The capital structure implications of pursuing a strategy of innovation

In this paper, we argue that consideration of firm strategy can help illuminate the choices managers make between debt and equity financing. Within an industry, the form of competition that each firm chooses will determine the strategic value to the firm of maintaining financial slack. Our empirical analysis yields strong support for the proposition that financial slack should be a particularly critical strategic imperative for firms pursuing a competitive strategy premised on innovation. We also demonstrate that firms pursuing such a strategy that fail to recognize the value of financial slack are likely to perform poorly. Copyright © 2003 John Wiley & Sons, Ltd.     

Why Press Coverage of a Client Influences the Audit Opinion

In this study I use an experiment to examine why auditors are more likely to issue going–concern opinions when the client has been the subject of negative press coverage prior to the date of the audit opinion. I find no evidence that negative press coverage increases auditors' perceptions of legal liability, as was suggested in the prior literature. I do find, however, that negative press coverage increases auditors' perception of a client's bankruptcy probability and this, in turn, leads auditors to modify the audit opinion. Because the press coverage presented in this study provides no new information, the results suggest that auditors react too strongly to redundant information. This over–reaction can result in inefficient allocation of audit resources and can have deleterious affects on clients. Accordingly, policy makers, auditors and their clients might be interested in how auditors' reliance on redundant information can be reduced.     

数据管理:电子商务数据的存储问题

许多情况说明，用于组织中数据存储的消费已经成爆炸状态。产生这种情况的主要因素是电子邮件和电子商务对数据的质量和数量的要求提高了，并且这种数据大部分是分散的、非结构性的，这就增加了对组织中数据管理的要求。本文是在澳大利亚进行的一次调查的基础上做出的，该调查是关于组织中如何处理数据增长和由于数据增长所带来的问题。调查的结果显示人们对该问题表现出高度的关注，同时显示出一种乐观的趋势，即技术将对未来出现的各种各样的问题提供解决方案。     

FDI facilitated by agglomeration economies: evidence from manufacturing and services joint ventures in China

The open door policy of China’s economic reform since the 1980s has attracted heavy foreign direct investment (FDI) flows into China and especially to Guangdong (particularly the Pearl River Delta region, PRD) and induced significant economic growth during the past two decades. While there exist various classical theories of FDI in attempting to identify the determinants of FDI inflow and to explain the behavior of FDI flows, limited attention has been given from the perspective of agglomeration effects generated by a core-periphery (CP) relation.This paper intends to study the impacts of agglomerations on FDI inflows in the context of Krugman’s CP relation (1991) by investigating (1) the formation of a CP relation via gravity model analysis; (2) whether different types of industry FDI flows will respond differently in the CP-system, given agglomeration effects; and (3) whether FDI origin and firm scale matter in affecting FDI flows.A database consisting of a population frame of 37,742 firm-level manufacturing and services joint ventures investing in Guangdong in 1998 was used. Empirical results show that the agglomerations of the CP relation have affected FDI flow patterns. While both manufacturing and services FDI and sources of investment responded differently to the impacts, smaller firms were found more responsive to the CP-agglomeration settings regardless of FDI by industry type and by source. The significance and implications of the CP-system to further facilitate FDI in the region are discussed.     

Identifying “best” applicants in recruiting using data envelopment analysis

Selecting the most promising candidates to fill an open position can be a difficult task when there are many applicants. Each applicant achieves certain performance levels in various categories and the resulting information can be overwhelming. We demonstrate how data envelopment analysis (DEA) can be used as a fair screening and sorting tool to support the candidate selection and decision-making process. Each applicant is viewed as an entity with multiple achievements. Without any a priori preference or information on the multiple achievements, DEA identifies the non-dominated solutions, which, in our case, represent the “best” candidates. A DEA-aided recruiting process was developed that (1) determines the performance levels of the “best” candidates relative to other applicants; (2) evaluates the degree of excellence of “best” candidates’ performance; (3) forms consistent tradeoff information on multiple recruiting criteria among search committee members, and, then, (4) clusters the applicants.     

R&D strategy and Australian manufacturing industry: an empirical investigation of emphasis and effectivness

This research investigates the degree of emphasis placed by the Australian manufacturing industry on Research and Development (R&D) strategy as well as on other organisational strategies such as marketing, HRs (HR), technology, and operations at the functional level. The research extends further to investigate whether the emphasis on R&D strategy differs with contextual factors such as firm size, firm’s generic strategy, type of market, firm’s life cycle stage, etc. A mail survey was carried out to collect information from manufacturing firms across Australia. This was followed by an on-site interview of some of the senior managers of manufacturing firms from three Australian states: South Australia, Victoria and New South Wales.The study found that although the emphasis on R&D strategy has received a high priority in the past few years, it has not been as effective as the operations strategy and the technology strategy. The operations strategy has been accorded the highest importance in the past few years and this will continue in the future. The study also indicated that firms, which adopt a differentiation generic strategy, put more emphasis on R&D than the firms, which adopt cost leadership and focus generic strategies. The results did not indicate any evidence of a relationship between firm size and the R&D strategy although large firms are found to put more emphasis on operations and marketing strategies. Relatively higher emphasis was placed on the R&D strategy by businesses: at the growth stage; involved in the manufacture of consumer goods as opposed to industrial goods; involved in exports with a higher sales growth in export markets; and having a higher growth rate relative to their industry.     

Evidence on agglomeration economies,diseconomies, and growth

Conventional urban economic analysis suggests that a local economy's size is closely related to a number of features, including levels of human capital and the availability of specialized inputs, which are likely to influence positively the rate at which it accumulates further economic activity. At the same time, urban theory also suggests that once cities reach a certain level of size, these agglomeration benefits begin to peter out, while diseconomies rise rapidly. Consequently, we should see an ‘inverted U‐shaped’ pattern of growth with respect to economic size—rates of growth first rise, then fall as size increases. This paper shows that, while such a pattern is largely absent from recent data on growth in metropolitan area population and employment, it emerges strikingly in county‐level data. Copyright © 2002 John Wiley & Sons, Ltd.     

Changes in food provision in Russian households experiencing perestroika

The purpose of this article is to describe how households in Novgorod the Great, Russia, deal with food provision in everyday life. The study focuses on changes experienced in food provision and consumption in Russian society, in order to illustrate how households respond to the transformation towards a market economy. The study reflects women's perspective on food provision. Students from Novgorod the Great visited 105 households and asked the women in the household to answer a questionnaire. Results from the study show that in order to cope with changes in society related to economic reforms, Russian households had changed both their food consumption and food production patterns. There was no big difference between urban and rural households. Nearly all of the households were self‐sufficient in the provision of vegetables and potatoes. Many households had a ‘dacha’ (plot), where they produced most of what they needed. Among the changes experienced during recent years (i.e. during the end of the 1990s), a decade after perestroika was initiated, households mentioned the rise in food prices and the decrease of income. Households reported that they consumed less fruit and/or meat. Some households also mentioned that the quality of nourishment had decreased, thereby indicating lower general quality, lower nutrition value, or less healthy foodstuffs.