Co-development ventures: Optimal time of entry and profit-sharing

We find the optimal time for entering a joint venture by two firms, and the optimal linear contract for sharing the profits. We consider risk-sharing, timing-incentive and asymmetric decisions contract designs. If the firms are risk-neutral and the cash payments are allowed, all three designs are equivalent. With risk aversion, the optimal contract parameters may vary significantly across the three designs and across varying levels of risk aversion. We also analyze a dataset of joint biomedical ventures, in which, in agreement with our theoretical predictions, both royalty and cash payments are mostly increasing in the smaller firm's experience, and the time of entry happens sooner for more experienced small firms.     

Fuzzy model estimation of the risk factors impact on the target of promotion of the software product

ABSTRACT

This article studies the application of fuzzy logic to the risk analysis of a new software product development and marketing in specific case of a small size IT company. Identification and analysis of external and internal risk factors show that this type of business activity could be evaluated as high-risk enterprise. So, the purpose of the paper is to develop robust method to evaluate probability of occurrence of major risk events and their impact on the company financial health. The fuzzy logic is used to estimate degrees of threat of each relevant risk factor due to lack of reliable statistical data. The novelty of proposed approach is the inclusion into the model the risk event time.     

Foreign direct investment,labour relations and sector effects: US investment outflows to Europe

This paper analyses the impact of national labour relations on foreign direct investment (FDI), with emphasis on macro-markets and sector properties. Since there are sector-specific differences between industries in transferability, labour-relations effects on FDI probably vary across sectors. The paper finds that labour costs dampen FDI, while the impact of national market potential remains inconclusive. Collective labour institutions have a significantly adverse impact on FDI in manufacturing, and a relatively beneficial one on FDI in services. While investment in manufacturing seeks to minimize labour costs at given skill levels, investment in services maximizes skills at given levels of cost.     

Drei herausragende Controller mit der Ehrendoktorwürde der European Business School ausgezeichnet

Ohne Zusammenfassung     

(Non-)robustness of maximum likelihood estimators for operational risk severity distributions

The quality of operational risk data sets suffers from missing or contaminated data points. This may lead to implausible characteristics of the estimates. Outliers, especially, can make a modeler's task difficult and can result in arbitrarily large capital charges. Robust statistics provides ways to deal with these problems as well as measures for the reliability of estimators. We show that using maximum likelihood estimation can be misleading and unreliable assuming typical operational risk severity distributions. The robustness of the estimators for the Generalized Pareto distribution, and the Weibull and Lognormal distributions is measured considering both global and local reliability, which are represented by the breakdown point and the influence function of the estimate.     

Accounting for privatisation in Africa? Reflections from a critical interdisciplinary perspective

The interrelation of privatisation and accounting constitutes a wide-ranging focus for research that is attractive from a critical theoretical and interdisciplinary perspective. A number of studies may be considered part of this focus in holding themselves out as types of evaluation of – or as an accounting, or accountability, for – privatisation. For us, the evaluation of privatisation programmes is properly a concern of critical accounting research and of those interested in the development of more holistic forms of accounting and auditing for appraisal, such as is envisaged in forms of social accounting and social auditing. Indeed the assessment of privatisation has been deemed within the ambit of the social audit movement. Privatisation in Africa is controversial. In today's context it is often integral to the particular form of the globalisation process and carries related ambiguities. Apparently something of a panacea for its advocates, it is problem-ridden for its critics. How should we account for privatisation in Africa? We promote the delineation of a holistic accounting evaluation model by reflecting on a critical review of research constituting accounts of privatisation in Africa. Of course such research, to the extent that it is holistic or comprehensive, would include attention to the mobilisation in context of various accountings as well as related practices of governance at micro- and macro-levels—in turn reflecting the sense in which accounting, along with related systems of governance, is pervasive in privatisation processes. While we find strengths in the research analysed and acknowledge its contribution, we point to deficiencies and gaps from a critical theoretical and interdisciplinary perspective. These gaps and deficiencies delimit policy discourse and praxis vis-à-vis privatisation in Africa and beyond. They also point to a more holistic accounting model of appraisal. We acknowledge the particularities of Africa, and indeed of the differing nations, cultures and regions of Africa, but also suggest the model's relevance not only for African contexts but beyond.     

Islam, nature and accounting: Islamic principles and the notion of accounting for the environment

Islamic principles are suggestive of a variety of implications for governance and accounting. Reflecting upon Islamic principles, we here engage with the notion of accounting for the environment. Drawing from key Islamic texts and relevant prior literature, we elaborate and discuss key Islamic principles of relevance and delineate what they suggest for accounting. Our endeavours here are consistent with a concern to contribute to a critical theoretical project seeking to develop a progressive and emancipatory universalism that is respectful of difference, a project with its accounting implications. In concluding, we point, among other things, to the irony whereby Western transnational corporations have sought to promote their particular brand of corporate social (and environmental) responsibility accounting in Arab countries, variously influenced by Islam, with little to no mention of a notion of accounting for the environment integral to and deeply rooted in Islam.     

Revenue Recognition under IFRS Revisited: Conceptual Models,Current Proposals and Practical Consequences

Since 2002, the FASB and the IASB have been undertaking a joint project on the revision and convergence of US GAAP and IFRS revenue recognition. Even though the outcome of the project is still open, the project's course as well as trends in recently published IFRS and other current IASB projects suggest that existing earnings-based and realisation-based IFRS revenue recognition criteria are likely to be replaced by a radically new approach. This paper demonstrates the inconsistencies in current IFRS revenue recognition that have triggered the project and then presents and discusses three conceptually different revenue recognition models that are internationally debated at present. The paper concludes that a major revision of existing IFRS revenue recognition as proposed by the FASB and the IASB is not required. It is argued that the perceived deficiencies should rather be solved on the basis of current transaction-based IFRS revenue criteria.     

Entry and exit echoes

While aggregate data do not show the investment echoes predicted by vintage-capital models, echoes arise in rates of entry and exit of firms at the industry level. Moreover, industries where prices decline rapidly experience early ‘shakeouts’. The relation emerges naturally in a vintage-capital model in which exit of firms sometimes accompanies the replacement of their capital, and in which a shakeout is the first replacement ‘echo’ of the capital created when the industry is born.