The Discriminating Beta: Prices and Capacity with Correlated Demands

Uniform customer‐class pricing can do much of the work of congestion‐based or time‐of‐day pricing in communication or wireless networks. A monopolist exploits differences in the stochastic characteristics of demands. If demands are correlated and the firm faces a capacity constraint, then it can set prices to reduce the variability of aggregate demand, thereby reducing the probability of excess demand and the associated service quality deterioration. Demands that covary negatively with aggregate demand are valuable to the firm in much the same way that securities that covary negatively with the market are valuable in a stock portfolio. Customer classes that exhibit low covariance with aggregate demand realize lower optimal prices. Optimal capacity is also affected by these covariances. As long as demands are not perfectly positively correlated, expected costs of joint production are less than expected costs of serving demands separately.     

Tax avoidance and ex ante cost of capital

This study examines the association between tax avoidance and ex ante cost of equity capital. Based on prior research, we develop two proxies for investors’ expectations of tax avoidance and explore whether deviations from those expectations result in higher ex ante cost of equity capital. We find that the ex ante cost of equity capital increases with tax avoidance that is either below or above investor expectations and that the increase is larger for tax avoidance that exceeds investors’ expectations. We then examine whether firms that alter their future tax avoidance exhibit a lowering of their ex ante cost of equity capital and find that tax avoidance decreases (increases) from the prior year for firms that were above (below) investors’ expectations in the prior year. These results are consistent with the trade‐off suggested by the Scholes and Wolfson framework and reinforce the notion that balancing tax benefits and non‐tax costs is an important feature of firms’ tax planning.     

Forecasting technology diffusion: a new generalisation of the logistic model

The present research proposes a new generalisation of the logistic model aiming at technology diffusion forecasting. Regarding criticisms and failures reported in the literature to apply logistic function for long-term forecasting, in our work we focused on short-term accuracy of forecast. To formulate the model, based on mathematical approximation, at first the differential equation governing the diffusion process is found and then by solving the derived differential equation, the forecast function is obtained. In all steps, mathematical tools from numerical analysis are used. We compared the New Generalized Logistic Model with eight of the most renowned models in the literature. The model led to more accurate fits and forecasts than those obtained from other models we applied for comparison.     

Readability of accountants’ communications with small business—Some Australian evidence

This paper explores the readability of a new and non-corporate narrative area, accountants’ communications with small business. The distinctive motivations, agendas and interests of small business managers are considered. The findings are informed by rationales from Shearer's (2002) thesis on the influence of neoclassical economics on accounting discourse. The study finds low readability accentuated by potentially low reader interest with accounting documents composed according to conventional accounting's rules and statutory requirements. Higher readability and document content which informs small business managers’ interests is evident when accountants are not compelled to author documents with reference to these professional rules and legislation.     

You May Not Reap What You Sow: How Employees’ Moral Awareness Minimizes Ethical Leadership’s Positive Impact on Workplace Deviance

Although a growing body of research has shown the positive impact of ethical leadership on workplace deviance, questions remain as to whether its benefits are consistent across all situations. In this investigation, we explore an important boundary condition of ethical leadership by exploring how employees’ moral awareness may lessen the need for ethical leadership. Drawing on substitutes for leadership theory, we suggest that when individuals already possess a heightened level of moral awareness, ethical leadership’s role in reducing deviant actions may be reduced. However, when individuals lack this strong moral disposition, ethical leadership may be instrumental in inspiring them to reduce their deviant actions. To enhance the external validity and generalizability of our findings, the current research used two large field samples of working professionals in both Turkey and the USA. Results suggest that ethical leadership’s positive influence on workplace deviance is dependent upon the individual’s moral awareness—helpful for those employees whose moral awareness is low, but not high. Thus, our investigation helps to build theory around the contingencies of ethical leadership and the specific audience for whom it may be more (or less) influential.     

Increasing pay transparency: A guide for change

The gender pay gap is an important issue today in the U.S. The lack of transparency surrounding pay in businesses is viewed as one cause of this gap. The first section of this article explores the origins of the gender pay gap and presents a brief history of pay transparency. Then, I propose a framework built from three continua that breaks the concept of pay transparency into types and levels. Using this framework, I offer guidance to organizations that want to increase pay transparency. The article concludes with a discussion of the risks associated with increased pay transparency and suggestions for future research.     

Does Interindustry and Intraindustry Information Help Predict Financial Distress?

This study investigates whether and how the accounting ratios of peer firms within the same industry (the industry peers) or firms within the industry of their customers (the downstream peers) help improve the predictability of sample firm financial distress. We document that the Z‐score factors of the companies with high correlation in stock returns help predict financial distress. The results show that accounting‐based ratios of the industry peers and the downstream peers enhance the accuracy of early warnings of financial distress, especially when prior returns of peer firms are highly correlated with the sample firm.