Accounting conservatism and voluntary corporate governance mechanisms by Australian firms

This study examines the relationship between voluntary adoption of selected corporate governance mechanisms and accounting conservatism for a sample of firms listed on the Australian Securities Exchange (ASX) over the 11‐year period prior to the promulgation of the ASX Corporate Governance Council Good Governance Principles and Best Practice Recommendations in 2003. Using four accounting and market‐based accounting conservatism measures, our results provide evidence of both conditional and unconditional conservatism in accounting reporting for Australian firms. We find that voluntary audit committee formation, increasing board independence and decreasing board size are positively associated with unconditional accounting conservatism and negatively related to the degree of conditional conservatism. Our results support the contention that firms voluntarily adopting perceived best practice corporate governance mechanisms employ unconditional accounting conservatism as a complimentary agency control device and are consistent with the observed negative association between the unconditional and conditional forms of accounting conservatism practice.     

The impact of a sales team’s perceived entitativity on customer satisfaction

This research investigates the impact of a sales team’s entitativity—the extent to which a group of individuals is perceived as a unified single entity—on customer satisfaction. Four studies demonstrate that a sales team entitativity cue, either based on appearance (e.g., wearing the same outfit) or based on behavior (e.g., explicit coordination in service), leads to heightened perceptions of service quality, which subsequently enhances customer satisfaction. Further, these two entitativity cues are shown to have interactive effects. Specifically, when both cues indicate high entitativity, customer satisfaction with the sales team exceeds the average evaluation of individual team members. However, if at least one cue suggests low entitativity (e.g., different outfits or no explicit coordination), the positive influence of the entitativity cue is undermined and customer satisfaction with the team’s service is mitigated. Product category is identified as an important moderator of the main effect.     

Partnerships,management systems and the search for innovative regulation in the vehicle body shop industry

This article examines innovative approaches to regulating the environmental performance of vehicle body shops, in the state of Victoria, Australia. Based on field research, this provides a useful opportunity to not only identify the limitations of the environmental management practices (including regulatory resistance, a lack of resources and cultural obstacles), but also the failure of conventional regulatory approaches to adequately address and overcome problematic characteristics typical of small and medium sized enterprises (numerous, geographically dispersed, environmentally unsophisticated and, collectively, a substantial source of pollution). Particular focus is given to cleaner production, partnerships and environmental management systems in improving environmental performance. We also consider the potential role of ‘regulatory surrogates’ as an adjunct to a mix of government regulatory initiatives. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment.     

A model of entry–exit decisions and capacity choice under demand uncertainty

Many investment decisions of agribusiness firms, such as when to invest in an emerging market or whether to expand the capacity of the firm, involve irreversible investment and uncertainty about demand, cost or competition. This paper uses an option‐value model to examine the factors affecting an agribusiness firm's decision whether and how much to invest in an emerging market under demand uncertainty. Demand uncertainty and irreversibility of investment make investment less desirable than the net present value (NPV) rule indicates. The inactive firm is more reluctant to enter the market when it takes into account demand uncertainty because it preserves the opportunity of making a better investment later. The active firm is more reluctant to abandon the investment because there is an option value of keeping the operation alive. There is a greater distance between the entry and exit thresholds under the option‐value approach than under the NPV rule due to demand uncertainty. The results have implications for agribusiness decision‐making.     

Sales Concessions in the US Housing Market

This article examines the use of concessions in the US housing market, specifically payments for closing costs, home warranties, and structural repairs. This is the first study to examine the motivations and characteristics of homeowners that utilize concessions. It also examines the impact concessions have on transaction prices and marketing durations. While the literature has attempted to determine if concessions can reduce marketing durations or increase transaction prices, the evidence is tainted by endogeneity and sample issues. Additionally, we find that relative bargaining power between buyers and sellers has a fundamental effect on how concessions alter prices and marketing durations. This aspect has been considered only narrowly in the extant literature. Our results demonstrate that when sellers have bargaining power, transactions including concessions exhibit higher prices and shorter marketing durations. Conversely, when buyers have greater negotiation leverage, transactions including concessions experience lower prices and longer marketing periods.     

How source cues impact consumer evaluations of direct and indirect persuasion attempts

This research demonstrates how the directness of a persuasion attempt by a sales agent, in this case flattery, changes how source cues influence consumers’ evaluation of the shopping experience. When the persuasion attempt is direct, source cues do not influence consumer evaluations. However, when an indirect persuasion attempt is used, it is only effective when positive source cues are present. In particular, when the persuasion attempt is indirect, evaluations are more effective when the sales agent is attractive to or shares similar opinions with the consumer. Copyright © 2013 ASAC. Published by John Wiley & Sons, Ltd.