Accruals,Cash Flows,and Equity Values

We find, as predicted, that the differential ability of accrual and cash flow components of earnings to help forecast future abnormal earnings and the persistence of the components result in the components having different valuation implications. We base our tests on Ohlson (1999) applied to fourteen industries. We find: (1) Accruals and cash flows aid in forecasting future abnormal earnings incremental to abnormal earnings and equity book value. (2) Accruals and cash flows provide explanatory power for equity market value incremental to equity book value and abnormal earnings. (3) There is evidence that accruals and cash flows valuation coefficients are consistent with the Ohlson model.     

The Chinese steel industry in transition: industry perspective on innovation policy

There is little empirical research on how the Chinese Government should function in innovation management, particularly during its critical period of economic transition. This study explores and investigates the Chinese Government's innovation management structure, procedures and functions by interviewing government R&D management officials and industrial innovation managers and users. Questionnaires were distributed to industrial innovation practitioners and users of new steel products to solicit their perspectives on innovation policy issues. Findings indicate that current government innovation management procedures have received a tepid welcome from the industries. While there was general agreement that the government should maintain some involvement in industrial innovation, opinions regarding just how the government should intervene differed significantly between producers and users. Producers generally favoured more indirect government involvement. Policy implications are discussed.     

Bridging ties: a source of firm heterogeneity in competitive capabilities

What explains differences in firms’ abilities to acquire competitive capabilities? In this paper we propose that a firm’s embeddedness in a network of ties is an important source of variation in the acquisition of competitive capabilities. We argue that firms in geographical clusters that maintain networks rich in bridging ties and sustain ties to regional institutions are well‐positioned to access new information, ideas, and opportunities. Hypotheses based on these ideas were tested on a stratified random sample of 227 job shop manufacturers located in the Midwest United States. Data were gathered using a mailed questionnaire. Results from structural equation modeling broadly support the embeddedness hypotheses and suggest a number of insights about the link between firms’ networks and the acquisition of competitive capabilities. Copyright © 1999 John Wiley & Sons, Ltd.     

Duopoly models with a joint capacity constraint

The paper proposes a two-stage mixed duopoly model of exhaustible resource market where at the first stage the government decides on the degree of privatization of public firm and at the second stage the public and private firms decide simultaneously on the two-period extraction paths. It is demonstrated that if the two firms have symmetric technologies with increasing marginal extraction costs and the same resource stocks, then neither full nationalization of any of the two firms nor full privatization will be socially desirable. It is shown that the presence of a semi-public firm improves intertemporal allocation of the fixed resource stock. Thus, partial privatization is optimal even under exogenously fixed total outputs of each firm. For asymmetric cost case, when the public firm is less efficient than the private firm, we derive the conditions under which full nationalization or full privatization is optimal.     

Price clustering on the Shanghai Stock Exchange

We investigate price clustering of intraday trades and negotiated block trades on the Shanghai Stock Exchange (SSE) from 2003 to 2009. Prices of traded assets tend to cluster on certain final digits, such as 0 and 5. In Chinese culture, 8 is associated with good luck and 4 with death so these numbers may be attractive or avoided. We find that price clustering on the final digit of 0 is significantly higher during the morning call auction and early in the trading day. We find no evidence of price clustering for the digit 8, but there is a significant dearth of prices ending in the inauspicious number 4. Price clustering is significantly higher for negotiated block trades, for which about 28% end with 0. Multivariate analysis shows that price clustering is lower for more liquid firms, but higher for firms with higher return volatility, a higher price level, or when the market is volatile. Our evidence supports the costly negotiation hypothesis. Our results also support the attraction hypothesis in that we document significant price clustering at round numbers and even numbers even after controlling for factors that are associated with price uncertainty.     

Brand morphing across Wal-Mart customer segments

The premise of segmentation theory is that different segments each have a discrete customer profile and behavioral characteristics. At a conceptual level, the recent branding literature recognizes that different sub-cultures or segments could experience different meanings of an organization's brand. However, few quantitative studies address the issue. The current paper combines branding and segmentation theory and offers a new perspective on whether all segments have the same brand meaning. A leading discount retailer, Wal-Mart, is the focus of this Canadian-based investigation. Two segments of Wal-Mart customers are the basis of the study — one segment preferring Wal-Mart and one less attached. The research quantifies the two networks of brand meaning that the two segments associate with the Wal-Mart (corporate) brand. Empirically, brand morphing of the corporate brand occurs, with different brand meanings across the two segments.     

Leadership Competencies for Hotel General Managers: The Differences in Age,Education, and Hotel Characteristics

This study was designed to explore the leadership competencies necessary for general managers (GM) in Thailand hotels. The exploratory factor analysis extracted six leadership competency components: leadership, motivational/interpersonal skills, strategic orientation, planning and implementation, team building and ethics, communication skills, flexibility, and concern for the community. The results showed that team building and ethics, leadership, and communication skills are the most important factors for the GMs. In contrast, flexibility and strategic orientation were the least important competencies for them. There were significant differences between leadership competency factors and GMs’ age, education, hotel stars, and hotel locations in diverse aspects.     

‘Gone to Gowings’ - An Analysis of Success Factors in Retail Longevity: Gowings of Sydney

Low productivity within service industries has been a major concern, but this situation is unlikely to improve without a general change in the way productivity is measured and managed. This paper aims to illustrate the value of stepwise data envelopment analysis (DEA) for measuring and benchmarking productivity. The issues and problems regarding productivity measurement as well as the advantages of using DEA in productivity measurement are analysed. The article extends current DEA applications by developing a stepwise approach to DEA. The latter technique combines correlation and DEA analysis for developing robust models and sound productivity measurement. The advantages of the proposed methodology are illustrated by applying it to a dataset of three-star hotels in the UK. Six inputs and three outputs are identified as the factors affecting rooms division efficiency in three star hotels.     

The long-run Phillips curve and non-stationary inflation

Modern theories of inflation incorporate a vertical long-run Phillips curve and are usually estimated using techniques that ignore the non-stationary behaviour of inflation. Consequently, the estimates obtained are imprecise and unable to test the veracity of a vertical long-run Phillips curve. We estimate a Phillips curve model taking into account the non-stationary properties in inflation and identify a small but significant positive relationship between inflation and unemployment. The results also provide some evidence that the trade-off between inflation and the rate of unemployment in the short-run worsens as the mean rate of inflation increases.