Sustainability and Accounting Education

Given the growing debate concerning the use of alternative presentation formats in corporate financial reporting, Volmer's recent paper in this journal is to be welcomed (June, 1992). Volmer conducts an experiment which compares students' perceptions of graphical and numerical presentations of financial information. From this he concludes that (i) graphical presentations improve the communication of financial information, and (ii) the integration of accounting research and teaching constitutes an effective alternative teaching method. We agree with the general message of Volmer's paper, and hope that subsequent studies will build on his exploratory work. This comment suggests a number of areas for future developments. These concern the literature base, experimental design, corporate practice and educational implications.     

Mortality Among the Elderly in Sweden 1988–1997

By replacing the exponential growth in a Makeham function with a straight line at very high ages, graduated mortality rates gives an acceptable adherence to observed data.     

Persistence in Portuguese mutual fund performance

Recent evidence suggests that future performance is predictable from past performance, that is, funds with superior (inferior) performance in the past are likely to remain good (bad) performers in the future. This research addresses the persistence of mutual fund performance in a European regional market (the Portuguese equity fund market). Some of the problems in evaluating fund persistence are identified in the context of limited sample size and using the peer group median as a benchmark for contingency table analysis of performance persistence. The criteria for assessing performance persistence based on the contingency table methodology of repeated winners and losers are presented in terms of significance statistics, adjusted for small sample bias. The adjustments are accomplished through the Yates continuity correction and Fisher's exact p-value. The appropriateness of each criteria under different circumstances is also discussed. The analysis of the returns of all Portuguese domestic equity funds, since a representative number was established, shows some performance persistence (on a quarterly basis). The persistence, however, is reduced when the returns are controlled for the various dimensions of risk. Significant risk persistence has been documented. Furthermore, for more or less frequent intervals of measurement, the industry persistence is rejected, although individual funds exhibit superior/inferior performance.     

Systemic risk in Europe: deciphering leading measures,common patterns and real effects

The paper studies salient features of systemic risk in a sample of 22 European (EU and non-EU) countries during January 2010–March 2016. Building on a novel dataset and conducting an empirical horse race, we determine pivotal systemic risk measures for the sample countries. SRISK and volatility indicator tend to lead other metrics, followed by leverage. In contrast to the conventional wisdom, composite systemic risk measures aggregated with the aid of principal and independent component analysis perform worse. The leading systemic risk measures exhibit a high degree of connectedness. The VIX index, TED spread, the Composite Index of Systemic Stress (CISS) and long-term interest rates underlie their dynamics. Two clusters within the sample are identified, with CISS and long-term interest rates being crucial to distinguish between them. There is only scarce evidence for causal linkages between systemic risk and industrial production in the sample countries, based on the concurring results of standard and nonparametric Granger causality tests.     

Trade credit,collateral liquidation,and borrowing constraints

Assuming that firms’ suppliers are better able to extract value from the liquidation of assets in default and have an information advantage over other creditors, the paper derives six predictions on the use of trade credit. (1) Financially unconstrained firms (with unused bank credit lines) take trade credit to exploit the supplier's liquidation advantage. (2) If inputs purchased on account are sufficiently liquid, the reliance on trade credit does not depend on credit rationing. (3) Firms buying goods make more purchases on account than those buying services, while suppliers of services offer more trade credit than those of standardized goods. (4) Suppliers lend inputs to their customers but not cash. (5) Greater reliance on trade credit is associated with more intensive use of tangible inputs. (6) Better creditor protection decreases both the use of trade credit and input tangibility.     

Comovement,information production,and the business cycle

Recent theoretical research suggests that information production is a positive externality of aggregate economic activity (Veldkamp, 2005). Both the quantity and quality of information increase during periods of economic expansion and decrease during periods of contraction. Based on this insight, we hypothesize and confirm that time-varying information production drives the comovement patterns observed in stock returns. We examine stock return comovement in 36 countries from 1980 to 2007 and show that, consistent with the theory, comovement patterns are countercyclical; that is, when information production is high (low), comovement is low (high). We also find that the relation between comovement and the business cycle is stronger in countries that experience large intertemporal swings in information production. Finally, we show that the relation between business cycle and comovement is stronger in poor countries, countries with less developed financial markets, and countries with weaker accounting and transparency standards. These results suggest that financial development and transparency are conducive to a steady flow of financial information over the business cycle.     

Capital structure,equity ownership and firm performance

This paper investigates the relationship between capital structure, ownership structure and firm performance using a sample of French manufacturing firms. We employ non-parametric data envelopment analysis (DEA) methods to empirically construct the industry’s ‘best practice’ frontier and measure firm efficiency as the distance from that frontier. Using these performance measures we examine if more efficient firms choose more or less debt in their capital structure. We summarize the contrasting effects of efficiency on capital structure in terms of two competing hypotheses: the efficiency-risk and franchise-value hypotheses. Using quantile regressions we test the effect of efficiency on leverage and thus the empirical validity of the two competing hypotheses across different capital structure choices. We also test the direct relationship from leverage to efficiency stipulated by the Jensen and Meckling (1976) agency cost model. Throughout this analysis we consider the role of ownership structure and type on capital structure and firm performance.     

How Should Customers Be Integrated for Effective Interorganizational NPD Teams? An Input–Process–Output Perspective

Interorganizational new product development (NPD) teams with business customers are rapidly becoming more prevalent; yet the drivers of such cooperations at the team level remain unclear to practitioners and researchers alike. This study proposes an input–process–output model in which various characteristics of interorganizational teams affect NPD team effectiveness through the mediating construct of NPD team cooperation. Furthermore, various moderators, reflecting the supplier's dependence on the customers (customer power and customer participation) and the supplier's environmental uncertainty (market dynamism and technological turbulence), affect the strength of the underlying relationships. The results show that customer power positively affects the relationship between intrapersonal team characteristics and team cooperation. In addition, a negative moderation occurs in interpersonal characteristics. Customer participation exhibits opposing moderating effects. Regarding the supplier's environmental uncertainty, market dynamism and technological turbulence strengthen the relationships under consideration.     

The coopetition paradox and tension in coopetition at multiple levels

This article explores the nature of the paradox inherent in coopetition; that is, the simultaneous pursuit of cooperation and competition between firms, and emanating tensions that develop at individual, organizational, and inter-organizational levels. We dissect the anatomy of the coopetition paradox to discover how it materializes by creating an external boundary (i.e., via unifying forces) and internal boundaries (i.e., via divergent forces). After explaining the coopetition paradox, we distinguish tension from paradox and submit that tension comprises both positive and negative emotions simultaneously, also known as emotional ambivalence. Finally, we recognize that emotional ambivalence in coopetition prevails at different levels, and vary in its level of intensity and persistency in relation to different contexts. We employ illustrative cases to ground our propositions empirically. This article provides understanding on concepts, expects to incite fruitful dialogue, and fuels further studies on inter-firm paradoxes.