Multinational corporations and economic nationalism: Conflict over resource development in Canada

Faced with rising Third World nationalism, multinational corporations engaged in resource exploitation are turning back to higher cost but apparently politically more secure investments in the industrialized states. To what extent does the dynamic of government– resource industry relations in an industrialized setting differ from the pattern observed in the Third World? To answer this question the article analyses the decision to nationalize the potash industry in the Canadian province of Saskatchewan using models of host government–MNC conflict developed by Vernon, Mikesell and Moran to study Third World cases. The research suggests that the dynamic logic of government-industry conflict in a developed country setting is very similar to the pattern observed in the Third World. The decentralized Canadian federation, the ideology of the party in power in Saskatchewan and the nature of the potash industry combine to structure a situation in which coercive nationalization of a resource industry was seen as the only policy option.     

The crisis of fair-value accounting: Making sense of the recent debate

The recent financial crisis has led to a vigorous debate about the pros and cons of fair-value accounting (FVA). This debate presents a major challenge for FVA going forward and standard setters’ push to extend FVA into other areas. In this article, we highlight four important issues as an attempt to make sense of the debate. First, much of the controversy results from confusion about what is new and different about FVA. Second, while there are legitimate concerns about marking to market (or pure FVA) in times of financial crisis, it is less clear that these problems apply to FVA as stipulated by the accounting standards, be it IFRS or US GAAP. Third, historical cost accounting (HCA) is unlikely to be the remedy. There are a number of concerns about HCA as well and these problems could be larger than those with FVA. Fourth, although it is difficult to fault the FVA standards per se, implementation issues are a potential concern, especially with respect to litigation. Finally, we identify several avenues for future research.     

Project-Specific External Financing and Headquarters Monitoring Incentives

This article analyzes the relationship between a firm's financingand its project incorporation decisions. It is shown that headquartersmay have an incentive to carry out a new project within a subsidiaryrather than within the existing firm. The project is partiallyfinanced through an external claim which is taken on by thesubsidiary even though the parent corporation has sufficientfunds to finance the project on its own. The reason for thisis that reducing headquarters' claim on the project's cash flowmay increase its incentive to monitor the quality of the projectprior to making a continuation investment. This has positiveincentive implications for the manager who is running the project.     

Adoption of Biometric Authentication Systems: Implications for Research and Practice in the Deployment of End-User Security Systems

Recent security lapses have demonstrated the importance of augmenting authentication protocols in sensitive areas of the economy, such as financial services and banking. In addition, new legislative requirements for secondary authentication mechanisms have highlighted the use of biometric technology as a reliable, but not required, means of authentication. The focus of this study examines the factors that influence the adoption of biometric authentication in organizations. The research model measures the relative contribution that variables in three categories (External Pressure, Readiness, and Perceived Benefits) have in the intent to adopt biometric authentication in financial services institutions. Managers of these institutions were surveyed, and the resulting model indicates that, as expected, the intent to adopt is driven by competitive factors, an organization's financial resources, and the perceived benefits associated with the technology. An important unanticipated finding from this research is that managerial support was not shown to be significantly related to adoption intent, which may be attributed to the context of biometric systems adoption. This research advances our understanding of the adoption literature by demonstrating how structural factors can influence the decisions made by organizational actors and by applying theories of adoption to a new technology—biometrics.     

The Ignored Performance Measure

This paper studies a setting in which a risk-averse agent must be motivated to work on two tasks: evaluating a potential project and, if the project is adopted, implementing it. Although a performance measure that is informative of an agent's action is typically valuable because it can be used to improve the risk sharing of the contract, this is not necessarily the case in this two-task setting. I provide a sufficient condition under which a performance measure that is informative of the agent's implementation effort is worthless for contracting despite the agent being risk averse. This shows that information content is a necessary but not a sufficient condition for a performance measure to be valuable.     

TRADE SIZES AND THEORIES OF THE BID-ASK SPREAD

Relations between trade-size characteristics and the bid-ask spread are developed to distinguish among major theories of the spread. These trade-size characteristics are determinants of the spread for NASDAQ/NMS stocks. They explain much of the cross-sectional variation in the spread commonly associated with volume, volatility, and share price. Evidence shows that order-processing costs are dominant relative to inventory effects for low-price, small-capitalization, and low-volume stocks, but that the opposite is true for high-price, large-capitalization, and high-volume stocks. Inventory effects are more important relative to asymmetric information costs when stock price or capitalization is lower.     

On the benefits of allowing CEOs to time their stock option exercises

This article examines the costs and benefits of permitting executives to use inside information to time their stock option exercises. Whereas prior research has focused on the negative effects of timing discretion, I show that such discretion can have beneficial incentive effects in that it leads to improved project abandonment decisions. This result follows because at‐the‐money options used to induce managerial effort tilt the CEO's preferences toward project continuation. When the CEO is free to unload stock options at will, he will do so exactly in those states where the continuation bias is most detrimental (i.e., in the event of bad news), making the CEO willing to abandon the project.