The effect of earnings quality and country-level institutions on the value relevance of earnings

This study investigates the relationship between the value relevance of earnings and earnings quality across countries. We find that there is a stronger relationship between earnings quality and the value relevance of earnings in countries with high investor protection than in countries with weak investor protection. We also find that the association between the value relevance of earnings and earnings quality is higher when a country’s information environment is less opaque. Overall, our study documents evidence on international differences in the ability of stock prices to capture useful accounting information, consistent with the notion that the returns-earnings association reflects not only the quality of accounting earnings but also the informativeness of stock prices.     

MISGUIDED CORPORATE VIRTUE: THE CASE AGAINST CSR,AND THE TRUE ROLE OF BUSINESS TODAY1

The doctrine of corporate social responsibility (CSR) has now been accepted across the world – not only by businesses and business organisations, together with an array of commentators and NGOs, but also by many governments. This is a worrying development. The doctrine rests on mistaken presumptions about recent economic developments and their implications for the role and conduct of enterprises, while putting it into effect would make the world poorer and more over‐regulated.     

CLIMATE CHANGE ISSUES: A DISSENTING VOICE

(The text which follows formed the basis for a brief presentation to a conference held on 22 April 2009 at the Said Business School, Oxford University. The subject of the conference was 'Beyond Kyoto – Green Innovation and Enterprise in the 21st Century'.)
Governments across the world are mishandling climate change issues. The content, the orientation, and in particular the basis and rationale of current policies to curb emissions of (so-called) 'greenhouse gases', are all open to serious question.     

Can entrepreneurial firms benefit from product piracy?

We examine the potential benefits of product piracy to entrepreneurial firms. Specifically, we use a resource-based perspective to show that a decrease in the inimitability of an entrepreneurial firm's intellectual property does not necessarily diminish performance when piracy increases the value of this resource, and an information economics perspective to explain why and when imitation can increase the value of an intellectual property resource. This explanation reconciles empirical studies that indicate mixed results. It also expands the resource-based view by suggesting that reducing the value of one resource can directly increase the value of another.     

When consumers switch brands

A proposed integrative approach measured consumer response to various incentives to switch brands. The response measure consisted of both actual behavior (i.e., switching behavior) and an evaluative measure, which underlies the behavior. Self-perception theory was utilized to assess consumer switching behavior in response to intrinsic versus extrinsic motives. The integrative approach was tested in the context of a multistage longitudinal field study concerning five product classes. Findings show that there is a difference depending upon whether switching behavior was induced by extrinsic (e.g., price, coupon) or intrinsic (e.g., a desire to try a new brand) incentives. Unlike intrinsically induced switching, extrinsic incentives motivated consumers to switch despite a high level of satisfaction with the last purchased brand. However, this switching behavior resulted in weaker intentions to repurchase the new brand.     

Choice and the Internet: From Clickstream to Research Stream

The authors discuss research progress and future opportunities for modeling consumer choice on the Internet using clickstream data (the electronic records of Internet usage recorded by company web servers and syndicated data services). The authors compare the nature of Internet choice (as captured by clickstream data) with supermarket choice (as captured by UPC scanner panel data), highlighting the differences relevant to choice modelers. Though the application of choice models to clickstream data is relatively new, the authors review existing early work and provide a two-by-two categorization of the applications studied to date (delineating search versus purchase on the one hand and within-site versus across-site choices on the other). The paper offers directions for further research in these areas and discusses additional opportunities afforded by clickstream information, including personalization, data mining, automation, and customer valuation. Notwithstanding the numerous challenges associated with clickstream data research, the authors conclude that the detailed nature of the information tracked about Internet usage and e-commerce transactions presents an enormous opportunity for empirical modelers to enhance the understanding and prediction of choice behavior.