Foreign trade regimes and economic development: A review article

How does protection by means of import quotas (QRs) differ from tariffs in ten typical less developed countries? Bhagwati provides a convincing taxonomy, for stalic equilibria, of the manifold additional distortions arising from QR regimes. Krueger analyzes the monetary, fiscal and exchange-rate problems associated with the struggle to liberalize. Both demonstrate that QRs on foreign trade are very damaging to economic development, but neither rationalizes why QRs are so common in practice. The reviewer fills part of the gap by appealing to malfunctioning capital markets, and these financial considerations may help explain why devaluations in LDCs have such unexpected outcomes.     

Stakeholder-Sensitive Business Ethics Teaching

Well-established, well-intended and well-designed business ethics teaching can still have little effect. This is not surprising, as long as business ethics does not undertake a business-school-wide dialogue about goals and obstacles, not least as an example of stakeholder participation. The article elaborates such views in a systematic fashion and formulates a list of thirteen premises and nine recommendations in thesis format.     

Competitive trade models and real world features

Competitive small-dimension international trade models perform well in comparing free (or restrictive) trade with autarky, especially in emphasizing that consumption patterns can differ from production patterns and that production becomes highly concentrated while consumption patterns are expanded. Variations on these small-dimensional models can usefully show how with trade production patterns may nonetheless be more diverse and a country’s labor force become more heterogeneous in its skills. The paper illustrates how the Middle Products framework can be reinterpreted to support variety in production and in labor skills.      

Ethnicity,acculturation, and the importance of product attributes

This investigation examined the relationship between subcultural group membership and the importance of various product attributes in purchase decisions. Subcultural group membership was defined on the basis of Hispanic ethnicity and level of assessed acculturation. The results indicate that cost considerations such as price and the availability of credit best distinguish these groups. This is particularly meaningful, given that these results persist even when income level is statistically controlled. The second major purpose of the investigation was to test the appropriateness of the traditional progressive learning model of acculturation within the specific buyer behavioral context of product attribute importance. The findings clearly indicate support for this model.     

International Variation in Bank Accounting Information Content

This study explores the cross‐country impact of financial system and banking regulations on the information content of bank earnings and book value. Test results provide empirical evidence that financial system and banking regulations have a joint effect on the association of equity price with earnings and book value components in Germany, France, the United Kingdom and United States. This effect is explainable by the objective bank function, which shows that earnings of the period determine the terminal book value, thus consistent with the clean surplus accounting approach. Cross‐country variation in bank accounting information content calls for caution in interpreting international bank financial and operating ratios.     

Incentive effects of stock purchase plans

Financial economists are interested in whether alternative compensation plans are adopted primarily for tax, incentive or signaling reasons. As most compensation plans have tax implications, examining for other effects is difficult. In this paper we examine the stock market reaction to employee stock purchase plans which are ‘non-tax advantageous’ and adopted for incentive/signaling reasons. The results suggest that (1) equity-based compensation schemes have a positive effect on shareholder wealth for reasons other than tax reduction, (2) a motive for adopting these plans is to align managerial and shareholder interests, and (3) equity ownership motivates key executives more than subordinate employees.     

Auditors gone wild: The “other” problem in public accounting

Following the scandals involving Enron, WorldCom, and Qwest Communications, the accounting profession has spent the past several years trying to get back on track. While Sarbanes-Oxley may improve the decision-making of audit professionals, and help prevent future large-scale catastrophes that hurt stockholders and bring down firms, there is another problem in public accounting that few consider and nobody has proposed to solve: deviant workplace behavior. Previous research describes deviant workplace behavior as the voluntary behavior of organizational members that violates significant organizational norms and, in so doing, threatens the well being of the organization and/or its members. Building from recent work in various business literatures, this is the first research since the passage of Sarbanes-Oxley to examine workplace deviance at Big 4 accounting firms. Taking a cross-disciplinary, collaborative approach, the authors endeavor to explain why workplace deviance has infiltrated accounting firms and how it is undermining their effectiveness and derailing their long-term prospects for success. After describing its genesis and effects, the authors prescribe several managerial strategies for preventing deviance and minimizing its effects on a firm.