Measurement of formal harmonization progress:: The IASC experience

As a result of globalization, the accounting profession has become increasingly aware of the need to establish a single set of accounting standards that would be valid in the international arena. Recent events highlight the timeliness of this study, which provides an empirical measurement of International Accounting Standards Committee (IASC) progress throughout its harmonization history. The purpose of this article is twofold: first, a new measure of the advances achieved through formal harmonization and second, to use this methodology to evaluate the IASC achievements all through its standard-setting activity. Our results prove that the IASC has made great progress in regard to the level of harmony achieved through the accounting standards it has issued or revised. Nevertheless, we conclude that the IASC needs to continue working towards greater formal harmonization. Our study also indicates research directions that could advance the study of formal harmonization. This specific area of research has generally been disregarded in the existing literature, a trend we would like to see reversed, considering that its application can provide valuable insight for standard-setting processes, especially now that the accounting community is so conscious of the need to advance the harmonization process.     

Testing for output convergence: a re-examination

This paper investigates output convergence for the G7 countriesusing panel time-series techniques. We consider both the nullhypotheses of no convergence and convergence. It is shown thatinferences on output convergence depend on which one of thetwo null hypotheses is considered. Further, the no convergenceresults reported in previous studies using the time-series definitionmay be attributed to the low power of the test procedures beingused. Our results also highlight some potential problems oninterpreting results from some typical panel unit root and stationaritytests.     

Which Characteristics Predict the Survival of Insolvent Firms? An SME Reorganization Prediction Model

The negative impact of insolvency, especially in small and medium enterprises, informs the objective of this paper: to study the characteristics of bankrupt firms to achieve a preventive diagnosis for reorganization by means of artificial intelligence (AI) methodologies such as rough set and PART methods. The AI models obtained show not only the key variables to predict insolvency, but also their relations and the critical values. Using only five firm characteristics (sector, size, number of shareholdings, return on assets, and cash ratio), our model could reduce delays and costs, since it is able to predict which firms will undergo reorganization or liquidation before the legal procedure.     

Economic Analysis for the UK National Ecosystem Assessment: Synthesis and Scenario Valuation of Changes in Ecosystem Services

We combine natural science modelling and valuation techniques to present economic analyses of a variety of land use change scenarios generated for the UK National Ecosystem Assessment. Specifically, the agricultural, greenhouse gas, recreational and urban greenspace impacts of the envisioned land use changes are valued. Particular attention is given to the incorporation of spatial variation in the natural environment and to addressing issues such as biodiversity impacts where reliable values are not available. Results show that the incorporation of ecosystem services and their values within analyses can substantially change decisions.     

Income Inequality and Health: Do the Equivalence Scales Matter?

The aim of this paper is to explore the relationship between income inequality and health in the European Union countries using new data from the European Community Household Panel (ECHP). The heterogeneity of the households has been approached using different equivalence scales. A variety of different model specifications were tried using different dependent variables such as life expectancy at birth and child mortality. The results give support to the influence of income inequality on health indicators using aggregate data and panel techniques, and show the sensitivity of the Gini index to the equivalence scale considered.     

The ‘Neighbourhood Effect’: A multidisciplinary assessment of the case for farmer co-ordination in agri-environmental programmes

In this paper we present a multi-disciplinary analysis of the potential impacts of undertaking similar environmental actions on multiple farms in a small geographic area, using organic farming as a proxy for a co-ordinated approach. Recent papers have called for more co-ordinated efforts between farmers in terms of their environmental actions, but there has been limited applied research demonstrating the environmental benefits or the economic and social implications to farmers of this approach. Comparative analysis of biodiversity, soil and water, and farm profitability were undertaken in England on 32 matched farms in areas of low and high organic farming concentration; qualitative interviews were also conducted with 48 farmers living in two of the eight areas. Findings demonstrate higher overall levels of biodiversity on organic farms (particularly in “hotspot” areas) but this was not universal across the species groups investigated. Higher water infiltration rates were found in organic grasslands, which could prove to be a useful measure to combat flooding. In terms of the technical efficiency of producing these environmental gains, conventional and organic farms in hotspot areas demonstrated equivalent efficiency from a financial perspective. Socio-cultural research identified the different amounts of trust farmers have in their neighbours, based in part on their performance as ‘good farmers’. We discuss the neighbourhood effect with a multi-disciplinary approach and conclude that encouraging local farmer co-ordination can have clear environmental benefits without high economic cost, but must be undertaken with caution - specifically regarding the trade-offs between benefits, local geophysical and social characteristics, and assumptions made about inter-farmer trust.     

The pros and cons of rewarding social responsibility at the top

Overemphasis on financial performance criteria to award incentives for CEOs has often been mentioned as one of the main culprits behind recent corporate scandals. In response, there is a growing chorus for inclusion of social performance criteria in the design of executive compensation schemes. To date, however, very little is known about the true benefits of this practice. This article critically discusses the potential advantages and pitfalls of this recommendation. © 2009 Wiley Periodicals, Inc.     

Necessity as the mother of ‘green’ inventions: Institutional pressures and environmental innovations

Drawing on institutional theory and innovation literature, we argue that greater regulatory and normative pressures concerning environmental issues positively influence companies' propensity to engage in environmental innovation. Analysis of environment‐related patents of 326 publicly traded firms from polluting industries in the United States suggests that institutional pressures can trigger such innovation, especially in those firms displaying a greater deficiency gap (i.e., firms polluting relatively more than their industry peers). Moreover, we find that this effect is stronger when asset specificity is high, and that the availability of resources plays different roles depending on the type of pressures (regulatory vs. normative).Copyright © 2012 John Wiley & Sons, Ltd.     

On the Efficiency of Bankruptcy Law: Empirical Evidence in Spain

The current economic crisis is showing one of the main problems that many companies in financial distress have to face, namely, the impact of bankruptcy law in relation to companies and firms. This paper aims to analyze the bankruptcy law ex‐ante efficiency when companies are in financial distress. To test it out, two research questions are submitted: (i) Is solvency, the criterion used in the Spanish law, the best one to assess the relative significance of the main indicators, which determine bankrupt firms? (ii) Is the Spanish bankruptcy law efficient according to solvency or are there better criteria? To answer them, a logistic regression model is conducted. The sample embraces 1,387 firms in Spain, the data being obtained from 12 Commercial Justice Courts complemented with financial information. The main conclusion is that the solvency criterion is adequate to classify bankrupt companies although currently Spanish Bankruptcy law is not as efficient as it could be. Additionally, the relevant companies' indicators, which explain the financial distress procedure, are presented. Copyright © 2013 INSOL International and John Wiley & Sons, Ltd