Pacific Accounting Review

Neale G. O'Connor; F. Johnny Deng; Jingsong Tan

doi: 10.1108/01140581111130643pmid: N/A

Purpose – The purpose of this paper is to investigate the influence of liberalization forces, political constraints (on labor decisions) and formal control mechanisms (i.e. delegation of decision authority, objective performance measurement and merit‐based rewards) on the performance of Chinese State‐owned enterprises (SOEs). Design/methodology/approach – A survey instrument was used to collect data from functional managers representing over 500 SOEs. Structural equation modeling was used to analyze the data. Findings – The findings revealed significant and positive path relationships between liberalization forces and each of the formal control mechanisms, leading to firm performance. The findings also reveal that political constraints have a significant and negative path relationship with objective performance measures and firm performance. Originality/value – The evidence provided in this study adds to our understanding of the role the institutional environment plays in the structuring and management of the firm in transitional economies. The topic is of interest, given the pace of modernization of firms in emerging economies, and the differences in the institutional “rules of the game” that exist compared with developed economies. Both of these forces have the potential to affect not only the management control practices in emerging economy firms, but also other firms that do business with them.

Russel Poskitt; Alastair Marsden; Nhut Nguyen; Jingfei Shen

doi: 10.1108/01140581111130652pmid: N/A

Purpose – The purpose of this paper is to examine the impact of the introduction of anonymous trading on the liquidity of New Zealand Stock Exchange (NZX)‐listed stocks. Design/methodology/approach – The paper examines the impact of the switch to anonymous trading on effective spreads and adverse selection costs using both univariate and multivariate approaches and data spanning a 240‐day event window period. The paper also compares the NZX's share of trading in cross‐listed stocks before and after the switch to anonymous trading to determine if the change in market architecture improved the NZX's competitiveness vis‐à‐vis the Australian Stock Exchange (ASX). Findings – The paper finds that effective spreads and adverse selection costs increased following the switch to anonymous trading across the broad range of NZX50 stocks, consistent with an increase in information risk in the post‐event period. However, the paper also finds that the switch to anonymous trading improved the NZX's market share in trading in cross‐listed stocks vis‐à‐vis the ASX. Originality/value – The results show that market liquidity deteriorates in a more opaque environment due to the greater information risk facing investors. This is in sharp contrast to prior research, which reports that similar changes in pre‐trade transparency on other exchanges have improved market liquidity. The results suggest that although institutional investors and the NZX itself might well have benefited from the switch to anonymous trading, liquidity demanders face higher transaction costs as a result.

Natasja Steenkamp; Jill Hooks

doi: 10.1108/01140581111130661pmid: N/A

Purpose – This paper seeks to examine the extent to which pictures are used to communicate intellectual capital (IC) information and the changes in volume of IC disclosure when pictures are included. Design/methodology/approach – A content analysis was conducted to determine the impact that pictures have on IC reporting (ICR) results. In determining the extent to which pictures are used in corporate annual reports the paper compares frequencies of IC reported in pictures as proportions of: total IC reported, total pictures and total pages. A key assumption underlying content analysis is that the volume of disclosure signifies the importance of the item(s) being disclosed. The paper compares the volume of IC items disclosed with and without pictures to determine which items firms signal as being most important. Using these volumes the paper determines which of the sampled firms use pictures as a popular reporting mechanism to disclose their IC resources. Findings – A significant portion (42 per cent) of ICR is made in picture form and the majority of pictures (66 per cent) communicate messages about IC resources. Therefore, the volumes of IC items disclosed change significantly when pictures are included. It is found that many firms use pictures to disclose their IC resources, particularly employees and brands which may indicate that these are their most important IC items. Practical/implications – A significant part of IC is reported in picture form in annual reports. Excluding pictures when analysing content in annual reports will result in ICR not being fully captured, a partial understanding of what IC is disclosed and misunderstanding of what IC items firms consider as being important. Originality/value – The authors incorporate pictures into their content analysis. Pictures are not normally included in IC disclosure studies.

Carolyn J. Cordery; Carolyn J. Fowler; Khairil Mustafa

doi: 10.1108/01140581111130634pmid: N/A

Purpose – The purpose of this paper is to explore the factors influencing the non‐adoption of Extensible Business Reporting Language (XBRL) technology. Design/methodology/approach – This exploratory study analyses interview data obtained from key XBRL stakeholders on the relative importance of environmental, organisational and technological context factors to ascertain why adoption has not occurred. Findings – The research finds three reasons for XBRL non‐adoption. First, the lack of a government “push” for XBRL technology results in organisational ignorance. Second, it appears that organisations do not believe that XBRL will beneficially reduce compliance costs. Third, complexity in developing the structured language (taxonomy) for XBRL use has significant budgetary implications. Research limitations/implications – As qualitative research, this study does not claim to be generalisable or objective. However, the rich data were analysed from a diverse group of interviewees experienced and knowledgeable in respect of XBRL development and adoption. Social implications – Governments' promises to reduce organisational compliance costs may be a reason for them to invest extensive taxpayers' dollars into XBRL. However, organisations are sceptical they will benefit, requiring government to “push” the technology. Until government servants can forecast the real benefits to argue for increased budgets to develop a comprehensive taxonomy, widespread adoption of XBRL is unlikely to occur. Originality/value – The non‐adoption of XBRL highlights the difficulties encountered when enthusiastic professionals can see the potential of a business solution, and yet are impotent to execute it. Environmental and technological contextual factors need to “push” organisations, as with XBRL, organisations do not demand, or “pull”, the technology.