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We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and that lower percentage tick sizes are not associated with higher turnover. We consider the implications of these findings for the recent decimalization of stock trading in the United States, and conclude that decimal trading is likely to result in lower stock prices (due to stock splits) with no substantial change in dollar trading volume.

Models for valuing an option to exchange one commodity for another, or any combination of n commodities for some combination of m others, are applied to the capital budgeting problem. By analyzing a project in the exchange option pricing framework, it is possible to draw wellfounded conclusions about the effects on project value of such attributes as flexibility and innovativeness. A project which uses systems that have many alternative uses is recognized by such analysis to be more valuable than an otherwise identical project which uses very specialized systems, because the former provides a greater array of choices. Likewise, a company which thinks of a new use for some kind of system will be able to generate a project which has a higher value than any other company could generate from the same system. By including divestiture as one of the alternatives in the portfolio of options representing a project, it is possible to incorporate project abandonment into the analysis, which is an improvement over earlier methodologies which simply add the value of the “abandonment option” to the discounted cash flow net present value. Finally, shortcomings of the options approach to capital budgeting are discussed.

A capital budgeting decision procedure appropriate for choosing the continuance, replacement, or abandonment of an asset‐in‐place is examined. The optimal replacement decision on an asset already in service requires simultaneous consideration of project life, project chaining, and possible abandonment points for both the asset‐in‐place and the replacement asset. The additional information required for the suggested procedure over the traditional replacement procedure is generally manageable and a practical solution procedure is feasible.

Many libraries have been affected by the proliferation and price inflation of serial publications in recent years. Academic libraries have been especially hard‐hit since they are trying to cope with increasing subscription prices while facing budget reductions or very small increases. Although requesting additional funds and freezing new subscriptions help as short‐term measures, some libraries have undertaken serials evaluation and cancellation programs as a more permanent solution. Our university library conducted a comprehensive serials review, which is described here. This article explains the justification for the review and describes the methodology used and the problems encountered in canceling serials subscriptions.

This study investigates whether cyclical turning points in the U.S. and U.K. stock markets are unevenly distributed over the year, that is, whether they are more likely to occur during certain months of the year. In examining this form of periodic seasonality, a Markov switching‐model is applied to U.S. and U.K. stock market chronologies of monthly peak and trough dates for the periods May 1835 through March 2000 and May 1836 through September 2000, respectively. In order to provide some evidence on robustness with respect to the sample data, results are obtained for the entire sample periods as well as for various sub‐. For both markets, the evidence indicates that while the probability of moving from an expansion to a contraction does not depend on the month of the year, the probability of switching from a contraction is greater for some months. Additionally, the durations of contractions, but not expansions, are dependent on the month of the year in which they begin.

One important issue international firms must face involves the evaluation and control of credit risk. Many studies dealing with international credit management have focused on the practices used by multinational enterprises. In this study we take a different approach to this topic by analyzing the credit management decisions made by 188 U.S. foreign subsidiaries. We examine many aspects of the foreign subsidiary manager's credit policies including credit standards, credit terms, collection efforts and customer creditworthiness. The results of this study indicate that credit management practices of foreign subsidiaries are similar to those used by parent companies. In addition, the findings show that foreign managers generally use theoretically‐preferred methods when making credit decisions.

This research aims to explore and explain the determinants of irrational financial decision making, especially the day‐of‐the week anomaly, by using psychological approach.

As it is a conceptual paper, this research explores the psychological biases literature and links it to the day‐of‐the week anomaly. Using Ellis' ABC (Activating Event, Belief, and Consequences) Model, the authors survey and classify the stimulant as the occasion that stimulates the psychological biases of investors, and these psychological biases will bring a consequence in behaviour which is irrationality in weekend effect.

Adopting Ellis' ABC model, the paper constructs a theoretical framework that link the psychological biases and day‐of‐the week anomaly. The theoretical model is also given as a proposed model for future empirical research.

This paper contributes to research by giving the theoretical model and its framework. The latter, future research can examine the proposed psychological biases as the determinant of day‐of‐the week anomaly empirically.

This paper conceptually builds a framework and derives a proposed equation model linking the psychological biases (weather, moon, attention bias, heuristic bias, regret, and cognitive bias) to the day‐of‐the week anomaly.

The purpose of this paper is to investigate how internationalisation of corporate governance mechanisms influences firm performance.

The paper is based on the data collected from annual reports of the year 2004, from all 239 Swedish corporations listed on the Stockholm Stock Exchange, on which a quantitative analysis was performed.

The findings suggest that internationalisation of corporate governance does not have a straightforward influence on firm performance, which can be due to: the fact that mechanisms with governance functions have several functions, of which governance is but one; and the fact that governance mechanisms cannot be analyzed in isolation, since they are included in a coherent corporate governance strategy.

The paper is the first to investigate the corporate governance mechanisms' internationalisation issue.

The present paper aims to question the rationale of paying a high remuneration to executives who are presiding over loss-making companies. The neoclassical wage model asserts that the remuneration of executive directors is positively related to their company’s financial performance. However, evidence suggests that executives can obtain a higher level of personal compensation regardless of how the company performs.

The relationship between executive remuneration and performance for viable but loss-making Bombay Stock Exchange (BSE)-listed companies has been studied for 2009-2011. The paper examines the determinants of the level of executive remuneration as well as discerns the strength of the remuneration–performance relationship, both at the overall and across various board hierarchical levels, using the JM sensitivity and HL elasticity models.

Results for univariate and multivariate analyses highlight that both the remuneration–performance sensitivity and elasticity are weak. Further, factors such as ownership structure, risk and industry class moderate the remuneration–performance elasticity. It seems that it is only the lower rung of executive directors whose cash remuneration gets adversely affected with the performance of the company.

The paper offers valuable insight into the complexities relating to the remuneration performance relationship by putting forth a multi-theoretical perspective. The fact that executives are drawing a whopping remuneration while their companies continue to report disappointing results suggests that a catalytic role has to be played by the government so as to ensure that executive remuneration policies and practices are consistent with the company’s long-term objectives and control environment.

This study aims to understand the dynamics underpinning the exit and re-entry strategies adopted by multinational enterprises (MNEs) in an emerging market, Pakistan.

This study undertook an in-depth historical case study of Yamaha Motorcycles, which had initially entered Pakistan as a joint venture but had then exited and re-entered as a wholly owned subsidiary.

This study found that, despite its status as a market leader and one of the older players in the Pakistani market, changing market dynamics in the 2000s – especially the increased competition brought by more affordable (inexpensive) Chinese motorcycles and the weak enforcement of industrial policies – had pushed Yamaha Motorcycles to exit. Another factor that had contributed to its exit were differences in risk perception and strategies with its local joint venture partner (a Pakistani business group). Hence, both firm-level and institutional factors had played significant roles in Yamaha’s market exit. This study further found that re-entering in a wholly owned subsidiary operation mode had been beneficial for the firm, as it gained a significant market share due to its focus on innovation and on capturing a market niche, which had earlier not been its main focus. The findings also suggest that opportunity logics and multiple forms of learning can be important for a firm’s re-entry into a host market – such as experiential (i.e. learning from experience) and vicarious learning (i.e. learning from other organizations, including suppliers and competitors) in an emerging market context, in which institutions evolve amid political and policy uncertainty. Finally, this study found that exit and re-entry timing is an important factor for the development of competitive advantage in a host market.

This study is among the few to have investigated the exit and re-entry strategies of MNEs in emerging markets. The relatively short time during which Yamaha Motorcycles had been out of the market had benefited it on its re-entry, as the firm had been able to capitalize on its prior learning and ties to suppliers’ networks.