HOW JAPAN FIRST BEGAN TO EXPORT MACHINE‐MADE MANUFACTURES TO EAST ASIA*

Drawing on late Meiji period data, the efforts of Japan's cotton spinning mills to overcome overseas competition and establish themselves in the Chinese, Korean and Hong Kong markets are examined. Estimating a probit model of the decision to export, it is found that despite readily available export finance and commercial networks that should have greatly lowered the costs of participating in East Asian markets, sunk entry costs still appear to have been quite large. Many otherwise capable mills apparently saw little prospect of entering tariff‐less East Asian markets, notwithstanding the possibility of generous subsidies and trade association devised predatory strategies.     

Relative versus Incremental Information Content*

Abstract. This study distinguishes between incremental and relative information content. Incremental comparisons ask whether one accounting measure provides information content beyond that provided by another, and apply when one measure is viewed as given and an assessment is desired regarding the incremental contribution of another (e.g., a supplemental disclosure). Relative comparisons ask which measure has greater information content, and apply when making mutually exclusive choices among alternatives, or when rankings by information content are desired (e.g., when comparing alternative disclosures). Questions of both incremental and relative information content arise frequently in accounting. However, few previous studies have examined questions of relative information content. Possible explanations include unfamiliarity with the relative versus incremental distinction, and the additional statistical complexity involved in testing for relative information content. First, we examine analytically the relation between incremental and relative information content, demonstrating that they address different research questions and require different tests for statistical significance. Second, we identify accounting research contexts in which questions of relative and incremental information content arise. Third, we propose a new regression-based test for relative information content. This test applies to both returns and valuation studies, generalizes to any number of predictor variables, and can be used in conjunction with White's (1980) adjustment for heteroskedasticity. Fourth, we illustrate tests for relative and incremental information content in a familiar research setting that compares the information contents of net income, cash flows, and net sales in 40 industries. Résumé. Les auteurs établissent la distinction entre le contenu marginal et relatif en information. Les comparaisons du contenu marginal visent à déterminer si une mesure comptable livre un contenu en information supérieur à celui d'une autre, et elles s'appliquent dans les cas où une mesure est considérée comme étant donnée et où l'on souhaite évaluer la contribution marginale d'une autre mesure (par exemple, la présentation de renseignements complémentaires). Les comparaisons du contenu relatif visent à déterminer quelle mesure livre un contenu en information supérieur, et elles s'appliquent dans les cas où les choix entre différentes possibilités sont mutuellement exclusifs ou lorsqu'il s'agit d'établir des classifications selon le contenu en information (par exemple, dans la comparaison de différentes possibilités en ce qui a trait à la présentation d'information). La question du contenu marginal aussi bien que du contenu relatif en information se pose fréquemment en comptabilité. Dans les études réalisées jusqu'à maintenant, l'on s'est peu intéressé aux questions touchant le contenu relatif en information. Cette lacune pourrait s'expliquer, entre autres, par le caractère inusité de la distinction entre contenu relatif et contenu marginal en information et par la complexité statistique accrue que supposent des tests portant sur le contenu relatif en information. Selon un schéma analytique, les auteurs examinent en premier lieu la relation entre le contenu marginal et le contenu relatif en information, en démontrant que les mesures correspondantes se rapportent à des questions de recherche différentes et qu'elles exigent des tests de signification statistique différents. Ils déterminent en deuxième lieu quels sont les contextes de recherche comptable dans lesquels se posent les questions pertinentes au contenu relatif et marginal en information. Ils proposent, en troisième lieu, un test inédit fondé sur la régression et s'appliquant au contenu relatif en information. Ce test convient à la fois aux études de rendement et aux études d'évaluation, peut être généralisé à n'importe quel nombre de variables prédictives et peut être utilisé en association avec l'ajustement de White (1980) relatif à l'hétéroscédasticité. Ils illustrent, en quatrième lieu, l'application de tests du contenu relatif et marginal en information dans un contexte de recherche familier où le contenu informationnel du bénéfice net, des flux de trésorerie et du chiffre d'affaires net est comparé dans 40 entreprises.     

Effects of Organizational Learning and Information-Processing Behaviors on New Product Success

Individual learning constructs were formulated in an organizational learning context and empirically tested for relationships with new product success. Two constructs, information recording-retrieving and information reviewing, were found to be positively related to new product success. The relevance of these constructs to organizational learning theory are discussed, along with the implication that managers should carefully record and review past information to improve future new product success rates.     

Strategy Selection,Surrogation, and Strategic Performance Measurement Systems

Strategic performance measurement systems operationalize firm strategy with a set of performance measures. A consequence of such alignment is the tendency for managers to lose sight of the strategic construct(s) the measures are intended to represent, and subsequently act as though the measures are the constructs of interest, a phenomenon referred to as surrogation. We investigate how involvement in strategy selection affects managers’ propensity to exhibit surrogation. We predict and find that strategy selection reduces surrogation. Surprisingly, we do not find that engaging in strategy deliberation, a key process underlying strategy selection, reduces surrogation. Thus, managers’ involvement in the actual choice of strategy appears to be both a necessary and sufficient condition to mitigate surrogation. Our paper broadens understanding of factors that influence surrogation, such as the effects of different aspects of managers’ strategic involvement and buy‐in. Further, by documenting how managers behave within (as opposed to simply with) strategic performance measurement systems, we highlight the potential for managers to endogenously influence the effectiveness of such systems.     

Liquidity Risk,Bank Networks,and the Value of Joining the Federal Reserve System

Reducing systemic liquidity risk related to seasonal loan demand was one reason for founding the Federal Reserve System. Nevertheless, less than 8% of state‐chartered banks joined the Fed in its first decade. Banks facing high liquidity risk from seasonal loan demand were more likely to join the Fed in its first decade. We also find evidence consistent with the notion that banks could obtain some indirect access to the discount window through interbank transfers. Some banks apparently joined the Fed to pass through discount window liquidity to other banks via the interbank network.  Joining the Fed increased member banks’ lending.     

New Measures of Union Organizing Effectiveness

This study compares union organizing activity and success in the United States and Canada. Based largely on certification data for the period 1976–1985, he results indicate there was a substantial decline in union organizing effectiveness in the United States and the Canadian unions were more active and successful in recruiting new members than their American counterparts. The evidence suggests that labor policy in Canada is more supportive of union organizing and the achievement of first collective agreements.     

Financial Intermediaries and Liquidity Creation

Trading losses associated with information asymmetries can be mitigated by designing securities which split the cash flows of underlying assets. These securities, which can arise endogenously, have values that do not depend on the information known only to informed agents. Bank debt (deposits) is an example of this type of liquid security which protect relatively uninformed agents, and we provide a rationale for deposit insurance in this content. High-grade corporate debt and government bonds are other examples, implying that a money market mutual fund-based payments system may be an alternative to one based on insured bank deposits.