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The purpose of this paper is to examine supply‐side disruptions in a supply chain, and to analyse the effectiveness of two inventory‐based policies for mitigating the impact of supply disruptions: maintaining strategic inventory reserves (the R‐policy), and using larger orders (the Q‐policy).

The paper assess the effectiveness of two inventory‐based mitigating policies implemented at a reseller when end customer demand is stable but supply can be disrupted. An analytical model is provided, and numerical experiments are conducted to evaluate the effectiveness of the policies for mitigating the impact of disruption under different disruption scenarios.

Results indicate that the R‐policy performs consistently better than the Q‐policy in terms of product availability measures, as tested under a wide range of frequency and duration of supply disruptions.

Supply chain trends of lean operations and global sourcing have exposed business organizations to a greater risk and have further raised the need to protect businesses against random supply disruptions.

The paper intends to contribute to the narrowing of the gap in the research of supply‐side disruptions. Further, the topic of inventory reserves has been discussed to date in only a very general sense; the paper proposes conditions for practical implementation and provides unique insights into the effectiveness of the use of strategic inventory reserves as a supply disruption mitigation policy.

The Mexican housing industry was hindered by a shrinking market and tighter financial conditions related to the Great Recession. Moreover, in 2013, a major change in public policy further modified this industry’s environment. Mexico’s new urban development policy supported inner-city new housing, in contrast to the previous policy that incentivized sprawling. Three out of eight publicly traded housing companies filed for bankruptcy protection in 2013-2014, arguably because of the effects of the Great Recession and the new housing policy. The purpose of this study is to identify firm-level factors that caused some firms to file for bankruptcy protection.

Three approaches were used to analyze the housing industry in Mexico from 2006 to 2015. First, a policy analysis focused on the new housing policy and its consequences for housebuilding companies. Second, a financial analysis of the two economic shocks was performed in search for the transmission mechanisms in the companies’ financial metrics. Third, a retrospective analysis using the Fisher’s exact test was used to identify variables statistically associated with companies filing for bankruptcy protection.

There are two features significantly associated with bankruptcy protection: increasing market share while being vertically integrated, as a response to the Great Recession, and the relative magnitude of the loss on firms’ inventory value due to the new public policy. Neither Altman’s Z-score values nor firm size or degree of integration are significantly related to bankruptcy.

The small sample size presented a challenge, as most statistical methodologies require large samples; however, this was overcome by using the Fisher’s exact test.

The main contribution of this paper is the statistical identification of the possible causes for bankruptcy protection in Mexico amongst homebuilding firms in 2013 and 2014, which have not previously been reported in the literature.

Shortly after this series of articles started, we received from Novo Industries in Denmark a copy of their corporate report. Following correspondence with Kare B Dullum, Novo's Financial Executive, we received permission to reproduce part of that report. Management for Profitability and Interest Group Accounting, written by Kare Dullum, is a section of Novo's report which shows the flow of funds through a company to the various interest groups. The article demonstrates the basic decisions on financial management that are needed for integrated decision making on marketing, production, research development and administration. For this series of articles the figures used in earlier articles have been fitted in to the table presentations. The text of the article is self explanatory and readers of the previous articles in this series will recognise the different way of presenting the figures.

This essay explores evolutionary and competence‐based theories of the firm. Evolutionary theories can be regarded as a subset of a wider class of theories, variously described as “capabilities”, “resource‐based”, or “competence‐based” theories of the firm. These contrast with a different set of contractarian theories, emanating largely from the work of Coase. It is argued that the contractarian theories of the firm misleadingly assume given individuals thus neglecting processes of individual learning and transformation. Similarly underestimated is importance of technology and the persistence of variety in firm structure and performance. The genesis of the alternative, competence‐based approach is outlined, including the important subset of “evolutionary” approaches of the Nelson‐Winter type. The paper concludes with a discussion of the relevance of the competence‐based approach to strategic management.

The purpose of this paper is to use qualitative research findings to describe and analyze the use of a new teaching approach for a better understanding of earnings management.

Three classroom workshop designs with finance professionals were performed as an experiment to discuss the underlying assumptions of mainstream earnings management research. The outcome of the experiment is analyzed and serves as a basis for reflection on the new teaching approach.

The teaching experiment revealed the value to participants in discussing the complexity of the accounting choice process. The workshops provided insights into the wide range of accounting choices that finance professionals are confronted with and into the differences in perception of the participants relating to the accounting choices to be made. These insights contradict the assumptions of a “neutral reporting process” and solely “purposeful interventions” used in mainstream earnings management research. Analyzing the elements of the different workshop settings in relation to the outcome of the discussion identified strengths and weaknesses of each setting and generated ideas for further development of the teaching approach.

This research note adds to the understanding on how qualitative research can be used in teaching and shows that it is also coherent with using teaching as a site for qualitative research.

The discussions relating to the limitations of mainstream accounting research are predominantly of a general nature. This research note takes these discussions into consideration by exploring the subject of earnings management, offering an alternative teaching approach.

The purpose of this paper is to study the impact of political connections and institutional environment differences on private enterprises' acquiring bank loans, and to analyze the governance effect of bank debts and its impact on firm value.

Choosing private listed enterprises in China as samples, this study builds equation models and uses the three‐stage least squares estimation method to estimate these models.

The results show that: political connections influence lending policies of banks; the politically connected private enterprises could acquire more loans from banks. In poorer institutional environment, political connections can help private enterprises to acquire more bank loans; building political connections is an informal substitute mechanism for private enterprises to overcome the drawbacks of market institutions. The bank loans have governance effects on politically connected private enterprises and can increase firm value; the allocation of bank loans through political connections is efficient.

This study provides a meaningful perspective for understanding the impact of political connections on firm value and allocation of social resources.

A recent global pandemic, known as coronavirus disease 2019 (COVID-19), affects the manufacturing supply chains most significantly. This effect becomes more challenging for the manufacturers of high-demand and most essential items, such as toilet paper and hand sanitizer. In a pandemic situation, the demand of the essential products increases expressively; on the other hand, the supply of the raw materials decreases considerably with a constraint of production capacity. These dual disruptions impact the production process suddenly, and the process can collapse without immediate and necessary actions. To minimize the impacts of these dual disruptions, we aim to develop a recovery model for making a decision on the revised production plan.

In this paper, the authors use a mathematical modeling approach to develop a production recovery model for a high-demand and essential item during the COVID-19. The authors also analyze the properties of the recovery plan, and optimize the recovery plan to maximize the profit in the recovery window.

The authors analyze the results using a numerical example. The result shows that the developed recovery model is capable of revising the production plan in the situations of both demand and supply disruptions, and improves the profit for the manufacturers. The authors also discuss the managerial implications, including the roles of digital technologies in the recovery process.

This model, which is a novel contribution to the literature, will help decision-makers of high-demand and essential items to make an accurate and prompt decision in designing the revised production plan to recover during a pandemic, like COVID-19.

The aim of the study is to provides a timely examination of the valuation effect of current initiatives to repeal LIFO by analyzing the valuation impact of the potential repeal of LIFO conditional on the pricing power of the firm.

Using the methodology from prior research for all LIFO companies, we use price levels regressions to empirically test the potential tax effect of LIFO’s repeal on the value of the firm. To evaluate the robustness of these results, we also use event study methodology to estimate abnormal returns around the House Bill H. R. 3970.

Results show a favorable (unfavorable) valuation effect for high (low) pricing power firms that are able (unable) to recover tax payments by reducing costs and/or charging higher prices. These findings are robust to alternative measures of valuation (price and returns), as well as long and short event windows and suggest that certain firms may be able to offset post-LIFO repeal increased tax payments by increasing sales-output prices and or decreasing cost-input prices.

The primary contribution of this paper is to provide relevant and new empirical evidence regarding the potential valuation effects of the currently proposed political and regulatory initiatives to abolish LIFO.