Examining dual accounting systems in Europe

After adoption of International Financial Reporting Standards (IFRS) for consolidated financial statements by European-listed companies, a number of European countries still require the use of local standards in the preparation of legal entity financial statements. This study investigates whether this requirement can be explained by a low demand for high-quality financial reporting and an orientation of accounting toward the fulfilment of regulatory needs in these countries. Specifically, using accounting quality as an indicator of the focus of accounting on capital providers' needs, we compare accounting quality between countries permitting and prohibiting the use of IFRS in individual financial statements. Consistent with our expectations, we find that countries requiring the use of local standards in the preparation of legal entity financial statements exhibit a significantly lower level of accounting quality, both prior to and after IFRS adoption. We interpret these results as evidence that these countries have local standards more oriented toward the satisfaction of regulatory needs, rather than investors' needs. Furthermore, since differences in accounting quality persist after the implementation of IFRS, results suggest that firms in these countries face a lower demand for high-quality financial reporting.     

The pharmacist as a drug information supplier in hospitals: A view from services marketing

The aim of this study is to gain insight into how the information supply services of the pharmacist and his or her potential competitors are seen by physicians. In the context of the upcoming professionalization trend of the pharmacist we are interested in determining how the hospital pharmacist can position himself as a drug information supplier and what factors are critical for his or her success. A research framework is presented which explains the selection process and use of personal drug information sources by hospital physicians. Data was collected from a sample of 329 Dutch internists. Overall, subspecialized physicians and supporting medical specialists were perceived as the most important sources of information for internists. The hospital pharmacist was perceived as lacking in expertise in the areas of therapy choice and implementation of the therapy and as being competent in the diagnosis-related cases. Regression analyses showed that technical and process dimensions significantly relate to the overall perceived quality with an information supplier. Pharmacists and others who were perceived as less important sources of information can use the results of this study to strengthen their position.     

Credit Ratings and CEO Risk‐Taking Incentives

This study examines the sophistication of rating agencies in incorporating managerial risk‐taking incentives into their credit risk evaluation. We measure risk‐taking incentives using two proxies: the sensitivity of managerial wealth to stock return volatility (vega) and the sensitivity of managerial wealth to stock price (delta). We find that rating agencies impound managerial risk‐taking incentives in their credit risk assessments. Assuming other things equal, a one standard deviation increase in vega (delta) will lead to an approximately one‐notch (two‐notch) rating downgrade. In addition, we evaluate the significance of credit ratings in the design of CEO compensation. Our findings suggest that rating‐troubled firms will gear down managerial incentives of risk seeking. In particular, other things equal, a rating downgrade to the lower edge of the investment category (i.e., BBB?) in the immediate prior year will bring about an approximately 51 percent reduction of vega incentive from options newly granted to the CEO in the current year. However, we find no evidence that firms' rating concerns significantly affect delta. Given the significance of credit ratings in the marketplace and their close connection to accounting, the findings of the current study advance our understanding, not only of how sophisticated rating agencies are in incorporating forward‐looking information (i.e., vega and delta) into risk assessments, but of how influential the raters are in changing firms' compensation policies. The findings also have implications on the role of accounting in constraining excessive managerial risk taking with improved disclosures on managerial compensation.     

Spatial distribution of employment opportunities in the city of Santa Cruz de Tenerife

The analysis of spatial mismatches in access to employment remains a very important area of labour market literature. A particular case is that of the mismatches in urban labor markets, which can result in substantial differences in the employment opportunities available in city centre and suburbs. This study examines the spatial mismatches present in the labour market of Santa Cruz de Tenerife. To that end, the results of a survey taken in 2003-2004 with a sample of 2000 city residents were reviewed. Results confirm the importance of transport policy for city residents; they suggest that public transport linking the different districts to the city centre should be reviewed.     

Economic Integration and Regional Income Inequalities: Competing Dynamics of Regional Wages and Innovative Capabilities

A factor‐price difference scenario has recently been used by Krugman and Venables and by Puga to explain why, in the absence of labor migrations, economic integration should first produce and then dissolve regional income inequalities. The authors question this scenario in a dynamic analysis framework that extends the Baldwin, Martin, and Ottaviano ones to allow for regional wage differences. In this context, wage flexibility is no more a sufficient condition to induce long‐run convergence. Indeed, when regions are equally sized, the innovative capability advantage of the “core” outweighs the wage cost advantage of the “periphery” even for very low transport costs, and regional wage gaps are likely to persist in the long run.     

Natural resource-collection work and children's schooling in Malawi

This paper presents results of research that investigates if long hours of work spent by children in fuel wood and water-collection activities, i. e., natural resource-collection work, influence the likelihood that a child aged 6–14 attends school. Potential endogeneity of resource-collection work hours is corrected for, using two-stage conditional maximum likelihood estimation. Data from the 1997–1998 Malawi Integrated Household Survey (IHS) conducted by the Malawi National Statistics Office (NSO) in conjunction with the International Food Policy Research Institute (IFPRI) are used. The study finds that Malawian children are significantly involved in resource-collection work and their likelihood of attending school decreases with increases in hours allocated to this work. The study further shows that girls spend more hours on resource-collection work and are more likely to be attending school while burdened by this work. Consequently, girls may find it difficult to progress well in school. However, girls are not necessarily less likely to be attending school. Results further show that presence of more women in a household is associated with a lower burden of resource-collection work on children and a higher probability of children's school attendance. Finally, the research shows that children from the most environmentally degraded districts of central and southern Malawi are less likely to attend school and relatively fewer of them have progressed to secondary school compared to those-from districts in the north.     

A critical examination of Hofstede's thesis and its application to international reward management

Hofstede's model has been extensively used and applied in international management. This study begins with a critique of Hofstede's thesis. The applicability of his framework is then tested using a cross-cultural comparison of reward preferences in four countries. The findings reveal that although his framework provides both theoretical and practical contributions to the reward arena, the proposition that human values are conditioned solely by national culture ignores the potential influence of a variety of other contextual factors.     

The Influence of Business School’s Ethical Climate on Students’ Unethical Behavior

Business schools play an instrumental role in laying the foundations for ethical behavior and socially responsible actions in the business community. Drawing on social learning and identity theories and using data collected from undergraduate business students (n = 318), we found that ethical climate was a significant predictor of unethical behavior, such that students with positive perceptions about their business school’s ethical climate were more likely to refrain from unethical behaviors. Moreover, we found that high moral and institutional identities strengthened the effect of ethical climate on unethical behavior. In addition to novel theoretical contributions to the business ethics and socio-psychology literature, this study offers practical pathways through which business schools can nurture and instill the values and behaviors that ultimately help shape positive organizational ethics. Directions for future research are provided.     

Socioeconomic conditions and farm policy in Bangladesh

Bangladesh is one of the youngest and poorest countries on earth. Overpopulation and searcity of land are among the most critical problems confronting the nation, which has basically an agricultural economy. As yet, the country has no national farm policy. This article describes the sociocconomic condition of the country, and examines the merits and drawbacks of the existing system of agriculture. Critical problems are pin pointed and possible solutions are suggested.