Volume 03 Number 01
The Economics of Industrial Espionage: A Game Theory Approach
Yun Hsing (YH) Cheung
This paper studies the impact of industrial espionage as an alternative strategy to R & D on cost-reducing process innovation. A two-stage theoretic game model is constructed to capture the effects of industrial espionage. It is found that the strategic effect of an innovative firm's R & D can be positive, zero or negative depending on the degree of misappropriation. When substantial misappropriation occurs, the strategic effect of R & D and the innovative firm's relative profit are both negative. As a result, the innovative firm stops its R & D activities altogether. Nevertheless, the value of relative profits can be restored back to positive, by sufficiently forestalling industrial espionage, so that R & D activities are carried out again.
The Production of Special Purpose Employee Reports: A Discussion of Australian Evidence and Future Research Possibilities
Craig Deegan, Pamela Kent and Justine Lyons
The objective of this paper is to provide some information about the practice and policy of Australian firms in relation to the production of employee reports. Australian legislative and professional pronouncements do not require the production of special purpose reports for employees. However, past studies and observation indicate that the production of employee reports is a widespread practice within Australia and overseas. A survey of Australian firms is undertaken and reported in this paper. One aim of the paper is to document contemporary Australian corporate policies for employee reporting. A further aim of the paper is to highlight a number of issues which could be investigated in subsequent research activities.
Risk Analysis Effectiveness in Capital Budgeting and Firm Specific Contingencies
Simon Ho and Richard Pike
Prior research indicates that use of the sophisticated capital budgeting techniques may not be appropriate for all firms and any benefits derived are, in part, contingent upon firm specific characteristics. The current study seeks to examine the main characteristics identified in the literature which enable firms to capture main of the benefits from the use of probabilistic risk analysis in capital budgeting. The organizational characteristics studied were information systems, reward and control schemes, corporate strategy, and perceived environmental predictability. A matched- pairs correlational analysis indicated a significant positive association between the relative earnings performance of risk analysis using firms and the use of investment control systems. The implications of these findings for research and practice are discussed.
The Utilisation of Conjoint Analysis Within a Multi-criteria Decision-making Setting to Determine the Strength of Various Influences Upon Foreign Direct Investment
Conjoint analysis is applied to the problem of ascertaining the relative strength of factors that influence the foreign direct investment (FDI) decision by multinational corporations. Finance directors from some of the world's largest multinationals evaluated investment opportunities in different countries, within a multi-criteria decision-making setting. Analysis of "part-worth" utilities reveals the importance of the dimensions of the FDI decisions, and the relationship between attributes of these dimensions. The partworth utilities are then used as an input to a discriminant and cluster analysis which reveals further interesting results.
Accuracy of Financial Analysts' Forecast: Some UK Evidence
Kwaku K Opong and Andrew Wilson
This study examines the accuracy of analysts' forecasts. The determinants of forecasting accuracy and forecasting behaviour are evaluated in this study. Earnings forecast are deemed useful to users of accounting information. The relevancy of an earnings forecasts may depend to a large extent on the accuracy of these forecasts. The results of the study are broadly consistent with prior empirical evidence from both the United Kingdom and United States. The results indicate that financial analysts forecasts are more accurate than random walk models and that firm size, uncertainty about earnings, and the number of analysts that follow a particular firm are important factors in forecast accuracy.
Warrants as a Strategic Tool for Control: An Expensive Gamble?
Ameen Talib, Surekha Vaidya and MA Islam
It is well known that warrants are frequently used by target companies as a poison pill to deter takeover bids. This paper provides evidence that in takeovers warrants may also be used by the bidding company as a strategic tool for control. The takeover of Singapore Land (Singland) by United Industrial Corporation (UIC) in the Stock Exchange of Singapore (SES) is used as a case study to highlight some of the potential risks of using warrants as such a tool in takeovers.