The Effectiveness of Internal Auditing: An Empirical Examination of its Determinants in Israeli Organisations

Internal auditing (IA) has become an indispensable control mechanism in both public and private organisations. Yet very few academic studies have been conducted on the effectiveness of IA. The current exploratory study aims to build a conceptual understanding of the effectiveness of IA in organisations. Towards this end it develops a scale to measure the effectiveness of IA and a model of its determinants. One hundred and eight Israeli organisations that employ IA participated in the study (a 37% response rate). Data on the effectiveness of IA were collected from the organisations’ general managers and data on the determinants from their internal auditors. The findings reveal good psychometric properties for the scale developed in this study. The correlation and regression analyses show support from top management to be the main determinant of IA effectiveness, with some effect also found for the organisational independence of IA. The effect of the predictors was consistent between the public and private sectors. The research model explained a large amount of variance of IA effectiveness. The findings are discussed in terms of how they can help guide and encourage the continuation of research on this issue.     

Bloody foreigners! Overseas equity on the London Stock Exchange, 1869–1929

This article presents data on quantity, capital gains, dividend yields, and total returns of domestic and overseas equities listed on the London Stock Exchange during 1869–1929. Indices are presented for Africa, Asia, Australia (including New Zealand), Europe, Latin America, and North America (as well as for the UK), and for the finance, transportation, raw materials, and utilities sectors in each region. Returns and volatility were typically highest in emerging regions and the raw materials sector. Dividend yields were similar across regions and differences in total returns were due largely to disparities in capital gains. Contingent liability was most extensively employed where leverage was high and the physical assets were either meagre or inaccessible to creditors.     

Simple Reputation Systems*

We develop a model of simple “reputation systems” that monitor and publish information about the behavior of sellers in a search market with asymmetric information. The reputations created influence the equilibrium search patterns of buyers and thus provide for market‐based “punishment” of bad behavior. We show that a reputation system that rewards honesty can enhance welfare by allowing good sellers to truthfully signal their type. However, the same system can be prone to strategic manipulation by sellers who always have low‐quality products. In that case, we show that an alternative system which assigns reputations based on product quality rather than honesty can be superior.     

Technology's varying impact on the success of strategic business units within the miles and snow typology

The high-tech industry is usually treated as an homogeneous entity, without differentiating between organizations according to the relative importance of technology in their business strategy. This paper investigates the varying impact of technology on the success of strategic business units within the Miles and Snow typology. Although common wisdom might lead to the conclusion that prospectors are more dependent on technological progress than the other strategic types, the results show rather that the influence is greater and more fruitful for the defenders both in the short and the long term.     

THE PROFITABILITY OF COLONIAL INVESTMENT

This paper develops a model for studying colonial investment in which the metropolitan government restricts the amount of investment in the colony in order to maximize the net profits earned in the colony. The model explicitly includes the threat of subversive activity by the indigenous colonial population. The analysis suggests why historically some countries but not others became colonies and why many colonies that were initially profitable subsequently become unprofitable and were abandoned. The model also has implications for the amount of investment in colonies, the allocation of indigenous colonial labor between production and subversive activity, and the distribution of income between colonial firms and the indigenous population.     

Effects of Crop Prices,Nuisance Costs,and Wetland Regulation on Saskatchewan NAWMP Implementation Goals

Current Saskatchewan wetland regulation may be insufficient to meet North American Waterfowl Management Plan (NAWMP) preservation and restoration goals in a climate of increasing demand for grains and nuisance costs. Therefore, the purpose of this paper is to ascertain the effects that crop prices, nuisance costs, and alternate wetland regulation have on these goals. An integrated geographic information system and economic farm‐level model that assesses the net present value of drainage projects in the Whitesand River Watershed is employed. If prices eventually reach historical highs observed in the early 1970s, more than 85% of the wetland area in the study area could be drained, making NAWMP goals impossible to achieve. In this scenario, nuisance costs have little effect on drainage outcomes because they are dwarfed by the magnitude of agricultural revenue. If prices remain at the current higher levels observed from 2007 to 2012, the use of a binding permit could help achieve NAWMP goals. In this case, nuisance costs play a large role in determining the drainage of marginal, comparatively larger wetlands. If prices return to the recent lower levels observed from 1999 to 2006, current Saskatchewan regulation is sufficient. In this scenario, agricultural returns are low and nuisance costs are not high enough to cause wetland drainage. Both wetland regulation and nuisance costs can play an important role in agricultural wetland drainage, but that role depends critically upon the price of agricultural products.     

Heterogeneous workers and international trade

In this paper, I survey the recent theoretical literature that incorporates heterogeneous labor into models of international trade. The models with heterogeneous labor have been used to study how talent dispersion can be a source of comparative advantage, how the opening of trade affects the full distribution of wages, and how trade affects industry productivity and efficiency via its impact on sorting and matching in the labor market. Some of the most recent contributions also introduce labor market frictions to study the effects of trade on structural unemployment and on mismatch between workers and firms.     

Theorising change and stability in service ecosystems: a morphogenetic approach

Service scholars are recognising the complex, adapting, and dynamic nature of value creating service systems. There remains an opportunity to explore the dynamic properties of these multilevel systems and build explanations of how these complex systems change and stabilise providing the context for value creation. This paper builds on the continuing work and use of sociological theory in these efforts and argues for an alternative meta-theoretical approach and accompanying framework. Together this contribution provides a basis for building midrange theory to address the stabilising (morphostatic) and change inducing (morphogenetic) mechanisms in service ecosystems.     

What Drives Urban Consumption in Mainland China? The Role of Property Price Dynamics

This paper adds to the literature on wealth effects on consumption by disentangling house price effects on consumption for mainland China. In a stochastic modelling framework, the riskiness, rate of increase and persistence of house price movements have different implications for the consumption/housing ratio. We exploit the geographical variation in property prices by using a quarterly city‐level panel data set for the period 1998Q1–2009Q4 and rely on a panel error correction model. Overall, the results suggest a significant long‐run impact of property prices on consumption. They also broadly confirm the predictions from the theoretical model.     

The Impact of Pension Age Changes — The Case of Malta

After remaining unchanged for several decades, the pension age in Malta started to rise in 2012. This process, which will continue until 2026, was introduced to help boost the workforce and partially countervail the impact of the country’s demographic transition. The scope of this article is to review evidence on the impact to date of these changes and to use this to try to understand the potential impact of remaining pension age changes.