Market timing and corporate capital structure: a transatlantic comparison

This article provides comparative international evidence on the effect of market timing on corporate capital structures using panel data for US, UK and continental European firms. We document that the empirical regularity found for US firms, that historical market-to-book ratios and corporate leverage correlate negatively does not extend to UK and continental European firms. The latter tend to raise debt rather than equity when stock prices are high, thus sticking more closely to a pecking order in which debt is preferred over external equity.     

On the distribution function for a function of n statistic variables and the Central Limit Theorem in the Mathematical Theory of Probability

According to the Central Limit Theorem in the mathematical theory of probability, the sum i. e. a specific function of n mutually independent statistic variables — under very general conditions — converges towards the normal distribution function : when the number of the statistic variables entering into the sum (function) examined tends to infinity. This theorem has attracted the attention of many mathematically interested statisticians. A great number of famous mathematicians, as Moivre, Laplace, Ljapounoff, Lindeberg, Kolmogoroff, Khintchine, Petrowsky, Lévy, Feller, Cramér etc. have dealt with the formulation of and the proof of the central limit theorem. As a result of these efforts, the space of validity of the central limit theorem has been found to be very extensive and very difficult to define, so that the limits of the space within which the theorem provably is valid have repeatedly been widened. Feller and Lévy have, however, found a formulation touching the limits for the space of validity of the theorem in the case that only considers the sum of n mutually independent variables, the relative signification of which approaches zero.     

Strategic orientation and performance measurement model in Taiwan's travel agencies

This longitudinal study attempts to examine those effects and relationships of various performance measuring dimensions using the balanced scorecard conceptual framework on travel agencies under different strategic orientations in Taiwan. A three-stage research design is adopted to explore a valid and reliable e-commerce strategy performance measuring model for travel agencies. The research also uses the structural equation modeling (SEM) approach to further empirically build up e-commerce cost leadership and differentiation strategy performance measurement models. The theoretical model identifies an underlying variable construct, dimensions, and their associated attributes which combine the traditional subjective or objective measures with operating measures of e-commerce strategy performances. According to this research, Taiwanese travel agencies consider five financial, three customer, four internal process, and three innovation and learning perspective indicators of performance measurement that also have cause-and-effect relationships among themselves under two different strategies. Finally, this paper proposes two optimal models that match the essential needs of e-commerce cost leadership and differentiation strategic development and overcomes the traditional performance measuring shortcomings.     

‘My Brilliant Career’? New Organizational Forms and Changing Managerial Careers in Japan,the UK,and USA

The end of the traditional management career has been heralded with supporting, albeit largely anecdotal, data. The ‘old’ career was set within internal labour markets in large organizations and characterized by long‐term stability. The ‘new’ arrangements have apparently shifted responsibility from employer to employee, with careers being developed across organizations. Such change is premised on new organizational forms and is often associated with a growing sense of employee insecurity. We explore the reality of this ‘new’ scenario through interpretation of in‐depth semi‐structured interviews conducted with middle and senior human resources managers in large firms in Japan, the UK, and USA. The data indicate that most of our case study organizations had downsized and delayered, with hybrid structural forms emerging. Career prospects were diminished, with fewer vertical promotions and a greater emphasis on lateral ‘development’; middle managers were generally resentful of such factors and forces. Although not directly reflective of ‘Anglo‐American’ business practice, similar changes to career trajectories were witnessed in Japan as in the UK and USA.     

Are non-risk based capital requirements for insurance companies binding?

We investigate whether insurers base their solvency margins on risk factors even when operating under a supervisory regime where minimum solvency requirements do not fully take such risk factors into account. To do this, we use a dataset of about 350 Dutch insurers from all major lines of business during the pre-Solvency II period 1995–2005. We find that the levels of insurers’ actual solvency margins are related to their risk characteristics and not to regulatory solvency requirements. Consequently, the vast majority of insurers hold much more capital than required, i.e. non-risk based capital requirements generally are not binding. Requirements are found to affect solvency adjustment behaviour, though. More specifically, below-target capital ratios are raised most rapidly by those insurers whose targets are relatively close to the regulatory minimum. One implication from our results is that, because insurers already follow a risk-based approach, the transition to the new European regulatory framework, Solvency II, is likely to be smooth.     

An empirical approach to distributive justice

This paper starts from the idea that it would be interesting to complement the deductive reasoning about economic justice with an empirical approach which tries to describe and interpret the actual value judgements held by the economic agents. We present results from a pilot study with 180 subjects. Factor analysis indicates that it makes sense to work with desert and compensation criteria, as most economists and philosophers do. We then illustrate that it is possible to operationalise equity judgements, estimating for each subject separately an equation describing his perception of the equitable compensatory income variation. We use the factor analysis results to construct a ‘compensation’ and a ‘desert’ index. All coefficients can be nicely interpreted and interesting patterns of interindividual variation emerge.     

The development of a conceptual model of greening in the business events tourism sector

This paper examines the process of corporate greening, and proposes a general conceptual model of the process, which may be relevant in a number of different corporate sectors. The model includes drivers of greening and barriers to greening and also the organisational context in which greening decisions are taken. In addition, this paper considers the role of media coverage in influencing pro-environmental behaviour amongst organisations. The paper then tests the model in one particular tourism context – that of business events – in order to ascertain the specific nature of the corporate greening process in that context. The paper concludes that the general model may be applied to a number of industry sectors, and the model specific to business events tourism may be used to underpin future research in this area.     

Medical interventions among pregnant women in fee-for-service and managed care insurance: a propensity score analysis

This paper extends earlier research on the effect of managed care on the receipt of four medical interventions for pregnant women: ultrasound, induction/stimulation of birth, electronic fetal monitor, and Caesarean delivery. Propensity score methods are used to account for sample selection issues regarding insurance choice. Managed care enrollees are more likely to receive an ultrasound, which may be indicative of receiving better prenatal care. Managed care plans reduce the rate of Caesarean deliveries, but such limitations may be beneficial given the substantial medical evidence that Caesarean deliveries are over-utilized. The results indicate that insurance coverage does influence treatment intensity, but that utilization controls and provider financial incentives do not adversely affect care for pregnant women.     

Stalling innovation of Cognitive Radio: The case for a dedicated frequency band

After more than a decade of frantic R&D efforts, Cognitive Radio (CR) technology continues to fail to pass the first developmental milestone of a working prototype, suggesting that the CR innovation process may be stalling. This paper analyzes possible reasons for this situation from the perspective of innovation management and economics. The CR innovation process has developed in a complex environment shaped by a combination of technology-push and market-pull forces. This paper shows that this process is being stifled by two barriers emerging from the current reliance of CR technology on opportunistic dynamic spectrum access as the sole means for entry into the wireless market. The technology-push is affected by the barrier of technological complexities linked to the requirement to protect highly sensitive incumbent systems. The market-pull forces are being negated by market lock-in and a strong status quo of well-established wireless players. This paper argues that overcoming these barriers and revitalizing the practical development of CR could be possible with the aid of light-touch governmental intervention. This could take the form of designating a dedicated CR band, which would benefit CR through less strict spectrum access requirements. A vibrant cognitive environment could flourish in this type of band, supporting CR innovation.     

Transfer sciences and the Austrian system of innovation

This paper attempts to outline the technological position of Austria, its catching up process following World War II and the national system of innovation. Furthermore the process of knowledge production and application in a national system of innovation is highlighted. Austria went through a rapid catching up process after the second world war. The industrial structure of Austria has improved in the sense that the importance of the basic goods sector has continuously diminished whereas medium and high-tech activities have been enforced. Simultaneously, the technological position measured in R&D expenditures and patent grants has also improved. Three possible modes of knowledge production (i.e. interaction between universities and industry) in the national system of innovation can be distinguished: classical relationships, co-operative relationships and transfer sciences. Transfer sciences offer new options for science and technology policy and challenge the more traditional modes of knowledge production.