Asymmetric Monitoring:
Good versus Bad News Verification
John Christensen/Joel S. Demski
We analyze a principal-agent setting with multiple sources of contracting information in which the signal from each source can be unmistakably interpreted as "good" or "bad" news. We then ask whether it is best to condition the acquisition of one of the information sources on whether the earlier reporting source has reported "good" or "bad" news. That is, is it efficient to "chase the good news" or to "chase the bad news"? The answer depends on whether the earlier source is publicly observed or self-reported by the agent. We also explore ties to institutional features, and in particular conservative accounting treatments.
pp. 206-222
DCF Valuation and Imputed Interest on Equity Increase - Implications of the Austrian Tax System in a Model with Stochastic Profitability
Stefan Bogner/Manfred Frühwirth/Markus Schwaiger
As early as the 1980s, several European countries implemented tax systems with imputed equity interest provisions. Since its tax reform in 2000, Austria has also allowed the deduction of (fictitious) imputed equity interest from the tax base. This paper integrates the resulting equity-related tax benefits into the valuation of corporations. Using the equity method with special attention to the deductibility of imputed equity interest, we calculate the value of a business in a multi-period model. We find that a market-to-book ratio endogenous to the model results. We then demonstrate how to apply the APV method in a model with imputed equity interest. For each business - and thus also for an unlevered company - an adjustment is necessary to account for the tax shield resulting from equity financing.
Therefore, an unlevered company that does not use equity tax shields has to be chosen as a common denominator in the application of the APV method, in which a closed-form solution is presented for the value of this tax benefit. Finally, we derive a weighted average cost of capital that considers the deductibility of imputed equity interest. We show that an additional term correcting for equity tax shields is necessary.
pp. 223-257
The Development of Trust and Implications for Organizational Design: A Game- and Attribution- Theoretical Framework
Peter Eberl
Trust has been one of the central topics in organization research for the last years. Although the positive economic effects on the existence of trust relationships are relatively indisputable, the consequences for organizational design remain unclear. Against this background, the paper explores the conditions of trust development by using game and attribution theory in order to derive implications for organizational design. I argue that trust is based on emotional bonding and thus cannot be fully controlled by organizational measures. Rather, organizational structure can provide a context that fosters closer relationships.
pp. 258-273
Drivers of Team Performance:
What Do We Know and What Have We Still To Learn?
Ruth Stock
The investigation of drivers of team performance has become the main issue of numerous publications in the last decades. Researchers of different disciplines in business administration (especially organization theory, marketing research, and human resources management) and psychology have been interested in that topic.
This article aims at providing deeper insights into the existing research on antecedents of team performance by a systematic literature review. More specifically, this literature review is based on 72 empirical studies which investigate the antecedents of team performance empirically. Based on the literature review, a systematic evaluation of the studies is provided and areas for future research are discussed.
pp. 274-306
