in relatively R&D-intensive industries. The evidence also suggests there was a shift in the relations between R&D and CAPEX over time. Our findings contribute to the debate on accounting for R&D expenditures.     

Evaluating a non-linear asset pricing model on international data

The paper analyses the ability of a non-linear asset pricing model suggested by Dittmar [Dittmar, R.F., 2002. Non-linear pricing kernels, kurtosis preference, and the cross-section of equity returns. Journal of Finance 57, 369-403] to explain the returns on international value and growth portfolios. For comparison we use competing pricing models such as the ICAPM, the exchange rate risk augmented ICAPM and the international two-factor model proposed by Fama and French [Fama, E.F., French, K. R., 1998. Value versus growth: The international evidence. Journal of Finance 53, 1975-1999]. All models are evaluated both unconditionally and conditionally. The models are evaluated by applying the Hansen and Jagannathan distance measure, and we also employ several alternative measures to ensure a robust comparison of the models. We find support for the model of Dittmar [Dittmar, R.F., 2002. Non-linear pricing kernels, kurtosis preference, and the cross-section of equity returns. Journal of Finance 57, 369-403]. Evaluated conditionally, this model successfully passes all the different diagnostic tests performed in the analysis.     

Conditional Properties of Hedge Funds: Evidence from Daily Returns*

Using daily returns on a set of hedge fund indices, we study (i) the properties of the indices' conditional density functions and (ii) the presence of asymmetries in conditional correlations between hedge fund indices and other investments and between hedge fund indices themselves. We use the SNP approach to obtain estimates of conditional densities of hedge fund returns and then proceed to examine their properties. In general, a nonparametric GARCH(1,1) model appears to provide the best fit for all strategies. We find that the conditional third and fourth moments are significantly affected by changes in the current volatility of returns on hedge fund indices. We examine changes in the conditional probability of tail events and report significant changes in the probability of extreme events when the conditioning information changes. These results have important implications for models of hedge fund risk that rely on probability of tail events. We formally test for the presence of asymmetries in conditional correlations to determine if there is contagion between hedge funds and other investments and between various hedge fund indices in extreme down markets versus extreme up markets. We generally do not find strong evidence in support of asymmetric correlations.     

Impact of airport green atmospherics on mental health value,image, and loyalty among visitors and workers

Nature‐based solutions (NBS) are becoming increasingly crucial as NBS brings diverse health‐related benefits to travelers and workers in the tourism business sector. This research explored the influence of green atmospherics as NBS on airport occupants' mental health value, image, and loyalty generation processes. A quantitative approach with a field survey method was employed. A structural equation modeling and metric invariance test were used as data analysis technique. Our empirical result revealed that green atmospherics as NBS significantly improve the occupants' mental health value and image of the airport, and these variables contribute to their loyalty enhancement for the airport. The effect of green spaces and natural surroundings on loyalty was maximized through mental health value and image. In addition, the linkages from natural surroundings to mental health value and image were stronger in the visitor group whereas the mental health value—loyalty relation was stronger in the worker group.