Federal capital expenditures and budget deficits: Gross national product and labor implications

The issue of separating capital from operating expenditures has been largely ignored in discussions of the U.S. Federal Government's deficit. This paper attempts to overcome this void by conducting a simulation experiment designed to assess the macroeconomic consequences of separating capital from current expenditures under several alternative balanced budget rules and financing arrangements. The alternatives considered are directly related to management accounting issues and thus the purpose of this paper can be seen as compatible with the literature on the relationship between accounting techniques and economic analyses. The results of the study reaffirm the need for federal capital investment planning.     

The meeting place: Qualitative aspects of product environmental assessment

Quantitative methods for evaluating the environmental impact of products are receiving considerable attention. Software is being developed to enable analysis of many aspects of a product's life cycle—from materials' extraction, through manufacture, to use and disposal. Less attention is being paid to the qualitative aspects of products and their significance in addressing environmental concerns. Here, the argument is made for including qualitative evaluations as an important facet of product environment assessment. Such evaluations are essential if significant progress is to be made in alleviating the adverse environmental effects of products. Combined with quantitative analyses, the two approaches become mutually supportive and, ultimately, inseparable.Qualitative environmental assessments can be applied to existing products and at every stage of the design process. Their adoption within the context of professional practice will be fostered by their inclusion, formulation and discussion within design education. This paper describes the basis and nature of these qualitative judgments, and places the qualitative and quantitative in a unified context which points towards more sustainable ways of living. The use of scenarios is discussed as a tool for academic design projects in order to address the complex relationships which might otherwise seem overwhelming to the design student.     

How Information Technology Assimilation Promotes Exploratory and Exploitative Innovation in the Small‐ and Medium‐Sized Firm Context: The Role of Contextual Ambidexterity and Knowledge Base

This research sheds new light on how information technology (IT) assimilation affects exploratory and exploitative innovation in the context of small‐ and medium‐sized firms (SMEs). This contextualization is important in establishing the boundary conditions for the theory, as well as generating specific managerial insights for SME managers. A sample of 248 U.K.‐based SMEs in the manufacturing industry demonstrates contextual ambidexterity (CA) mediates the relationship between IT assimilation and two types of innovation. This finding highlights that IT assimilation does not automatically promote innovation. Instead, IT assimilation represents a critical resource that enables the effective implementation of CA, which in turn affects innovation. This implies that SMEs cannot fully realize the potential of their IT assimilation and use it to enable innovation without implementing CA. Furthermore, this study differentiates between two different dimensions of knowledge base: knowledge breadth and knowledge depth. This study finds that knowledge breadth moderates the indirect IT assimilation–exploratory innovation relationship by influencing the effect of CA on exploratory innovation. Knowledge depth, on the other hand, moderates the indirect IT assimilation–exploitative innovation relationship by influencing the effect of CA on exploitative innovation. This finding implies that SMEs can benefit from their IT assimilation that enables them to engage in CA, which in turn allows them to perform innovation. However, it is apparent that the dimension of knowledge that SMEs hold internally can determine what types of innovation that they are able to perform.     

Management Guidance Pre‐ and Post‐Restatement

We examine whether the quality of restating firms’ management guidance differs in periods before and after restatement announcements. While characteristics of restating firms and the consequences of restatement have been a central topic in accounting and auditing research, the quality of management guidance around restatements is less well understood. We consider two competing characterizations of the link between management forecast accuracy and bias and restatement (an event that tends to signal poor financial controls): “Forecast–Opportunism Explanation” and “Forecast–Ability Explanation”. Under the Forecast–Opportunism Explanation, pre‐restatement weaknesses in financial controls enable managers to manipulate earnings toward forecasts and to meet or exceed opportunistically biased forecasts, and the post‐restatement strengthening of financial controls constrains opportunistic behavior. Under the Forecast–Ability Explanation, pre‐restatement weaknesses in financial controls impede managers’ ability to issue accurate forecasts, and post‐restatement improvements remove impediments so that the accuracy of forecasts improves; forecast bias remains unaffected. Evidence indicates that before a restatement, restating firms’ forecasts are more accurate and relatively more downwardly biased than control firms’ forecasts. Post‐restatement, restating firms have less accurate and less downwardly biased management guidance. Our overall results are consistent with the Forecast–Opportunism Explanation.     

Correction to: Carry Trade Returns and Segmented Risk Pricing

Atlantic Economic Journal - A correction to this paper has been published: https://doi.org/10.1007/s11293-021-09708-3     

The Endogeneity Problem in Applied Fisheries Econometrics: A Critical Review

Environmental and Resource Economics - The purpose of this essay is to bring attention to some serious problems that exist in econometric application of fisheries economic models. These problems in...     

Innovation speed under uncertainty and competition

Innovation speed is widely considered to be a key factor for a firm's ability to maintain competitive advantage. Primarily, empirical evidence has found contradictory interdependencies regarding the role of innovation speed. The prevailing proposition of “the faster the better” has been challenged by results of empirical studies heavily depending on the methodological setup used. In contrast, we propose a model of the complete innovation process to study innovation speed under uncertainty and competition. We find that higher market uncertainty speeds up innovation and encourages firms to innovate incrementally. Strong competition tends to reduce innovation speed and encourages rather radical innovation.