Estimation of the default risk of publicly traded companies: evidence from Canadian data

Through Canadian publicly traded companies, this study assessed how combining firms' continuous valuations by the market (structural model) with the value given in their financial statements (accounting model) could enhance prediction of a company's probability of default. The hybrid model outperformed other models. Specifically, estimated structural probabilities of default (PDs) contributed significantly to predicting default probabilities when they were included alongside accounting and macroeconomic variables in our hybrid model. These results were obtained with two versions of the structural model: the Merton model (Merton, 1973, 1974) and the default barrier model (Brockman & Turtle, 2003). Both models were estimated with the maximum likelihood method. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.     

Dynamic capabilities and e-service

The rapid, pervasive growth of Internet use for business purposes has had a noticeable effect on numerous firms' business strategies. This type of perturbation among competitors results in a more dynamic market. To be successful in such a market often requires a firm to reexamine how it competes. In recent years, two strategic management theories—the resource-based view (RBV) and the dynamic capabilities theory (DCT)—have been advanced by proponents as being the key to developing successful competitive advantage. We argue that the DCT is a logical extension of the RBV. Operationalization has been a critical issue for both theories, and this paper fills a gap in the literature by offering a method of operationalizing dynamic capabilities. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

Credibility of corporate announcements and market reaction: evidence from Canadian share repurchase programs

Do market participants evaluate the credibility of a firm's share repurchase announcement based on the firm's share repurchase history? Using a sample of 1,507 share repurchase programs for firms listed on the Toronto Stock Exchange from 1994 to 2005, we find that 69% of firms fail to acquire the target number of shares specified at announcement and many firms fail to repurchase any shares. We develop credibility indices and find a positive relationship between current announcement abnormal returns and completion credibility of previous announcements. We conclude that the market prices completion credibility of past share repurchase announcements in reacting to current repurchase announcements. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

Determinants of online shopping: Examination of an early-stage online market

A conceptual framework intended to predict the number of online purchases made by Internet users in an early stage market is presented and examined using data collected in Israel. Those more likely to report buying online saw low costs and substantial benefits associated with e-shopping. They were experienced Internet users who valued online information searching. They were also more likely to shop over the phone, but did not especially like to go shopping. Finally, they tended to be the primary purchaser in the household. Our framework enhances understanding of the factors affecting consumers' online shopping behaviour, aides in profiling typical electronic shoppers, and may help practitioners develop more personalized marketing programs to increase e-commerce sales. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

CEO Attributes,Board Composition,and Acquirer Value Creation: A Canadian Study

We examined CEO attributes, board composition, and ownership structure for their relationship to the share performance of the acquiring company around the acquisition announcement. Based on 273 acquisitions by Canadian firms from 1998 through 2002, we have shown that the levels of CEO and director ownership as well as the level of board independence were positively associated with the short‐term financial performance of the acquirer. Board size was negatively related to value creation. Finally, cash‐based deals and cross‐border transactions were also positively related to increases in shareholder wealth for the acquirer. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.     

An examination of the relationships among market orientation,innovation resources,reputational resources,and company performance in the transitional economy of Slovenia

We investigated relationships among market orientation, innovation and reputational resources, and their impact on market performance and financial performance within the transitional economy of Slovenia. Market orientation related positively to market and financial performance of firms indirectly through innovation and reputational resources. Reputational resources associated positively with loyalty, market share, and sales volume, innovation resources associated positively with market share, and sales volume indirectly through customer loyalty. Selected marketing resources related positively to financial performance indirectly through customer loyalty, market share, and sales volume. The implications of these findings for theory and practice are considered. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.     

Tourists and refugees: Coinciding Sociocultural Impacts

The new millennium holds promise of being both the “Century of Tourism” and the “Century of the Refugee.” Never in history have there been so many refugees and tourists crossing international borders. This paper discusses the ironic similarities of both positive and negative impacts of tourism development and refugee relief on developing countries. Parallels in recommendations for both phenomena are also presented. Although not originally intended, the observations made in the paper are drawn from two different fieldwork projects: a study of refugee camp aid with Operation Lifeline Sudan in northern Kenya in 1994 and an investigation of tourism development in Malaysia in 1992.     

XBRL and Accruals: Empirical Evidence from China

We examine whether XBRL adoption by publicly traded firms on the Shanghai Stock Exchange and Shenzhen Stock Exchange is related to the level of total accruals that firms report in the pre‐XBRL versus post‐XBRL periods. Our results indicate that the level of total accruals in the post‐XBRL period is lower relative to the pre‐XBRL period. This finding is robust to several controls for macroeconomic conditions and firm fundamentals. Moreover, we find this main effect is most prominent for firms that are most likely to benefit from greater transparency: high‐growth firms, small firms, and firms in high‐technology industries. One interpretation of our results is that XBRL implementation decreases investor’s information acquisition costs and thereby improves their ability to detect earnings management; managers in turn reduce accruals.