Controlling the Overall Significance Level of a Battery of Least Squares Diagnostic Tests*

Double bootstrap methods are used to control the overall significance level of a battery of diagnostic tests applied to a regression model estimated by ordinary least squares. Monte Carlo evidence on the finite sample performance of the bootstrap methods is reported and discussed.     

FOREIGN-CURRENCY ACCOUNTING METHODS: REPORTING THE EXCHANGE RATE RISK EXPOSURE OF EQUITY

This study tests whether Australian firms' unregulated foreign-currency accounting policies indicated the extent to which equity claims against the firm were exposed to exchange rate risk. Evidence supports the hypothesis that the methods of accounting for foreign-currency gains and losses on long-term monetary-items were associated with the exposure. Methods of disposing of the gains and losses arising from translation of the accounts of overseas subsidiaries were also associated with the exposure, but not in the manner predicted. The results indicate that foreign-currency accounting policies were established in an interactive (portfolio) decision-making process, and that managers reported equity claim exposures relative to the returns to equity claims against other firms. Overall, the study provides evidence that at least some unregulated choices of foreign-currency accounting methods were made to minimise the agency costs associated with contracts between shareholders and management.     

Consumption externalities and upward-sloping demand

The law of demand states that individual demand curves are negatively sloped. To date, the Giffen Paradox represents the only analytically valid exception to the law under standard assumptions. This article shows that if consumption externalities exist, it is possible for the individual's demand curve to slope upward. In particular, the condition under which demand becomes upward-sloping can be delineated in terms of measures of elasticity of demand. Research grants (Grant #2056/99H and Grant #FRG99-00/II-12) from the Research Grant Council of Hong Kong and the Hong Kong Baptist University are gratefully acknowledged.     

The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective

Small Business Economics - Small and medium sized firms play an important role in the process of creative destruction. The focus of the paper is on the international diffusion of small and medium...     

Does Greater Firm‐Specific Return Variation Mean More or Less Informed Stock Pricing?

Roll [1988] observes low R² statistics for common asset pricing models due to vigorous firm‐specific return variation not associated with public information. He concludes that this implies “either private information or else occasional frenzy unrelated to concrete information”[p. 56]. We show that firms and industries with lower market model R² statistics exhibit higher association between current returns and future earnings, indicating more information about future earnings in current stock returns. This supports Roll's first interpretation: higher firm‐specific return variation as a fraction of total variation signals more information‐laden stock prices and, therefore, more efficient stock markets.     

Big business with Chinese characteristics: two paths to growth of the firm in China under reform

This paper presents a case study of two large firms which emergedfrom among the ranks of traditional state-owned enterprisesand new entrants: Shougang (steel) and Sanjiu (pharmaceuticals).Rather than being irreconcilable with the market economy, theexperience of these two firms suggests that the Chinese CommunistParty and the People's Liberation Army possessed a rich legacyof organisational and motivational skills. Moreover, Shougangand Sanjiu both grew rapidly through mergers and acquisitionsin the absence of privatisation and a developed stock market.Furthermore, the main reason for Shougang and Sanjiu's successis not special help from the government or the army, but ratherthe fact that its leadership used their autonomy to constructa highly effective business organisation.     

OHSAS 18001 certification and operating performance: The role of complexity and coupling

Today, manufacturing firms encounter pressure from multiple stakeholders to manage occupational health and safety issues properly, systematically and transparently. While manufacturing firms commonly use internally developed Occupational Health and Safety Management Systems, there is growing pressure to adopt externally certified system such as OHSAS 18001. However, there are conflicting views and little empirical evidence that examines the linkage between OHSAS 18001 certification and operating performance. Hence, this paper examines the impact of OHSAS 18001 on operational performance through three theoretical lenses: Institutional Theory, Normal Accident Theory, and High Reliability Theory. We also investigate how complexity and coupling moderate the relationship between OHSAS 18001 and operational performance. Based on a sample of 211 U.S. listed manufacturing firms with OHSAS 18001 certification, we find that certification leads to significant increases in abnormal performance on safety, sales growth, labor productivity, and profitability and that these benefits increase as complexity and coupling increase.     

The Impact of Chinese Culture on Service Predisposition

376 service employees at 27 Hong Kong food service outlets were surveyed using Lee-Ross's Service Predisposition Index instrument together with the cultural values questionnaire of the Chinese Culture Connection. The objective was to examine the influence of Chinese culture upon employees’ willingness to deliver service. Results suggested that cultural values influence service predisposition through specific job attitudes. Respondents perceived humbleness, loyalty to superiors and tolerance of others to have the greatest positive effect on their job attitudes. This influence was most pronounced for the service dimensions disposition and communication and the moderator deference. The cultural values that had the most negative influence on service predisposition were protecting face, conservatism and repayment of good/evil. Respondents interpreted delivering service in terms of personal deference, to the customer or their employer, rather than as a relationship with the customer. There seemed also to be a cultural reluctance to accord (unknown) customers status and hence to perceive them as worthy recipients of service.     

Intangible assets,IFRS and analysts’ earnings forecasts

We investigate whether the adoption of International Financial Reporting Standards (IFRS) in 2005 by Australian firms has been associated with a loss of potentially useful information about intangible assets. We find that the negative association between the accuracy and dispersion of analysts’ earnings forecasts and aggregate reported intangibles previously documented by Matolcsy and Wyatt (2006 ) becomes stronger subsequent to IFRS adoption, primarily for firms with high levels of underlying intangible assets. Our result is largely attributable to reported goodwill, rather than other intangible assets, suggesting that the impairment approach to goodwill valuation required by IFRS conveys more useful information than does the former straight‐line amortization approach. When we investigate a sub‐sample of firms that report lower intangibles under IFRS than under the prior Australian GAAP, we do find some evidence consistent with a loss of useful information relating to intangibles.     

Incidence,patterns and risk factors for injuries among Ugandan children

There is limited epidemiological data on childhood injuries in developing countries. This study assessed the incidence, patterns and risk factors for injuries among children aged 0–5 years in Wakiso District, Uganda. To determine differences, chi-square and Wilcoxon rank sum tests were used. Risk factors were assessed using Poisson regression. Overall, information from 359 children of mean age 32 months (SD: 18.4) was collected. Annual incidence of injuries was 69.8 per 1000 children/year (95% CI 58.8–80.8). One fatal injury due to burns was reported. Incidence of injuries was less associated with being female (IRR: 0.56, 95% CI 0.34–0.90) and increasing age of the caretaker (IRR: 0.96, 95% CI 0.92–0.99). The high incidence of childhood injuries necessitates the need for interventions to reduce injuries among children.