A Note on Affordability and the Optimal Share Price

Despite the increase in institutional ownership, decreased trading costs, and increased real personal savings, we find that the average stock price is lower today than it was in the 1920s. In the aggregate, the propensity to split is a function of recent market performance, personal savings, and the desirability of appearing to be a small firm. Our results indicate that, after decades of inflation and the average stock price falling, splitting stocks to return to an affordable trading range must be rejected as an explanation. This suggests that other economic forces are behind splits, whether traditional or behavioral in nature.     

Changes in Malaysia: Capital controls,prime ministers and political connections

During the 1997 Asian currency crisis and resulting imposition of capital controls in Malaysia, evidence from previous studies shows that firms with political connections suffered more during the crisis but benefited more when capital controls were introduced. In the period since then, the evidence shows financial firms with political connections have not performed as well as others since the measures set up to support them have been removed. The study period not only includes the relaxation of capital controls, but also the resignation of Tun Dr. Mahathir Mohammad as prime minister and the handover of control to Datuk Seri Abdullah Ahmad Badawi.     

Issues in the relationship between theory and practice in management accounting

In recent decades the interest of academic researchers in the practical aspects of management accounting has waned. This editorial explores some of the reasons of this development. Over the past few decades we have witnessed the establishment of management accounting in academia as a social science. This has increased the credibility of the accounting academics. However, it has also meant that academic researchers have neglected the technical core of their discipline and its problems and issues which have a direct practical relevance. It is concluded that there is a need for academic researchers to have a stronger focus on the technical core of the subject and to harness the findings of empirical research so that they can be used to develop and support practice.     

Aged-care support in Japan: perspectives and challenges

This article explores economic aspects of the market for long-term care (LTC) in Japan. As the world's most rapidly aging nation, it is of interest to understand that country's current LTC system and projections of LTC utilization patterns and costs, as well as their potential drivers. Since Japan appears likely to experience important shortfalls in LTC in the future, the authors also discuss alternate forms of provision.     

Hedonic pricing and the role of stud fees in the market for thoroughbred yearlings in Australia

Using data from one of Australia's largest thoroughbred auction houses, we investigate the price determinants of thoroughbred yearlings sold at auction. We include novel key variables to construct hedonic pricing models and examine the relative role of stud fees compared to the wide range of attributes in the pricing of yearlings. We find that the price effect of stud fees is influenced by the value buyers place on both the characteristics of sires and the characteristics of sire side siblings. The findings imply that the quality of dams a sire has been matched within the breeding market has consequential effects on yearling prices through the sire's stud fee and progeny.     

Do investors actually value sustainability? New evidence from investor reactions to the Dow Jones Sustainability Index (DJSI)

Research Summary: Research exploring investor reactions to sustainability has substantial empirical limitations, which we address with a large‐scale longitudinal financial event study of the first global sustainability index, DJSI World. We examine investor reactions to firms from 27 countries over 17 years that are added, deleted, or continue on the index. We find that once relevant controls and comparisons to observationally equivalent firms beyond the index are included, DJSI events have only limited significance and/or materiality. Nonetheless, investors' valuation of sustainability around the world has evolved over time, involving diminishing reactions to U.S. firms and increasing benefits, particularly of continuation on the index, over time. The study highlights the importance of careful analysis and longitudinal global samples in making inferences about the financial effects of social performance. Managerial Summary: The debate about how investors perceive corporate social responsibility (CSR) predates Milton Friedman's famous statement that the only social responsibility of business is to increase profits. Although extensive research has studied whether sustainability contributes to financial performance, we have yet to understand whether investors believe it pays off. This financial event study of reactions to the addition, continuation, and deletion from DJSI World, the first global sustainability index, shows that investors care little about DJSI announcements. Nonetheless, there is some evidence that global assessments of sustainability are converging and that investors may increasingly be valuing continuation on the DJSI, suggesting that firms may gain at least limited benefits from reliable sustainability activities.     

Quality management practices and their relationship to buyer’s supplier ratings: a study in the Korean automotive industry

This research explores if quality management practices are different among suppliers whose performance is rated high, medium, or low by a common buying company and identifies which specific practices contribute to the differences. The entire population of first-tier suppliers to a Korean auto assembler was surveyed to measure use of quality management practices. Useable returns were received from 25% of the suppliers surveyed. To measure conformance quality and overall rating, suppliers were categorized into high, medium, and low performing groups based on the buying company’s data. Multivariate analysis of variance was done using general linear model (GLM-MANOVA) to explore differences in the high-, medium-, and low-performing supplier groups based on their use of quality management practices. No statistically significant differences were found when suppliers were categorized based on conformance quality. However, when categorized based on overall rating, the highest rated suppliers were found to emphasize process management and employee satisfaction to a greater degree than the lowest rated suppliers.     

The Peter Principle resuscitated: are promotion systems useless?

The challenge of developing and maintaining an effective organisation is intimately linked with HR activities that include selecting and motivating employees. Many organisations engage in an internal selection process designed to fill upper level positions with employees who have proven their worth at a lower level in the organisation. However, some observers have questioned whether this approach actually results in optimal individual and organisational performance. Using the Peter Principle as a starting point, this article examines the evidence for problems with merit‐based promotions, as well as various explanations that have been advanced for why these problems occur. This article then proposes a new model, based on contemporary management theory and evidence, which addresses the question of why promotions fail.     

Can corporate social responsibility resolve the sanitation question in developing Asian countries?

The existing state of sanitation in developing Asian countries fails to deliver a level of service that is adequate for meeting the human right to a standard of living consistent with dignity and health, or for sustaining the capacity for future generations to have access to clean water resources and healthy ecosystems. We argue that translating the current neo-centralised technologies and institutional arrangements mainstreamed by industrialised countries would not resolve the problem in the context of developing countries. Instead it is necessary to ‘leap frog’ to the emerging technological and institutional arrangements that are responsive to current needs and contexts and to potential risks. The sustainability focus and often decentralised technologies of this emergent stage in sanitation present many opportunities for new actors to enter the urban sanitation industry. At the same time, there are many barriers to entry, particularly from the perspective of conventional business management focused on increasing shareholder value.We propose that perspectives from the corporate social responsibility discourse have the potential to provide both the ‘pull’ for seizing the business opportunity for profit while serving social needs, and the ‘push’ to overcome the barriers in order to serve a wider social purpose for corporations. The wealth of nations, at least as reported in ubiquitous GDP terms, has greatly increased through the activities of corporations driven by a profit motive; but the increased poverty, injustice and ecosystem degradation that have resulted from economic activity suggest that corporations perhaps ought to have regard for broader concerns beyond shareholder value. We explore how the alternative relational view of a corporation, as a metaphorical person within society who adopts a moral code consistent with both Buddhist economics and Adam Smith's philosophy, may facilitate profitable corporations that provide better economic, ecological and social outcomes in serving the need for sustainable sanitation services in developing Asian countries.