Excess Returns to R&D-Intensive Firms

Recent studies indicate that both current R&D investment levels and current or recent changes in R&D investment are positively associated with subsequent excess (risk-adjusted) stock returns. The tentative explanation offered for these results is that shares of R&D-intensive firms are mispriced because investors fail to see through earnings distortions caused by conservative accounting for R&D costs. However, an alternative explanation is that conventional controls for risk do not completely capture the riskiness of R&D-intensive firms, causing measured excess returns for these firms to be biased upward. This study provides evidence useful for distinguishing between the mispricing and risk explanations for R&D-related excess returns. Overall, our empirical results suggest that the positive association between R&D investment levels and excess returns is more likely to result from failure to control adequately for risk than from mispricing. On the other hand, our results do not rule out the possibility of a second source of excess returns that are due to mispricing and that are associated with changes in the level of R&D investment.     

Identifying Fraud in Online Auctions: A Case Study

According to the FBI (IC3, 2011), losses as a result of auto‐auction fraud exceeded $8.2 million dollars in 2011. How can one detect deception in online auction transactions? The authors use a comprehensive case to teach students about deception detection processes, detection cues, and the e‐commerce environment. Students are challenged to make a professional judgment about whether the transaction under consideration is an attempt to deceive. The case is based on a real‐life situation and provides a valuable exercise for business students, educating them in the reality of online auction markets and developing their critical thinking skills. The case may be used with undergraduate accounting majors in Accounting Information Systems classes and with graduate students in an e‐commerce course either as an in‐class assignment or as a term project. Students provided favorable responses as to the value of the case.     

Implications of nurse-physician relations: report of a successful intervention

Given the evidence linking medical errors to ineffective communication, strategies for improving communication among health care professionals must be implemented. The purpose of this article was to examine the effect of a collaborative intervention on improving communication patterns between nurses and physicians on two study units. The intervention consisted of two nurses and two physicians (per unit) meeting together (8 hours total) to collaboratively develop a solution to communication issues on their respective units. Physicians scored significantly higher on reports of openness of communication within groups, openness between groups, accuracy between groups, and collaboration between groups. Collaboration reported among nurses and physicians improved for both professions, with significance reached for physicians (p = 0.031). Strategies must be identified to break down the barriers set by the current culture, and that expedite the development of a team-centered culture supporting collaborative relations among health care professionals.