Currency carry trading is an investment strategy whereby traders invest in high-interest rate currencies and fund in low-interest rate ones. Historically, this trade has generated substantial returns. Typical analysis of the trade has focused predominantly on currencies that yield high interest rate differentials, as the Australian dollar on the long side ... Read More

Shopkeepers and store managers should base decisions on whether to discount or destroy leftover perishable goods on consumer behavior, an innovative new study has found. While marking down prices can provide welcome revenue for foodstuffs that would otherwise go to waste, this can also result in “intertemporal cannibalization”—a reduction in full-price sales ... Read More

Litigation can be a costly process for firms. As such, the question of how the risk of securities class action lawsuits affects corporate decisions has drawn a great amount of research interest in accounting and finance literature. To measure ex ante litigation risk, previous studies have generally used industry membership, either alone or in conjunction ... Read More

Overconfidence among top managers may be “instrumental” to firm innovation, according to a pioneering new study of more than 6,000 U.S. and Chinese companies. Given the crucial role played by executives in every aspect of business operations, it is little wonder that their personalities affect firms’ decisions and performance. However, researchers have ... Read More

Debt covenants are an important monitoring mechanism that govern cash-flow rights and control rights between borrowers and lenders. Although it is believed that enforcement and property rights are primary determinants of a firm’s ability to write comprehensive contracts, there is currently little evidence supporting if or how these legal institutions affect ... Read More

Agriculture—the science of cultivating soil, growing crops, and raising livestock—is the primary economic sector of many developing economies throughout the world. Within this context, farmer producer organisations (FPOs) aim to combat poverty by reducing inefficiencies in agricultural markets. For example, FPOs work closely with farmers to integrate ... Read More

The real economic effects of financial reporting can be understood by looking into the joint effect of managerial overconfidence and accounting conservatism, specifically regarding the quality of corporate decisions. For instance, under what conditions does accounting conservatism improve corporate performance? Within the context of a firm, a chief executive ... Read More

Non-compete clauses in employment contracts are widely used in countries like the US to forbid certain employees, such as CEOs and specialised technicians, from working with the competition when their contract is terminated. The aim is to safeguard employers’ proprietary information and investment in human capital. But research by Tai-Yuan Chen, Guochang ... Read More

In recent years, there has been a rapid increase in the number of new technologies, tools, and platforms; for example, social networking, cloud computing, and data analytics. As such, IT projects that were developed for use in traditional client-server environments must now be deployed across these new platforms, be able to leverage big data, and have ... Read More

Exporting plays a significant role in the development of a firm, as can provide an opportunity to access knowledge from other sources, which can facilitate organizational learning. As such, governments in emerging markets (EMs) encourage exporting, as it is considered a key indicator of firms’ technological sophistication. That said, EM exporters often ... Read More