Mandatory Adoption of IASB Standards: Value Relevance and Country-Specific Factors

The objective of this study is to investigate if the value relevance of European-listed companies increased after the mandatory application of International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) and how the value relevance of accounting information prepared under IAS/IFRS is shaped by the specific factors of the country in which companies are domiciled. Results show that the value relevance of financial information during the period companies applied mandatory IAS/IFRS is higher than for the period during which they applied local accounting standards. We also found that countries where accounting and tax are clearly separated show more relevant accounting information. Finally, we found that companies from countries with more legal and public enforcement mechanisms disclose less relevant accounting information under IAS/IFRS.     

The strength of R&D network ties in high-tech sectors – a multi-dimensional analysis of the effects of tie strength on innovation performance

We study the effect of the tie strength of inter-firm R&;D partnerships on the innovation performance of companies in four high-tech sectors (pharmaceuticals, computers, semi-conductors and telecom). Returning to Granovetter's (1973 Granovetter, M. S. 1973. The strength of weak ties. American Journal of Sociology, 78: 1360–80. [Crossref], [Web of Science ®] , [Google Scholar]) seminal contribution, tie strength is analysed through a broad multi-dimensional perspective. We find that inter-firm R&;D network ties that are stronger in terms of their extent (measured by the length and multitude of R&;D partnerships) and weaker in terms of their depth (the degree of cooperation and the similarity of ties of companies) improve the innovation performance of companies. Interestingly, we find strong support for the role of these R&;D ties in the context of the run-of-the-mill innovation performance of companies. However, there is no support for this effect on significant innovations of companies.     

A Reduced Rank Regression Approach to Tests of Asset Pricing

Both the Arbitrage Pricing Theory (APT) and the Capital Asset Pricing Model (CAPM) place restrictions of the cross-sectional variation of conditional expectations of asset returns and of macro indicators. We show that these restrictions imposed on the reference statistical models lead to special cases of the reduced rank regression model. The maximum likelihood problem is solved by canonical correlation analysis. Likelihood ratio tests about the number of factors underlying stock returns are straightforward to calculate, thus allowing discrimination between competing financial theories. Moreover LR tests on the relevance of each macroeconomic indicator within a chosen model can be implemented. Some of the tests are illustrated by an application to Italian stock market data.     

Gender and Age Differences in Socio‐economic Inequalities in Total and Avoidable Mortality in Portugal: A Trend Analysis*

The purpose of this paper is to analyse how socio‐economic inequalities in mortality (total and avoidable) evolved in Portugal from the 1990s onwards by looking at differences by gender, age group, poverty and cause of death. Results show that mortality in younger age groups is decreasing faster in the most deprived municipalities. Yet, avoidable deaths do not follow this pattern, particularly with respect to treatable mortality amenable to the health care services. Although total and avoidable mortality are decreasing across all age groups and both genders, decreases in treatable deaths during and after the 2011–14 economic crisis slowed down among the young, with a sharpening of socio‐economic inequalities in avoidable mortality among adults and the elderly. This provides evidence that, in some respects, focusing programmes on those living in poor circumstances has been successful over time. However, the impact of the Great Recession on health care services might have contributed to a significant increase in some treatable causes of death associated with these services.     

Do Harmonised Accounting Standards Lead to Harmonised Accounting Practices? An Empirical Study of IAS 39 Measurement Requirements in Some European Union Countries

The objective of this paper is to investigate the level of harmonisation for IAS 39 Financial Instruments: Recognition and Measurement and to identify if different levels of harmonisation are associated with company-specific factors. Based on Rahman et al. (2002) , we used the Jaccard (JACC) index to determine the level of harmonisation between IAS 39 and the financial reporting practice of a broad-based sample of European-listed companies in 2005. We applied regression analysis to identify companies' specific characteristics that affect the level of convergence of the reporting practice of financial instruments. The results of this study show a high level of harmonisation between accounting practices of European companies included in our sample and IAS 39.     

Increase your divestment effectiveness

In many large diversified corporations there is a largely prevalent habit to consider divestment decisions as ‘top secret’: information concerning potential divestitures is restricted to top management and only a handful of senior managers are involved in the decision making process. The major assumption underlying such behaviour is the fear of failure; that is, top management is concerned about involving line—generally divisional—managers in the process of making up one's mind to divest (a time consuming process as will be seen later) and searching a potential acquirer, in the fear that such involvement might work in counteractive ways and perhaps cause the abortion of the project. As a result, information is most often withheld, decisions in progress are kept secret; an ‘underground’ strategy is developed. The purpose of this article is to show that the most successful divestments are precisely those where line management's co-operation has been elicited at very early stages and to suggest that such a participative management mode is likely to produce better results. Our research, based on the study of 14 divestments in the US and Europe (see Appendix), thus shows that the division manager is a key person on the divestment chess-board and accomplishes varied missions.