A longitudinal examination of intellectual capital reporting in Marks & Spencer annual reports, 1978–2008

This paper examines the intellectual capital content of Marks & Spencer annual reports over a 31 year period from 1978 to 2008 using a content analysis instrument. Motivated by the gap among prior studies in respect of longitudinal samples, the paper also sets out to note the ways in which the annual report has changed over the three decades in response to the supposed change from the assumption that fixed assets and operations were the key driver of value creation to a belief that knowledge and the stock of intellectual assets had become a more powerful explanation of value-added. The paper finds an overall increase in intellectual capital reporting over the 31 years but notes a particular increase in relational capital reporting and a re-ordering of sub-categories over time. Narrative (as opposed to quantitative) reporting has increased and ‘factual’ (as opposed to opinion and judgement) reporting has decreased. The paper concludes that annual report narratives have reflected a wider change in the market for information among investors and other stakeholders. Whilst the exact nature of these market changes was beyond the scope of this paper, it is concluded that changing patterns of ICR reflect the increased complexity of the messages being conveyed in voluntary reporting. The increased reliance on IC in value creation has, we argue, created a need for narrative of less factual certainty and with more ambiguity and circumspection in describing increasingly complex knowledge assets.     

Modeling income inequality and openness in the framework of Kuznets curve: New evidence from China

This article tests the relationship between openness and income inequality in openness Kuznets curve framework. The Auto Regressive Distributed Lag (ARDL) estimator is employed to establish the long run relationship between openness and income inequality. We add to the literature by noting that Kuznets curve fits the relationship between openness and income equality in the case of China. This evidence is new and in line with the Kuznets hypothesis that income inequality rises with the increase of openness and then starts fall after a critical point.     

Customer perception and competitive quality strategy

The objective of this paper is to determine the optimum level of quality a firm should choose in a product/service, given the customers‘ perceptions of quality and the reference standard in a competitive market. Our work on this quality selection problem differs from those of past researchers in that we model explicitly customer's perceptions and the reference standard. We develop a game-theoretic model to obtain insights into the firms’ quality selection problem. The model results suggest that the market differentially provides rewards or penalties to firms depending upon customers' perceptions as well as other market and product-specific parameters. We contrast our findings for an oligopolist with that for a monopolist and observe that although an oligopolist often provides a better quality product, he does not do so always; especially when perceptions are sufficiently weak and the reference standard is endogenous.     

An analysis of recruitment,training and retention practices in domestic and multinational enterprises in the country of Brunei Darussalam

This paper studies the behavioural differences in the recruitment, training and retention practices of domestic enterprises (DEs) versus multinational enterprises (MNEs) in the country of Brunei Darussalam. Hypotheses from literature survey predict MNEs to be more stringent in their recruitment and training and rigourous with promotion practices. Results show this is to be largely true. MNEs are found to be more rigourous in recruitment and place more emphasis on such traits as candidates' ‘devotion to task’, ‘self-motivation’ and ‘independent judgement’. MNEs were found to rely more on internal appointments. MNEs place more emphasis on training; they also emphasise a stronger work culture by relying on ‘induction by socialisation’ and ‘buddy system for mentoring’. When analysed by age, older firms were found to place more importance on language and commitment. They also rely on training via the buddy system and on external appointments for senior posts. Large firms place emphasis on employees' willingness to travel and on work experience in other countries as the main recruitment criteria. Large firms also believe in external appointments for senior positions. The study, which is one of few of its kind conducted in non-Western environment, and the only one in the context of Brunei, adds to our understanding of human resource practices in the context of two different genres of enterprises and has implications for future research.     

Degrees-of-freedom problem and implied cost of equity capital

Bias in implied cost of equity estimates arises from analyst optimism and a degrees-of-freedom problem. The common practice in empirical studies of using a proxy for the earnings forecast horizon beyond two years in the Ohlson and Juettner-Nauroth (OJ) model is potentially biased. We derive a generalized OJ model over a T period forecast horizon and indicate the extent of this bias. The implied cost of equity capital is obtained from a quadratic equation, where our constant term comprises T short-term annual earnings per share growth rates, rather than just the next-period counterpart in the OJ model.     

Static and dynamic measurement of intra-industry trade and adjustment: A geometric reappraisal

Static and Dynamic Measurement of Intra-Industry Trade and Adjustment: A Geometric Reappraisal. — The principal analytical device used is an industry “trade box” that allows the authors to geometrically examine changes in intra-industry trade (ITT), total trade (TT), net trade (NT) and the Grubel and Lloyd (GL) index as a result of movements in trade points. The authors propose an approach to measure changes in both the absolute and relative valuesof ITTand NT with respect to changes inTT. Their methodology highlights a number of weaknesses with the existing literature on marginalIIT and provides a methodology that can be applied to investigate adjustment implications of changing patterns and levels of intra-industry trade.     

Parental control: A study of U.S. subsidiaries in Mexico

This study develops a framework that suggests that subsidiary characteristics, such as performance, purpose and manager nationality affect the extent of control and mechanisms of control (i.e., results, cultural and action controls) that their parent companies exercise over them. Hypotheses were tested using survey responses from 44 Mexican subsidiary—U.S. parent dyads. As expected, results suggest that parental perceptions of subsidiary performance are inversely related to the extent of control that parent companies exercise over these subsidiaries. It was also found that subsidiaries established for purposes relating to a knowledge seeking motivation tended to be subject to more cultural control, but no support was found for the hypothesized relationships between market purpose and results control, and resource purpose and action control. Finally, also as predicted, Mexican managers tended to be subject to greater action control by their U.S. parent than American managers.     

SYSTEMATIC RISK IN A PURELY RANDOM MARKET MODEL: SOME EMPIRICAL EVIDENCE FOR INDIVIDUAL PUBLIC UTILITIES

A minimum norm quadratic (MINQU-) type of OLS estimator is derived. The estimator is used to test if the betas of the single factor market (SFM) model are random for a sample of utilities for two contiguous periods. The estimated betas for individual utilities vary considerably over time. The statistical significance of such nonstationarity depends on both the utilities and period studied. The relative reduction in the mean square error (MSE) from using a GLS (and not OLS) estimator of beta, when beta is purely random, can be substantial for some utilities but is modest on average.     

An empirical study of moral reasoning among managers in Singapore

The study reported here sought to examine the ethical orientations of business managers and business students in Singapore. Data were obtained using Defining Issue Test. Analysis of Variance revealed that age, education and religious affiliation had influenced cognitive moral development stages of the respondents. Vocation, gender and ethnicity did not seem to have affected moral judgement of the subjects. Contrary to the general view, both business students and business managers demonstrated the same level of sensitivity to ethical dimensions of decision-making. Implications of the findings and limitations of the study are discussed. Jayantha S. Wimalasiri is Senior Lecturer of Business Policy at the National University of Singapore. His primary professional and research interests are in Human Resource Management and Business Policy/Strategic Management. Francis Pavri is Lecturer of Decision Science at the National University of Singapore. He received his first degree in Engineering and Ph.D. in Business Administration. Prior to joining the university he worked at IBM (Singapore) as a systems engineer and later as a systems consultant in a local consulting firm. Abdul A. K. Jalil graduated with Honours in Business Administration at the National University of Singapore. He is currently working as an executive officer in the public sector.     

Energy-Driven Economic Growth: Energy Consumption—Economic Growth Nexus Revisited for China

This paper revisits the relationship between energy consumption and economic growth in the case of China using an autoregressive distributed lag (ARDL) bounds testing procedure for the period from 1952 to 2008. The results suggest that energy is one of the engines of growth in China, along with labor, capital, and international trade. In particular, a 1 percent increase in energy consumption leads to a 0.17 percent increase in gross domestic product. In addition to energy consumption, results also suggest that labor, capital, and international trade are also important factors stimulating China’s economic growth.