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This paper examines the assertion that the financial market pays fixed PE multiples and that the recognition of goodwill and subsequent amortization depresses earnings and stock prices, putting U.S. firms in a competitive disadvantage in the international merger and acquisition arena. Evidence from this study suggests that, contrary to common belief, price/earnings ratio expands by a sufficient amount in response to amortization, making amortization irrelevant to stock valuation.

This study examines the ability of fundamental summary measure Pr to predict earnings change for the subsequent year, the association of Pr and stock returns, and the relationship between Pr and risk factors beta and size. Pr is a probability index generated by logistic model and financial statement data. Beta effect is minimized by grouping firms into beta portfolios while size is controlled through incorporating size as an independent variable in the regression models. Evidence from the study indicates that Pr has a strong ability to predict future earnings change and has a positive and significant association with adjusted market returns, after controlling for beta. Pr's association with adjusted market returns is mitigated when beta and size are controlled simultaneously.

This paper aims to examine the concerns that high‐tech “new economy” companies employ aggressive revenue recognition practices to boost stock prices.

The authors test empirically the hypothesis that revenue is more value relevant than other key performance measures traditional earnings and operating cash flows, especially in the case of high‐tech firms with losses.

Test results from this study demonstrate the association between stock prices and reported revenues, both before and after year 2000 the stock market meltdown.

The study limits its scope on the high‐tech new economy sector. The findings may not be applicable to other industries.

An important implication of the findings is that the association between stock prices and revenue is presumably the underlying reason for aggressive revenue recognition.

This paper provides empirical evidence demonstrating the association between stock prices and revenues, which is very valuable to policy makers and market participants.

The purpose of this study is to explore what is synergistic innovation in the logistics service outsourcing context and how this strategy can potentially benefit an organization by improving performance outcomes.

A total of 21 in-depth interviews were conducted to conceptualize the construct of synergistic innovation. In addition, a theory-based model is tested using data collected from 282 Chinese manufacturing firms that are currently engaged in logistics service outsourcing.

The results from the in-depth interviews reveal that synergistic innovation goes beyond just interactions on innovation but requires both parties to achieve synergies that otherwise cannot be achieved by individual party alone. In addition, the empirical analysis suggests that synergistic innovation can help firms improve both logistics service performance and market performance. This process is dynamic as knowledge integration capability influences the outcomes of synergistic innovation.

This study is among the first to conceptualize synergistic innovation. It also offers a practical scale that helps future studies effectively measure this construct. Moreover, the results of this study provide compelling insights into how managers can use logistics service outsourcing as an important source for improving innovation outcomes.