Angela Andrews, Pradyot Sen and Jens Stephan
The purpose of this study is to use implied volatilities from exchange traded options to examine the interaction between analysts’ forecast revisions and the market’s perception…
Abstract
Purpose
The purpose of this study is to use implied volatilities from exchange traded options to examine the interaction between analysts’ forecast revisions and the market’s perception of uncertainty about firm value.
Design/methodology/approach
The authors examine how characteristics of individual forecast revisions, e.g. news and changes in dispersion of forecasts, affect changes in implied volatilities, whether analysts use the observable changes in implied volatilities to inform their forecast revisions and whether changes in dispersion of forecasts are correlated with changes in implied volatilities.
Findings
The authors find that good (bad) news forecast revisions reduce (increase) investors’ perception of uncertainty about firm value, analysts do not appear to use changes in implied volatilities to shade their forecast revisions to good/bad news and dispersion of forecasts are a reasonable proxy for uncertainty about firm value as indicated by their correlation with implied volatilities.
Originality/value
Recent research on analysts’ forecast revisions and management forecasts has focused on risk perception rather than value. This paper extends this work with a risk metric based on market transactions in both a short and long window analysis, as well as univariate and multivariate analysis.
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Mary P. Mindak, Pradyot K. Sen and Jens Stephan
The purpose of this paper is to document at the firm-specific level whether firms manage earnings up or down to barely miss or meet/beat three common earnings threshold targets…
Abstract
Purpose
The purpose of this paper is to document at the firm-specific level whether firms manage earnings up or down to barely miss or meet/beat three common earnings threshold targets, namely, analysts’ forecasts (AFs), last year’s earnings and zero earnings, and whether the market rewards or punishes up versus down earnings management.
Design/methodology/approach
The authors assign each firm to its most likely earnings target using an algorithm that reflects management’s economic incentives to manage earnings. The authors place reported (managed) earnings in standard width intervals surrounding the earnings target. Jacob and Jorgensen’s (2007) proxy for unmanaged earnings is also placed into the intervals. Thus, a firm with unmanaged earnings in the interval just below the target and reported earnings in the interval just above the target would be deemed to have managed earnings up. The authors also document whether the market rewarded or punished the earnings management strategy with three-day cumulative abnormal returns.
Findings
The authors find that most firms which barely meet/beat their target did so by managing earnings up. The market rewarded this earnings management strategy. The market did not, however, reward firms that managed earnings down (i.e. created a cookie jar of reserves) to barely meet/beat their target. Thus, the meet/beat premium does not apply to all firms. The authors’ explanation is that most earnings targets are set by AFs; that these are usually the highest of the three targets; and that these are, therefore, considered to be “good” firms by the market because they have the ability to find that extra penny to meet/beat the target. Firms that were assigned to the last year’s earnings and/or zero earnings thresholds are not as “good” because they usually do not target the highest threshold and must manage earnings down, as they are more likely to have to reverse income-increasing accruals booked during interim quarters.
Research limitations/implications
The primary limitation in this study is the algorithm used to assign firms to their threshold target. It is ad hoc in nature, but relies on reasonable assumptions about the management’s incentives to manage earnings.
Practical implications
This study has practical implications because investors and regulators can adopt this methodology to identify potential candidates for earnings management that would allow further insight into accounting and reporting practices. This methodology may also be useful to the auditor who wants to understand the tendencies of a new client. It may also be a useful tool for framing auditing hypotheses in a way that would be appropriate for clients who manage earnings.
Originality/value
This paper documents for the first time at the firm-specific level the market reaction to upward versus downward earnings management designed to barely meet/beat the earnings threshold. It also documents the frequency with which firms target the three earnings thresholds and the frequency with which firms miss or meet/beat their threshold.
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The rise of East Asia to most dynamic center of processes of capital accumulation on a world scale is a phenomenon of the 1970s and 1980s. As a first approximation, the extent of…
Abstract
The rise of East Asia to most dynamic center of processes of capital accumulation on a world scale is a phenomenon of the 1970s and 1980s. As a first approximation, the extent of this rise can be gauged from the trends depicted in figure 1. The figure shows the most conspicuous instances of “catching‐up” with the level of per capita income of the “organic core” of the capitalist world‐economy since the Second World War. As defined elsewhere, the organic core consists of all the countries that over the last half‐century or so have consistently occupied the top positions of the ranking of GNPs per capita and, in virtue of that position, have set (individually and collectively) the standards of wealth which all their governments have sought to maintain and all other governments have sought to attain. Broadly speaking, three regions have constituted the organic core since the Second World War: North America, Western Europe and Australasia (Arrighi, 1991: 41–2; Arrighi, 1990).
Christoph Borzikowsky, Stephan Raimer and Jens Kowalski
Not only since the Corona pandemic, working from home has become an important part of the modern workplace. The purpose of this study is to identify environmental as well as…
Abstract
Purpose
Not only since the Corona pandemic, working from home has become an important part of the modern workplace. The purpose of this study is to identify environmental as well as psychological factors that could predict employees’ weekly desired home office.
Design/methodology/approach
Two cross-sectional online surveys were conducted during April and July 2022 at a German company for digital services (Study 1: N1 = 1,912; Study 2: N2 = 1,132). In Study 1, the authors developed a multiple linear regression model with backward selection for employees’ weekly desired home office. Predictor variables were sociodemographic as well as psychological variables. After that, the authors validated the exploratory found model in Study 2.
Findings
In the final prediction model, the weekly desired home office was positively affected by two age groups (26 to 35 years and 36 to 45 years) and commuting distance (from 10 km upwards). In addition, it was also negatively affected by leader status (i.e. being a leader), stress experience at work and identification with the company.
Research limitations/implications
Some sociodemographic variables that should be relevant for employees’ choice to work from home were not measured in this study.
Practical implications
The paper contributes to both theory and practice. The validated prediction model may guide personnel managers in finding the best-fitting working solution for their employees.
Originality/value
A newly developed model for predicting employees’ weekly desired home office is presented.
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Stephan Bögel, Stefan Stieglitz and Christian Meske
The purpose of this paper is to introduce a novel role model-based approach for modelling collaborative business processes. The authors present an architecture for…
Abstract
Purpose
The purpose of this paper is to introduce a novel role model-based approach for modelling collaborative business processes. The authors present an architecture for subject-oriented business process modelling relying on the role concept and the demonstration of collaboration patterns expressed by role models.
Design/methodology/approach
The authors present a literature review and they identify requirements for collaborative business process modelling. Moreover, roles are introduced as the enabling concept for collaborative business process modelling. The concept of roles offers a dynamic type aspect as a linking element to business process modelling as well as the ability to model collaboration aspects as they are central elements of social software.
Findings
The authors propose a role-based approach to use the potential of social media for business process modelling of collaborative processes. The approach helps to overcome traditional business process modelling drawbacks like “model-reality divide” and “lost innovations.”
Research limitations/implications
The proposed approach and derived prototype architecture have not been tested yet and therefore still need to be empirically proved and verified. However, the conceptual work will help other researchers as well as practitioners to further elaborate the model and to develop prototypes.
Practical implications
The paper includes implications for the improvement of business process modelling in team-based and knowledge-centric organizations, which strive for an optimization of collaboration management.
Originality/value
This work is the first to introduce a role model-based approach to overcome traditional drawbacks of business process modelling.
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Jens Gammelgaard, Frank McDonald, Heinz Tüselmann, Christoph Dörrenbächer and Andreas Stephan
The purpose of this paper is to explore how the proportion of skilled jobs in subsidiaries is influenced by resource gaps created by subsidiary development.
Abstract
Purpose
The purpose of this paper is to explore how the proportion of skilled jobs in subsidiaries is influenced by resource gaps created by subsidiary development.
Design/methodology/approach
This paper develops a range of propositions that connect the constructs of effective autonomy and organisational relationships with subsidiary employment. Propositions are built on an extensive literature review based on such approaches as the resource‐based view, transaction cost economics, network approach, and institutional theory.
Findings
The framework developed in the paper suggests that a higher proportion of employment in skilled jobs in subsidiaries is most likely in cases where subsidiary entrepreneurship, role specialization, and absorptive capacity are higher. Conversely, the proportion is likely to be lower in cases of increased institutional distance from the parent company.
Practical implications
The conceptual model can help parent company managers assess the likely effects of developments in effective autonomy and organisational relationships in their subsidiaries. Subsidiary managers can assess the possible impact of such factors as development of entrepreneurial activities, specialization within the multinational corporation supply chain and enhancement of absorptive capacity on the proportion of skilled jobs.
Originality/value
This paper is the first to describe subsidiary development from a skilled job perspective. It further develops the concept of autonomy and introduces the term “effective autonomy”.
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Dr Thomas Kohlborn, Dr Oliver Mueller, Professor Jens Poeppelbuss and Dr Maximilian Roeglinger
Michael J. Seiler, Peter Shyu and J.L. Sharma
Reviews previous research on the announcement effects of changes in US Federal Reserve policies and presents a study of the impact of federal funds rate and discount rate changes…
Abstract
Reviews previous research on the announcement effects of changes in US Federal Reserve policies and presents a study of the impact of federal funds rate and discount rate changes since the current chairman took office (1988) on the treasury bills/bonds and stock markets. Uses event study methodology to show that there is no significant effect on cumulative excess returns for any of the three markets, although the treasury bill market displayed the greatest reaction; and that market reactions were similar for either type of rate change.
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Mareba M. Scott and Andrew J. Frew
This chapter examines the factors influencing actual in-trip information and communications technology usage by leisure tourists and the potential of adopted technologies to…
Abstract
This chapter examines the factors influencing actual in-trip information and communications technology usage by leisure tourists and the potential of adopted technologies to support sustainable tourism. Thirty semi-structured interviews were conducted in the city of Edinburgh. A thematic analysis of the data revealed that consistent with the literature, perceived ease of use, perceived usefulness, and social influence affected usage while in-trip. Tourists’ level of personal innovativeness also moderated smartphone ownership and actual usage while in the destination. Location-based services and social media proved to be the applications which enjoyed the most usage and the greatest opportunities to promote sustainability.
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Jen Nelles and Tim Vorley
Over the past 20 years public policy has sought to promote and formalise the socio‐economic role of universities under the auspices of the so called “third mission”. The purpose…
Abstract
Purpose
Over the past 20 years public policy has sought to promote and formalise the socio‐economic role of universities under the auspices of the so called “third mission”. The purpose of this paper is to consider how the third mission relates to, and has the capacity to reinforce the core missions of teaching and research.
Design/methodology/approach
By highlighting the key limitations of contemporary debate the paper bridges the conceptual model/case‐study dichotomy that characterises the literature. The paper draws on an ongoing study of higher education institutions in the UK and Europe.
Findings
The paper contends that triangulating teaching, research, and third stream activities reinforces the respective dynamics of each component through their recursive and reciprocal development.
Research limitations/implications
The paper forms the foundations of a de novo research agenda to better understand the dynamics of the third mission as a central facet of the contemporary university.
Practical implications
The paper has implications for policy‐makers and institutional strategy alike – identifying an unparalleled opportunity for institutional development by linking teaching, research, and third stream activities.
Originality/value
By highlighting the importance that universities need to embody an “inherent idea” the paper contends the third mission presents the capacity for institutional development beyond the third mission.