The Diversification Discount Puzzle: Evidence for a Transaction-Cost Resolution

The literature on the corporate diversification discount and the relative efficiency of internal versus external capital markets provides mixed results. We argue that transaction-cost economics is useful in understanding this puzzle. According to transaction-cost economics, diversified firms should outperform single segment firms in industries with higher external transaction costs (e.g., emergent industries) and under-perform in industries with low external transaction costs and high agency and other internal costs (e.g., some mature industries). This paper provides evidence supporting these contentions.     

A Framework for Adopting Collaboration 2.0 Tools for Virtual Group Decision Making

Decision making in virtual teams is gaining momentum due to globalization, mobility of employees, and the need for collective and rapid decision making by members who are in different locations. These factors resulted in a proliferation of virtual team software support tools for decision making, the latest of which is social software (also known as collaboration 2.0), which includes tools such as wikis, blogs, microblogs, discussion forums, and social networking platforms. This paper describes the potential use of collaboration 2.0 software for improving the process and the specific tasks in virtual group decision making. The paper proposes a framework for exploring the fitness between social software and the major activities in the group decision making process and how such tools can be successfully adopted. Specifically, we use a fit-viability model to help assessing whether social software fit a decision task and what organizational factors are important for such tools to be effective. Representative research issues related to the use of such tools are also presented.     

A collective,undifferentiated accounting profession: an Australian study

A study of 386 potential and current members of the accounting profession in Australia and South‐East Asia provides evidence of the importance of three attributes – brand/reputation, international recognition of qualifications and career opportunities – in the decision to join a professional accounting body. While these attributes are important, logit regression models indicate that they are not discriminatory in the choice of professional body and suggest a perception of a collective, undifferentiated accounting profession. The marketing of brand/reputation and membership benefits may be a more efficient and effective strategy in attracting members and differentiating the profession if undertaken by a combined or coordinated professional body.     

Educational gender gaps

Cross-country studies reveal two consistent gender gaps in education—underachievement in school by boys and low rates of participation in STEM studies by girls. Recent economics research has shown the importance of social influences on women's STEM avoidance, but male low achievement has been less-studied and tends to be attributed to behavior problems and deficient non-cognitive skills. I revisit the determinants of the gender gap in U.S. educational attainment with a relatively-advantaged sample of young men and women and find that school behavior and measured skills are not very important drivers of gender differences, particularly in the transition to college. Educational aspirations, on the other hand, are strongly predictive of educational gaps and the gender difference in aspirations cannot be explained, even with rich adolescent data that includes parental expectations and school achievement indicators. These results suggest that gender identity concerns may influence (and damage) the educational prospects of boys as well as girls through norms of masculinity that discourage academic achievement.     

A heuristic-systematic processing analysis of the effectiveness of product warning labels

In this article we present the heuristic-systematic model (Chaiken, 1980, 1987; Chaiken, Liberman, & Eagly, 1989) as a theoretical framework for research on product warning labels. The model proposes two fundamental information processing modes. When processing systematically, perceivers access, scrutinize, and integrate all useful information to reach their judgment. In contrast, heuristic processing involves the use of learned knowledge structures in the form of simple decision rules, or cognitive heuristics, to reach judgments. In addition to proposing when either or both of these processing modes will occur, and with what effect, the model also specifies three different underlying types of processing motivations, termed accuracy, defense, and impression, each with implications for information processing and judgments. This model is used to explain past findings on the effectiveness of product warning labels, and to suggest new areas for future research as well as practical guidelines for the design of warning labels. © 1998 John Wiley & Sons, Inc.     

An Analysis of the Cross Section of Returns for EREITs Using a Varying-Risk Beta Model

A dual-beta asset pricing model is employed to examine the cross-section of realized equity real estate investment trust ( EREIT ) returns over bull and bear markets. No significant relationship is found between EREIT returns and a constant beta. However, beta explains cross-sectional returns when betas are allowed to vary across bull markets. This positive relationship exists for both January and non-January months. During bear-market months, no significant relationship is found between REIT betas and returns. But, during such months, size and book-to-market ratio are found to be negatively related to returns.