The Spatial Distribution of Japanese Manufacturing Industries in Indonesia

This paper presents an analysis of regional changes in the spatial pattern of Japanese manufacturing industries and the effect of deregulation of foreign investment in Indonesia during 1984–1994. Empirical analysis in this paper uses data of 560 Japanese manufacturing industries in Indonesia. The result of this study indicates their continuous regional concentration in the core region of Java. The regression analysis indicates that market, agglomeration and infrastructure continue to be the main reasons for the location of Japanese manufacturing industries. The current economic crisis has substantially reduced the level of new investment in the core region of Java.     

Civil war, stock return, and intellectual capital disclosure in Sri Lanka

This study examines the effect of current-period intellectual capital disclosure on earnings and current annual stock return during a civil-war period. Using the top 30 firms by market capitalization listed on Colombo Stock Exchange over six years (from 1998 to 2003), this study finds that firms do not include the current-period intellectual capital disclosure in the current stock return, and the increase in the current-period intellectual capital disclosure activity has no influence on earnings included in the current stock return. Future accounting-based earnings, if stated in the current period, by contrast are included in the current stock return. The findings provide insights into the intellectual capital disclosure practice and its influence on stock return in a civil-war environment.     

Bayesian assessment of Lorenz and stochastic dominance

We introduce a Bayesian approach for assessing Lorenz and stochastic dominance. For two income distributions, say X and Y, estimated via Markov chain Monte Carlo, we describe how to compute posterior probabilities for: (i) X dominates Y, (ii) Y dominates X and (iii) neither Y nor X dominates. The proposed approach is applied to Indonesian income distributions using mixtures of gamma densities that ensure flexible modelling. Probability curves depicting the probability of dominance at each population proportion are used to explain changes in dominance probabilities over restricted ranges relevant for poverty orderings. They also explain some seemingly contradictory outcomes from the p-values of some sampling theory tests.     

The Effect of Board Diversity on Earnings Quality: An Empirical Study of Listed Firms in Vietnam

Previous studies have established that firms’ effectiveness can differ based on the differences among directors within a board, and between boards. However, studies have yet to establish the effectiveness of the diverse attributes of the board on firms’ quality of earnings in an emerging market setting such as Vietnam. This study investigates the effect of board diversity on earnings quality in a sample of Vietnamese listed firms. The two dimensions of board diversity measures in this study cover a wide range of structural and demographic attributes of board of directors, using a diversity‐of‐boards index (dissimilarities among firm boards, i.e., board structure) and a diversity‐in‐boards index (dissimilarities among directors within a board, i.e., demographic attributes of board members). Earnings quality is an aggregate measure compiled from four accounting‐based measures of earnings quality: accruals quality, earnings persistence, earnings predictability and earnings smoothness. We find a significant, positive linear relationship between diversity of boards and earnings quality, while the relationship between diversity in boards and earnings quality is non‐linear, with a U‐shaped curve.     

Network ties and entrepreneurial orientation: Innovative performance of SMEs in a developing country

This study investigates the role of intra-cluster ties, extra-cluster ties, and entrepreneurial orientation in shaping firms’ innovative performance. We conduct our analysis on a primary data set of 120 small and medium enterprises located in the Cibaduyut footwear-manufacturing cluster, Indonesia. We explore the effectiveness of knowledge acquisition through intra-cluster ties and extra-cluster ties on innovative performance. We find that extra-cluster ties mediate the relationship between proactiveness and innovative performance. Also, a combination of high extra-cluster ties and risk taking exert a positive impact on innovative performance. Surprisingly, we find that risk taking negatively moderates the influence of intra-cluster ties on innovative performance. Over-reliance on within-cluster knowledge sharing may result in the diffusion of redundant knowledge rather than making new knowledge available to the firm. Overall, our findings point to the synergistic effects of entrepreneurial orientation and extra-cluster ties on innovative performance.     

Application of Fuzzy Risk Analysis for Selecting Critical Processes in Implementation of SPC with a Case Study

Fuzzy risk analysis is widely used in risk assessment of components by linguistic terms. Fuzzy numbers are used to quantify the associated uncertainty. This study employs fuzzy risk analysis to evaluate processes for implementing statistical process control (SPC) in a specified manufacturing system. To reach this goal, fuzzy risk analysis has been applied based on both ranking and similarity of generalized trapezoidal fuzzy numbers in a stepwise procedure. Therefore, a new approach has been introduced for fuzzy risk analysis of processes to overcome the shortcomings of previous fuzzy risk analysis approaches. As a result, fuzzy risk analysis is used as a decision making technique to select critical processes under uncertainty. Also, the application of the proposed SPC implementation algorithm is illustrated in the manufacturing line of a car battery factory.     

How Best to Communicate Intangible Resources on Websites to Inform Corporate‐Growth Reputation of Small Entrepreneurial Businesses

Identifying disclosure communication signals as narrative, visual, and numerical, and measuring them using two methods, this study investigates how best the intangible resources can be used to communicate future‐period corporate‐growth reputation, measured as future sales growth, of the fastest growing small companies in Australia over a continuous three‐year period. Using insights from resource‐based theory and signaling theories, and generating data using content analysis from 276 companies, this study finds that communication signals when combined rather than in isolation are predictors of future‐period corporate‐growth reputation. The study provides additional support for current‐period corporate‐growth reputation mediating intangible resource signals in predicting future‐period corporate‐growth reputation.     

Intangibles Disclosure on Entrepreneurial Small Businesses’ Websites to Influence Stakeholders’ Impressions

This study examines the ways in which entrepreneurs influence stakeholders to form perceptions using intangibles disclosed on business websites. Interviews were conducted with 10 entrepreneurs, each representing an entrepreneurial business, and 17 intangible capabilities disclosed to impress three stakeholder groups using five impression‐management tactics were uncovered. The study uses an entrepreneurship perspective to investigate entrepreneurs’ motivation to share their beliefs with stakeholders, and resource‐based theory to posit that intangibles combined with business capabilities are competencies for such communication, in addition to stakeholder theory for targeting specific stakeholders.     

Duration of equity overvaluation and managers’ choice to use aggressive underlying earnings disclosure and accrual-based earnings management: Australian evidence

This paper examines whether equity overvaluation duration influences managers’ choice of different earnings management mechanisms and how corporate governance and the Australian Securities and Investment Commission’s underlying earnings disclosure guidelines influence managers’ choices. The study samples Australian Securities Exchange 200 firms from 2009 to 2016. Findings show that on average, firms more likely engage in accrual-based earnings management in the early overvaluation stage. In later stages, firms more likely disclose underlying earnings aggressively to sustain overvaluation. Additionally, firms with a high proportion of independent directors on the board prefer to disclose underlying earnings aggressively to sustain the equity overvaluation; firms with a low proportion of independent directors prefer both accrual-based earnings management and aggressive underlying earnings disclosure to sustain the overvaluation. Moreover, firms that conform to the Commission’s underlying earnings disclosure guidelines use neither accrual-based earnings management nor aggressive underlying earnings disclosure to sustain overvaluation, but non-conforming firms use both mechanisms.