The University of Sydney Business School Research Seminars

The Intransparency of Financial Risks in Bank Financial Statements

Aligning programmatic ideals and technological capabilities: The case of sustainability assurance

Addressing Learning Issues in International Student Cohorts to Enhance Educational Outcomes in the Master of Professional Accounting

Standards, incentives and accounting practice - lessons from the IFRS transition in Sweden

Does Reporting Timeliness Affect Book-Tax Differences?

Funding Asbestos Liabilities: An investigation of corporate and regulatory responses

OHS Disclosure: Corporate Accountability or Instiutionalised Safewash?

Bonus Caps, Corporate Governance and Pay-Performance Sensitivity

Accounting and Pastoral Power: The case of Indigentured Indigenous 'Apprenticeship' Programs in Australia

International Accounting Standard Board (IASB)'s Agenda Formulation Process: A Case of Small and Medium-sized Entities (SMEs) standard

Performance Management: A Conceptual and Empirical Analysis

Institutional Homology: Explaining Corporate Art

The role for management controls at different stages of project management. Some insights from a qualitative study.

State and Local Government Owned Enterprises in Italy. Their growth, misuse and the inappropriateness of their reporting.

Are capital expenditures, R&D, advertisements and acquisitions positive NPV?

Information Asymmetry of Fair Value Accounting and Loan Loss Provisions during the Global Financial Crisis

Making Sense of Social Practice: Theoretical Pluralism in Public Sector Accounting Research

Management control systems and strategising: A case study of a Japanese manufacturing company

Financial Statements Insurance

Building Schools for the Future: The Accountability Challenges of Joint Ventures Between the Public and Private Sectors

Writing Masters and Accountants in England - a Study of Occupation, Status and Ambition in the Early Modern Period

Accountable Governance in Corporate Groups; The Interrelationship of Law and Accounting

Consistent Asset Valuation for Purposes of Rate Regulation

Earnings Quality Metrics and what they Measure

Firm Size and National Profiles of IFRS Policy Choice

Complexity - The Other Side of the Expertise Coin: A Three way Interaction Analysis of Task Complexity in Learning

Securitization Accounting

Living with Numbers

Inventory Valuation, Company Value and the Uncertainty Principle

ABC and Enterprise Systems

The GRI's Sustainability Reporting Guidelines: Promoting Accountability to Stakeholders or Institutionalising Corporate Social 'P.R.'?

Analyst Recommendations and Corporate Bankruptcies: An International Study

The impact of voluntary audit on credit ratings: Evidence from UK private firms

The impact of social influence pressure on the ethical reasoning of professional accountants: Australian and New Zealand evidence

Defining the reporting entity in the consolidation of public and private entities: Accountability lost? The case of IPSASs

Rhetoric and the fate of budgeting

The impact of an independent inspector in improving governance and accountability in prisons: Pressure points and conflict in the pursuit of an ideal of performance

Conservatism implications for the properties of accounting information: The case of R&D Accounting

Publishing in a top tier accounting journal: A critical perspective

Designing a semi-confusing management control system package -sensebreaking in the Swedish armed forces

Sustainability accounting without accountants. Results of an explorative investigation of large German companies

The economic sociology of responsibility accounting: A field study in a Chinese state-owned enterprise

Sustainability Reporting in Italian Local Governments

The effect of disclosure transparency on intangibles and analysts' stock pricing forecasts

Accounting For Sustainable Development: (Re)Constructing the Agenda

Text Analysis Methodologies in Corporate Narrative Reporting Research

Improving the Measurement of Book-Tax Conformity

Accounting and Rehabilitation

Pragmatism and Sustainability

The Geography of Professionalism: An Introduction to the Specialization of Professional Accounting Practice in the City

The Relation of Key Performance Indicators and Strategy Development Revisited

What the Models Cannot See: Integrating Environmental, Social and Corporate Governance Information in Investment

The privileged status of new public management reforms: The decontextualization of UK whole of government accounts

Unfair "fair value" in an opaque credit default swap market: How marking-to-market may have pushed the international credit crunch

Material legitimacy: Blending organisational and stakeholder concerns through management action and reporting

A comparison of historical cost and fair value accounting systems: General and some regulatory concerns.

Management control systems in organizations in far from equilibrium conditions

Responses to water scarcity in the absence of economic incentive

A linguistic evaluation of accounting representation

Behind open doors: Auditors face-work at the annual general meeting

Imagining finance capital

Payout Policy Relevance and Accounting Based Valuation

Complexity - the other side of the expertise coin

Effects of IFRS adoption

Un-locking intellectual capital

Revealing or substituting for corporate social performance? ??? distinguishing functions of CSR disclosures

Is the reporting entity concept an appropriate basis for differential reporting in Australia?

Related party transactions and government-linked companies

Longitudinal analysis of US resource company environmental disclosure practices - A changing landscape

Antecedents and challenges in the adoption & use of management accounting techniques in enterprise systems environments

Exploring the role of staff in the IASB???s standard setting process: The case of IFRS for SMEs

Embodied classification and the regulation of migrant worker health: Filipino workers at the Hamakua Mill Company, 1921-39

Two Studies on the Effective use of Information Systems

Information systems are designed and used to achieve certain objectives. However, achieving these objectives often requires that the systems are used effectively. This notion of 'effective use' is, therefore, an important phenomenon to understand. Surprisingly, it is a very under-researched phenomenon. In this presentation, I will describe two initial studies I have undertaken of this topic. The first is a conceptual study that presents a theory of effective use, offering a view on its nature (what it is) and its drivers (what can be done to improve it). The second is a grounded-theory study of the effective use of an electronic health record system used by health workers in a community care setting. This study sheds light on some of the complexities involved in defining, assessing, and improving effective use in real-life settings.

"... Because we don't manufacture cars - we treat people!": Improving Knowledge-Intensive Health care Processes Beyond Efficiency

Health care has been one of the most important domains for Business Process Management (BPM) research and practice for many years. Through an exploratory case study conducted in a real organization named "SpecialClinic", this research aims to investigate what lies beyond process efficiency and traditional approaches to BP improvement for an industry leader with a very high-level of process automation. This presentation focuses on a complex example of customer-facing knowledge intensive BP and investigates the case organisation's approach to its ongoing improvement. The main findings of this research challenge the main objectives of BP improvement (i.e. reduced costs and improved efficiency) as they show that some organizations are making their "to-be" processes slower and more expensive, yet significantly improved in terms of quality of customer service.

In addition to the main research contribution related to new approaches to improvement of knowledge intensive BPs, this work offers some important lessons for the practitioners interested in expanding the current boundaries of BPM beyond efficiency and traditional BP improvement methods.

Based on Marjanovic O (2011) "Improving Knowledge-Intensive Health Care Processes Beyond Efficiency", 32nd International Conference on Information Systems ICIS 2011, Shanghai, China, 7th December 2011

Designing collaborative infrastructures to support distributed work

A growing proportion of contemporary organizational work takes place in the context of distributed collaborative environments which involve the interaction of multiple organizations with distinct areas of expertise, technologies, and work practices. In this research-in-progress, we develop a three-part model of the facets of collaborative infrastructure that support such distributed collaborative environments. We argue that collaborative infrastructures inherently reflect the interplay of practices, artifacts, and discourse. Specifically, our model asserts that the development of shared practices and artifacts by organizations engaged in collaboration is mediated by the emergence of common discourses between the parties. The preliminary theorizing developed in this paper is based on multiple case study analyses of collaborative projects in the areas of architecture, engineering, and construction (AEC) and software development and implementation. Our initial research suggests key areas of consideration by collaboration leaders in the development of collaborative infrastructures for distributed work.

An Agile Approach to Context Aware Cloud Adaptation

Organizations have shown a significant interest in the adoption of cloud technology-enabled operating environment. While many organizations are interested in adopting cloud technology-enabled operating environment suitable to their local circumstances, there is little guidance available on how to do so. We propose the iterative development and evaluation of a context-aware cloud adaptation (CACA) framework construct, based on agile philosophy and Actor-Network-Theory, by applying a design science research approach. This framework, whilst still under development, can be useful in assisting organizations to develop self awareness of their cloud adoption readiness, while at the same time being able to iteratively self assess, adopt and improve an appropriate cloud technology-enabled operating environment for their business by obtaining, modeling, processing and managing contextual information for their economic and competitive advantage. This seminar presents our ongoing research in this emerging area of cloud technology-enabled business transformation and highlights how businesses can best deal with the challenge of context-aware cloud assessment, adoption and improvement.

Transformational Journey of a Retail Organisation Towards Bi-Influenced Strategy Creation

The research examines how the upward and downward strategic influence of the head of the BI unit in the case organization evolved over time and the BI perspective became legitimate in the organization. The analysis covers a decade long period of time. We engaged in an Action Research (AR) inquiry where the change process was explored through the first-hand experiences of one of the co-authors. The model of the strategic agency of middle managers was applied in the analysis. Our study demonstrates that a reciprocal relation between top management and head of the BI unit is necessary for enabling the interaction between BI and strategy making. This interaction capability could help organizations find those innovative solutions that make a difference in the market place and provide the competitive edge over the competitors.

Historical Narrative: Understanding and Learning from IS Strategising Failure

This seminar will look at the historical narrative of an ICT outsourcing initiative by the Australian Federal government from 1996-2001. Three different narrative perspectives, which are embedded within the Perspectival ITS Management Model (PISTM - Bunker 2004), are utilised to highlight the "competing voices" (Curthoys & McGrath 2009) that ultimately contribute to the strategising failure. These narrative accounts were constructed through the examination of secondary data sources which documented the outsourcing initiative. Through this approach we learn that "whole of government" and individual departmental contextual assumptions were made regarding technological skill sets, system outcomes, conceptual expression, building techniques and organisational culture, which were different to those embedded in the artifacts created and used to produce the outsourcing strategy. It is explained how these differences in assumptions caused Federal Government ICT outsourcing to fail in 2001. It is then suggested how this narrative approach allows us to better understand and learn from what occurred in this case.

Place-making: A Phenomenological Theory of Technology Appropriation

The topic of this talk is the introduction of new technologies into organisational practices. While IS textbooks conceive of IS introduction largely as a decision process, a body of literature has emerged characterizing the phenomenon as a time-extended appropriationprocess, whereby users adapt and integrate a technology into their everyday practices. However, research in this field, typically aimed at explaining the variation in (unintended) outcomes, has struggled to grasp how exactly both the technology and the practice change during appropriation. We argue that appropriation research has been limited by certain commitments at the ontology level to a widely held dualist worldview. Against this background we develop a phenomenological theory of appropriation based on Martin Heidegger's analysis of equipment. On this view, technology goes from being an object with properties when inspected upon first encounter, to a specific means for the enterprise of the practice, captured in the notion of equipment. Equivalently, we can say that technology moves from the foreground as a thing to be evaluated to the practice background where it lends intelligibility to other entities and events. We show that this transformation occurs through a practice of actively performed place-making in which the technology is accommodated in the practice among existing equipment, practical logics and social identities. We illustrate our theory with a rich case study of social media appropriation, making methodological use of the novel feature that self-referential user conversations are captured within the technology, providing access to direct evidence of the appropriation phenomenon. The paper contributes a more nuanced sociomaterial account of the simultaneous transformation of technology and practices occurring in technology introduction.

Handling the Complexity of Information Systems Development Projects With Agile Methods

Traditional approaches to software and information systems development (ISD) cannot fulfil the challenges presented by the complexity inherent in today dynamic and changing environments. In this research we argue that ISD projects are socially complex endeavours and suggest that agile development methods display characteristics that justify them as being appropriate for such project environments. We suggest that one theory that justifies the appropriateness of agile methods in such contexts is the complex adaptive systems (CAS) theory. We do this by first, assessing the alignment between complex adaptive systems (CAS) and agile ISD principles, and second, by proposing a conceptual framework for handling complexity with agility. We therefore aim to shed some preliminary light and contribute to both theory and practice by offering: 1) a new theoretical perspective (CAS) that justifies the applicability of agile methods in complex ISD projects, and 2) better approaches to manage such project initiatives in practice. Our future research directions seek to explore the key characteristics of complexity in ISD projects, and identify the suitability of specific agile methods for specific ISD projects.

Digital disruption: The length of the fuse and the size of the bang.

According to leading professional services firm, Deloitte, responding to the 'length of the fuse and the size of the bang' is set to become a new measure of success, and failure, for business and public sector organisations across Australia as they grapple with the transformative reality of digital disruption. Using data across 13 factors and 26 indicators that determine the intensity and timing of digital disruption, industries, and the organisations operating within them, have been mapped to identify digital impacts and timeframes. Deloitte, has singled out six industries, representing about one third of the $1.4 trillion Australian economy, that they predict will be subject to significant digital disruption (the bang) in the near future (the fuse). The industries are professional services, finance, ICT and media, retail trade, art and recreation and real estate. Those facing an equally big bang, but within a longer time frame, comprise another third of the economy including education, government services, transport and post, health, recruitment, utilities and agriculture. Deloitte suggest that the landscape of each is open to transformation as falling barriers to entry open the door for a new generation of entrepreneurs. To continue to thrive incumbents will need to move beyond defending past business models and engage in new, innovative and disruptive approaches.

Stabilized Materiality: NASA's Enterprise System and the Loosely Coupled Equilibrium of Practice

In this paper we present a study of NASA's enterprise system implementation and the subsequent four years of its adaptation. Through a grounded analysis of loosely coupled misalignments associated with this implementation over time, we document the complex relationship between the enterprise system and its objectives of integration and control at two levels: the level of local practices and the level of the organization overall. In contrast to many of the prevailing studies on enterprise systems that emphasize the idiosyncratic appropriation of such systems immediately after implementation, through our multi-year analysis we found material effects of a stabilized enterprise system at the organizational level. First, while certainly the system does not have deterministic effects at the level of practice, this particular form information system that spans an entire organization can have somewhat deterministic effects on the overall organization. We refer to this as the effects of the "stabilized materiality" of such a system that spans an entire organization. Second, although the system itself is tightly coupled and is intended to integrate and control certain processes in the organization, we find that it is through a "dynamic loosely coupled equilibrium" on the local level that that this stability is enabled. Based on these findings, we conclude that the stabilized materiality of a tightly coupled enterprise system can simultaneously enable legitimatization and tight integration on an organizational level, while allowing for locally situated actions subject to less-than-complete levels of integration and control.

Economic Integration and Structural Change

We show the dynamics of sectoral production - structural change - come with systematic changes in the geographic dispersion of activity. In developing countries, sectoral diversification is accompanied by geographic agglomeration, and regions become heterogeneous. In advanced economies, sectoral specialization is accompanied by geographic dispersion, and regions become homogeneous. We argue that developing countries diversify because their constituent regions integrate with each other, and can specialize regionally as a result. Advanced economies specialize because they integrate internationally and their constituent regions all produce according to the global pattern of comparative advantage. We .nd systematic support for these claims in international data on sectoral production at the regional level, including in the US, China and India, but no such evidence once the samples focus on non-traded sectors or relatively closed regions. Economic areas formed by specialized, regionally homogeneous countries tend to diversify and agglomerate, as if their constituent countries were integrating.

Balancing appointments and walk-ins in healthcare

Outpatient clinics and diagnostic testing facilities traditionally provide patients with individual appointments to balance workload. Disadvantages however, include patients needing to revisit the hospital, an involved planning process and potentially long access times. In this talk I discuss a study in which we explore the viability of walk-in based policies. We introduce a stochastic method that finds the mixed strategy that balances the benefits and drawbacks of pure appointment and walk-in policies.

Accuracy of Copula-Based Multivariate Density Forecasts in Selected Regions of Support

This paper develops a testing framework for comparing the predictive accuracy of copula-based multivariate density forecasts, focusing on a specific part of the joint distribution. The test is framed in the context of the Kullback-Leibler Information Criterion, and using (out-of-sample) conditional likelihood and censored likelihood in order to restrict the evaluation to the region of interest. Monte Carlo simulations show that the resulting test statistics have satisfactory size and power properties in small samples. In an empirical application to daily exchange rate returns we find evidence that the dependence structure varies with the sign and magnitude of returns, such that different parametric copula models achieve superior forecasting performance in different regions of the copula support. Our analysis highlights the importance of allowing for lower and upper tail dependence for accurate forecasting of common extreme appreciation and depreciation of different currencies.

Practical Use of Sensitivity in Econometrics with an Illustration for Forecast Combinations

Jan R. Magnus and Andrey L. Vasnev

We consider practical use of the sensitivity measure studied by Magnus and Vasnev (2007). For this purpose we distinguish between absolute and relative sensitivity
and highlight the context dependent nature of the sensitivity analysis. Relative sensitivity is then applied in the context of forecast combination and sensitivity based
weights are introduced. All concepts are illustrated with the help of the European
yield curve example. In this context it is natural to look at sensitivity to autocorrelation
and normality assumptions. Different forecasting models are combined with equal, fit based and sensitivity based weights and compared against the multivariate and random walk benchmarks. We show that the fit based weights and the sensitivity based weights are complimentary.

Graphical modelling representation of multivariate time series

Graphical modelling is very effective for identification and estimation of sparse structural multivariate time series model. After an introduction to graphical modelling and some of its useful properties there will be a discussion of the issues pertaining the identification of sparse structural vector autoregressions and how graphical modelling can assist. Extensions will be presented to I(1) time series and structural vector autoregression moving average models.

Prediction with Macroeconomic Models

There are several relevant layers of uncertainty that characterise econometric models routinely used for policy making. First and foremost, there is intrinsic uncertainty about the future conditional on a model and parameters. Then there is extrinsic uncertainty about model parameters conditional on a model. Then there is uncertainty about models conditional on a set of models. In addition there is unconditional uncertainty, when all models considered are false.

In this paper we incorporate all four levels of uncertainty and we assess the improvements in the quality of prediction that we get by doing so. We provide a practical example based on the joint combination of a DSGE model, a Bayesian VAR and a dynamic factor model for a set of US macroeconomic time series.

In our paper we find that:

Taking into consideration parameter uncertainty is most relevant in periods of unusual data
A pool with equal weights provides predictions of superior quality with respect to prediction obtained with individual models
We introduce a measure of value of each of the models being combined that can be decomposed across sub-periods and this measure provides important indication regarding the usefulness of the individual models.

Ranking games and gambling: When to quit when you're ahead

It is common for rewards to be given on the basis of a rank ordering, so that relative performance amongst a cohort is the criterion. In this paper we formulate an equilibrium model in which an agent makes successive decisions on whether or not to gamble and is rewarded on the basis of a rank ordering of the final position amongst competing players. One application of this model is to the behavior of mutual fund managers who are paid depending on funds under management, which in turn are greatly influenced by annual or quarterly rank orderings. We model a situation in which fund managers can elect either to pick stocks or to use a market tracking strategy. In equilibrium the distribution of the final position will have a negative skew. We explore how this distribution depends on the number of players, the probability of success when gambling, the structure of the rewards, and on information regarding the performance of other players.

A Hidden Markov Process Approach to Information-Based Trading

This paper proposes a novel approach to information-based trading, incorporating the dynamics and serial correlation of trading activities. Unlike the existing approaches of sequential trading modeling, it updates the prior belief of information states using newly observed order flows and identifies trading motives in a data-driven manner. It allows the set of information states to vary across time and companies. Extensive simulation demonstrates that the proposed approach can generate dynamic daily measures of information-based trading in high accuracy. Based on a sample of 30 NYSE stocks, we provide evidence of the significant explanatory power of information-based trading on return volatility.

Competition and Coordination in Online Marketplaces

Online marketplaces, such as those operated by Amazon, have seen rapid growth in recent years. These marketplaces serve as an intermediary, matching buyers with sellers, while control of the good is left to the seller. In some cases, e.g., the Amazon marketplace system, the firm that owns and manages the marketplace system will also sell competing products through the marketplace system. This creates a new form of channel conflict, which is a focus of this paper. We consider a setting in which a marketplace firm operates an online marketplace through which retailers can sell their products directly to consumers. We consider a single retailer, who currently sells its product only through its own website, but who may choose to contract with Amazon to sell its product through the marketplace system. Selling the product through the marketplace expands the available market for the retailer, but comes at some expense, e.g., a fixed participation fee or a revenue sharing requirement. Thus, a key question for the retailer is whether she should choose to sell through the marketplace system, and if so, at what price. We analyze the optimal decisions for both the retailer and the marketplace firm and characterize the system equilibrium.

Application and Implication of Cointegration in Asset Pricing

Cointegration is a useful econometric tool for identifying assets which share a common equilibrium. The importance of cointegration has become recognized and resulted in a Nobel Prize in Economics for Granger in 2003. In this talk, I will report several recent advances of asset pricing theories based on continuous-time cointegration dynamics. It covers cointegrated pairs-trading using classical mean-variance portfolio theory, cointegration option pricing with stochastic correlations using Fourier analysis, and (if time allows) the hedging with mortality risk in insurance products. Our theories predict that 1. if cointegrated assets are liquidly traded, then there exists a statistical arbitrage opportunity; 2. If the assets are not traded or not liquidly traded, their corresponding derivatives securities, in particular futures contracts, exhibit stochastic convenient yields which are partially driven by cointegrating factors; and 3. As human mortality is not traded by its nature and the national mortality rate is cointegrated with the mortality rate of an individual insurance company???s client pool, cointegration techniques enhance the hedging of mortality risk with national mortality bonds. Empirical studies are performed to validate the use of the developed theories and numerical methods. (The talk is based several joint papers with M.C. Chiu, T.W. Wong and J. Zhao)

How Does Obama Match Up?

Abstract: Barack Obama won a convincing victory in the 2008 U.S. presidential election. But would the outcome of the election had been different had Obama not been the nominee? In this paper we analyze a unique data set in which over 14,000 survey respondents were presented with numerous head-to-head match-ups between Democratic and Republican candidates (both real and hypothetical), at various time points over the 2008 election campaign. We use these data to estimate Obama's exceptionalism as a candidate, via hierarchical logistic regression models, with each hypothetical matchup generating a distinct set of parameters for predictors of vote choice. We find that "old-fashioned" racial stereotyping is uniquely important in shaping decisions about Obama in 2008, relative to its role in past elections or in 2008 choices substituting Hillary Clinton or John Edwards for Obama. A similar pattern emerges for other measures of racial prejudice. Inspection of the posterior predictive densities from the model indicate that the Democrats would have won the 2008 election regardless of who they nominated; but the average Democratic party nominee from the last 16 years, and either of Edwards or Hillary Clinton, would have done better against McCain than Obama, although in Clinton's case, not by much. We conclude with what these results portend for the 2012 election, given that the electoral context is less favorable for Democrats -- and for Obama in particular -- than in 2008.

An Alternative Class of Skew Distributions and Parametric Quantile Regression Models?

This paper proposes a method to construct a univariate skew distribution
through the mixture of two scaled normal distributions. As a result, we obtain
an alternative class of skew distributions where the skewness parameter value is defined in the ]0,1[ interval and this allows us to have an application on parametric quantile regression. By expressing a skew distribution as a scale mixture of normal, it can facilitate a flexible parameter estimation procedure via the Bayesian Markov Chain Monte Carlo methods. In addition, the proposed distribution has a closed-form probability density function and we can perform statistical inference via likelihood-based approaches such as maximum likelihood. The performance of the proposed distributions is demonstrated in two simulation studies on (i) regression models with skewed error distribution and (ii) parametric quantile regression models. In empirical studies, we analyse the U.S. market return data for skew error regression and the U.S. infant birthweight data for parametric quantile regression.

Efficient Estimation of Parameters in Marginals in Semiparametric Multivariate Models

Recent literature on semiparametric copula models focused on the situation when the marginals are speci
ed nonparametrically and the copula function is given a parametric form. For example, this setup is used in Chen, Fan and Tsyrennikov (2006) [Efficient Estimation of Semiparametric Multivariate Copula Models, JASA] who focus on
efficient estimation of copula parameters. We consider a reverse situation when the marginals are speci
ed parametrically and the copula function is modelled nonparametrically. This setting is no less relevant in applications. We use the method of sieve for efficient estimation of parameters in marginals, derive its asymptotic distribution and show that the estimator is semiparametrically
efficient. Simulations suggest that the sieve MLE can be up to 70% more efficient relative to QMLE depending on the strength of dependence between the marginals. An application using insurance company loss and expense data demonstrates empirical relevance of this setting.

Adaptively Combined Forecasting for Discrete Responses

Adaptive combining is generally desirable for forecasts. In this paper, we propose an adaptively combined forecasting method for discrete response time series data. We demonstrate in theory that the proposed forecast is of the desired adaptation with respect to the widely used squared risk and other significant risk functions under mild conditions. Furthermore, we study the adaptation of the proposed forecasting method with a model screening step that is often useful in applications. Our simulation study evidently illustrates the superiority of the proposed approach, with two real-world data examples further demonstrated.

Hedonic functions, hedonic methods, estimation methods and Dutot and Jevons house price indexes: are there any links?

Hedonic methods are a prominent approach in the construction of house price indexes. This paper investigates in a comprehensive way whether or not there exists any kind of link between the type of price index to be computed (Dutot or Jevons) and the form of hedonic functions, hedonic methods and estimation methods, with a link being defined as a specific combination of price indexes, functions and methods that simplifies substantially the calculations required to compute hedonic price indexes. It is found that: (i) there is a link between Dutot indexes, exponential hedonic functions and the Poisson pseudo maximum likelihood estimator, on the one hand, and Jevons indexes, log-linear hedonic functions and ordinary least squares, on the other hand; and (ii) unlike implicitly assumed in the hedonic literature, there is no link between Jevons indexes and the time dummy variable method, since in this context quality-adjusted Dutot price indexes may also be simply computed as the exponential transformation of a time dummy variable coefficient, provided that an exponential hedonic function is used. A Monte Carlo simulation study illustrates both the convenience of the links identified and the biases that result from overlooking them or implementing bias corrections based on invalid assumptions.

Asymptotic Refinements of a Misspecification-Robust Bootstrap for GMM Estimators

I propose a nonparametric iid bootstrap that achieves asymptotic refinements for t tests and confidence intervals based on the generalized method of moments (GMM) estimators even when the model is misspecified. In addition, my bootstrap does not require recentering the bootstrap moment function, which has been considered as a critical procedure for bootstrapping GMM. Regardless of whether the assumed model is correctly specified or not, the proposed bootstrap achieves the same sharp magnitude of refinements as the conventional bootstrap methods which establish asymptotic refinements by recentering in the absence of misspecification. The key procedure is to use a misspecification-robust variance estimator for GMM of Hall and Inoue (2003, Journal of Econometrics 114, 361-394) in constructing the t statistic. Examples of overidentified and possibly misspecified moment condition models with Monte Carlo simulation results are provided: (i) Combining data sets, and (ii) invalid instrumental variables.

El Nino Southern Oscillation and Primary Commodity Prices: Causal Inferences from Smooth Transition Models

Global climate anomalies affect world economies and primary commodity prices. One of the more pronounced climate anomalies is El

Ni??o Southern Oscillation (ENSO). In this study I examine the relationship between ENSO and world commodity prices using monthly

time series of the sea-surface temperature anomalies in the Nino 3.4 region, and the real prices of the twenty four food and agricultural

commodities. I apply smooth transition auoregressive (STAR) modelling techniques to assess causal inferences that could potentially be

camouflaged in the linear setting. I consider out-of-sample causality based one-step-ahead forecasts applied to expanding windows. I

illustrate dynamics of ENSO and commodity price behavior using generalized impulse-response functions.

Incremental network design problems

Network infrastructures are a common phenomenon. Network upgrades and expansions typically occur over time due to budget constraints.

We introduce a class of incremental network design problems that allow investigation of many of the key issues related to the choice and timing of infrastructure expansions and their impact on the costs of the activities performed on that infrastructure. We focus on two variants: incremental network design with shortest paths and incremental network design with maximum flows. We consider the complexity of the problem, we analyze the performance of natural heuristics, we derive approximation algorithms, and we study integer program formulations.

The Cross Moment Model of Choice

Several generalizations of Chebyshev-type (1874) inequalities were published in 1950s and 1960s that proposed tight upper or lower bounds on the expectation of functions of random variables given moments information. When mean-covariance information is given, a tight upper bound on the expectation of highest order statistic can be found using a semidefinite program. Empowered with this result and an extreme point argument, I will propose a method of finding choice probabilities in discrete choice. This new method, known as Cross Moment Model (CMM), generates choice probabilities using a convex semidefinite program and avoids the evaluation of multidimensional integrals as is typically done in choice models such as multinomial probit. Several simple examples will illustrate power of the proposed approach and beauty of this deterministic way of solving problems with random parameters.

What Can Headquarters Do If Divisions Prefer Capital-Intensive Projects?

We analyse the friction between the headquarters and the divisional manager in the project selection process. The divisional manager who prefers capital-intensive projects manipulates the selection process by presenting the project that maximizes the managerial utility rather than the added value. Because the headquarters cannot observe all available projects, an ex ante standard for project approval must be specified. We derive the optimal standard for the headquarters. The optimal standard can be described by a threshold function that has a complex form. We also study several heuristics that are commonly used in practice. Our analysis indicates that the heuristic that imposes a hurdle rate on the project return rate gives the headquarters almost the same payoff as the optimal standard does. However, the headquarters??? payoff reduces substantially if a threshold is put on the required capital or the expected return. Our findings underscore the importance of using appropriate criterion in project selection process to mitigate the organizational challenge caused by misaligned objectives and information asymmetry. Although NPV is the best statistics to measure added values, it is not the best instrument to increase the added values.

Some New Developments of the Student-t Distribution

This talk presents some well-known and new properties of the Student-t distribution. Some of the properties improve the model ability of the distribution and some make the model implementation of the Student-t distribution as easy as the normal distribution using Bayesian computational methods. Actuarial and financial applications will be given.

The Generalised Autocovariance Function

The generalised autocovariance function is defined for a stationary stochastic process as the inverse Fourier transform of the power transformation of the spectral density function. Depending on the value of the transformation parameter, this function nests the inverse and the traditional autocovariance functions. A frequency domain non-parametric estimator based on the power transformation of the pooled periodogram is considered and its asymptotic distribution is derived. The results are employed to construct classes of tests of the white noise hypothesis, for clustering and discrimination of stochastic processes and to introduce a novel feature matching estimator of the spectrum.

Keywords: Stationary Gaussian processes. Non-parametric spectral estimation. White noise tests. Feature matching. Discriminant Analysis.

Geometric Process Maintenance Model

In this talk, as an important application of geometric process (GP) which was introduced by Lam (1988), we shall study the geometric process maintenance model (GPMM). According to different values of parameters in the GP, a deteriorating GPMM and an improving GPMM are studied respectively. A policy N is applied by which the system will be replaced following the Nth failure. Then an optimal policy N* is determined analytically and the monotone properties of N* are then studied. Hence, the GPMM is a more reasonable model and a simpler model than the classical maintenance models such as the perfect repair model and the minimal repair model. Some generalization of the GPMM is also introduced.

The Pricing Policy of Banks on the German Secondary Market for Leverage Certificates: Interday and Intraday Effects

This paper is the first thorough analysis of finite leverage certificates on the German market. Our study, based on a unique data set at investor- and certificate-specific level, contains more than half a million trades in DAX leverage certificates by more than 7,000 retail costumers of a large German direct bank for the years 2007 and 2008. We analyse the order flow induced by the investors and compare traded prices - rather than quotes - with corresponding theoretical fair product values. We examine deviations between the prices and the values in two directions: interday, i.e. the development of the deviations over a certificate's lifetime and intraday, i.e. deviations depending on the time of day the trade is made. Our major results can be summarized as follows: (i) Leverage certificates are overpriced. (ii) The "Life Cycle Hypothesis" by Stoimenov and Wilkens (JBF, 2005), initially developed for long-term investment certificates, also holds for short-term leverage certificates. This interday effect is more pronounced the less likely a premature knock-out of the certificate is. (iii) At the end of the underlying's trading hours issuers increase the prices. (iv) The issuers' pricing policy is consistent with the customer-driven order flow and the overnight gap risk issuers face.

How important is the industry experience of independent directors?

We analyze a newly available data set with the full employment history of independent directors at S&P 1500 companies and show that the proportion of independent directors with industry experience (IDIEs) is positively and significantly correlated with firm performance, but the proportion of independent directors without industry experience (IDNIEs) is not. We find that higher proportions of IDIEs are associated with fewer earnings restatements and more cash holdings. Firms with IDIEs have higher CEO pay-performance sensitivity, higher CEO turnover-performance sensitivity, and more patents with more citations. We also find that CEO power is negatively correlated with the presence of IDIEs.

Labor as a monitor of the CEO: A Power Game of Outsourcing

Consistent with a stakeholder model, we propose a power play hypothesis that the CEO power is balanced by labor that can monitor the CEO behavior. We develop a theory of a cooperative power game between the CEO and labor in corporate outsourcing, and test the model's predictions concerning the decision to outsource, division of profit, and post-outsourcing firm performance using a sample of 162 outsourcing deals by U.S. firms during 1992-2005. In accord with the model, a firm is more likely to outsource the greater is CEO power, the greater is the firm's production cost, and the more homogeneous is the industry; the greater is CEO power, the greater is the CEO's share of profits. And the outsourcing decision does not affect the CEO's share of profits, and CEO power is positively related to post-outsourcing performance. Interestingly poor prior firm performance moderates power dynamics between the CEO and labor. The implication is that in addition to the traditional governance mechanisms such as board, institutional investors or banks, labor can also be an effective managerial monitor when the firm undergoes a major restructuring.

Buyers versus Sellers: Who Initiates Trades and When?

We study the relation between order imbalance and past returns and firm characteristics and test a number of hypothesis including the disposition effect, momentum and contrarian trading, taxloss selling and flight-to-quality hypothesis. These hypotheses make predictions about investors' buy or sell decisions, but previous studies that test these hypotheses use turnover data that combine both buyer and seller-initiated trades. We find that investors behave as contrarians over short horizons and as momentum traders over longer horizons. We find strong support for seasonal tax induced trading but little evidence of flight-to-quality.

Credit Lines as Monitored Liquidity Insurance, Theory and Evidence

Characterizing Global Financial and Economic Integration through Analyst Forecast

This paper presents new evidence on international financial market integration using stock analyst earnings forecasts from 37 countries around the world. By examining cash flow (CF) and discount rate (DR) news co-movements, we find that the influence of these two driving forces of global market integration have diverged over time as DR news have become more important than CF news over the past decade. However, this divergence is less severe in emerging markets compared with developed markets where expected return news has played a less prominent role. We interpret this as being that financial integration has developed relatively slowly in emerging markets due to the hampering effects of their poor information environments.

Investor Sentiment and Seasoned Equity Offerings

We document that investor sentiment is positively related with pre-SEO overpricing and plays an important role in managers' equity issuance decisions. Further, we provide evidence that investor sentiment impacts the SEO discounting and underpricing. High sentiment periods are followed by low long run returns suggesting that sentiment does not proxy for unobservable fundamentals. Overall, our findings are consistent with market timing and behavioural explanations for equity offerings.

Liquidity Constraints and Consumer Bankruptcy: Evidence from Tax Rebates

This paper estimates the extent to which legal fees prevent liquidity-constrained households from declaring bankruptcy. To do so, it studies how the 2001 and 2008 tax rebates affected consumer bankruptcy filings. We exploit the randomized timing of the rebate checks and estimate that the rebates caused a significant, short-run increase in consumer bankruptcies in both years, with larger effects in 2008 when the rebates were more generous and more widely distributed. Using hand-collected data from individual bankruptcy petitions, we document that the rebates caused an increase in the average liabilities and the liabilities-to-income ratios of filers.

Co-Insurance in Mutual Fund Families

We apply a bootstrap approach to show that mutual fund families coordinate actions across member funds in order to support those that are forced to sell due to heavy outflows. We show how such strategy can affect the pricing implications of asset fire sales and how it distorts the incentives of fund managers. First, we show that coordination is more likely to be observed within families that have a sufficiently large number of funds. Consistent with internal coordination, we document weak or no price pressure coming from the widespread selling by financially distressed mutual funds that are affiliated with large families, while the effect is very strong for their small-family peers. Moreover, we show that affiliation with large families significantly reduces the sensitivity of outflows to poor past performance, in particular for funds holding more illiquid portfolios. However, by improving the convexity of their implicit payoff structures, we show that risk-sharing strategies at the family level can encourage individual fund managers to take extra risks.

The Aggregate Information in Unexpected Media Coverage of Firms' Earnings Reports

Economists have recently begun to explore the roles of the financial media in the stock market.

We extend this line of inquiry by assessing the aggregate information contained in the Wall Street Journal's decisions to cover firms' earnings reports. Since the information in earnings announcements varies across firms and time, we first measure unexpected coverage of each firm's announcement and then aggregate unexpected coverage across firms each month. The resulting measure quantifies the monthly flow of market-wide information regarding stock valuation -- arising from the Wall Street Journal's perception of the informativeness of the earnings reports. In months when the level of coverage is surprisingly high, returns on the CRSP value-weighted index are high and continue to be high for roughly six months. The six-month predictability in returns seems due to the persistence in the flow of market-wide news rather than aggregate media coverage capturing investor sentiment.

We conclude that high aggregate unexpected coverage identifies periods of high valuation uncertainty and that high returns are compensation for bearing this time-varying risk. In addition, we find that exposure to this risk varies across stocks and is priced in the cross section of returns. Finally, serial correlation in the index return is highly dependent on our measure of aggregate news flow, switching from positive to negative serial correlation as aggregate unexpected coverage changes from high to low.

The Valuation of Hedge Funds' Equity Positions

We provide evidence on the valuation of equity positions by hedge fund advisors. Reported valuations deviate from standard valuations based on closing prices from CRSP for roughly seven percent of the positions. These deviations are economically significant for about 25 percent of the hedge fund advisors. Advisors with more pronounced valuation deviations show a stronger discontinuity in their reported returns around zero, manage a higher fraction of potentially fraudulent funds, show smoother reported returns, self-report to commercial databases, and are domiciled in offshore locations. Additional tests suggest that the documented equity valuation deviations respond to past performance.

Customers as Advisor: The Role of Social Media in Financial Markets

This paper investigates the extent to which peer-based advice transmitted through social media affects the stock market. We conduct textual analysis of articles published on Seeking Alpha, a popular social-media platform among investors. We find that the views expressed in these articles associate strongly with contemporaneous and subsequent stock returns, and help predict earnings surprises. The social media effect is stronger for articles that receive more attention and for companies likely to be neglected by traditional advice sources. The association remains strong for companies with no mentioning in the Dow Jones News Service in the week surrounding the publication of the Seeking Alpha article. Together, these findings point to the importance of social media as both a source of peer-based advice and a channel through which views become reflected in stock prices.

The Term Structure of Money Market Spreads During the Financial Crisis

I estimate a no-arbitrage model of the term structure of money market spreads during the recent financial crisis to identify how much of the sharp movements in spreads can be attributed to observable interest rate, credit, and liquidity factors. The restrictions of the model imply that longer- term spreads are linear, risk-adjusted expected values of future short-term spreads. In addition, the linear representation of spreads can be partitioned into two distinct components: one related to time-varying expectations of spreads, and the second to time-variation in risk premia. Estimation of the model highlights the importance of time-variation in risk premia. Up to 50% of the Variation of spreads is explained by time-varying risk premia, and risk premia has significant predictive power for spreads.

The Value of a Third Opinion: Split Ratings, Information Opacity and Fitch Ratings

We examine the marginal impact of Fitch rating on the yields at issuance of industrial and utility bonds rated by both Moody's and S&P. We find that Fitch ratings reduce the yield premiums on information opaque bond issues. The finding is robust even when a Fitch rating exactly equals the average of the two major ratings. However, for non-opaque bonds, an additional rating from Fitch has no impact on bond yields. We measure opacity in two ways: split ratings and an index of commonly used proxies for opacity. We estimate that a Fitch rating reduces the opacity premium on informational opaque bond issues proportionally by 30% to 40%, or 9-14 basis points. When ratings are split and the opacity levels are high, a Fitch rating has the largest reduction in bond yields.

Labor Income, Relative Wealth Concerns, and the Cross-section of Stock Returns

The finance literature documents the relation between labor income and the cross- section of stock returns. A possible explanation is the hedging of investors with relative wealth concerns who pay a premium for securities that help them to keep up with their peers. At the census division level we find that the risk premium associated with labor income risk is negative and statistically significant. This premium is predominantly local in nature, as opposed to the aggregate, country-wide cross-sectional effect so far documented. Also, it is larger in areas with lower population density, as expected when investors have relative wealth concerns.

Analyst Forecasts, Errors-in-expectations, and the Value Premium

Investors' extrapolative errors-in-expectations about future corporate earnings have been hypothesized in the literature as an explanation for the value premium. The extant literature uses analysts' earnings forecasts as a proxy for investors' expectations and has found certain evidence consistent with the hypothesis. But researchers have not reached consensus on whether the value premium is indeed caused by extrapolative errors-in-expectations. In this paper, we examine analysts' long-term earnings growth forecasts, compare them with the earnings growth predicted by an empirical model, and use the difference between the analyst forecast and the model forecast as a measure of the errors-in-expectations. We find evidence that analysts extrapolate in their earnings forecasts, although not for all types of stocks, but we conclude that the errors-in-expectations are not the cause of the value premium because the errors-in-expectations measure we construct does not have strong predictive power for future returns and does not subsume the market-to-book ratio in generating the value premium.

Informed Trading through the Accounts of Children

This study argues that a high proportion of trading through underaged accounts is likely to be controlled by informed guardians seeking to share the benefits of their information advantage with young children, or camouflaging their potentially illegal trades. Consistent with this conjecture, we find that the guardians behind underaged accounts are very successful at picking stocks. Moreover, they tend to channel their best trades through the accounts of children, especially when they trade just before major earnings announcements, large price changes, and takeover announcements. Building on these results, we argue that the proportion of total trading activity through underaged accounts (labeled BABYPIN) should serve as an effective proxy for the probability of information trading in a stock. Consistent with this claim, we show that investors demand a higher return for holding stocks with a greater likelihood of private information, as proxied by BABYPIN.

Why Do Individuals Exhibit Investment Biases?

We find that a long list of investment biases, e.g., the reluctance to realize losses, performance chasing, and the home bias, are "human" in the sense that investors are born with them. Genetic factors explain up to 50% of the variation in these biases across individual investors. We also find that genetic factors influencing investment biases affect behaviors in other, non-investment, domains. For example, those with a preference for familiar stocks exhibit a preference for familiarity also in other domains. Our results provide empirical support for a biological basis for investment behaviors that have been shown to be wide-spread and persistent. Finally, we find that education does not seem to significantly reduce genetic predispositions to investment biases, and we demonstrate that accounting for confounding genetic factors is important when assessing whether, e.g., education reduces investment biases.

Asymmetric and negative return-volatility relationship: the case of the VKOSPI

KOSPI 200 index options are the most actively traded exchange-listed derivative contracts in the world. And, unlike most other active options markets, trading is dominated by individual investors. This study examines the short-term relationship between stock market returns and implied volatility in the Korean financial market using high frequency data on the recently introduced volatility index (VKOSPI) implied by KOSPI 200 options. We find a strong asymmetric and negative return-volatility relationship at both the daily and intraday levels, which cannot be explained by either leverage or volatility feedback hypotheses on the asymmetric volatility phenomenon. Moreover, we also find that the asymmetric relationship is more pronounced for extremely negative stock market returns. We conjecture that behavioral factors better explain the observed asymmetric return-volatility relationship.

Momentum Strategies in Futures Markets and Trend-following Funds

In this paper we study time-series momentum strategies in futures markets and their relationship to commodity trading advisors (CTAs). First, we construct one of the most comprehensive sets of time-series momentum portfolios by extending existing studies in three dimensions: time-series (1974-2002), cross-section (71 contracts) and frequency domain (monthly, weekly, daily).

Our timeseries momentum strategies achieve Sharpe ratios of above 1.20 and provide important diversification benefits due to their counter-cyclical behaviour. We find that monthly, weekly and daily strategies exhibit low cross-correlation, which indicates that they capture distinct return continuation phenomena.

Second, we provide evidence that CTAs follow time-series momentum strategies, by showing that time-series momentum strategies have high explanatory power in the time-series of CTA returns.

Third, based on this result, we investigate whether there exist capacity constraints in time-series momentum strategies, by running predictive regressions of momentum strategy performance on lagged capital flows into the CTA industry. Consistent with the view that futures markets are relatively liquid, we do not find evidence of capacity constraints and this result is robust to different asset classes.

Our results have important implications for hedge fund studies and investors.

Access to Management and the Informativeness of Analyst Research

We study the effects of broker-hosted investor conferences on the informativeness of analyst research. We find analysts' stock recommendations have significantly larger price impacts when the broker has a conference-hosting relationship with the firm. The incremental effect is most pronounced in the quarter following the conference and remains significant for three quarters. The post-conference effect is stronger for small, volatile stocks and when the analyst has more experience covering the firm. Analysts at brokers with a conference-hosting relation also issue more accurate earnings forecasts than non-hosts in the post-conference period. Our findings suggest access to management remains an important source of analysts' informational advantage following the passage of Regulation Fair Disclosure.

Director Experience

Do directors learn from their prior CEO turnover experiences?

This study examines independent directors who have had prior experience with a CEO turnover event. Experienced directors are more active in subsequent boards as evident in fewer meeting absences and greater involvement in the nominating committee relative to other independent directors. Interestingly, they are less likely to be a member of the audit committee and subsequent CEO turnover events are less sensitive to accounting performance. Conversely, as the number of CEO turnover experiences increase, each event the director is involved with becomes increasingly sensitive to firm stock performance. These results are consistent with experienced directors learning from their prior associations with CEO turnover and their becoming more concerned with indicators of long run performance expectations. Not surprisingly, there is also evidence that CEOs are less supportive of experienced director appointments to their boards.

Private Equity and the Resolution of Financial Distress

We explore the financial distress costs of private equity-backed firms by examining the default likelihood and restructuring behavior of 2,156 firms that obtained leveraged loan financing between 1997 and 2010. We show that PE-backed firms are no more likely to default during this period than other firms with similar leverage characteristics. When private equity-backed firms do become financially distressed, they are more likely to restructure out of court, take less time to complete a restructuring, and are more likely to survive as an independent going concern, compared to financially distressed peers that are not backed by a private equity investor. Private equity investors also frequently remain in control of their firm following the restructuring, an occurrence that is rare among non private equity owners. Private equity investors appear not to exacerbate the likelihood of financial distress and, when a default occurs, resolve the distress fairly efficiently.

The Sum of All Seasonalities

Heston and Sadka (2008) document that stock returns 'repeat' themselves in the cross-section every twelve months. We explain this puzzling pattern with a model where past same-month returns serve as noisy signals of stock characteristics associated with return seasonalities; for example, stocks that have generated high January returns in the past tend to be small and generate high returns also in future Januarys. Our model predicts that even small individual seasonalities can sum up to an economically significant cyclical pattern, that this pattern exists at any interval at which returns exhibit seasonalities, and that it is subsumed by the average past same-month return. The data are consistent with the model's predictions, offering evidence of cyclicality in daily returns at annual and weekly lags.

Innovative Capacity and the Asset Growth Anomaly

Innovative capacity (IC) is a firm's ability to produce and commercialize multiple innovations. Expected returns need not fall following asset growth (AG) by high IC firms because investment can generate new growth options. Using patents and citations based IC measures, we find that the well-known negative relation between AG and subsequent excess returns (the "asset growth anomaly") holds only for low IC firms. However, there is no asset growth anomaly for high IC firms and rapid asset expansion in these firms is significantly positively related to future excess returns. Direct tests on the relation of IC to growth options proxies following the asset growth events suggest that asset expansion converts growth options to assets-in-place in low IC firms, while generating new growth options in high IC firms. Our analysis indicates that IC plays an important role in the dynamics between asset growth and stock returns.

Exit and Transitions in Family Firms in Post-War Japan

Abstract

The involvement of families in post-war corporate control has not been widely researched. In this study, we provide two novel contributions to the literature on family successions. First, we develop a new technique to measure the decay in fractional firm ownership. We call this the half-life of ownership, and find considerable variation in half-lives across firms. Specifically, we find that half-lives are shorter firms with for older CEOs, high growth, and less liquidity. Second, we describe various ways in which families may exit the firms that they found, either partially by retaining ownership but not control (e.g. hiring a professional manager) or by disposing off ownership but continuing to serve as CEO, or a full exit by selling out. We provide evidence on the cross-sectional determinants of such exit.

The Unpriced Side of Value

Book-to-market (BE/ME) ratios explain variation in expected returns because they correlate with recent changes in the market value of equity. Although the remaining variation in BE/ME ratios captures comovement among stocks, it does not predict returns. Therefore, the HML factor consists of a priced and unpriced component, leading multi-factor models to assign spurious alphas to strategies that covary with the unpriced component. Portfolio managers can exploit the unpriced component--a portfolio long the "true" and short the "false" value strategy has an annual three-factor model alpha of 7.7%. The unpriced component also distorts inferences regarding known anomalies. Five-year changes in the market value of equity provide a better measure of value: they spread returns more than BE/ME ratios and are free of the unpriced component.

Evaluating corporate acquisitions: Exploratory studies of financial analysts' use of accounting information

Abstract: Recent changes in the accounting for business combinations and goodwill have, arguably, resulted in more complex and comprehensive financial reports. In light of the changes, there may be consequences in regard to how analysts evaluate corporate acquisitions and, in turn, how the stock-market will react to such transactions. The International Accounting Standards Board (IASB) aims for its standards to be useful to capital market participants and the Board further states that users should have a reasonable degree of financial knowledge and are responsible for studying the information with reasonable diligence (IASB, 2010). The paper reports results from two exploratory studies. The first one is based on semi-structured interviews with five Swedish sell-side analysts concerning how they incorporate information about acquisitions into the analysis and the valuation of specific companies that they follow, and their subsequent communication with customers. The second study, based on a questionnaire sent to members of the Swedish Society of Financial Analysts, aims to capture the following topics: the analysts' knowledge of relevant International Financial Reporting Standards (IFRS) in the area of acquisitions (IFRS 3 and IAS 36), their use of such accounting information for the evaluation of acquisitions, their use of valuation-related measures, their communication of with customers, and a psychological variable concerning the analysts' need for cognition (NC). The interview study suggests that acquisitions are handled in a context where analysts spend most of their time and effort on giving prompt feedback to customers in response to news and events, including corporate acquisitions. The analyst seldom finds the time for more comprehensive analyses of the companies followed, and the communication with customers is framed around 'on the margin' effects. The impact of acquisitions on the analysts' use of accounting information should be seen in this context. When the acquisition is announced, the amount of accounting information is generally very limited, but the analysts must still give their views very quickly on expected share price effects and the impact on company fundamentals. More accounting information is then gradually added in the subsequent company presentations, quarterly and annual reports, and the prospectus, but the additional details do not generally represent significant events worth reporting to the customer. Results from the questionnaire study suggest, among other things, that the analysts had a low level knowledge of IFRSs directly related to acquisitions (IFRS 3 and IAS 36), but they still considered accounting information based on these standards to be of great importance for their evaluations of acquisitions (e.g., the acquisition analysis and impairment information). The paper discusses implications related to analysts' use of accounting information where they have limited knowledge of how the information has been prepared and also the implications of promoting analysts' skills in communicating 'on the margin' effects of news and corporate events rather than more in-depth analyses.

BIO: Dr. Niclas Hellman is Acting Professor in Accounting at the Stockholm School of Economics (SSE), Sweden. His research interests pertain to financial accounting and auditing and he has published papers in the areas of international accounting, the impact of accounting information on the behavior of financial analysts and investors, auditor-client interaction, and corporate governance. Niclas is the head of the SSE master specialization in Accounting and Financial Management and teaches international programs for students, financial specialists and executives in his areas of expertise. Niclas is also Vice Chairman of the Swedish Accounting Standards Board.

Wages, Overseas Investment and Ownership: Implications for Internal Labor Markets in Japan.

Abstract: Japanese firms expanded their outward foreign direct investment (FDI) rapidly in the emerging economies in Asia in the post-1990 period. The Japanese public feared that companies would increasingly rely on cheaper foreign workers and that large numbers of home country workers would find their responsibilities, and hence their earnings, dwindling over time. However, using several recent data sets on workers in firms with and without FDI investments, we show that workers received earnings premiums if they were with firms that engaged in outward FDI involving ownership of at least 50% in some foreign firm. Higher ranked workers benefited more, but even some non-managerial workers did benefit as well. These wage benefits crucially depend on the level of ownership in FDI projects. Increased foreign employment, on the other hand, did not benefit workers' wages except those in the highest ranks.

BIO: Masao Nakamura received his B.S. and M.S. degrees in administration engineering from Keio University in Tokyo and his Ph.D. degree in operations research and industrial engineering from The Johns Hopkins University. He has also worked for Toshiba as a systems engineer. His research interests include economic behavior of firms and households, corporate governance, international business and Japanese economy, and management of technology and environment. Since 1994 he has been a Professor and the Konwakai Japan Research Chair in the Sauder School of Business and the Institute of Asian Research of the University of British Columbia in Vancouver, Canada. He has published books and also articles in academic journals. His recent publications include: Adoption and Policy Implications of Japan's New Corporate Governance Practices after the Reform, Asia Pacific Journal of Management 28, 2011, 187-213; and Changing Corporate Governance Practices in China and Japan: Adaptations of Anglo-American Practices (Ed.), Palgrave Macmillan, 2008. For further details please see his home page.

Transferring tacit know-how through licensing or joint venture: Is opportunism really redundant?

Abstract

Transaction cost theory (TCE) scholars argue that MNEs exist due to failure of markets, a main stimulus of which is opportunism. On the contrary, proponents of the knowledge based view (KBV) claim that the opportunism assumption is redundant; the existence of the MNE can be explained without recourse to opportunism. This debate still persists (e.g., Fransson, Hakanson, & Liesch, 2011), but a key feature is that despite competing causal mechanisms, predictions of TCE and KBV are identical. We see this lack of predictive uniqueness as the prime bottleneck in resolving the question of whether opportunism matters, and contribute to the debate in two ways: (1) conceptually, we exploit the contingency logics inherent in KBV and TCE to build distinctive predictions from both theories and (2) empirically, we test the competing logics of both theories, bringing empirical evidence to the debate which has this far been largely on conceptual turf alone. Our results suggest that, subject to certain caveats, opportunism matters

Bio

Dr. Alex Eapen earned his doctoral degree from Tilburg University, The Netherlands in June 2007, and is currently a lecturer in International Business at the University of Sydney Business School. His research seeks to better understand the impact of multinational enterprises (MNE) on host country firms and economies. The question his research seeks to answer is: what are the conditions that make international expansion of MNEs beneficial to host country firms? This issue has far reaching implications, not only theoretically, but also for practice. To find the right answers, his research has focused on better understanding (1) the spillover process and (2) the entry and evolution of foreign firms in a host country. His research has been published in journals such as Journal of International Business Studies and Canadian Journal of Administrative Sciences.

Relative Value Appropriation by Partners in Cross-Border Technology Transfer Alliances: How the Alliance Value Pie is Split Between the Allies

Abstract: This paper tests different determinants of partner shares of alliance returns, for a sample of cross-border technology transfer alliances. Findings suggest the importance of bargaining power as an influence on partner shares of alliance returns and suggest that firms with better absorptive capacity (relative to their partners) gain more from alliances. There is a positive correlation between risk and return in alliances; in other words, firms that want a greater share of total returns from an alliance may be able to reach that objective by also agreeing to accept more risk or volatility. On a related point, shifting risk to a partner by insisting on minimum sales or minimum royalty requirements is typically accompanied by a smaller share of total alliance returns for the partner offloading risk. Finally, the findings suggest that return and risk are evaluated in a holistic manner by those negotiating and designing alliances. Implications for theory and practice are explored and further research about issues raised in this paper is recommended.

Speaker: Dr. Farok Contractor is Professor in the Management and Global Business department at Rutgers Business School. He has also taught at the Wharton School, Copenhagen Business School, Fletcher School of Law and Diplomacy, Tufts University, Nanyang Technological University, Indian Institute of Foreign Trade, XLRI (India), Lubin School of Business, Theseus, EDHEC and conducted executive seminars in the US, Europe, Latin America and Asia.

He is a graduate of the Wharton School, University of Pennsylvania, where he received his Ph.D. (Managerial Science and Applied Economics) and MBA, and the University of Michigan, where he received an M.S. in Industrial Engineering. Farok Contractor's research has focused on corporate alliances, outsourcing and offshoring, valuation of intangible assets, the technology transfer process, licensing, and foreign direct investment. He is particularly focused on the negotiated, inter-firm aspects of International Business such as alliances between firms from different nations, including joint ventures, and licensing, as well as negotiations between investors and governments. His work treats the strategic implications of companies sharing their expertise and markets with other firms, and has involved gathering data from a large number of companies.

Dr. Contractor has written well over a hundred scholarly papers on these topics, and books: (1) International Technology Licensing: Compensation, Costs and Negotiations (Lexington Books), (2) Licensing in International Strategy; A Guide for Planning and Negotiations (Quorum Books), (3) A co-authored textbook, Introduction to International Business (Kendall Hunt), (4) Cooperative Strategies in International Business (co-edited) (Lexington Books), (5) Government Policies and Foreign Direct Investment (UNCTAD), (6) Economic Transformation In Emerging Countries: The Role of Investment, Trade and Finance (edited) (Elsevier), (7) The Valuation of Intangible Assets In Global Operations (edited) (Quorum Books), (8) Cooperative Strategies and Alliances (co-edited) (Oxford: Elsevier), (9) Global Outsourcing and Offshoring: An Integrated Approach to Theory and Corporate Strategy (co-edited) (Cambridge University Press, 2010).

Prof. Contractor has among the highest citation counts amongst scholars in the field of International Management (Academy of International Business (AIB), or Academy of Management (AOM)) with Google Scholar citation totals exceeding 4200 citations in other scholarly papers. Prof. Contractor has also been rated by several surveys as among the top-ranked contributors of scholarly papers to the field.

Over the past 15 years, Dr. Contractor has chaired or been on the supervisory committees of 14 doctoral dissertations on International Strategic Management topics, and served on the faculty of several Doctoral and Junior Faculty Consortiums organized by the Academy of Management, Academy of International Business, and CIBERs. Dr. Contractor has served on the Executive Board of the Academy of Management's International Management Division, was Chair of the division and Program Chair at the at the Academy of Management. Earlier, he was elected to a two year term on the Executive Board of the Academy of International Business, and is an active member in other professional bodies in the field of International Management.

He was elected a permanent Fellow of the Academy of International Business, an honor reserved for approximately 60 out of an academy membership exceeding 3,500 persons worldwide. Prof. Contractor has also held other term fellowships such as the Fulbright Fellowship and Unilever Fellowship. Recently he has been Nanyang Visiting Professor at Nanyang Technological University.

Conferences organized by Dr. Contractor have had a catalytic influence on company practices. The Rutgers/Wharton/IMD conferences on Cooperative Strategies in International Business served to spark interest in corporate alliances which subsequently proliferated to the point where alliances today comprise a central facet of corporate strategy. The conference books continue to be used in graduate and executive programs worldwide. Recently, he initiated a conference at Bocconi University on Global Outsourcing and Offshoring strategies resulting in a definitive compilation of papers on the subject.

He has served Rutgers University in many capacities such as Department Chair for the International Business Department for six years, as Research Director of the CIBER (Center for International Business Education and Research), Coordinator of the Ph.D. program in International Business, the Dean's Leadership Council, and several other key school and university initiatives.

Before his academic career, Prof. Contractor was an executive with the international arm of the Tata Group of Companies, an India-based multinational group. Besides Rutgers, Prof. Contractor also taught at the Wharton School, full time, for four years, conducted courses at universities in Europe and Asia and lectured and given executive seminars throughout the world.

A Global Value Chain Approach to Emerging Market Catch-up

Abstract: Value chain analysis is an innovative tool that views economy in terms of activities instead of its constituent industries and firms (Mudambi, 2008). The value chain approach analyses, at the sector level, each link in the 'chain of activity' - from the ideation of the product or service to its post-use disposal.1 A value chain for any product or service consists of a number of inter-linked activities extending from upstream R&D, to raw materials and component supply, production, through delivery to international buyers, and often beyond that to disposal and recycling. Modern value chain analysis enables us to pinpoint the relative contributions to value creation associated with each activity, from basic raw materials to final demand. This approach helps us to understand that as far as a geographic location is concerned, success in terms of creating prosperity is based on the local activities performed rather than the identity of local firms or industries. GVCs are part and parcel of international trade and have existed as long as there have been trade relations between countries. However, two fundamental trends have arisen over the last few decades that have changed the characteristics of GVCs in fundamental ways. First, the advance of technology, especially information technology has enabled firms to re-configure themselves in very basic ways so that they can now outsource activities deep in the heart of the firm with surgical precision and focus on activities where they have superior competencies. It is now routine for firms to outsource functions involving sensitive information like payroll, pensions and accounts receivable (Metters, 2008). The robustness of modern information technologies allows firms a great deal of latitude in terms of the geographic location to which these outsourced activities re-located (Mithas and Whitaker, 2007). Some of these activities are knowledgeintensive and create a great deal of value for the location where they are eventually undertaken. Second, the number of locations where such activities can be undertaken has risen dramatically over the last two decades with the increasing sophistication of infrastructure and other resources in a wide range of emerging markets from China and India to Mexico and Turkey. GVCs today are truly global within industries ranging from apparel (Gereffi, 1999; Smakman, 2003) and shoes (Pyndt and Pedersen, 2006), to electronics

The importance of fragmented production and intermediates trade has been widely documented in academic research (e.g., Baldwin, 2006). When trade is disaggregated and geographically dispersed across national borders, a global value chain (GVC) exists. GVCs incorporate all the activities related to producing a good or service and delivering the product or service to the end user. This type of trade is especially important in China and other emerging economies due to the great importance of GVCs in their economywide catch-up processes. In some emerging markets such as China, the percentage of high technology exports in total exports (or high technology output in GDP) has been increasing at unprecedented rates. Na??ve interpretation of this data would suggest that technological catch up and convergence are well advanced. However, these traditional output-based measures are undertaken as the industry level, thus facing two important shortcomings:

The measures fail to take into account that different stages of the same GVC (e.g. specialized versus standardized activities) can have distinct value added levels.
The measures often capture gross output and not value added. As a result, they not only capture the activities that have taken place in a country, but also the value of upstream activities that are used as inputs. Example of the Apple iPhone (Linden et al., 2009). In this paper we apply GVC analysis to Chinese data to examine the extent of economywide catch-up. Using this approach we find that catch-up is significantly less advanced than simple output-based measures indicate.

Speaker: Ram Mudambi is professor and Perelman Senior Research Fellow in General and Strategic Management at the Fox School of Business and Management at Temple University.[1][2] He has published over fifty refereed journal articles and six books on the multinational strategies of entrepreneurial firms; the location and research and development strategies of multinational firms, and the politics of international business. Mudambi serves on the Editorial Boards of the Journal of International Business Studies, the Asia Pacific Journal of Management and the Journal of International Management.

Prior to joining Temple University, Mudambi taught at Case Western Reserve University in Cleveland, Ohio and the University of North Carolina at Chapel Hill. He taught in Europe for seven years at the University of Reading and the University of Buckingham. He retains a Readership at the University of Reading Business School [3] and is a Fellow of the Academy of the University of Messina in Italy. He completed his Masters degree at the London School of Economics in the United Kingdom and his Ph.D. at Cornell University.

Being in Good Standing: The Value of a Corporate, Workplace & Social Reputation to Potential Employees

Abstract: It has been readily accepted that prospective employees, including MBA students seeking jobs after graduation, put great stock in a potential employer's reputation - particularly that relating to its social responsibility and workplace practices. However, other than potentially biased results from self-report surveys we have little information as to whether or not job seekers would actually trade-off salary and other utilitarian aspects of a job contract to work at firms with supposed greater reputational standing. In the present study we use a structured experimental approach to determine the extent to which the facets of reputation - corporate, social and workplace - drive job contract choice. We discover that while some aspects of corporate and workplace reputation matter marginally, MBA job seekers appear to put little value on social reputation and those in other professions even less so. Even in the specific cases where we can discern individuals who do value social reputation, this is unrelated to their stated preferences revealed using standard survey methods. The implication is that firms seeking to entice potential employees should focus on utilitarian aspects of the employment contract that may impact their reputation rather than attempting to manipulate that reputation directly.

Speaker: Timothy Devinney is a Professor of Strategy at the University of Technology, Sydney and Professor (Conjoint) in the Faculty of Medicine at the University of New South Wales. Prior to that he was a Professor and Professorial Research Fellow at the Australian Graduate School of Management (AGSM), Director of the Centre for Corporate Change and the AGSM Executive MBA. Before joining the AGSM he held positions on the faculties of The University of Chicago, Vanderbilt University and UCLA and has been a visiting faculty member at numerous universities in Europe (Copenhagen Business School, Humboldt University-Berlin, Wirschaftsuniversitat Wien, and the Universities of Hamburg, Trier, Konstanz, Ulm & Frankfurt) and Asia (Hong Kong University of Science and Technology & City University, Hong Kong) and taught at many others (e.g., CEIBS, Helsinki University of Technology & Helsinki School of Economics). He has published seven books -- e.g., Managing the Global Corporation (with J. de la Torre and Y. Doz, 2000) and The Myth of the Ethical Consumer (with P. Auger and G. Eckhardt) -- and more than eighty articles in leading journals including Management Science, the J. of Business, The Academy of Management Review, J. of International Business Studies, Organization Science, California Management Review, Management International Review, J. of Marketing, J. of Management, Long Range Planning, J. of Business Ethics and the Strategic Management Journal. He has presented papers and addresses at more than 200 universities and conferences in the last ten years. In 2008 he was the first recipient in management of an Alexander von Humboldt Research Award and was Rockefeller Foundation Bellagio Fellow. In 2008 he was elected a Fellow of the Academy of International Business.

Timothy is heavily involved in the international networks of scholar. He served as Chair of the International Management Division of the Academy of Management. He is the co-editor of The Academy of Management Perspectives, co-editor of the Advances in International Management series (Emerald Publishers), and the Director of the International Business & Management Network of SSRN. He operated, jointly with the University of Illinois, the annual Workshop in Theory and Measurement in International Business and ran the 2001 Academy of International Business Conference in Sydney. He was a member of the Executive of ANZAM (Australia New Zealand Academy of Management) and was named a Fellow in 2008. He is a former Chair of the Intl Mgt Division of the Academy of Management. He is on the editorial board of more than 12 of the leading international journals. He is an International Fellow under the auspices of the AIM Initiative in the UK, which gave him a Professorship at London Business School. He is one of the largest recipients of Australia Research Council funding in the last five years having won over $11,000,000 in supported research from the ARC and other organizations.

Timothy has taught in numerous executive programs in Australia, USA, Germany, Austria, France, Finland, Korea, India, China, Turkey and the Netherlands, as well as having worked and consulted with corporations world wide, including Apple Computer, Anadolu (Turkey), Telekom Austria, LG (Seoul), Boral, AT Kearney, GEC-Alsthom, AMP, TMP, GM/Holden, CSR, Mobil, Koppers Industries, SAP, Rolls Royce (UK), SAS Institute, Hanimex/Rabbit Photo, Sabanci Holdings (Turkey), Thomson Publishing, Transfield, and Westfield Holdings-as well as many small Internet startups-e.g., Agribuys (US), Haburi (Denmark), Maconomy (Denmark), and ChateauOnline (France)-and governments and non-profits-e.g., the State Council of the PRC (China), the government of PNG, Amnesty International, The Property Council of Australia, Invest Australia, Australian Manufacturing Council and the City of Sydney, to name only a selection. He was a panel member of the Australian Federal Government's Research Quality Framework, responsible for the allocation of $600M in annual funding.

Response Strategies of Local Firms to Import Competition in Emerging Markets and Its Impact on Firm Performance

Abstract: In recent decades, emerging markets have undergone significant change in their competitive landscape. These markets, which were relatively free from import competition, have become characterized by a significant import presence in most industry segments. We analyze the impact of three strategic options that can be implemented by local firms given the changed circumstances in their domestic market. Using a sample of 3804 firms from 1996 to 2007 we find, on average, firms with greater investments in intangible resources and tighter corporate focus do better, while firms with greater international sales performed worse compared to their peers. However, import competition moderates the relationship between intangible resources, corporate focus, and international sales and firm performance.

Bio: Dr. Elango (Ph.D., Baruch College-CUNY) is a Professor of International Strategy at the College of Business, Illinois State University. Recently, he has been selected as the Country Insurance & Financial Services Faculty Scholar and was also appointed as Director of Research at the College of Business. His primary research interests are in the area of international strategy and competition and secondary research interests include entrepreneurship and technology innovation management. He has published over forty-five articles in top-tier journals and his work has been cited over 1000 times according to Google Scholar. He serves on the Editorial Review Board of the journal Management International Review and is a research fellow at the Katie School of Insurance and Financial Services. He has been recognized for his work through awards in teaching innovation and research. These awards include: 2011 AIB Best Paper Award (Emerging Markets Track); Wilma Jean Alexander Faculty Technology Award; Caterpillar Faculty Scholar Award; College of Business Outstanding Researcher; and the Illinois State University Research Initiative Award.

Expert cognition in global leaders

Abstract: The purpose of this research is to determine how global leaders think and behave in order to accelerate their effective training. The investigated sample consists of outstanding leaders, mostly from the high tech industry in Silicon Valley. The presentation will include preliminary results of the investigation as well as an overview of the field of global leadership research.

Speaker: Dr. Joyce Osland, a senior partner of The Kozai Group, Inc., is a specialist in international management with a focus on global leadership, Latin America, and organization development. As the Lucas Endowed Professor of Global Leadership, Joyce founded the Global Leadership Advancement Center at San Jose State University. She has won numerous awards for teaching, research, and leadership, and was a Senior Research Fellow at the Army Research Institute.

Joyce has over 80 articles and chapters in academic journals and professional publications. She is the co-author of two OB textbooks: The Organizational Behavior Workbook: An Experiential Approach and The Organizational Behavior Reader. The second edition of her co-authored book on Global Leadership is due out in October. Joyce has lived and worked overseas for 14 years in seven different countries, mostly in Latin America and West Africa, and continues to be a visiting professor in graduate programs all over the world.

Corporate governance - the Polish perspective

Abstract: The main aim of the class is to present the information and case studies on selected corporate governance issues to provide the understanding of the functioning of control structure that emerged and function worldwide. A crucial part of the class are case studies analyses, discussions and practical examples. Particularly, the global experience of corporate governance is referred to the reality transition in Central and East European (mostly Poland) when the creation of control mechanisms was the crucial element of the reform agenda as well as the reality of emerging market (the surge of newly funded companies) and the EU accession (the harmonization of law). The Polish experience may be currently referred to reforms in China, Ukraine, Russia and other emerging markets. The class is not only to provide information and develop the understanding on control mechanisms, but aims also at the development of the certain skills such as analytical skills, critical thinking, knowledge integration of different topics, awareness and openness for current initiatives in the economy, understanding of interdependence of social, economic and legal systems both on the national as well as on the international level.

Speaker: Maria Aluchna - associate professor at Department of Management Theory, Warsaw School of Economics, Poland. She specializes in corporate governance (ownership structure, board, executive compensation, transition economies) as well as in strategic management. Additionally, she conducts research on corporate social responsibility. She was awarded Deutscher Akademischer Austauschdienst (DAAD) scholarship for research stay and Universit??t Passau and Polish-American Fulbright Commission scholarship for the research stay at Columbia University. She received Polish Science Foundation award for young researchers (2004, 2005). Recently, within a grant financed by the EU she completed a visiting scholar stay at London Metropolitan Business School. Maria Aluchna teaches "Corporate governance" (both in Polish and English), "Strategic management" (in English) and "Transition in Central and Eastern Europe" (in English). She is the author of a number of articles for national and international journals as well as conference papers. She was serving on two boards, in 2008 she was the editor in chief of Warsaw Stock Exchange portal on corporate governance best practice. Currently, she provides advice for the law firm G??uchowski, Siemi??tkowski i Zwara and conducts research projects for the Capital City of Warsaw.

A Journey Toward Collaborative Cultural Competency Building to Increase Sustainable Social Impact

Abstract: In this talk, Cristina discusses a recently launched research program which develops theory, tests relationships, and pushes the boundaries of practice in the domain of collaborative competency building and social impact. She will discuss the overarching framework that she and her colleagues at UWA have been evolving for increasing sustainable community development and social impact in the resources sector. Next, she describes one component of the framework - a model of collaborative cultural competency building - which she is investigating using a multi-method longitudinal design among university partners, corporate partners and Jawun, a non-profit organization that provides work experiences in Indigenous communities.

Bio: Cristina B. Gibson is Winthrop Professor of Management and Organization and Australia Research Council Future Fellow at the University of Western Australia School of Business. Her area of expertise is the nexus of organizational behavior, international management, and cross-cultural psychology. She is a leading scholar on collective cognition, developing and testing theories and practical techniques for the shared use of information and knowledge in groups and teams.

In particular, she has conducted preeminent research on multinational, geographically dispersed, and electronically enabled teams. Her work has appeared in over sixty scholarly articles in the field's most prominent journals such as Administrative Science Quarterly, Academy of Management Review, Academy of Management Journal, and Journal of Applied Psychology. She is the co-author of the book Multinational Teams: A New Perspective (Lawrence Erlbaum Associates, 2002), that extends and consolidates the evolving literature on multinational teams, developing a comprehensive model that incorporates a dynamic, multi-level view, focusing on various features of the team's members, their interactions as a team, and the organizational context in which they operate. She is also co-editor of Virtual Teams That Work (Jossey-Bass, 2003), a collection of scholarly writings by leading researchers in psychology, sociology, engineering, information technology, political science, and economics, which focuses on developing implication of research for the practice of managing and working in virtual teams.

Cristina has received nearly 5 million dollars in external funding for her research from prestigious granting institutions such as the Australian Research Council, U.S. National Science Foundation, the Center for Innovation and Management Studies, Carnegie Bosch Institute for Applied International Management, and the Center for Research on Information Technology in Organizations. In her work with teams in multinational organizations, she strives to increase performance, sustainability, and quality of work life for team members from various cultures. She has two decades of experience conducting research and training on team development, cross-cultural interaction, and social impact for over 30 major multinational firms, including Woodside, BHP-Billiton, General Electric, General Motors, Johnson & Johnson, Lockheed Martin Aerospace, DaimlerChrysler, Booz-Allen & Hamilton, and Merck. Teams have been located in over 20 countries, encompassing the U.S., Canada, Australia, Latin America, Western Europe, and Southeast Asia.

Cultural Intelligence and All That Jazz. An examination of the state of the field of assessing inter-cultural competence

Abstract: In recent years international management research has focused on the cultural competency of managers as increasingly important in a complex, dynamic and multicultural business environment. As part of what might be called a cognitive revolution in international management research several individual difference constructs have been introduced that promise to improve upon our ability to link culture to action beyond the study of dimensions of cultural variability. In this presentation I examine two of these ideas, global mindset and cultural intelligence. I examine their conceptual similarities and level of development, and indentify five criteria that need to be satisfied for these new ideas to have utility in international management research.

I suggest that in order for measures of intercultural competence to have utility five criteria need to be satisfied. We need to know (a) what is included and what is not included in the construct; (b) the process through which these facets are developed in individuals; (c) if multidimensional, how these underlying facets combine to form the higher level construct; (d) the process through which the construct influences intercultural effectiveness; and (e) how this individual-level construct crosses levels to influence groups and organizations. I contrast the major conceptualizations of global mindset (e.g., Javidan, Steers, & Hitt, 2007 and Levy, Beechlor, Taylor, & Boyacigiller, 2007) and cultural intelligence (Earley & Ang, 2003 and Thomas & Inkson, 2003) and their subsequent operationalization (Ang & Van Dyne, 2008; Hough, Fandre, & Oswald, 2008; Thomas et al., 2008) on the previously outlined criteria. Based on this comparison I suggest that theses ideas promises to relegate inventories of cultural competencies to the past, but also discuss what is required for them to make good on this promise. I then describe the development of a multi-method web based assessment of cultural intelligence.

Bio: David C Thomas (PhD University of South Carolina) is currently Professor of International Business in the School of Management at the Australian School of Business, University of New South Wales, Sydney.

He is the author of eight books including the bestselling Cultural Intelligence: Living and Working Globally, (2009, Berrett-Koehler Publishers). His book Cross-Cultural Management Essential Concepts (2008, Sage Publications) was the winner of the R. Wayne Pace Human Resource Development book of the year award for 2008. In addition, he has recently edited (with Peter B. Smith and Mark Peterson) The Handbook of Cross-Cultural Management Research from Sage Publications. His research on cross-cultural interactions in organizational settings has appeared in numerous journals. He is currently the Area Editor of the Journal of International Business Studies and serves on the editorial boards of the Journal of World Business, Journal of Organizational Behavior, and European Journal of Cross-Cultural Competence and Management.

His previous academic postings have included positions at the Beedie School of Business, Simon Fraser University, the Pennsylvania State University and The University of Auckland, New Zealand, where he was also Director of the Master of International Business Program. He has held visiting positions at Koc University, Istanbul, Turkey, The Chinese University of Hong Kong, the University of Hawaii, Massey University, New Zealand, and ESCEM, Tours, France. In addition to teaching at both undergraduate and post graduate level, Dr Thomas has consulted on diversity issues with numerous organizations including, the Canadian Police College, the Royal Canadian Mounted Police, Citizenship and Immigration Canada, and Correctional Service Canada. When not writing or teaching he can often be found scraping or varnishing (or sometimes sailing) his Cheoy Lee ketch "Pounamu".

On the Resource Foundations and Triggers of Lucky Events

Abstract

Principal Topic (300-400 words)
This study takes an inductive approach to different contingencies that create lucky events for entrepreneurs. By comparing the resource base (internal versus external) and trigger (exogenous versus endogenous) of 39 lucky events, I reveal a 2x2 categorization scheme. Each category is described by a different ethos and related to a different type of activity. This study expands the scope of serendipity research (Dew, 2009), contributes to research regarding the ability to anticipate events and outcomes (Isabella, 1990), research on opportunity recognition (Kaish & Gilad, 1991; Baron, 2006; Ozgen & Baron, 2007), effectuation theory (Sarasvathy, 2001) and exaptation (Dew, Sasarvathy & Venkataraman, 2004, Chandra & Yang, 2011).

Method (200-300 words)
This is an inductive study, in the spirit of grounded theory development (Glaser & Strauss, 1967), in which themes emerge from interviews while comparing them to the extant literature. Data were collected in the form of interviews using a Life History approach (McAdams, 1993). The interviews elicited stories about significant events in the life history of the venture as perceived by the entrepreneur. Of the over 200 significant events in the evolution of 27 ventures, I focus on 39 stories in which the entrepreneurs describe the event in terms of luck. Building on a working definition of luck - a contingent event with better than expected outcomes - I contrast and compare these 39 stories using case study methods (Eisenhardt, 1989; Yin, 1994) to reveal two dominant types of contingencies: the trigger and the foundation. Triggers are categorized whether the event has endogenous or exogenous origins, and the foundation is categorized whether the event was contingent on prior internal resources (including knowledge) or one or more external resources. The latter foundation includes coincidences of multiple (interrelated) external resources unexpectedly becoming available to the entrepreneur.

The 39 stories are categorized according to the trigger and foundation to reveal four archetypes of lucky events (experimenting, trend watching, pitching, and social networking). The categorization shows that most lucky events are based on resources and related opportunities that unexpectedly become available through the entrepreneur's network; i.e., fewer events are based on experiments or other forms of knowledge generation done by the entrepreneur in isolation. Roughly half the events have exogenous (or endogenous) triggers. Interestingly, four stories are combinations of two of the four archetypes of lucky events, and can thus be interpreted as exceptionally lucky events. Analysis of the words chosen by the entrepreneurs to describe their luck shows inconsistent use of the words luck, serendipity, chance, circumstance, fortune, coincidence, happenstance, and ???out of the blue'. Perhaps mirroring the lack of an agreed upon definition of luck in the literature. Entrepreneurs use these words and descriptions interchangeably.

Results and Implications (300-400 words)
The implications of the findings in this study and the literature indicate that there are significant benefits to increasing exposure to opportunities by networking in general, as well as by ???shooting for the moon' in targeted pitches. While one cannot predict what the outcome will be, one can at least expect that there will be an outcome. However, such implications must also be taken in light of the opportunity costs involved in over-exploring opportunities, and not developing internal resources. This research synthesizes recent developments in effectuation theory, exaptation and opportunity recognition and expands these areas by being more explicit about the unpredictable nature of many entrepreneurial events.

Speaker:
Martin Bliemel is a Lecturer in Innovation and Entrepreneurship, and joined the School of Management (formerly the School of Strategy and Entrepreneurship) at the Australian School of Business, UNSW, in 2009. Since 2010, he is also the Director of the Centre for Innovation and Entrepreneurship (CIE) at UNSW. The CIE's administers the newly revised Diploma in Innovation Management, an inter-faculty undergraduate diploma, unique to UNSW, with an emphasis on experiential learning.

Prior to his PhD he worked as a mechanical engineer in one of Canada's 50 Best Managed companies, completed his MBA at Queen's University, ran a non-profit organization, and started a business consulting firm specializing in technology commercialization. For 5 years, he was also a mentor with New Ventures Business Competition (Canada's largest business plan competition) and a presentation room manager at the Angel Forum (Canada's oldest angel network). Martin draws on these experiences for his research on entrepreneurial networks of high-tech entrepreneurs, and their evolution. Additional research interests include industry emergence with focus on the bio-nano industry, and innovation systems. New projects include investigation of the motivations and aspirations of entrepreneurs, and the role of luck and reactivation of dormant ties.

Martin is a Visiting Scholar in our Discipline (through to the end of 2012), and can be found in room 441 working on revise-and-resubmissions to Entrepreneurship: Theory & Practice and the Journal of Business Venturing, while also pursuing new submissions to these journals and more.

THURSDAY THE 8TH NOVEMBER
12:30 pm - 13:30 pm
The Darlington Centre Room #6

RSVP
E frank.schoenig@sydney.edu.au

Evolutionary Models of Behavioural Choice

The overall environment in which agents make choices has evolved rapidly. There is now a vast proliferation of alternatives. In many cases, the products are complex and difficult to evaluate. Further, greater connectivity means that agents have become much more aware of the decisions, ideas and behaviour of others.

In such circumstances, we observe two key features of the outcomes of agent behaviour. First, right-skewed non-Gaussian distributions of outcomes at a point in time. Second, turnover of the ranking of alternatives over time.

I consider models of agent behavioural choice which are compatible with this empirical evidence.

Global Business Market Research: From Information Vending to Knowledge Café

Analyzing Online Customer Review Engagement

Power Distance Belief, Power and Charity Giving

Four studies examined the link between power distance belief (PDB) - the tendency to accept inequalities in society - and charity giving. Results suggested that the effect of PDB depended on the respondents' perceived power. Among high PDB consumers, power was positively associated with charity giving, whereas among low PDB consumers, power did not influence charity giving. These results are traced to the differential empathy felt by high power people towards low power people in the two types of systems. Theoretical and managerial contributions are discussed.

Technologies of ironic revelation: enacting consumers in neuromarkets

Neuroscience is increasingly considered a possible basis for new business and management practices. A prominent example of this trend is neuromarketing - a relatively new form of market and consumer research that applies neuroscience to marketing by employing brain imaging or measurement technology to anticipate consumers' response to, for instance, products, packaging or advertising. In this paper, we draw attention to the ways in which certain neuromarketing technologies simultaneously reveal and enact a particular version of the consumer. The revelation is ironic in the sense that it entails the construction of a contrast between what appears to be the case - consumers' accounts of why they prefer certain products over others - and what can be shown to be the case as a result of the application of the technology - the hidden or concealed truth. This contrast structure characterises much of the academic and popular literature on neuromarketing, and helps explain the distribution of accountability relations associated with assessments of its effectiveness.

Ethnographic Stories and the Strategic Development of the Firm

Ethnography is a popular research method in a growing number of organizations. Companies such as Intel or Harley Davidson have found ethnography to be essential in creating customer-centric capabilities in organizations. Ethnography has helped companies develop an in-depth understanding of consumer segments leading to empathetic product designs and new market opportunities.

However, despite recent efforts to formalize what we know about the use of ethnographic methods as a form of consumer research (Cefkin 2009; Malefyt 2009; Sunderland and Denny 2007), major gaps persist in our understanding of the way ethnography is used within companies.

In this presentation, we will present the findings of a two-year study designed to examine how ethnography contributes to the development of market knowledge and the strategic development of the firm. We draw from extensive fieldwork in the world of commercial ethnography, including interviews with ethnographers, innovation consultants, advertising executives, market researchers and business executives who are involved in ethnographic projects. Our analysis focus on the properties of ethnography as a type of narrative knowledge.

We already know that storytelling is a powerful tool: stories delight, inspire us and they help us understand by imprinting a picture of the world in our minds. Most successful brands are built on evocative storylines and characters. Yet we rarely talk about market research as a form of storytelling, nor do we examine the specific properties of narrative knowledge as a way to build strategies. Our work looks at the power of ethnographic stories in an organizational context.

How Users Shape Markets

Users are recognised as key actors in processes of innovation, including technology design, commercialisation and appropriation. This paper shifts the focus from user influence over technology, to how user activity contributes to shape markets. Three principal user roles are synthesized from user-technology research, those of 'user', 'developer' and 'mediator'. Based on the literature on market shaping, we identify five sub-processes in which users could potentially be involved: 'generating market representations', 'establishing market rules and regulations', 'configuring exchange agents', 'framing the mode of exchange', and 'qualifying the objects of exchange'. We then explore user participation in shaping existing markets through four complementary case studies: an effort to standardize customer service in the market for diagnostics instruments, the use of frequent flyer programmes in the market for air travel, the development and spread of car sharing schemes, and the growth of file sharing of digital media via The Pirate Bay. Taken together, the cases provide examples of users assuming all three user roles and becoming involved in all five sub-processes of market shaping, although the level of involvement varies. The paper contributes to our understanding of innovation processes and the presumed link between users and markets by showing that user involvement goes beyond shaping exchange objects, and that users may be involved not only in the establishment of markets, but also in their ongoing organising. The paper also adds to our understanding of market shaping processes by empirically demonstrating various roles via which users participate in efforts to reshape markets.

Degrees of Separation and Locus of Control in Services Networks

The role of the distribution channel in high-technology products and services contexts is investigated using an exploratory investigation of the practices of high technology vendors and their partners. New forms of product service network can be seen to be developing; these can be represented as value-led ecosystems in which value is appropriated in different forms by different actors at different times. These ecosystems exhibit a number of tensions from coopetition and separation of service roles to a potential change in locus of channel coordination from the OEM to the customer. Trust and expert power are found to be the coordinating functions within these ecosystems.

Engineering Cooperation: Mean bad birds vs Kind Friendly Chickens

The development of cooperative relations within and between firms plays an important role in the successful implementation of business strategy. How to produce such relations is less well understood. I build on work in relational contract theory and the evolution of cooperation to examine the conditions under which group based incentives outperform individual based incentives and how they produce more cooperative behavior. Group interactions are modeled as iterated games in which individuals learn optimal strategies under individual and group based reward mechanisms. The space of possible games is examined and it is found that, when individual and group interests are not aligned, group evaluation and reward systems lead to higher group performance and, counter-intuitively, higher individual performance. Such groups include individuals who, quite differently to free-riders, sacrifice their own performance for the good of the group. I discuss the implications of these results for the design of incentive systems in business and academia.

Extraneous Factors in Judicial Decisions

Are judicial rulings based only on laws and facts? Legal formalism holds that judges apply legal reasons to the facts of a case in a rational, mechanical and deliberative manner. In contrast, legal realists argue that the rational application of legal reasons does not sufficiently explain judges' decisions and that psychological, political, and social factors influence judges' rulings. We test the common caricature of realism that justice is "what the judge ate for breakfast" in sequential parole decisions made by experienced judges. We record the judges' two daily food breaks, which result in segmenting the day's deliberations into three distinct "decision sessions." We find that the percentage of favorable rulings drops gradually from approximately 65% to nearly zero within each decision session and returns abruptly to approximately 65% following a break. Our findings suggest that judicial rulings can be swayed by extraneous variables that should not influence legal decisions.

Living in Celebrity Society

On television, in magazines and books, on the internet, and in films: celebrities of all sorts seem to take up a lot of space. The cross-over between the celebrity and politics appears to be intensifying, with actors and pop stars becoming politicians, politicians needing to function in the same way as celebrities, and increasingly rely on their association with celebrities for their political effectiveness. The more one looks around the world today, the more one sees social, economic and political life being organized around celebrities.

But we still understand very little about what different celebrities have in common with each other, and what celebrity actually means. The aim in this presentation, drawing on the book Celebrity Society (Routledge), is to reflect on the deeper significance of celebrity for our everyday life, our sense of self, and relations of status, recognition and power. It will look at the way in which the figure of 'the celebrity' is bound up with the emergence of modernity, as well as how the 'celebrification of society' is not just the twentieth-century product of Hollywood and television, but a long-term historical process, beginning with the printing press, theatre and art. It will sketch the central elements of what can be called 'celebrity society', organized around the distribution of visibility, attention and recognition.

Drawing on the work of the sociologist Norbert Elias, it is possible to see contemporary celebrity society as the heir (or heiress) of court society, reproducing but also democratising the role of the aristocracy. Understanding 'celebrity's secret' also means engaging with the idea of celebrity as driven by the 'economics of attention', because attention has become a vital and increasingly valuable resource in the information age.

Weathering the storm? Multinational companies and human resource management through the global financial crisis

'The Thought of Work': a presentation by Professor John Budd, University of Minnesota on his recent book

Professor John Budd, University of Minnesota, will visit the WWRG in February 2012 and present a seminar on his very recent book: 'The Thought of Work' an erudite and engaging interdisciplinary synthesis of ten meanings of work that shows the centrality of work in our lives, identity politics, and society.

John W. Budd is the Industrial Relations Land Grant Chair and Director of the Center for Human Resources and Labor Studies at the University of Minnesota. He is the author of 'Employment with a Human Face: Balancing Efficiency, Equity, and Voice', and 'Labor Relations: Striking a Balance', and coauthor of 'Invisible Hands, Invisible Objectives: Bringing Workplace Law and Public Policy into Focus'.

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Challenges to Teaching Evidence-Based Management: Why Students Might Not Believe Some of Our Research Findings

Authors

Dan V. Caprar, Australian School of Business Sara L. Rynes, University of Iowa Boram Do, Boston College Jean Bartunek, Boston College

Abstract

Teaching from an evidence-based perspective requires, first and foremost, that we focus on teaching principles where the science is clear (Rousseau & McCarthy, 2007). Unfortunately, however, research shows that people often do not believe even well-documented research findings, both in management and in many other scientific areas.

Although there are many specific reasons that people might not believe particular research results, there is at least one general principle that might explain resistance to a number of scientific findings: that certain findings may threaten people's emotional well-being and evoke a need for self-protection. This possibility is investigated in a study examining students' reactions to an essay arguing that employers should hire for intelligence because it is the best predictor of job performance. Consistent with predictions from self-enhancement and self-protection theories, students in general preferred essays arguing that employers should hire for emotional intelligence and fit over the essay promoting hiring for intelligence. In addition, students with lower grade point averages (GPA, a partial but highly salient indicator of intelligence) showed lower agreement with the essay than did those with higher GPAs. Finally, the relationship between GPA and agreement with the essay was mediated by test-taking anxiety, as well as affected by the order in which the intelligence essay was presented. Implications for future research and for teaching potentially threatening research findings are discussed.

Bio

Dan V. Caprar is a Lecturer at the Australian School of Business, University of New South Wales. He received his MBA and a PhD from the University of Iowa in the United States, and Australia is the fourth country he has lived and worked in, after Romania, the United Kingdom, and the United States.

Dan's research focus is on the interaction between business and its socio-cultural context, with particular interest in the impact of foreign business on local cultures. Dan's most recent work was published in the Journal of International Business Studies, in a special issue showcasing the use of qualitative methods in international business. He recently joined the Editorial Board for the Journal of International Business Studies, and will soon start as the Regional Associate Editor for the International Journal of Cross-Cultural Management. He is also a member of the Research Committee for the Academy of Management's International Management Division.

Dan teaches Cross-Cultural Management in the Master of Commerce program at UNSW, and also a Leadership course in the AGSM MBA program in Hong Kong.

A particular area of interest for Dan is what makes people believe (or not believe) research findings, with the objective of bridging the gap between academics and practitioners. The seminar presentation is based on a work-in-progress paper related to this interest.

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