Bank-led restructuring in Poland (II): bankruptcy and its alternatives

Poland's 1993 Enterprise and Bank Restructuring Programme (EBRP) provided for the resolution of problem loans through bank-led or court-led workouts, liquidation, or loan sales. This paper examines the workings of three traditional exit processes - court-led conciliation, bankruptcy, and state enterprise liquidation. Neither bankruptcy nor court conciliation as currently designed gives creditors in Poland enough control over firsm in financial distress. Suggested improvements in design need to be complemented by strong economic policies that give banks and other creditors powerful incentives to use these debt collection mechanisms. The most problematic of the three exit routes is state enterprise liquidation, and although on paper designed for solvent firms, it is often used to get around bankruptcy and keep debtor management in control of assets for as long as possible. Now that the special bank conciliation process has expired as an option, Poland should shift its energies to improving traditional, broadly applicable exit and workout processes.     

On the methodology of the holistic experiment: An approach to the conceptualization of large-scale social experiments

Presupposing Churchman's and Ackoff's definitions of a system, the notion of a holistic experiment is defined. A holistic experiment is an experiment on a nonseparable system for the purpose of determining the properties (measures of effectiveness) of the systems components. The basic problem of a holistic methodology is that of conceptualization: (1) the conceptualization of the systems “components,” (2) the conceptualization of the “teleological” standard that defines the systems components; and (3) the assessment of the degree of systems “separability.” Various guidelines for conceptualization are offered. These guidelines derive from such disparate disciplines of knowledge as the sociology of knowledge, the psychology of science, the philosophy of science, law, epistemology, ethics, and systems science. It is argued that the problem of defining an adequate methodology for holistic systems constitutes an “ill-structured” problem. The methodology for dealing with ill-structured problems is not the same as the methodology for dealing with well-structured problems. To date, the methodology of the management sciences has been overwhelmingly preoccupied with well-structured problems. Large-scale social experiments require a fundamentally different approach.     

A Comparative International Analysis of the Impact of Accounting Principles on Profits: The USA versus the UK,Sweden and The Netherlands

This paper explores the extent to which there are material quantitative differences in profits reported under US GAAP compared to profits reported in accordance with generally accepted accounting principles in the UK, Sweden and the Netherlands. From an analysis of Form 20-F reports filed with the SEC in the USA, there is support for the hypothesis that UK GAAP are significantly less conservative than US GAAP. On the basis of a case study approach, it seems that Swedish GAAP tend to be more conservative than US GAAP, particularly when the transfers to reserves are analysed, but there is insufficient evidence to establish a systematic pattern. In the Netherlands, on the other hand, there is evidence to suggest that Dutch GAAP are at the less conservative end of the spectrum of financial reporting measurement practices, in a position relatively similar to that of UK GAAP, although again the evidence is insufficient to establish a systematic pattern.     

Profit Measurement and UK Accounting Standards: A Case of Increasing Disharmony in Relation to US GAAP and IASs

UK accounting practice differs from International Accounting Standards (IASs) particularly with regard to amortisation of goodwill, provision for deferred taxation and the accounting treatment of pension costs. Under the core standards programme of the IASC the IASs have emerged closer to US practice. This paper evaluates the profit of those UK companies reporting to the Securities and Exchange Commission (SEC) in 1988 and 1994, spanning a period which saw the establishment of the ASB and the implementation of the IASC's comparability project. An increasing gap was found between the reported profit under UK accounting principles and that restated under US GAAP. The difference lay most frequently in accounting for goodwill, provision for deferred tax, and the accounting treatment of pension costs, with accounting for goodwill showing a particularly significant impact in 1994. Notwithstanding the introduction of FRS 10, an overall impression of increasing disharmony could continue to cause reconciliations to be required of UK companies seeking full listing on a US stock exchange, with consequent disadvantage relative to companies in other European countries seeking international capital in the US.     

Commodification of Volunteer Tourism: a Comparative Study of Volunteer Tourists in Vietnam and in Thailand

Volunteer tourism (VT) has often been depicted as a means of avoiding the commodification of tourism (and even ecotourism) by ensuring that local communities benefit from VT, both environmentally and economically, and that there is authentic engagement by the tourists with indigent people and their cultures. However, critics have questioned this claim, arguing that VT has become little different from tourism and ecotourism, entailing commodification by providing profit for VT organizations rather than for local communities and consuming rather than respecting local environments and cultures. This study tests these claims and counterclaims by a comparative analysis of two VT experiences, one in Vietnam and the other in Thailand. The findings of the study are that although each cohort of volunteer tourists (VTs) exhibited elements of both decommodification and commodification, on a continuum of decommodification and commodification, the Vietnam VTs were closer to the decommodification node, whereas the Thailand VTs were closer to the commodification node. In part, this was because the Vietnam VT project was pitched more towards conservation research, whereas the Thailand VT project was pitched more towards vacation conservation. Copyright © 2011 John Wiley & Sons, Ltd.     

Unconstrained estimates of the equity risk premium

Estimates of the equity risk premium implied by analyst forecasts—generally 2–4 %—are often significantly below realized equity returns of 6 %. Measurement error could result from conservative assumptions, reliance upon consensus rather than detailed forecasts, the use of market rather than target prices, and regression analysis, which can be influenced by a small number of observations. We address these potential sources of measurement error. Our estimates are consistent with subsequently realized returns and capture systematic risk exposure. Alternative techniques could capture another form of priced risk or identify firm characteristics associated with systematic mispricing. From 1999 to 2008, we estimate an average equity risk premium in the United States of 5.3 %. The estimate increases from 3.1 % for 1999–2000 to 5.9 % from 2001 to 2008, comparable to the historical average of realized equity returns.     

The ethical and policy implications of profiling ‘vulnerable’ customers

In the shadow of the global financial crisis, the issue of the marketing of credit has become an increasing concern in the past 12 months. Outstanding personal debt in the UK currently stands at £1479 billion and is rising by £1 million every 10.6 min. In Australia, there is currently $44.6 billion worth of outstanding credit card debt, and in the US, $2596 billion was owed on credit cards in 2008. At present, the banking sector utilizes sophisticated research methods to profile consumers, including those who might be considered financially vulnerable. However, the policy frameworks in most industrialized countries do not account for this form of target marketing when considering how to protect vulnerable groups. This paper is an initial attempt to examine the different methods by which profiling is conducted and the policy implications of this sophisticated form of segmentation and targeting. We argue that current consumer policies are inadequate in protecting vulnerable consumers from these marketing techniques, and recent recommendations from the Federal Reserve Bank of the United States, and the Australian Law Reform Commission to allow banks and lenders to ‘pre‐screen’ potential customers will exacerbate personal debt levels, rather than reducing them.     

Knowledge, values and internationalisation—introduction to the special edition

Internationalisation is increasingly being seen as an organisational learning process. However, entrepreneurial enterprises tend to be smaller, more innovative and more agile than their larger counterparts. When they internationalise, entrepreneurial firms often expand at a rapid rate. The cultures of so-called ‘born global’ firms also appear to differ from firms that internationalise in a more gradual, stepwise fashion. This raises interesting questions about how entrepreneurial firms acquire and manage knowledge about markets, networks and capabilities in turbulent and uncertain environments and how the values embedded in organisational cultures might influence strategic choices. The following articles in this special edition of the Journal of International Entrepreneurship focus specifically on how innovative firms—particularly small and medium-sized enterprises—recognise and exploit market opportunities, how they learn from international market entry and penetration experiences to improve core capabilities and how values may influence supply chain management and start-up decisions.