The role of strategic enterprise risk management and organizational flexibility in easing new regulatory compliance

The impact of new regulatory requirements for internal control reporting on an organization's ability to maintain strategic flexibility has been debated in the popular press extensively. This paper tests theory from strategic management to examine the relationship between an organizations' pre-regulatory strength of strategic enterprise risk management (ERM) processes and their ability to react to new regulatory mandates. In the context of companies' adoption of SOX Section 404 internal control reporting requirements, we examine organizations' pre-SOX ERM processes, ERM supporting technologies, and organizational flexibility in order to better understand the antecedents to the difficulty encountered in meeting SOX 404 requirements. Using responses from 113 Chief Audit Executives (CAEs), we find that organizations with stronger strategic ERM processes and flexible organizational structures already in place incurred little difficulty in implementing SOX 404 mandates. On the other hand, organizations using weaker ERM processes, which focused on control compliance, experienced more difficulty. These findings provide key insights into the importance of strategic ERM in effectively complying with new regulatory controls in volatile environments.     

Market intermediaries,storage and policy reforms

Intermediaries play a crucial role in the functioning of agricultural and food markets in developing countries through linking production, imports and storage with consumption. We analyse how competition in the intermediary sector and alternative forms of intermediaries determine the incentives for storage and market outcomes more generally. We apply this framework to the Egyptian wheat sector as an illustrative case study, a country where food security is a priority, where both forms of intermediaries co-exist and undertake storage but where issues of reforms to the role of intermediaries have been raised. Through stochastic simulation, we analyse two changes in government policy: first, the effects of changing the policy instruments with both types of intermediaries undertaking storage; second, relating to market reforms where the private sector replaces the storage function of the parastatal. These issues have wider significance for addressing the interaction between food security and a wide range of policy reforms including de-regulation of parastatals in developing countries.     

Demand responsive transport: towards the emergence of a new market segment

This paper focuses on recent British experience with telematics-based Demand Responsive Transport (DRT) services in rural areas. In recent years, the ability of DRT concepts to provide efficient, viable transport services has been greatly enhanced by the use of transport telematics as demonstrated in a variety of environments across Europe. The success of British local authorities in winning substantial funding under the Rural and Urban Bus Challenge programmes for the implementation of DRT has resulted in widespread interest in flexible forms of transport. It is thus timely to evaluate the impact of this substantial investment. Drawing on the experience of a number of UK schemes, the paper assesses the reasons for the new-found success of what is becoming a relatively well-accepted mode by concentrating on a variety of factors including: service characteristics (particularly route flexibility, flexibility of booking method and pre-booking regime), emerging markets and the overall contribution of DRT to increased social inclusion and intermodality. Impediments to the development of DRT services are highlighted. The paper also discusses current research into the next generation of DRT services and concludes by identifying some key issues for policy-makers concerned with the future implementation of DRT services.     

Do Wages Rise or Fall Following Merger?*

This paper provides a systematic empirical analysis of the effects of merger and acquisition activity on profitability and firm‐level employee remuneration in the UK, using a specially constructed database for the period 1979–91. It finds that both profitability and wages rise following acquisition, and firms that merge within the same industry division experience larger increases in profitability and pay their workers higher wages than those engaged in unrelated acquisitions; i.e. in part, the result of an increase in the efficiency with which labour is used following related acquisition.     

Were In-Process Research and Development Charges Too Aggressive?

Abstract:  Prior research documents that US firms write off large in-process research and development charges (IPRD) for acquisitions, possibly overstating the current period expense to inflate future earnings. Consequently, in 1998, the US Securities and Exchange Commission (SEC) began scrutinizing IPRD charges. We use pre-acquisition R&D expenses of 144 target firms as a benchmark for assessing whether IPRD charges are appropriate. Overall, the results suggest that most firms during our sample period were not overly aggressive in expensing IPRD–especially for acquisitions subsequent to the SEC's scrutiny. The results also indicate that the SEC's intervention reduced the frequency of overstated IPRD charges.     

THE ESTIMATED EFFECT OF CATHOLIC SCHOOLING ON EDUCATIONAL OUTCOMES USING PROPENSITY SCORE MATCHING

This paper examines the effect of attending a Catholic high school on educational outcomes. The statistical analysis is based on data obtained from the US National Educational Longitudinal Study. Using propensity score matching methods to control for selection bias, we find that Catholic schooling improves maths test scores, with stronger effects for males than for females, but appears to have little effect (if any) on reading scores. Catholic schooling also raises high school graduation rates and substantially increases the likelihood of enrolment in a 4‐year college. Use of the difference‐in‐difference method suggests that the effect of Catholic schooling on changes in maths scores is more muted, though still statistically significant.     

The Hidden Value of Knowledge in New Products

The purpose of this article is to evaluate the impact that knowledge management has on new product success. In this study, two aspects of knowledge management—knowledge acquisition and knowledge dissemination—were examined relative to traditional determinant of new product success. Moderating effect of competitive intensity is also investigated. The results generally support the importance of knowledge management to new product success. These findings imply that if organizations fail to understand the subtle ways by which different features of KM influence new product success, they may fail to harvest the full value of KM.     

Towards Economic Literacy

Following Fred Hankins's initial article on the approach to economics teaching in schools, two educational specialists involved in the 14—16 Project for school economics curricula, outline their approach to the fostering of economic literacy.