Towards a More Complete Efficiency Wage Theory

The efficiency wage is an important topic in the theory of employment. In a traditional efficiency wage model, only the representative firm is optimizing against an assumed S‐shaped effort supply function. This S‐shaped supply curve is critical for the model and the absence of a derivation of the curve in the literature means that it is an incomplete theory. In the present paper, we extend the model by specifying a worker's representative utility function so that the corresponding argmax function will be the S‐shaped effort supply curve. This will make the worker's decision process endogenous and will produce a more complete model. The importance of this extension is clear. The characterization of the utility function will make explicit the necessary conditions and crucial assumptions of the traditional model. More importantly, the extension will allow researchers to introduce employment compensation factors into the worker's utility function for analysis. This has important bearings on future development in employment theory. For example, a worker's satisfaction from shirking (net of dismissal risks), or his or her willingness to search for jobs (net of search cost), can now be included in his or her utility function to form an optimal work or search strategy. Incorporating the worker's optimization behaviour into the model will also enable researchers to study policy directed not just towards firms but also towards the worker's decision process. Furthermore, this approach provides a framework for researchers to generate comparative statics. These comparative statics can lead to interesting topics for econometric models or to further research within this field.     

Analysing interconnectivity among economies

As international financial integration gathers pace, interconnectivity has increased tremendously among financial institutions, financial markets and financial systems, a phenomenon to which the recent global financial crisis perhaps provided the best testimony. The interconnectivity among financial entities at various levels is multilateral in dimension and highly complicated with numerous feedback loops. To contribute to the understanding of the complexity of the global financial system, this study shows how the interconnected relationships can be disentangled into simple and quantifiable bilateral interdependence linkages, using 11 Asia-Pacific economies as an example. A major finding is that all these economies register a significantly higher sovereign risk once the condition that another economy is in distress is imposed.     

Evidence on the Determinants of Credit Terms Used in Interfirm Trade

Trade credit is created whenever a supplier offers terms that allow the buyer to delay payment. In this paper we document the rich variation in interfirm credit terms and credit policies across industries. We examine empirically the firm's basic credit policy choices: whether to extend credit or to require cash payment; and, if credit is extended, whether to adopt simple net terms or terms with discounts for prompt payment. We also examine determinants of variations in two-part terms. Results are supportive primarily of theories that explain credit terms as contractual solutions to information problems concerning product quality and buyer creditworthiness.     

The Importance Of Inherent Risk Factors: Auditors‘ Perceptions

This research project investigated auditors' perceptions of the importance of inherent risk factors in assessing inherent risk for accounts receivable and inventory. Sixty-eight auditors completed a questionnaire listing 42 inherent risk factors and six control risk factors. The auditors were required to: identify whether each factor was an inherent risk factor; indicate whether the factor affected their assessment of inherent risk at the financial statement or account balance (class of transactions) level; indicate whether the factor was associated with high or low inherent risk; and assess how important the inherent risk factor was in their assessment of inherent risk. In general, the auditors perceived variables pertaining to the characteristics of management and the history of errors to be the major determinants of inherent risk.     

Social criteria for evaluating population change: an alternative to the Blackorby-Donaldson criterion

"An ethical objection is raised against the Blackorby-Donaldson criterion of optimum population maximizing the sum total of utilities in excess of some critical level, since it may disprefer a social state with more people and with more worthwhile lives. However, the criterion may serve as a practicably reasonable compromise between maximizing total and average utility. Nevertheless, an alternative compromise (the maximization of number-dampened total utility) is proposed that is free from the above objection."     

Financial Reporting and Trade Credit: Evidence from Mandatory IFRS Adoption*

We investigate the effect of mandatory IFRS adoption on trade credit. We document that firms in countries that adopt IFRS receive more trade credit from their suppliers, consistent with improved financial reporting quality and comparability playing a role in facilitating informal financing. This increase is larger for countries with a low level of societal trust, a poor pre‐IFRS‐adoption information environment, and stronger legal enforcement. These cross‐sectional results suggest that the conditions under which higher‐quality information is made publicly available affect suppliers' decisions to provide trade credit. This increase is also larger for firms with greater exposure to foreign markets, a finding that highlights the importance of more comparable international financial reporting standards in facilitating cross‐country trade credit. We also find that IFRS adoption has a stronger positive effect on trade credit for firms with greater liquidity needs. Finally, we find that firms in countries that adopt IFRS also extend more trade credit to their customers. Overall, our results support the notion that financial reporting can have a causal effect on trade credit.     

Antecedents of Green Brand Equity: An Integrated Approach

A steady demand for green products from concerned consumers has led companies to introduce new product lines that match or exceed consumer environmental concerns. Nonetheless, not all the organizations were able to achieve significant returns on their investments in green products. These failures are generally attributed towards companies’ inability to overcome consumer scepticism towards the performance of functional and green attributes of their brands to generate a positive green image and green value in consumers mind. Therefore, the question arises that does the success in promoting green brand image and value depend on consumer existing perceptions about the brand quality and credibility? This study analyzes the influence of brand perceive quality and credibility on consumer perceptions towards a brand green image, green value and green equity. A theoretical model with hypothesized relationships is developed and tested to answer these research questions. Data have been collected from the consumers of electrical and electronic goods. The hypothesized relationships were tested with the help of structural equation modeling procedure. The results suggest that brand perceived quality and its overall credibility does have a significant influence on generating a greener image, green perceive value and green brand equity.     

Understanding B2B Supplier Selection Relationships: The Case of Taiwan Agribusinesses

Purpose: This article seeks to investigate the factors impacting the selection of suppliers in the Taiwan agribusiness sector and explore the relative importance of these factors. In addition, it explores the potential differences based on the organization's size and stakeholders (i.e., buyer versus supplier and management versus operational).

Methodology/Approach: This study is exploratory in nature and involves a two-stage process. In the first stage, in-depth interviews were conducted with 10 agribusiness professionals in Taiwan to determine the relevance of the current literature about the criteria used in the selection of suppliers in the Taiwan agribusiness industry. The second stage involved 16 case studies with 32 interviews, using information gathered from the first stage.

Findings: Findings revealed that the support of the 22 selection criteria presented in the preliminary framework was important to influencing an organization's selection of suppliers in the Taiwan agribusiness industry. The findings suggest that Taiwan agribusiness buyers consider the financial position of the suppliers and the quality of their managerial teams as critically important in the supplier selection process. There was little indication that the desire for business, geographical location, and repair service were regarded as important criteria for selecting suppliers.

Research Implications/Limitations: The findings of this research have added new insights to the existing literature of B2B supplier selection criteria with the identification of two additional criteria (innovativeness and willingness to cooperate). The exploratory nature of this study and the initial development of a framework of supplier selection within the context of the Taiwan agribusiness industry had constrained the applicability of the findings to other markets and industries.

Practical Implications: The findings highlighted a list of important selection criteria that agribusiness managers can consider during their supplier selection process. In addition, the findings can assist agribusiness managers from supplying organizations to build on their organizations' strengths and capabilities in meeting those important supplier selection criteria so that they can stay ahead in the increasingly competitive agribusiness industry.

Originality/Value/Contribution: By focusing on the agribusiness sector, this study provides insights into a much neglected industry where supplier selection is a crucial issue to many agribusinesses, particularly from the perspective of major buyers in value-adding agribusiness enterprises.