Corporate Governance: Factors Influencing Voluntary Disclosure by Publicly Traded Canadian Firms*

We report on the comprehensiveness of voluntary corporate governance disclosures in the annual reports and management information circulars of Toronto Stock Exchange (TSE) firms. We focus on disclosure of the corporate governance practices implemented by our sample of TSE 300 firms vis‐à‐vis the 14 guidelines set out in the TSE's report on corporate governance Where Were the Directors? Our analysis indicates that only a very few firms disclose that they have fully implemented the TSE guidelines, and that the extent of disclosure of corporate governance practices implemented varies widely among the firms. We then test factors associated with the comprehensiveness of such disclosures and the choice of disclosure medium using simultaneous equations multivariate analysis. We also assess the influence of publicized corporate governance failures on disclosure. Overall, our results suggest that the choices of disclosure medium and the extent of disclosure are made concurrently, and are influenced by the strategic considerations of management.     

The survivorship bias, share price effect, and small firm effect in Canadian markets

After controlling for survivorship bias, we examine the relation between average returns, firm size, and price levels for Canadian stocks during the 1975-1994 period. Our findings indicate that there is a significant inverse share price level effect in Canadian markets. When we compare the results of the overall sample with the groups of surviving firms and delisted stocks, the latter group shows strong performance for large-size, high-priced stocks. Evidence that supports an independent size effect is less clear for Canadian stocks. A small size effect exists only among the higher share price denominations, which suggests a confounded size-price effect. Although the delisted group returns are statistically different from those of the survivor and the overall groups, which implies some evidence of survivorship bias, the difference between the survivor group and the overall group is weak at best.     

The distribution of returns from land efficiency improvement in multistage production systems

This paper assesses the distributional consequences of technical changes that improve the efficiency of land and of other inputs in a multifactor crop‐production system. We introduced an equilibrium displacement model (EDM) by using the specification of a factor‐augmenting approach. Given the uncertainty about the EDM parameters, a Monte Carlo simulation is used to produce a distribution of possible return measures. We found that land suppliers (likely farmers) receive a larger share (73%) of total benefits from the adoption of land‐technical change than they do from the adoption of other input technologies. Each input supplier receives a larger share of total benefits from technical change in her own input. However, this result is sensitive to the value of the parameters, especially the value of the elasticity of substitution. We applied the EDM to the case of no‐tillage (NT) to provide insight into how the aggregate return from the adoption of NT was distributed among different groups on the Canadian Prairies. The results of this study can be used by policymakers and funding agencies in order to influence landowners and farming communities to adopt environmentally sound land technologies to achieve both greater agricultural productivity and sustainability.     

Reining in auditors: On the dynamics of power surrounding an “innovation” in the regulatory space

In the aftermath of Enron and the collapse of Arthur Andersen, new “independent” institutions were created to oversee financial auditing. Based on a modified version of Lukes’ multidimensional model of power, we first investigate how the creation of the Canadian Public Accountability Board (CPAB) has affected the dynamics of power among the main players enlisted in Canada’s regulation of public accounting. Our findings strengthen the view that a “form of allegiance” was, at the time of data collection, developing between CPAB and the largest Canadian accounting firms. Through a second analytical movement, we extend the boundaries of our argument, showing that patterns of resistance against the logic of arm’s length regulation operate in a variety of audit regulatory sites. Our conclusion points, in particular, to the spatial gap - and incidentally the limitations - of any attempt to control and supervise a globalized industry from a national or regional perspective.     

Enhancing financial performance by pharmacy innovation

Antecedents and consequences of customer orientation have been the subject of significant empirical investigation. Although several studies have explored employee variables as antecedents to customer orientation, work ethic has received little research attention. Additionally, there have been incongruent findings related to the effect of customer orientation on performance, as some have found it to be direct or indirect via innovation. This study explores overall work ethic as an antecedent to customer orientation and innovativeness as the missing link between customer orientation and performance among Canadian retail pharmacies. The results show support for the influence of work ethic on customer orientation, and the role of innovation as a mediating variable. This study advances the understanding of work ethic, customer orientation, innovation, and performance in Canadian retail pharmacy.     

Ethnographic Accounting Research: Field Notes from the Frontier

Ethnographic fieldwork in accounting is scarce and remains a “frontier” methodology, unfamiliar to most accounting researchers. Building on our field research project on corporate accountability and stakeholder engagement, set in the Canadian Arctic, we illustrate in this article the use and explanatory power of ethnographic methods for studying social groups and individual actors in the broader accounting universe. We share our fieldwork strategies and provide a few practical tips for conducting ethnographic research in both corporate and community environments. We then argue that ethnographies provide accounting researchers with untapped opportunities to discover vast reservoirs of knowledge inaccessible to other research methods, and offer a path to humanize accounting research.     

Collusion and combines in Canada, 1880–1890

ABSTRACT

It is a little-known fact that Canada adopted its own antitrust law one year before the landmark Sherman Antitrust Act of 1890. The Anti-Combines Act of 1889 (‘the Act’) was adopted after a decade in which ‘combines’ (the Canadian equivalent of ‘trusts’) had grown more numerous. From the combines’ numbers, Canadian historians, legal scholars, and economists have inferred that consumer welfare was hindered. However, price and output evidence has never been marshalled to provide even a first step towards assessing the veracity of this inference. This paper undertakes that task. I highlight the fact that the output from industries accused of collusion increased faster than national output in the decade before the passage of the Act and that their prices accordingly fell faster than the national price index. I argue that these findings militate for the position that the origins of Canada's Anti-Combines Act were partially rooted in rent-seeking processes similar to those that American scholars have found driving the Sherman Antitrust Act of 1890.     

Is Exchange Rate Pass-Through in Pork Meat Export Prices Constrained by the Supply of Live Hogs?

The impact of lags in the production and marketing of agricultural products on the degree of exchange rate pass-through in export prices is investigated. The predictions of the theoretical model are tested by investigating Canadian pork export prices in the United States and Japan. The empirical methodology accounts for unit root and cointegration using the dynamic seemingly unrelated regression framework and a minimum distance estimator. Predetermined hog supplies have a statistically significant impact on export prices of two out of three Canadian provinces. The degree of misspecification involved with standard pass-through models that do not account for production lags is also illustrated.