Are analyst stock recommendation revisions more informative in the post‐IFRS period?

This paper investigates whether the mandatory IFRS adoption has affected the informativeness of analyst recommendation revisions in Europe. Although prior studies document that IFRS adoption improved analyst forecast attributes, the impact of IFRS cannot be completely assessed without examining how the market reacts to information‐rich events in an environment with enhanced disclosure. To examine this question we utilize a difference‐in‐differences design using as main control sample firms that had voluntarily adopted IFRS before the EU's mandated switch. Overall, our evidence suggests that after the mandatory adoption of IFRS, both analyst upgrades and downgrades are more informative. These results hold after controlling for a number of variables that capture analyst, firm and information environment characteristics and are robust to a number of sensitivity analyses including the use of a US control sample. Finally, we examine whether our results are sensitive to the level of accounting enforcement. We find that analyst downgrades are more informative in the post‐IFRS period for firms in both high and low enforcement environments. Analyst upgrades, however, are more informative only if they are issued for firms in high enforcement countries.     

Welfare effects of insurance contract non-performance

Non-performance lies at the heart of much of the regulation that insurance companies face. Consumers’ concerns about non-performance of the insurance provider have also been cited as a possible explanation for low demand of microinsurance. We provide a behavioral evaluation of the welfare effects of non-performance risk. We test the hypothesis that the presence of non-performance risk negatively impacts not just take-up of insurance but more importantly the welfare of the insured. We also test if violations of the reduction of compound lotteries axiom could drive this decrease in take-up and welfare. The results show that the compound risk characteristic of non-performance risk does not significantly decrease the welfare of insurance choices made by individuals. This counter-intuitive result is sensitive to the structural modeling of risk preferences. If one assumes the reduction of compound lotteries axiom does characterize behavior towards risk, one finds evidence that non-performance risk reduces welfare for the insured. But if one correctly allows for violations in that axiom in the representation of risk preferences, which is appropriate if one is going to test for the effect of compound risk from non-performance, then the counter-intuitive result is obtained. Take-up is not a reliable proxy for welfare, and the behavioral drivers of take-up are again not the same drivers of welfare. These results provide structural behavioral insight to inform normative policy design with respect to insurance regulation.     

The role of productive efficiency on entry and post‐entry performance under different strategic orientation: the case of the Greek plastics and rubber industry

The present study formulates and empirically tests the hypothesis that the post‐entry performance and growth of new firms is affected by the way in which crucial resources are combined during the decision‐making process to enter the industry or not. Further, the study empirically tests the hypothesis that multifaceted productive efficiency influences both the entry decision and the entrants' post‐entry performance. The proposed analytical framework allows for testing these hypotheses under different strategic orientations assumed to be followed by entrants. Results of the estimated partial observability model provide support to these hypotheses in almost all of the examined cases. Copyright © 2008 John Wiley & Sons, Ltd.     

Correlations in price changes and volatility across international stock markets

The short-run interdependence of prices and price volatilityacross three major international stock market is studied. Dailyopening and closing prices of major stock indexes for the Tokyo,London, and New York stock markets are examined. The analysisutilizes the autoregressive conditionally heteroskedastic (ARCH)family of statistical models to explore these pricing relationship.Evidence of price volatility spillovers from New York to Tokyo,London to Tokyo, and New York to London is observed, but noprice volatility spillover effects in other directions are foundfor the pre-October 1987 period.     

Ambiguity in Problem Framing as a Barrier to Collective Actions: Some Hints from Groundwater Protection Policy in the Apulia Region

Differences in problem framing and understanding are unavoidable in multi-actor decision-making processes, deeming ambiguous problem definitions and actions. The presence of ambiguity may have diverse implications. On the one hand, a diversity in frames can enhance the co-production of knowledge offering opportunities for innovative solutions. On the other hand, the presence of ambiguity can be a source of discrepancies or conflict in a group, hampering the implementation and/or reducing the effectiveness of environmental policy. This work demonstrates that neglecting ambiguity in problem framing leads decision-actors to simplify the interaction space by ignoring the role of some of the other decision-actors and/or making wrong assumptions about their mental models. Moreover, they act as if the system is as simple as the decision-actors presume it to be. To demonstrate these hypotheses, a Causal Loop Diagram method was implemented to investigate the policy resistance mechanisms hampering the implementation of sustainable groundwater abstraction policy in the Apulia Region (Southern Italy).     

Environmental and Economic Dimensions of Sustainability and Price Effects on Consumer Responses

The lack of attention to sustainability, as a concept with multiple dimensions, has presented a developmental gap in green marketing literature, sustainability, and marketing literature for decades. Based on the established premise of customer–corporate (C–C) identification, in which consumers respond favorably to companies with corporate social responsibility initiatives that they identify with, we propose that consumers would respond similarly to companies with sustainability initiatives. We postulate that consumers care about protecting and preserving favorable economic environments (an economic dimension of sustainability) as much as they care about natural environments. Thus, we investigate how two sustainability dimensions (i.e., environmental and economic) and price can influence consumer responses. Using an experimental method, we demonstrate that consumers favor sustainability in both dimensions by giving positive evaluations of the company and purchase intent. In addition, consumers respond more negatively to poor company sustainability than to high company sustainability. In comparison, consumers respond more negatively to the company’s poor commitment to caring for the environment than to the company’s poor commitment to economic sustainability. We also find that consumers do not respond favorably to low prices when they have information about the firm’s poor environmental sustainability. Finally, we find support for an interaction effect between consumer support for sustainability and corporate sustainability; that is, consumers evaluate a company more favorably if the company shares the consumers’ social causes. Overall, we conclude, from our empirical study, support for the idea that consumers do respond to multiple dimensions of sustainability.     

Change and development in pluralistic settings: an exploration of HR practices in Chinese township and village enterprises

Very few systematic studies have been conducted on the managerial practices of Chinese Township and Village Enterprises (TVEs) despite their increasing contributions to China's economic development. Focusing on the HRM practices in ten different TVE organizations in a new city in Southeastern China, this study aims at filling a gap in the literature by exploring the general HRM practices in those organizations. Results show that HRM practices in TVEs, although still relatively primitive compared to those in state-owned enterprises (SOEs), have been much more formalized recently. Employees are now mostly selected rather than referred by existing employees or ' guanxi ' as they were previously. New employees in many large TVEs are now trained through formal procedures rather than through apprenticeships, and pay is tightly linked to performance and skill levels. However, in smaller TVEs, HR practices are less formalized. The study points out that the firm size may be an institutional factor affecting the implementation of formal HRM practices. Yet, regardless of the form of personnel management, HRM practices are shown to be a very important factor in the economic success of TVE firms. Further studies are necessary to understand HRM and other managerial practices in TVEs and to test the relationships between HRM practices and firm performance among the TVEs.     

Factors That Distinguish Proactive Versus Reactive Exporters: Decisions by Export Firms in a Developing Country

This study explored factors that distinguish proactive versus reactive export marketing strategies of Zimbabwean export companies. It identified key variables that contributed most to the discrimination between proactive firms with high levels of adaptation of export marketing strategy against reactive exporters with low levels of adaptation of export marketing strategy. Data were collected through a structured multi-item questionnaire involving a randomly selected sample of 105 exporting organizations. The overseas experience of management and strategic orientation of the company, cultural values, and legislation were found as key variables that discriminated between reactive exporting firms using low adaptation of export marketing strategy from those proactive exporters with high adaptations.