The Association Between Activity-Based Costing and Manufacturing Performance

This study examines the association between activity-based costing and manufacturing performance. Results using a cross-sectional sample of manufacturing plants indicates that extensive ABC use is associated with higher quality levels and greater improvements in cycle time and quality, and is indirectly associated with manufacturing cost reductions through quality and cycle time improvements. However, on average, extensive ABC use has no significant association with return on assets. Instead, we find weak evidence that the association between ABC and accounting profitability is contingent on the plant's operational characteristics.     

Corporate Diversification: What Gets Discounted?

Prior literature finds that diversified firms sell at a discount relative to the sum of the imputed values of their business segments. We explore this documented discount and argue that it stems from risk–reducing effects of corporate diversification. Consistent with this risk–reduction hypothesis, we find that (a) shareholder losses in diversification are a function of firm leverage, (b) all equity firms do not exhibit a diversification discount, and (c) using book values of debt to compute excess value creates a downward bias for diversified firms. Overall, the results indicate that diversification is insignificantly related to excess firm value.     

Knowledge transfer costs and dependence as determinants of financial reporting

Abstract This paper examines the circumstances in which financial reporting exists. Jensen and Meckling (1995 ) observe that where there are high knowledge transfer costs, then decentralisation is necessary; and that where decentralisation occurs there is a control problem, which can be addressed by providing a control system. I predict that where there are high knowledge transfer costs there will be a control system; if the control system uses financial reports, these will occur for activities with high knowledge transfer costs. The ability to decentralise is reduced where dependence makes it potentially costly to allow a subordinate to make decisions about the activity. The paper predicts that high dependence will be negatively associated with the existence of financial reports. The results confirm the predictions that financial reports are positively associated with knowledge transfer costs and negatively associated with dependence.     

Securityholder Taxes, Corporate Capital Structures and the Priority Structure of Debt

This paper shows that the firm has an incentive to issue multiple classes of debt that are differentiated by seniority to enhance securityholder tax-timing option values. The analysis establishes that there is at least one mix of senior and junior debt that maximizes the tax option gain from having multiple priority classes of debt. An analytic example provides specifications for the optimal amount of leverage and the optimal mix of senior and junior debt. Relative to the case of only one class of debt, a multiple debt priority structure increases the optimal amount of corporate leverage.     

Reframing science and other local knowledge traditions

By recognizing science as a set of local practices it becomes possible to ‘decentre’ it and develop a framework within which all knowledge systems can be equitably compared. It is argued that all knowledge traditions are spatial in that they link people, sites and skills. In order to ensure the continued existence of the diversity of knowledge traditions rather than have them absorbed into the great imperialist archive we need to enable disparate knowledge traditions to work together through the creation of a third space in which the social organization of trust can be negotiated.     

Risk taking and failure in de novo savings and loans in the 1980s

This article examines failure rates in de novo S&Ls that initiated operations during the 1980–1986 period. Overall failure rates are similar to those for existing institutions but are found to vary significantly by location, time of charter, and organizational form. Both univariate tests and results from a probability-of-failure model indicate that inadequate capital, economic stress, poor management of higher risk lending allowed by broader powers, and operating inefficiencies contributed significantly to the likelihood of failure. Use of brokered funds and rapid asset growth are also significantly related to failure likelihood. Interestingly, for those S&Ls which eventually failed, rapid asset growth and high proportions of nonperforming assets actually delayed the timing of their failure. We interpret this to be the result of regulatory forbearance. We also find significant differences between the financial characteristics of de novo and non-de novo S&Ls.     

Obtaining global market access for GMPCS

Demand for wireless telephony is huge and the potential for GMPCS, in particular, is widely recognized. However, the most serious problems to the introduction of GMPCS are not technical, nor financial, but are rather the political and regulatory barriers—notably fear of bypass and security concerns. Inmarsat does not believe that there should be any a priori limit to the number of GMPCS operators offering satellite capacity to national service providers. The market can best determine which will be successful. However, before countries open their markets, they will need to be convinced that it is in their interest to do so.     

大陆漂移

对于会计师来说，这是一个有趣的时期。作为最有野心的一个尝试——在欧盟，甚至全世界，会计惯例协调——正在高涨。 欧盟委员会早期倡导的协调一致没有走多远，因为成员国并不是真正愿意放弃自己的惯例。国家之间的妥协就是“你接受我的财务报表，我就会接受你的”。