Free cash flow, agency costs, and the affordability method of advertising budgeting

This is the published version. Copyright 2002 by the American Marketing Association.The allocation of excess cash has long been recognized in the finance literature as an important aspect of the basic agency conflict between managers and owners. In the advertising budgeting context, marketing scholars report that firms possessing high levels of cash tend to spend more on advertising than what seems necessary or desirable. Indeed, this positive link between excess cash and advertising expenditures constitutes a part of what is commonly referred to as the affordability method of advertising budgeting. Surprisingly, there has been little research that attempts to view this association as a manifestation of agency costs. Therefore, this article examines whether agency costs, as measured by managerial ownership, moderate the relationship between excess cash and advertising expenditures. On the basis of received theory, the authors conceptualize that agency costs will first decrease, then increase, and then decrease again with the level of managerial ownership

Information Technology and the Volatility of Firm Performance

This study investigates the impact of IT investments and several contextual variables on the volatility of future earnings. We find evidence that IT investments strongly increases the volatility of future earnings and that four contextual factors - industry concentration, sales growth, diversification, and leverage - strongly moderate IT's effect on earnings volatility. It is notable that while the main effect of IT spending on earnings volatility is strongly positive, not all of the moderators are. This suggests that there are conditions under which the positive risk-return relation can be either offset or even reversed. Taken together, these results suggest an explanation for what has recently been termed the "new productivity paradox", i.e. the apparent under-investment in information technology despite evidence of highly positive returns for doing so

The Value Relevance Of Announcements Of Transformational Information Technology Investments

In this paper, we examine the influence of IT strategic role to extend the findings of Im et al. (2001), Chatterjee et al. (2002) and Dos Santos et al. (1993). Specifically, we demonstrate that IT strategic role can explain how IT investments in each of the IT strategic roles might affect the firm\u27s competitive position and ultimately firm value. We find positive, abnormal returns to announcements of IT investments by firms making transformative IT investments, and with membership in industries with transform IT strategic roles. The results of previous research are not found to be significant when IT strategic role is included as an explanatory variable. These results provide support for the value of capturing the IT strategic role of a firm\u27s IT-related competitive maneuvering in studies striving to understand the conditions under which IT investments are likely to produce out-of-the-ordinary, positive returns

Assessing the Impact of Premier Information Systems Research over Time

In this study we examine the influence of premier information systems research over time to assess the maturity of the Information Systems (IS) field and its impact on subsequent IS and non-IS research. 19,357 citations from the Social Science Citation Index (SSCI) (1982-2004) are attributed to 879 articles published in MIS Quarterly (MISQ), Information Systems Research (ISR), and the IS articles from Management Science (MS) between 1982 and 2004, and this number continues to increase over time. The results suggest that research in premier IS journals has an influence on other disciplines as 7,137 citations come from outside the IS discipline and this number continues to increase over time. Of particular note is the consistent increase over time in citations of premier IS research articles from the management, engineering and physical sciences, organizational behavior, and computer science disciplines. Given recent debates regarding the IT artifact, we also directly test the impact of articles that address the IT artifact and those that do not. We find that articles that directly address the IT artifact are cited significantly more often than those that do not, consistent with arguments made by Benbasat et al. [2003]

Assessing Leading Institutions, Faculty, and Articles in Premier Information Systems Research Journals

This study provides a current assessment of the impact of various Information Systems (IS) articles, and the productivity of IS researchers and institutions. Using a data set of Information Systems articles that spans 15 years, we conducted a scientometric study of the field. The articles are drawn from three premier IS journals. We use citation analysis to demonstrate the impact of articles on institutions and individuals in the IS field. In addition, we identify IS topics with the highest impact. The results indicate that leading productive institutions have changed over time, and problematically, institutions outside of North America are poorly represented. We compare our results with earlier productivity findings created using alternative metrics

The Consequences of Information Technology Control Weaknesses on Management Information Systems: The Case of Sarbanes-Oxley Internal Reports

In this paper, we investigate the association between the strength of information technology controls over management information systems and the subsequent forecasting ability of the information produced by those systems. The Sarbanes-Oxley Act of 2002 highlights the importance of information system controls by requiring management and auditors to report on the effectiveness of internal controls over the financial reporting component of the firm’s management information systems. We hypothesize and find evidence that management forecasts are less accurate for firms with information technology material weaknesses in their financial reporting system than the forecasts for firms that do not have information technology material weaknesses. In addition, we find that this association appears to be driven by control weaknesses most directly related to data processing integrity. Our results support the contention that information technology controls, as a part of the management information system, affect the quality of the information produced by the system

Senior Executives' IT Management Responsibilities: Serious IT-Related Deficiencies and CEO/CFO Turnover

While the information systems scholarly and practice literatures both stress the importance of senior executive engagement with IT management, the recommendations for doing so remain, at best, limited and general. Examining the influence of serious IT-related deficiencies on CEO/CFO turnover within the post-SOX financial reporting context, specific CEO/CFO IT management responsibilities are identified: CEOs are shown to be held accountable for global IT management responsibilities, and CFOs are shown to be held accountable for demand-side IT management responsibilities. Implications for information systems research, management research, and information systems practice are provided

Neuromuscular Blockade with Rocuronium Bromide Increases the Tolerance of Acute Normovolemic Anemia in Anesthetized Pigs

Background: The patient's individual anemia tolerance is pivotal when blood transfusions become necessary, but are not feasible for some reason. To date, the effects of neuromuscular blockade (NMB) on anemia tolerance have not been investigated. Methods: 14 anesthetized and mechanically ventilated pigs were randomly assigned to the Roc group (3.78 mg/kg rocuronium bromide followed by continuous infusion of 1 mg/kg/min, n = 7) or to the Sal group (administration of the corresponding volume of normal saline, n = 7). Subsequently, acute normovolemic anemia was induced by simultaneous exchange of whole blood for a 6% hydroxyethyl starch solution (130/0.4) until a sudden decrease of total body O-2 consumption (VO2) indicated a critical limitation of O-2 transport capacity. The Hb concentration quantified at this time point (Hb(crit)) was the primary end-point of the protocol. Secondary endpoints were parameters of hemodynamics, O-2 transport and tissue oxygenation. Results: Hb(crit) was significantly lower in the Roc group (2.4 +/- 0.5 vs. 3.2 +/- 0.7 g/dl) reflecting increased anemia tolerance. NMB with rocuronium bromide reduced skeletal muscular VO2 and total body O-2 extraction rate. As the cardiac index increased simultaneously, total body VO2 only decreased marginally in the Roc group (change of VO2 relative to baseline -1.7 +/- 0.8 vs. 3.2 +/- 1.9% in the Sal group, p < 0.05). Conclusion: Deep NMB with rocuronium bromide increases the tolerance of acute normovolemic anemia. The underlying mechanism most likely involves a reduction of skeletal muscular VO2. During acellular treatment of an acute blood loss, NMB might play an adjuvant role in situations where profound stages of normovolemic anemia have to be tolerated (e.g. bridging an unexpected blood loss until blood products become available for transfusion). Copyright (C) 2011 S. Karger AG, Base

Clinical effectiveness and cost-effectiveness of a multifaceted podiatry intervention for falls prevention in older people : a multicentre cohort randomised controlled trial (the REducing Falls with ORthoses and a Multifaceted podiatry intervention trial)

BACKGROUND: Falls are a serious cause of morbidity and cost to individuals and society. Evidence suggests that foot problems and inappropriate footwear may increase the risk of falling. Podiatric interventions could help reduce falls; however, there is limited evidence regarding their clinical effectiveness and cost-effectiveness. OBJECTIVES: To determine the clinical effectiveness and cost-effectiveness of a multifaceted podiatry intervention for preventing falls in community-dwelling older people at risk of falling, relative to usual care. DESIGN: A pragmatic, multicentred, cohort randomised controlled trial with an economic evaluation and qualitative study. SETTING: Nine NHS trusts in the UK and one site in Ireland. PARTICIPANTS: In total, 1010 participants aged ≥ 65 years were randomised (intervention, n = 493; usual care, n = 517) via a secure, remote service. Blinding was not possible. INTERVENTIONS: All participants received a falls prevention leaflet and routine care from their podiatrist and general practitioner. The intervention also consisted of footwear advice, footwear provision if required, foot orthoses and foot- and ankle-strengthening exercises. MAIN OUTCOME MEASURES: The primary outcome was the incidence rate of falls per participant in the 12 months following randomisation. The secondary outcomes included the proportion of fallers and multiple fallers, time to first fall, fear of falling, fracture rate, health-related quality of life (HRQoL) and cost-effectiveness. RESULTS: The primary analysis consisted of 484 (98.2%) intervention and 507 (98.1%) usual-care participants. There was a non-statistically significant reduction in the incidence rate of falls in the intervention group [adjusted incidence rate ratio 0.88, 95% confidence interval (CI) 0.73 to 1.05; p = 0.16]. The proportion of participants experiencing a fall was lower (50% vs. 55%, adjusted odds ratio 0.78, 95% CI 0.60 to 1.00; p = 0.05). No differences were observed in key secondary outcomes. No serious, unexpected and related adverse events were reported. The intervention costs £252.17 more per participant (95% CI -£69.48 to £589.38) than usual care, was marginally more beneficial in terms of HRQoL measured via the EuroQoL-5 Dimensions [mean quality-adjusted life-year (QALY) difference 0.0129, 95% CI -0.0050 to 0.0314 QALYs] and had a 65% probability of being cost-effective at the National Institute for Health and Care Excellence threshold of £30,000 per QALY gained. The intervention was generally acceptable to podiatrists and trial participants. LIMITATIONS: Owing to the difficulty in calculating a sample size for a count outcome, the sample size was based on detecting a difference in the proportion of participants experiencing at least one fall, and not the primary outcome. We are therefore unable to confirm if the trial was sufficiently powered for the primary outcome. The findings are not generalisable to patients who are not receiving podiatry care. CONCLUSIONS: The intervention was safe and potentially effective. Although the primary outcome measure did not reach significance, a lower fall rate was observed in the intervention group. The reduction in the proportion of older adults who experienced a fall was of borderline statistical significance. The economic evaluation suggests that the intervention could be cost-effective. FUTURE WORK: Further research could examine whether or not the intervention could be delivered in group sessions, by physiotherapists, or in high-risk patients. TRIAL REGISTRATION: Current Controlled Trials ISRCTN68240461. FUNDING: This project was funded by the National Institute for Health Research (NIHR) Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 21, No. 24. See the NIHR Journals Library website for further project information

Applications of Field-Theoretic Renormalization Group Methods to Reaction-Diffusion Problems

We review the application of field-theoretic renormalization group (RG) methods to the study of fluctuations in reaction-diffusion problems. We first investigate the physical origin of universality in these systems, before comparing RG methods to other available analytic techniques, including exact solutions and Smoluchowski-type approximations. Starting from the microscopic reaction-diffusion master equation, we then pedagogically detail the mapping to a field theory for the single-species reaction k A -> l A (l < k). We employ this particularly simple but non-trivial system to introduce the field-theoretic RG tools, including the diagrammatic perturbation expansion, renormalization, and Callan-Symanzik RG flow equation. We demonstrate how these techniques permit the calculation of universal quantities such as density decay exponents and amplitudes via perturbative eps = d_c - d expansions with respect to the upper critical dimension d_c. With these basics established, we then provide an overview of more sophisticated applications to multiple species reactions, disorder effects, L'evy flights, persistence problems, and the influence of spatial boundaries. We also analyze field-theoretic approaches to nonequilibrium phase transitions separating active from absorbing states. We focus particularly on the generic directed percolation universality class, as well as on the most prominent exception to this class: even-offspring branching and annihilating random walks. Finally, we summarize the state of the field and present our perspective on outstanding problems for the future.Comment: 10 figures include