Phasing Out an Inefficient Venture Capital Tax Credit

In 2005, the Government of Ontario, Canada, announced the phase out of the Labour Sponsored Venture Capital Corporation (LSVCC) tax credit, which will become effective in 2011. Some media attention has suggested this might lead to difficulty for Ontario entrepreneurs and emerging firms in raising capital. This study presents evidence from Ontario innovative healthcare firms that capital raising concerns are not related to the phasing out of the LSVCC tax credit, and this evidence is consistent with evidence of extreme underperformance of LSVCCs. However, amongst firms currently funded by LSVCCs, there is significant concern about the phase out of the tax credit, which is at least in part attributable to the terms within LSVCC shareholder agreements. Policymakers should account for firms currently funded by LSVCCs to efficiently facilitate the phase out of the tax credit.     

Deception and its Detection Under Synchronous and Asynchronous Computer-Mediated Communication

As part of an ongoing research program investigating features of computer-mediated communication (CMC) that affect deception and its detection, an experiment was conducted to test the impact of synchronicity on communication processes, credibility assessments, deception detection, and team performance. At issue is whether various forms of CMC enable or deter successful deception. Synchronous (real-time) CMC was hypothesized to foster more involvement and mutuality during communication, more credibility for team members, and hence less detection of deception when it was present. Team performance was hypothesized to suffer under deception due to deceivers capitalizing on synchronous communication to build their credibility. Two-person teams conducted a decision-making task in real time (synchronous) or over the course of several days (asynchronous). In half of the pairs, one party was asked to be deceptive. The results indicated that participants in the synchronous mode were more involved, perceived more mutuality, and viewed their partners in a more favorable light, than participants in the asynchronous mode. Deceivers portrayed themselves as somewhat more credible than truthtellers. However, they were not perceived as more persuasive than truth-tellers. Participants in the deceptive condition made poorer decisions than participants in the truthful condition. Implications for CMC and future study are discussed.     

Legality and venture capital governance around the world

We analyze governance with a new dataset on investments of venture capitalists in 3848 portfolio firms in 39 countries from North and South America, Europe and Asia spanning 1971–2003. We provide evidence that cross-country differences in legality, including legal origin and accounting standards, have a significant impact on the governance structure of investments in the VC industry: better laws facilitate faster deal screening and deal origination, a higher probability of syndication and a lower probability of potentially harmful co-investment, and facilitate investor board representation of the investor. We also show that country-specific differences exist apart from legal and economic development.     

The cultural integrator

Cultural differences pose special problems for international firms. One solution can already be found in the manager's bag of tricks—an integrator, this time to integrate between cultures.     

The effectiveness of a complaint-based ethics enforcement system: Evidence from the accounting profession

Many professions, in order to enforce their ethics codes, rely on a complaint-based system, whereby persons who observe or discover ethics violations may file a complaint with an authoritative body. The authors assume that this type of system may encourage ethical behavior when practitioners believe that a punishment is likely to result from a failure to adhere to the rules. This perceived likelihood of punishment has three components: detection risk, reporting risk, and sanction risk. A survey of potential violation witnesses related to the accounting profession revealed that the profession's complaint-based enforcement system may not provide practitioners with the necessary disincentive to refrain from code violations.S. Douglas Beets is an Assistant Professor of Accounting at Wake Forest University. He is also a Certified Public Accountant, licensed in the state of Tennessee. Dr. Beets served on the accounting staffs of Armco Steel Corporation, Eastman Kodak Company, and Russell and Purkey, CPAs. Recently, he was selected as a faculty intern for Arthur Andersen and Co.Larry N. Killough is the Peat Marwick Professor of Accounting at Virginia Polytechnic Institute and State University. Dr. Killough is a Certified Public Accountant and served on the staff of Arthur Young and Company. His articles have appeared in numerous academic and practitioner journals.     

Shadow pricing diversity in U. S. national forests

Tobit estimation of the market value of timber sales in national forests of North Carolina demonstrates the important effect of stand diversity on the formulation of bid prices for mixed-species timber tracts. The hedonic model generates a shadow price for diversity according to changes in bid prices, an effective shift in the demand curve for auctioned tracts due to stand diversity attributes. This approach contrasts with traditional shadow price analyses that focus on the supply effects of environmental constraints. Results are corrected for the effects of bidder participation, market conditions, production costs, and other stand attributes. Econometric results demonstrate that stand heterogeneity is a highly significant factor influencing the market value of timber sales from national forests of the Appalachian region. Greater heterogeneity results in lower bid prices for timber sales, indicating a positive shadow price for maintenance of stand diversity.     

What do dividends tell us about earnings quality?

Over the past 30 years, there have been significant changes in the distribution of earnings—cross-sectional variation has increased, with increasing left skewness—as well as in corporate payout policy, with many fewer firms paying dividends and the emergence of stock repurchases. We investigate whether the informativeness of payout policy with respect to earnings quality changes over this period. We find that the reported earnings of dividend-paying firms are more persistent than those of other firms and that this relation is remarkably stable over time. We also find that dividend payers are less likely to report losses and those losses that they do report tend to be transitory losses driven by special items. These results do not hold as strongly for stock repurchases, consistent with them representing less of a commitment than dividends.     

When caring stops, staffing doesn't matter: part II

Response to a column on caring and staffing struck a cord with Nursing Economic$ readers worldwide. Measuring caring is complicated and a healthy debate exists over how exactly to do it. The extraordinary work of Dr. Jean Watson is an excellent resource for understanding how to measure and monitor caring. Beneath the instruments for measuring caring sits foundational work that can help us clarify and understand the topic of caring and just where it sits in our philosophies, intentions, patient care models, and care delivery systems.     

Propaganda’s Place in Strategic Communication: The Case of ISIL’s Dabiq Magazine

This study explores how extremist groups use propaganda as a form of strategic communication. The theoretical foundation used was an adaption of neo-institutional theory for strategic communication. The sample was an issue of Dabiq, an online propaganda magazine, from the Islamic State in Iraq and the Levant (ISIL). The qualitative method employed was ethnographic content analysis. The study found ISIL used Dabiq as a form of strategic communication to achieve organizational goals in compliance with neo-institutional theory. Furthermore, ISIL used strategic communication in a similar manner as nonextremist groups; it sought to advance its organization as being superior to rival ones. These findings indicate that neo-institutional theory can further understanding of how extremist groups use propaganda, as strategic communication, to achieve organizational goals. This is accomplished by analyzing the functions specified in neo-institutional theory that propagandists attempt to fulfill. In general, this study offers evidence that the academic field of strategic communication offers significant potential to advance propaganda theory. If neo-institutional theory, as adapted for strategic communication, can explain and predict what a propagandist does, other strategic communication perspectives might offer the same ability to analyze propaganda and develop propaganda theory.