A methodological note on diversity measurement

This research addresses the question, do categorical and continuous measures capture the same construct of diversity? Using analysis of variance, cluster analysis, and discriminant analysis, we investigated whether continuous measures (entropy and product count) differentiate between diversification categories, whether continuous measures converted to categories and subjectively assigned categories classified companies similarly, and whether continuous and categorical measures predicted similar diversity–performance relationships. We concluded that the techniques were associated but did not yield the same performance predictions. For researchers investigating diversity–performance relationships, choice of measurement technique will influence research results. Our research results suggest that attempts to combine categorical and continuous techniques as a way to overcome the limitations of both methods is not appropriate.     

A wicksellian indicator of monetary policy

This paper compares actual U.S. monetary policy with an ideal policy based upon Wicksell's theory of natural and market rates of interest. For the period 1952–1971, this comparison indicates that actual policies behaved in a distinctly pro-cyclical manner with the result that monetary policies amplified the magnitude of the business cycles. The explanation offered suggests that this stems from the central bank's attempt to stabilize the interest rate which is consistent with one of the paper's findings of a highly significant positive relationship between changes in the natural rate of interest and changes in the monetary base.     

Regulation as a means for the social control of technology

The argument that regulation is a necessary, though controversial, component of technology policy is discussed in detail. Ib addition to the regulation of technology, various other regulatory policies, such as market regulation, affect the development of technology. Various types of direct regulation and their conditions of operation are discussed. It is shown that regulation can afect technological innovation positively by providing a surrogate market. The paper serves as an introduction to this special issue and shows how the different contributions fit into a general framework of regulatory effects on technolgy. Regulation as a factor in competition is discussed, particularly in the context of developing countries.     

On Compliance with Ethical Standards in Tax Return Preparation

The Statements on Responsibilities in Tax Practice (SRTPs) provide guidance to the CPA when making decisions in tax practice. Many of these decisions are ethical in nature and have implications for tax compliance. In this study, a survey methodology is used to test whether the SRTPs affect decisions that CPAs make. The findings suggest that a clear majority of CPAs follow the SRTPs when making ethical decisions relating to tax return preparation and that CPAs follow the SRTPs more often than unlicensed preparers on half the issues tested. However, a statistically significant number of CPAs do not follow the SRTPs and, CPAs do not follow the SRTPs any more often than unlicensed tax preparers on three issues.     

Self‐selection,endogeneity, and the relationship between CEO duality and firm performance

This study focuses explicitly on the methodological implications of the endogenous theory of governance as applied to firm performance. In particular, if firms choose their governance structures as part of a constrained performance maximization process, then application of an appropriate empirical methodology should reveal statistical evidence of such behavior. In this study we take advantage of the endogenous switching regression model framework to determine whether such predicted optimizing behavior can be corroborated by the data. The model allows us to test explicitly for selection behavior in accordance with comparative advantage and, concomitantly, the presence of selectivity bias, in estimating the impact of CEO duality on firm performance. The selection and performance equations are modeled in accordance with the extant accounting, economics, and management literature on the impact of the dual governance structure on firm performance. Overall, we tested four performance measures for the entire sample of firm‐year observations as well as for the largest three industries in terms of sample sizes. The major finding, robust in all cases, is that there is no evidence to support a contention that CEO duality is a structure purposefully chosen for optimizing performance. If firms are indeed choosing the dual leadership structure, they are doing so for reasons other than improving performance from what it would be otherwise. In fact, for performance measured as market return and earnings per share, there is evidence of a significant selectivity bias that acts to lower performance below what it would have been under random assignment. For performance measured by Tobin's q and return on assets, we found neither evidence of selectivity bias, nor any significant marginal performance impacts of CEO duality. Such findings are inconsistent with an endogenous governance theory, at least when applied to firm performance. Copyright © 2009 John Wiley & Sons, Ltd.     

Is a $200 Nordstrom Gift Card Worth More or Less Than a $200 Gap Gift Card? The Asymmetric Valuations of Luxury Gift Cards

Gift cards account for a $200 billion market in the US, yet little is known about consumers’ preferences and valuations of different gift cards. We examine how average US consumers feel about exchanging luxury brand gift cards (LGCs) versus non-luxury brand gift cards (NLGCs). Using secondary data analyses, surveys, and experiments, we demonstrate two asymmetries: between valuations of LGCs versus NLGCs and between valuations of gift cards by givers versus recipients. We show that LGCs are valued less than NLGCs with identical price tags. LGCs are more likely to be swapped or sold. Resellers demand and buyers pay lower prices for LGCs. These effects are mediated by the perceived utility of the gift cards as gifts and moderated by a person’s role in the gifting process. Gift givers value and prefer to give LGCs more, whereas recipients prefer and value NLGCs more.     

A globally flexible,quadratic almost ideal demand system: an application to demand for meats and fish in Taiwan

A new demand system, called a globally flexible, quadratic almost ideal demand system (GF–QUAIDS), integrates both the quadratic Engel curve and the Fourier series. This novel GF–QUAIDS model is applied to study the demand for meats and fish in Taiwan. Empirical results show that the GF–QUAIDS fits the data well and that, by using the likelihood ratio test, its nested models are rejected, including the locally flexible functional form and the linear Engel curve. Nevertheless, other empirical model-selection measures indicate that the GF–QUAIDS can be as good as its famous nested models such as the AIDS, QUAIDS and GF–AIDS.