Innovation and borrower discouragement in SMEs

In this paper, we investigate whether innovative small- and medium-sized enterprises (SMEs) are more likely to be discouraged from applying for external finance than non-innovators. These so-called discouraged borrowers are credit worthy SMEs who choose not to apply for external finance despite the fact that this is needed. We find that SMEs undertaking pure product and joint product and process innovation have a significantly higher incidence of borrower discouragement than non-innovative counterparts. Moreover, radical and incremental product innovators are more likely to be discouraged relative to non-innovative counterparts. Innovative activity can increase borrower discouragement for a myriad of reasons including fear of rejection, reluctance to take on additional risk, negative perceptions of the funding application process and perceived negative economic conditions. Overall, our results suggest a need for targeted policy interventions in order to alleviate borrower discouragement within innovative SMEs, as well as a closer alignment between innovation and SME finance policy.

Auditor Choice and the Informativeness of 10-K Reports

This study provides new evidence on the influential role of external auditors in enhancing the informativeness of form 10-K annual reports to shareholders. Specifically, we find that the client’s choice of a Big 4 auditor (PwC, EY, KPMG, and Deloitte) versus a non-Big 4 auditor contributes to cross-sectional variations in 10-K disclosure volume. We also document that the benefit of enhanced disclosures provided by Big 4 auditors is more pronounced for audit clients with poorer accrual quality and those with higher information asymmetry. Furthermore, we introduce the portion of 10-K length unexplained by operating complexity and observable client characteristics as a new proxy for audit firm effort. Specifically, we find that abnormally long disclosures are associated with higher audit fees and longer audit report lag, which implies that an incremental level of audit effort can be inferred from the discretionary component of 10-K disclosures. As audit effort is costly, a greater volume of 10-K disclosures can be expected to be associated with an improvement in the quality of financial reporting. Overall, our findings show that auditors play more than a simple attestation role in the financial reporting process, and that the quality of financial reporting in a company’s 10-K annual report is a joint product of the effort and decisions of both a company’s managers and its auditors.

Can We Commit Future Managers to Honesty?

In a competitive business environment, dishonesty can pay. Self-interested executives and managers can have incentive to shade the truth for personal gain. In response, the business community has considered how to commit these executives and managers to a higher ethical standard. The MBA Oath and the Dutch Bankers Oath are examples of such a commitment device. The question we test herein is whether the oath can be used as an effective form of ethics management for future executives/managers—who for our experiment we recruited from a leading French business school—by actually improving their honesty. Using a classic Sender-Receiver strategic game experiment, we reinforce professional identity by pre-selecting the group to which Receivers belong. This allows us to determine whether taking the oath deters lying among future managers. Our results suggest “yes and no.” We observe that these future executives/managers who took a solemn honesty oath as a Sender were (a) significantly more likely to tell the truth when the lie was detrimental to the Receiver, but (b) were not more likely to tell the truth when the lie was mutually beneficial to both the Sender and Receiver. A joint product of our design is our ability to measure in-group bias in lying behavior in our population of subjects (comparing behavior of subjects in the same and different business schools). The experiment provides clear evidence of a lack of such bias.

Joint Product Framing (Display, Ranking, Pricing) and Order Fulfillment Under the Multinomial Logit Model for E-Commerce Retailers

Problem definition: We study a joint product framing and order fulfillment problem with both inventory and cardinality constraints faced by an e-commerce retailer. There is a finite selling horizon and no replenishment opportunity. In each period, the retailer needs to decide how to “frame” (i.e., display, rank, price) each product on his or her website as well as how to fulfill a new demand. Academic/practical relevance: E-commerce retail is known to suffer from thin profit margins. Using the data from a major U.S. retailer, we show that jointly planning product framing and order fulfillment can have a significant impact on online retailers’ profitability. This is a technically challenging problem as it involves both inventory and cardinality constraints. In this paper, we make progress toward resolving this challenge. Methodology: We use techniques such as randomized algorithms and graph-based algorithms to provide a tractable solution heuristic that we analyze through asymptotic analysis. Results: Our proposed randomized heuristic policy is based on the solution of a deterministic approximation to the stochastic control problem. The key challenge is in constructing a randomization scheme that is easy to implement and that guarantees the resulting policy is asymptotically optimal. We propose a novel two-step randomization scheme based on the idea of matrix decomposition and a rescaling argument. Managerial implications: Our numerical tests show that the proposed policy is very close to optimal, can be applied to large-scale problems in practice, and highlights the value of jointly optimizing product framing and order fulfillment decisions. When inventory across the network is imbalanced, the widespread practice of planning product framing without considering its impact on fulfillment can result in high shipping costs, regardless of the fulfillment policy used. Our proposed policy significantly reduces shipping costs by using product framing to manage demand so that it occurs close to the location of the inventory.

One Big Social‒Ecological System

Galápagos is no longer the “little world within itself” that Darwin visited: it is now one big social‒ecological system (SES): the evolutionary fitnesses of all, or nearly all, Galápagos organisms are today a joint product of natural conditions and human activity. But this also makes Galápagos an effective microcosm. At first glance, the place seems totally unique: it is small and isolated, its habitats are extreme, its wildlife is peculiar, and its initially tiny human population is diverse and growing rapidly. But on a larger scale, are those not all true about Earth itself? The small size and isolation of Galápagos may exacerbate some threats and challenges, its position in the heartland of El Niño may exaggerate the swings and changes of contemporary climate, and its land area for human use is close to a record low (3%, although human impact reaches to every corner of the archipelago), but these conditions make both problems and solutions show up faster in Galápagos than elsewhere. Galápagos is now a valuable test bed for the sustainability challenges facing the whole of planet Earth.

Production Function and Robotization - How Can CES Technology Help?

Depending on the workers qualification, the use of robots is perceived either as a helpful tool or as a competitor. We analyze the substitution of capital for labor, including the case where the product is entirely made by robots. We use CES production functions and their derived cost functions (the later being surprisingly missing in the literature). We focus on short-run and the case of an elasticity of substitution greater than 1. We highlight a level of product for which the cost is identical regardless of the factor used. As a joint product, we provide a foundation to cost functions exhibiting first increasing and then decreasing returns to scale (a so far missing justification to the usually assumed shape of cost functions).

Business Strategy for PT Finansindo Mikro Facing Competition in Microfinance Business

Financial technology or fintech, has developed rapidly and made matters easier for storing, borrowing or investing online or with mobile devices. The competition can be seen through peer -to-peer (P2P) lender accounts, which have increased from year to year. Finansindo is engaged in micro-business as a P2P that targets women entrepreneurs who cannot access conventional banks or are not bankable. such as banks and microfinance institutions (MFIs). The External and internal environment will be analyzed to understand current business conditions. Analysis of the external environment contains PEST, industry forces and competitor analysis. Internal environment includes 7P marketing mix analysis and STP analysis. SWOT Analysis and Ansoff Matrix are used to obtain three strategic choices, namely: market development, product development, and market development, together with product development. Based on the analysis, the chosen strategy is market development. Product development is less attractive due to regulations limiting P2P. Market development and joint product development are not attractive due to regulation and limited resources. In conclusion, Finansindo recommends focusing on market development, which offers the same target but in other geographical areas. Adjusting to the previous segment and with relatively high ceiling considerations, Finansindo is recommended to operate in Aceh, North Sumatra, and Riau.

Psychology and politics of COVID-19 misinfodemics: Why and how do people believe in misinfodemics?

Misinfodemics related to COVID-19 have negatively impacted people’s lives, with adverse health and psycho-sociopolitical outcomes. As the scientific community seeks to communicate evidence-based information regarding misplaced preventive strategies and misinformed help-seeking behaviors on global multifaceted systems, a secondary risk has emerged: the effects of misinfodemics on the public. Published articles on PubMed, EMBASE, Google Scholar and Elsevier about COVID-related misinfodemics have been considered and reviewed in this article. This review examines the mechanisms, operational structure, prevalence, predictive factors, effects, responses and potential curtailing strategies of misinfodemics of COVID-19. The present article shows that the popular variants of COVID-19 misinfodemics could be the joint product of a psychological predisposition which is either to reject information from experts or perceive the crisis situation as a product of misinfodemics mechanisms and partisan ideological motivations. The psychological foundations and political disposition of misinfodemics have implications for the development of strategies designed to curtail the negative consequences on public health.

On the joint product graphs with respect to dominant metric dimension

Some concepts in graph theory are resolving set, dominating set, and dominant metric dimension. A resolving set of a connected graph [Formula: see text] is the ordered set [Formula: see text] such that every pair of two vertices [Formula: see text] has the different representation with respect to [Formula: see text]. A Dominating set of [Formula: see text] is the subset [Formula: see text] such that for every vertex [Formula: see text] in [Formula: see text] is adjacent to at least one vertex in [Formula: see text]. A dominant resolving set of [Formula: see text] is an ordered set [Formula: see text] such that [Formula: see text] is a resolving set and a dominating set of [Formula: see text]. The minimum cardinality of a dominant resolving set is called a dominant metric dimension of [Formula: see text], denoted by [Formula: see text]. In this paper, we determine the dominant metric dimension of the joint product graphs.

Effects of search, experience and credence attributes versus suggestive brand names on product evaluations

Purpose This research aims to examine how credence, search and experience attributes compete with suggestive brand names that are incongruent with the attributes they cue (e.g. expensive EconoLodge Motel, short-lasting Duracell battery and joint-stiffening JointFlex pill). Design/methodology/approach This study relies on experimental studies, together with analyses of variance, t-tests and logistic regressions. Findings Incongruent suggestive brand names can distort product evaluations and alter perceptions of product performance in joint product judgments involving contradictory credence attributes; they can misdirect product evaluations even if the search attributes conflict with competitor brands. Furthermore, they are more likely to backfire if contradictory experience attributes are readily available to consumers. Research limitations/implications This test of the role of incongruence between suggestive brand names and actual product features includes key concepts that can inform continued studies, such as search attributes that consumers can readily observe, experience attributes that can be observed only after product use and credence attributes that might not be observed even after use. Practical implications This study provides applicable guidelines for managers, consumers and policymakers. Originality/value The findings expand beyond prior literature that focuses on memory-based, separate evaluations of advertised benefits and inferences or expectations of unavailable attributes. Specifically, this study details the implications of congruence between the suggestive brand names and different types of attributes observable at different consumption stages.