Sidney J. Gray and Helen Kang
This chapter explores accounting transparency as an important aspect of corporate accountability. After defining accounting transparency and identifying factors that influence it, the chapter considers the debate between providers and users of accounting information on how transparent accounting information should be defined, measured, and reported. It also discusses the roles of international standard-setting organizations in promoting accounting transparency as well as measures of accounting transparency, including disclosure level and market reactions. Finally, it looks at future prospects for setting international accounting standards, paying particular attention to International Financial Reporting Standards.
This chapter examines the potential discrepancies in the regulation applied to overseas issuers, as opposed to domestic issuers, of four leading financial centers. They are New York, London, Hong Kong, and Singapore. It consists of three substantive sections. The first section will reviews existing literature and empirical evidence concerning the motivations and current state of cross-listing. The second section examines the listing route for an overseas issuer and inquires how it might differ from a domestic listing in the host country. This chapter particularly concerns the potential discrepancies of rules between a foreign listing and a domestic listing and asks if those discrepancies would lead to better or inferior investor protection. The third section examines the continuing regulation of foreign-listed companies, reviewing some regulatory concerns involving cross-listed companies and discussing what can be done to curb the problems, for instance, through regulatory cooperation between home and host regulators.
C.A. Knox Lovell and Emili Grifell-Tatje
We study various analytical frameworks relating productivity change to change in the cost structure and cost efficiency of the firm. We begin by motivating a focus on the cost side, and not the revenue side, of the profit objective of the firm. We continue by relating the cost accounting tool of standard cost variance analysis to the economics tool of cost efficiency analysis. We focus on managerially controllable drivers of cost efficiency, including productivity change and its components. We conclude by noting some significant empirical applications of the analysis, by recommending cost efficiency analysis as a valuable tool for benchmarking against the best, and by suggesting some new directions for research.
Praveen K. Kopalle and Robert Hansen
There has been much interest in pricing strategies and tactics both in the research and practice domains. This chapter examines the recent literature on pricing with a focus on blending an economics approach with that of marketing. It begins with a brief discussion of the fundamental principles of optimal pricing, which serves as the foundation for the more advanced pricing methods. The chapter provides an in-depth discussion in the areas of second degree price discrimination, bundling strategies, revenue management, pricing using conjoint analysis, dynamic pricing, price psychology, personalized pricing, competitive considerations in pricing (Nash and Stackelberg games), dynamic structural models in pricing, and pricing in two-sided markets. The end of the chapter provides brief concluding remarks.
Brenda A. Barnes
This article first introduces some essential airline pricing and revenue management (PRM) terms and concepts, and then briefly reviews historical events that have shaped the field of airline PRM. It discusses current PRM practices, including strategy, tactics, processes, distribution, and systems, and, finally, highlights trends that will impact the future practice of PRM. The article focuses on the current practices of the major US airlines, which include Delta Air Lines, United-Continental Airlines, American Airlines, and US Airways and account for approximately 75 per cent of US industry revenue; and the practices of the largest low-cost carriers, such as AirTran, JetBlue, and Southwest Airlines.
All Ties Are Not Created Equal: Institutional Equity Ties, IPO Performance, and Market Growth of New Ventures
Yong Li and Beiqing Yao
This chapter examines whether and how different types of institutional ties affect new venture performance at different organizational stages. The authors propose that equity ties to government agencies will enhance the speed and returns of initial public offerings (IPOs) but hinder post-IPO market growth. By contrast, equity ties to research institutes will contribute positively to both IPO performance and post-IPO market growth. The authors build their arguments on how the two types of institutional ties meet new ventures’ need to be legitimate and competitive pre- and post-IPO. They test their hypotheses with new ventures in the pharmaceutical and chemical industries that went public in China and find supportive evidence.
Armin Schwienbacher and Benjamin Larralde
This article discusses crowdfunding as an alternative way of financing projects, with a focus on small, entrepreneurial ventures. It first provides a description of crowdfunding and discusses existing research on the topic. The next section looks at crowdfunding in the context of entrepreneurial finance and thereby describes factors affecting entrepreneurial preferences for crowdfunding as a source of finance. Thereafter it elaborates different business models used to raise money from the crowd, in particular with respect to the structure of the crowdfunding process. Building on this discussion, the article presents and discusses extensively a case study, Media No Mad (a French start-up). It concludes with recommendations for entrepreneurs seeking to make use of crowdfunding and with suggestions for researchers about yet-unexplored avenues of research.
Ramon P. DeGennaro
This article focuses on a class of angel investors that lies between venture capitalists and the typical informal individual angel investor. It discusses why people become angel investors. It then covers angel investors in groups and discusses group traits and their advantages. The section after that discusses angel investments and the investment process. The article discusses characteristics of a good deal, the financial parameters of an investment, and the angel's exit from the investment. A review of the literature on expected returns on angel investments and the problems with measuring them follows. The final section summarizes.
Liang Han and Song Zhang
This article reviews literature on the important role played by asymmetric information in entrepreneurial finance from two perspectives: asymmetric information and relationship lending, and the theoretical modeling of asymmetric information. Then it examines the relationship between capital market conditions and entrepreneurial finance and attempts to answer two questions: Why is the capital market condition important for entrepreneurial finance? and What are the effects of capital market conditions on entrepreneurial financial behavior in terms of discouraged borrowers, cash holding, and the availability and costs of finance?
Andrea Prat and Wouter Dessein
By bringing together multiple workers, organizations can perform tasks that are outside the reach of any individual. In order to be productive, however, workers must coordinate their actions. Often this requires communicating information that is dispersed throughout the organization, but communication is time-consuming and costly. As Arrow (1974) noted, given the importance of communication both as an opportunity and as a cost, organizations will strive to optimize information flows between workers. As a result, communication patterns within an organization will not be random but will be shaped by the goals of the organization. An attention network describes how communication flows and, as a result, how decisions are made within the organization. This chapter reviews optimal and equilibrium attention networks.