Risk reduction in S&L mortgage loan portfolios through geographic diversification

The reduction in foreclosure-risk exposure to S&L mortgage portfolios that results from elimination of geographic restrictions due to DIDMCA of 1980 is evaluated in this study. By employing a quadratic programming approach, it is empirically demonstrated that geographic diversification can reduce a mortgage portfolio's foreclosure-risk exposure by 50 percent to 90 percent when compared to geographically undiversified mortgage portfolios. The benefits of reduced-foreclosure risk could accrue to either the FSLIC or to member S&Ls if the FSLIC adopts a risk-based insurance premium.The authors would like to thank Ike Mathur, Donald Fraser, Stuart Rosenstein, the two anonymous referees, and the editor for comments, suggestions, and corrections.     

Gender-Based Differences in Perception of a Just Society

In this study, 191 subjects, 93 male and 98 female undergraduate business students, were asked to respond to a 51 item questionnaire to examine their perception of what constituted a "just society". The subjects agreed on 16 characteristics which a just society would have. Out of 51 there were only 10 statements whereon average responses showed significant differences based on gender.     

Freeware as a competitive deterrent

Using perfect foresight and adaptive models, this paper examines the effect of competitor asymmetry, consumer sensitivity to incentives and adaptive processes on freeware strategies and competitive outcomes. Four roles played by freeware in competitive markets are identified – it can be a mechanism to build or speed up the growth of a network without the need to lower prices on the commercial version, a deterrence mechanism, a hindrance to a rival’s network building efforts, and a coordination device in the presence of forward looking consumers. We determine the optimal prices of the commercial version, the decisions to introduce freeware and the freeware qualities for both competing firms.     

The Changing Face of the Auditor's Report: Implications for Suppliers and Users of Financial Statements

The International Auditing and Assurance Standards Board (IAASB) recently finalised several significant and controversial reforms of the audit reporting model. The reforms are in response to long‐standing criticisms about the form and content of the existing audit report. This study critically examines the current audit report reforms and their implications. In particular, we investigate the perceptions of prominent stakeholders in respect of these reforms and then evaluate the implications of the reforms on the informational value of the audit report, audit quality and audit costs. The findings suggest that the changes to the audit report are of significant informational value to users, while the implications for audit quality are unclear. Indeed, the changes would increase audit costs and potentially the legal liability of auditors. This appraisal is timely given the efforts made by the IAASB in commissioning these reforms to enhance the relevance and informational value of the audit report.     

Impact of Managerial Dependencies on Ethical Behavior

This study explores if managerial dependencies and organizational independence impact ethical behavior of employees. Survey data was collected from 203 employees working for three hospitals in Midwestern and Northwestern United States. Managerial dependencies like specialized expertise, political connections, and performance visibility significantly impacted ethical behavior. Organizational independence and ethical behavior of peers also had a significant impact on ethical behavior. Implications of this study for researchers and practitioners are discussed.     

The effects of tax policy on financial markets: G3 evidence

We investigate the effects of various tax policy innovations on stock market returns. By using a vector autoregressive model that controls for the mutual causality between fiscal policy and financial market performance, we test whether financial markets serve as a transmission mechanism for tax policy innovations. Our findings indicate that indirect taxes have a larger effect on market returns than do labor taxes. Further, corporate tax innovations do not have any statistically significant effect on stock returns. We consider that this finding is a result of a firm's ability to switch between equity financing and bond financing.     

Commodity Prices and the Terms of Trade

On combining national terms-of-trade data for developing countries with world prices of internationally traded primary commodities, it is found that variation in the world prices of three or fewer key exported commodities account for 50% or more of the annual variation in the terms of trade of a typical developing country. A considerable fraction of the variation is specific to a particular commodity and, given that the overall importance of primary commodities differs across developing countries, it is possible to account for much of the heterogeneity across them. It is concluded that commodity price fluctuations should be central features of two related literatures: studies of business cycle transmission across developing and industrialized nations, and empirical work aimed at constructing perpetual claims on developing country incomes as suggested by Shiller in 1995.     

Carrying capacity analysis and destination development: a case study of Gangotri tourists/pilgrims’ circuit in the Himalaya

The Himalaya has numerous natural, cultural, aesthetic, and adventurer tourists/pilgrims’ destinations, which are the major source of income and employment to the local people and revenue generation to the government. Meanwhile, tourism carrying capacity of these destinations is poor and thus tourism development could not take shape. This article examines carrying capacity and destination development of the Gangotri tourists/pilgrims’ circuit, which is also known as Gangotri eco-sensitive zone. We conducted this study using both qualitative and quantitative approaches, in which we collected data on tourists/pilgrims flow, accommodation, transportation, and infrastructural facilities. Primary data were collected through interview of 160 persons of 8 tourists/pilgrims centres who are involved in tourism activities. Further, we employed a participatory observation method after an extensive visit of Gangotri tourisms/pilgrims circuit in January 2017. Secondary data were collected from the Uttarakhand Tourism Development Board, Dehradun. We used correlation and rank method and analysed infrastructural facilities, carrying capacity dimensions, proposed destination development model for the circuit, and observed that a sustainable tourism development may enhance economic activities such as income generation and employment augmentation as the whole circuit obtains natural, cultural, and aesthetic importance.     

Do Chinese Retail Option Traders Know Anything about Market Volatility?

This paper examines the information content of implied volatility in the Chinese covered warrant market and finds that the implied volatility is consistently higher than the realized volatility for all warrants and across all maturities. The implied volatility has very little information content for future volatility in the Chinese warrant market which is dominated by retail investors. Possible explanations for the results are regulatory issues such as restrictions on the short-selling of warrants, differential trading rules for stocks and warrants, high leverage and low trading costs and a market dominated by retail investors.     

Modeling Drivers and Barriers of Artificial Intelligence Adoption: Insights from a Strategic Management Perspective

Artificial intelligence (AI) in business processes and academic research in AI has significantly increased. However, the adoption of AI in organizational strategy is yet to be explored in extant literature. This study proposes two conceptual frameworks showing hierarchical relationships among the various drivers and barriers to AI adoption in organizational strategy. In a two-step approach, the literature study is first done to identify eight drivers of and nine barriers to AI adoption and validated by academic and industry experts. In the second step, MICMAC (matrice d'impacts croises-multiplication appliqúe a un classment or cross-impact matrix multiplication applied to classification) analysis categorizes the drivers and barriers to AI adoption in organizational strategy. Total interpretive structural modeling (TISM) is developed to understand the complex and hierarchical associations among the drivers and barriers. This is the first attempt to model the drivers and barriers using a methodology like TISM, which provides a comprehensive conceptual framework with hierarchical relationships and relative importance of the drivers and barriers to AI adoption. AI solutions' decision-making ability and accuracy are the most influential drivers that influence other driving factors. Lack of an AI adoption strategy, lack of AI talent, and lack of leadership commitment are the most significant barriers that affect other barriers. Recommendations for senior leadership are discussed to focus on the leading drivers and barriers. Also, the limitations and future research scope are addressed.