Explaining regional variation in business births and deaths: U.S. 1976–88

Linear models are developed to determine the relative impact of 15 start-up processes on the annual regional birth rate of new business organizations for all industry sectors in the U.S. over 6 two-year periods. These stable linear models explained from 50–70|X% of the variation in regional firm birth and death rates up to 16 years into the future. Start-up processes that have the most impact involve regional economic diversity; population growth; greater personal wealth; presence of mid-career adults; low unemployment; and greater flexibility in employment relationships. There was a complete absence of any impact of regional variation associated with higher densities of customers, suppliers, workers, R&;D resources; costs of production; or access to national transportation facilities.     

The robustness of the asymmetrically dominated effect: Buying frames,phantom alternatives,and in‐store purchases

Given a choice set of two alternatives, the addition of a third alternative that is clearly inferior to one of the existing alternatives (but not the other), can result in a shift of preference to the alternative that dominates the new alternative. The basic asymmetrically dominated effect, as it is called, is first demonstrated under two different buying frames of mind (“What would you buy?” and “What would most people buy?”). It is then shown that the third alternative may be recognized as an unavailable option, yet still cause a preference shift. Finally, the asymmetrically dominated effect is demonstrated for real, in‐store purchases. It is concluded that the effect is robust, has a wide scope, is quite sizeable, and is of practical significance. © 1999 John Wiley & Sons, Inc.     

Alternative Perspectives on Post-Keynesian Price Theory

We present an overview of recent developments in methodological and epistemological discussion in post-Keynesian work. We use these developments as a basis for judging various contributions to the post-Keynesian literature on pricing, in particular the arguments presented by Lee in recent issues of this journal, whilst acknowledging the positive contribution of Lee's work, we argue that his critique of post-Keynesian pricing theory is flawed and that his 'empirical pricing model' is consequently ill-founded.     

The emotions of top managers and key persons in cross-border M&As: Evidence from a longitudinal case study

Building on prior research on emotions in M&A, this paper analyses the post-M&A emotions of top managers and key persons from the acquired company by examining what triggers emotions during the post-acquisition integration stage, and what the consequences of those emotions are. This study applies cognitive appraisal and affective event theories with empirical evidence based on a longitudinal, single case study of an Indian–Finnish acquisition. The main findings imply that M&As are very emotional for top managers and key persons. Our findings reveal that they experience a wide range of positive and negative emotions triggered by individual and company-level triggers. Interestingly various triggers can have different and opposite appraisal outcomes in the short and long-term. In addition, top managers and key persons are often restricted in the range of behavioural outcomes caused by emotions.     

Qualitative audit materiality and earnings management

This study investigates auditors’ propensity to rely on quantitative materiality thresholds to the exclusion of qualitative materiality thresholds. Specifically, we examine whether auditors are more likely to allow earnings management that is less than typical quantitative materiality thresholds but that nonetheless is qualitatively material. We use changes in tax expense as a proxy for earnings management. Our results indicate that companies with pre-managed earnings that would have missed the consensus analyst forecast are more likely to decrease their tax expense when the magnitude of the decrease is less than quantitative audit materiality thresholds. The results also indicate that firms are more likely to meet or beat the forecast when the amount of earnings management necessary to meet the analyst forecast is less than quantitative materiality. These results are consistent with auditors relying on quantitative materiality thresholds to the exclusion of qualitative materiality thresholds, i.e., the importance of meeting or beating the analyst forecast. Finally, we find that the ability to use tax expense reduction within quantitative materiality to meet or beat analysts’ consensus forecasts was significantly reduced by the SEC’s guidance on materiality in SAB-99 and by the passage of the Sarbanes–Oxley Act.     

Foundations of an Institutional Theory of Regulation

Although the work of Clarence Ayres is held in high regard within the tradition of American Institutionalism, it has made little impact upon the study of technology more generally. Moreover, even within the Institutionalist tradition, his work is seen to embody a tension - on the one hand his dichotomy between technology and institutions is too strict, but to the extent that it is "softened," his main contributions are undermined. This paper argues that Ayres' work does have something to contribute to current technology debates, but that this contribution cannot be made if his conception is "softened" in the way that recent contributions suggest.