Are We Lost in Translation? The Impact of Using Translated IFRS on Decision-Making


Accounting in Europe

2015, vol. 12, n°1, pp.107-125

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Translation, Language, Decision-making

International Financial Reporting Standards (IFRS) are issued in English and subsequently translated into a multitude of languages to make them accessible to non-English-speaking IFRS users. In an international work context, IFRS users apply either the original English version or a translated version of an IFRS standard to input information presented in different languages. While research has reported numerous challenges inherent in IFRS translation, we know very little about the actual impact of using different languages on decision-making. Based on a series of 2 × 2 between-subjects experiments with German students who possessed different levels of accounting knowledge, we investigate the influence of language on decision-making. Our experimental manipulations entail the language of the accounting standard used (English vs. German) and the language of the input case information (English vs. German). Our German participants made decisions about a series of cases relating to IAS 24 Related Party Disclosures. Based on an expert benchmark solution for the cases, we determine the quality of participants’ decisions. We find that the use of IAS 24 in the participants’ mother tongue (German) has a positive impact on decision-making quality. We also find some support for a positive influence of the native language of the input case information relative to English input case information. Moreover, participants’ accounting knowledge and English language skill are positively associated with decision-making quality

Asset Divestment as a Response to Media Attacks in Stigmatized Industries


Strategic Management Journal

août 2015, vol. 36, n°8, pp.1205-1223

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Stigma, Impression management, Divestment, Media, Categories, Reputation, Defense industry

In stigmatized industries characterized by social contestation, hostile audiences, and distancing between industry insiders and outsiders, firms facing media attacks follow different strategies from firms in uncontested industries. Because firms avoid publicizing their tainted-sector membership, when threatened, they can respond by divesting assets from that industry. Our analyses of the arms industry demonstrate that media attacks on the focal firm and its peers both increase the likelihood of divestment for the focal firm. Specifically, attacks on the focal firm are the most consequential, followed by attacks on peers in the same industry subcategory, and by attacks on peers in different subcategories. These findings shed new light on divestment as a response to media attacks in stigmatized industries and lead us to rethink impression management theory

Attribute-Level Heterogeneity


Management Science

avril 2015, vol. 61, n°4, pp.885-897

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Heterogeneity, Mixture models, Hierarchical Bayes, Conjoint analysis, Reversible-jump MCMC, Segmentation

Modeling consumer heterogeneity helps practitioners understand market structures and devise effective marketing strategies. In this research we study finite mixture specifications for modeling consumer heterogeneity where each regression coefficient has its own finite mixture—that is, an attribute finite mixture model. An important challenge of such an approach to modeling heterogeneity lies in its estimation. A proposed Bayesian estimation approach, based on recent advances in reversible-jump Markov chain Monte Carlo methods, can estimate parameters for the attribute-based finite mixture model, assuming that the number of components for each finite mixture is a discrete random variable. An attribute specification has several advantages over traditional, vector-based, finite mixture specifications; specifically, the attribute mixture model offers a more appropriate aggregation of information than does the vector specification facilitating estimation. In an extensive simulation study and an empirical application, we show that the attribute model can recover complex heterogeneity structures, making it dominant over traditional (vector) finite mixture regression models and a strong contender compared to mixture-of-normals models for modeling heterogeneity

Banque et nouvelles technologies: La nouvelle donne


Revue d'Économie Financière

2015, vol. 4/2015, n°120, pp.17-22

Départements : Economie et Sciences de la décision

Les nouvelles technologies engendrent pour chacun un nouveau rapport au monde et induisent une série de révolutions en chaîne, dans notre vie quotidienne comme dans l’entreprise. La première est une révolution commerciale, qui bouleverse les rapports entre les producteurs, les distributeurs et les clients, aux bénéfices de ces derniers. La révolution technologique positionne également les collaborateurs au centre de l’entreprise, avec des impacts sur l’organisation. Enfin, le facteur sociétal est désormais prépondérant, car la société devient une véritable partie prenante de l’entreprise, Internet et réseaux sociaux obligent.L’entreprise-banque, et plus spécifiquement la banque commerciale, n’échappe pas à ces bouleversements, bien au contraire, étant au coeur de l’activité économique. La banque doit donc se réinventer, sans perdre de temps. Les gens n’ont pas moins besoin de banques et la relation intuitu personae reste un élément fondamental du métier de banquier. Selon nous, la seule issue passe par la réinvention de la banque de proximité capable de promouvoir ce que nous pouvons appeler « la banque sans distance » qui offre plus de praticité, de pertinence et de personnalisation du conseil.

Behavioral Reasons for New Product Failure: Does Overconfidence Induce Overforecasts?


Journal of Product Innovation Management

septembre 2015, vol. 32, n°5, pp.825-841

Départements : Marketing

Efforts to organize and integrate research findings on new product performance determinants have lagged since the last significant overview paper appeared over a decade ago. Importantly, this literature has not considered entire categories of factors that are known to affect managerial decisions and behavior, namely those that pertain to decision-makers' cognitive limitations and incentive structures. This research empirically investigates one specific cognitive distortion heretofore neglected in studies of new product commercialization—overconfidence, commonly defined in the literature as excessive belief in one's own abilities to generate superior performance. To lay the groundwork for subsequent exploration, the paper first introduces a behavioral model that both organizes well-understood new product performance determinants and illuminates others heretofore not studied, namely incentive alignment and cognitive limitations and biases. The model summarizes extant research and allows development of research hypotheses related to overconfidence. The hypotheses and empirical investigation motivated by the model address two questions about the impact of overconfidence on new product commercialization activities. First, the study explores whether overconfidence is associated with overforecasting new product demand. Second, it evaluates two complementary mechanisms that may account for overconfidence-induced overforecasts. The empirical findings are based on data generated in the course of management simulation workshops conducted among graduate students at three leading business schools in India. Three hundred thirty participants played individually four rounds of a computer-based simulation game that involved decisions pertaining to new product development (including product formulation) and commercialization strategies. The decisions were captured and analyzed using statistical techniques. The results reveal that decision-makers' overconfidence is associated with a higher likelihood of overforecasting new product sales. The observed effect is fully mediated by flawed tactical decisions that dampen demand, namely elevated product pricing. Sensitivity analyses show that these results are robust to a number of alternative explanations. However, the study finds no evidence implicating overconfident individuals as poor “innovators”—overconfident and nonoverconfident decision-makers experienced comparable market demand for their new products. The paper concludes with a discussion of the results and provides specific recommendations for practice

Boards’ Response to Shareholders’ Dissatisfaction: The Case of Shareholders’ Say on Pay in the UK


European Accounting Review

décembre 2015, vol. 24, n°4, pp.727-752

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Executive compensation, Say-on-Pay, shareholders' vote, dissatisfaction

In 2002, the United Kingdom adopted a regulation allowing shareholders to cast non-binding (advisory) votes on their firm's Directors' Remuneration Report during annual general meetings (the 'Say-on-Pay' rule). This study evaluates a decade of this regulation and examines how it affected the behavior of shareholders and boards in a sample of FTSE 350 firms during the period 2002-2012. I find evidence that shareholder dissatisfaction increases with excess CEO compensation. This relationship does not exist for the expected level of compensation, suggesting that shareholders take a sophisticated approach when casting their vote. Boards do not appear to respond to shareholder dissatisfaction systematically, however they do respond selectively by reducing the excessiveness of CEO compensation when performance is poor. Boards also seem to respond swiftly to shareholder dissatisfaction. There is evidence that the probability of CEO turnover increases with shareholder dissatisfaction. Overall, the evidence suggests that 'Say-on-Pay' regulation addressed regulatory concerns about transparency, accountability, and performance linkage

Bridging the Service Divide Through Digitally Enabled Service Innovations: Evidence from Indian Healthcare Service Providers


MIS Quarterly

mars 2015, vol. 39, n°1, pp.245-264

Départements : Informations Systems and Operations Management, GREGHEC (CNRS)

Mots clés : Developing countries, Digital divide, Healthcare, India, Institutions, Process view, Service divide, Service innovation, Service science, Service systems, Social entrepreneurship, Society

The digital divide is usually conceptualized through goods-dominant logic, where bridging the divide entails providing digital goods to disadvantaged segments of the population. This is expected to enhance their digital capabilities and thus to have a positive influence on the digital outcomes (or services) experienced. In contrast, this study is anchored in an alternative service-dominant logic and posits that viewing the divide from a service perspective might be better suited to the context of developing countries, where there is a huge divide across societal segments in accessing basic services such as healthcare and education. This research views the prevailing differences in the level of services consumed by different population segments (service divide) as the key issue to be addressed by innovative digital tools in developing countries. The study posits that information and communication technologies (ICTs) can be leveraged to bridge the service divide to enhance the capabilities of service-disadvantaged segments of society. But such service delivery requires an innovative assembly of ICT as well as non-ICT resources. Building on concepts from service-dominant logic and service science, this paper aims to understand how such service innovation efforts can be orchestrated. Specifically, adopting a process view, two Indian enterprises that have developed sustainable telemedicine healthcare service delivery models for the rural population in India are examined. The study traces the configurations of three interactional resources—knowledge, technology, and institutions—through which value-creating user-centric objectives of increasing geographical access and reducing cost are achieved. The theoretical contributions are largely associated with unearthing and understanding how the three interactional resources were orchestrated for service-centric value creation in different combinative patterns as resource exploitation, resource combination, and value reinforcement. The analysis also reveals the three distinct stages of service innovation evolution (idea and launch, infancy and early growth, and late growth and expansion), with a distinct shift in the dominant resource for each stage. Through an inductive process, the study also identifies four key enablers for successfully implementing these ICT-enabled service innovations: obsessive customer empathy, belief in the transformational power of ICT, continuous recursive learning, and efficient network orchestration.

Business Partners: Complementary Assets, Financing, and Invention Commercialization


Journal of Economics and Management Strategy

été 2015, vol. 24, n°2, pp.228-252

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

This paper assesses the relative importance of the complementary assets and financial capital that business partners may add to the original inventor-entrepreneur. Projects run by partnerships were five times as likely to reach commercialization as those without business partners, and they had mean revenues approximately 10 times as great as projects run by solo entrepreneurs. These gross differences may be due both to partners impacting business success that is, who the particular partners were, and to selection of the type of project or of whom to select as a partner. After controlling for selection effects and observed/unobserved heterogeneity, the smallest estimate of partners' complementary assets approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean. Our findings suggest that a critical policy option to increase commercialization rates and revenues for early-stage businesses is to support the market for finding skilled partners

Central clearing and collateral demand


Journal of Financial Economics

mai 2015, vol. 116, n°2, pp.237-256

Départements : Finance, GREGHEC (CNRS)

Mots clés : Central clearing party; Margin; Credit default swap; Collateral; Client clearing

We use an extensive data set of bilateral credit default swap (CDS) positions to estimatethe impact on collateral demand of new clearing and margin regulations. The estimatedcollateral demands include initial margin and the frictional demands associated with themovement of variation margin through the network of market participants. We estimatethe impact on total collateral demand of more widespread initial margin requirements,increased novation of CDS to central clearing parties (CCPs), an increase in the number ofclearing members, the proliferation of CCPs of both specialized and non-specialized types,collateral rehypothecation practices, and client clearing. System-wide collateral demand isincreased significantly by the application of initial margin requirements for dealers,whether or not the CDS are cleared. Given these dealer-to-dealer initial margin requirements,mandatory central clearing is shown to lower, not raise, system-wide collateraldemand, provided there is no significant proliferation of CCPs. Central clearing does,however, have significant distributional consequences for collateral requirements acrossmarket participants

Common knowledge: a finitary calculus with a syntactic cut-elimination procedure


Logique et Analyse

juin 2015, vol. 58, n°230, pp. 279-306

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

In this paper we present a finitary sequent calculus for the S5 multi-modal system with common knowledge. The sequent calculus is based on indexed hyper-sequents which are standard hypersequents refined with indices that serve to show the multi-agent feature of the system S5. The calculus has a non-analytic right introduction rule. We prove that the calculus is contraction- and weakening-free, that (almost all) its logical rules are invertible, and finally that it enjoys a syntactic cut-elimination procedure. Moreover, the use of the non-analytic rule can be restricted so that the calculus can be considered as suitable for proof search