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This paper proposes the Student's t Dynamic Linear Regression (St-DLR) model as an alternative to the various extensions/modifications of the ARCH type volatility model. The St-DLR differs from the latter models of volatility because it can incorporate exogenous variables in the conditional variance in a natural way. Moreover, it also addresses the following issues: (i) apparent long memory of the conditional variance, (ii) distributional assumption of the error, (iii) existence of higher moments, and (iv) coefficient positivity restrictions. The model is illustrated using Dow Jones data and the three-month T-bill rate. The empirical results seem promising, as the contemporaneous variable appears to account for a large portion of the volatility.

The editors are pleased to offer the following papers to the reader in recognition and appreciation of the contributions to our literature made by Robert Engle and Sir Clive Granger, winners of the 2003 Nobel Prize in Economics. Please see the previous dedication page of this volume. This part of Volume 20 of Advances in Econometric focuses on volatility models. The contributions cover a variety of topics and are organized into three broad categories to aid the reader. The first five papers focus broadly on multivariate Generalised auto-regressive conditional heteroskedasticity (GARCH) models. The first four papers propose new models that enhance existing models, while the final paper proposes a test for multivariate GARCH in the models with non-stationary variables. The next three papers examine topics related to high frequency-data. The first of these papers compares asymptotically mean square error (MSE)-equivalent sampling frequencies and window lengths, while the other two papers in this group consider the problem of estimating volatility in the presence of microstructure noise. The last five papers are contributions relevant primarily to univariate volatility models. Of course, we are also pleased to include Rob's and Clive's remarks on their careers and their views on innovation in econometric theory and practice that were given at the third annual Advances in Econometrics Conference held at Louisiana State University, Baton Rouge, on November 5–7, 2004.

Recent interest in the multimodal accomplishment of organization has focused on the material and symbolic aspects of materiality. We argue that current literature invokes diverse “multimodal imaginaries,” that is, ways of conceiving the relation between the material and the conceptual, and that the different imaginaries support a plurality of perspectives on materiality. Using the empirical case of a large urban renewal project in São Paulo, Brazil, we illustrate three different multimodal imaginaries – the concrete, the semiotic, and the mimetic – and indicate how each imaginary determines the way in which the site in question is discursively constructed. After outlining the different approaches, we discuss their theoretical implications, advantages, and constraints, setting an agenda for future studies of materiality in organizational and institutional contexts.

The purpose of this paper is to discuss the interactive processes linking lived embodied experiences, language and cognition (body-talk-mind) and their implications for organizational change.

The authors use an “embodied realism” approach to examine how people feel/perceive/act (embodied experiences), how they make sense of their experiences (cognition) and how they use language and communication to “talk sense” into their social reality. To exemplify the framework, the authors use a cooking metaphor. In this metaphor, language is the “sauce”, the catalyst, which blends raw, embodied, “lived” experience with consequent rationalizations (“cooking up”) of experience. To demonstrate the approach, the authors employ the study of a Chinese multinational subsidiary in Bangkok, Thailand, where participants were encouraged to build embodied models and tell their stories through them.

The authors found that participants used embodied metaphors in a number of ways (positive and negative connotations) in different contexts (single or multicultural groups) for different purposes. Participants could be said to be “cooking up” realities according to the situated context. The methodology stimulated an uncovering of ineffable, tacit or sensitive issues that were problematic or potentially problematic within the organization.

The authors bring back the importance of lived embodied experiences, language and cognition into IB research. The authors suggest that embodied metaphors capture descriptions of reality that stimulate reflexivity, uncover suppressed organizational problems and promote the contestation of received wisdoms when organizational change is pressing and urgent. The authors see the approach as offering the potential to give voice to embodied cultures throughout the world and thereby make IB research more practically relevant.

This paper aims to proposes a framework, labeled strategic alignment matrix, to attain organizational alignment by integrating the horizontal dimension of performance (results driven by activities carried out by multiple organizational units) and the vertical one (results of single units) through the use of a sophisticated information structure composed by quantitative measures and management processes.

A science-based design approach was adopted. A review of the literature on strategic performance measurement systems (SPMS) and coordination allowed the identification of a set of design principles (guidelines reflecting the accumulated knowledge in the literature). The design principles guided the design of the proposed framework. The framework was tested in a tiles company on the new product development process.

Five design principles are presented for the design of a working SPMS as follows: to integrate the horizontal and vertical dimensions of performance; to have all the relevant information in one place (package); to understand how actors contribute to the overall performance; to favor the emergence of integrating conditions for coordination; and to enrich the role of quantitative non-financial information to attain inter-functional integration. During the test of the framework, managers highlighted the increased ability to coordinate actions and the existence of double-loop learning.

The model was tested in one organization. The study should be replicated in other contexts connecting the strategic alignment matrix to the budgeting and incentive systems.

Working at the interface between science and design helps to address the theory-practice gap that has been a priority in management studies for long.

The purpose of this study is to analyze the relationship between dynamic service innovation capabilities (DSICs) and startup growth in an emerging country.

This paper used a theoretical DSIC model to process data on 137 Brazilian startups, using a stepwise regression.

Service startup growth is related to the capability of enterprises to understand market signals, learn from customers and design a scalable, repetitive and profitable business model.

Despite the innovative nature of startups, this paper found that technological and networking capacities are not a determinant of growth.

Managers should commit themselves to improve their competence in terms of understanding market signals, even when they already have a consolidated business model, products and service offerings. The findings also function as a warning about the dangers of an excessive focus on technological capabilities.

Innovative startups, which achieve high growth create a disproportionate number of new jobs. Hence, by indicating the dynamic capabilities that are more conducive to firm growth, this paper contributes to society and the economy at large.

The findings challenge the myth of technological capacity and networking skills as the main sources of startup growth. This paper shows that founders and managers of service startups who want to achieve rapid growth should concentrate more effort on other skills. Marketing competence and building scalable business models – abilities that are common to successful traditional firms – are more relevant for short-term growth than technological innovation.

Despite worldwide climate change and the problems caused by using fossil fuels, energy consumption in the world keeps rising every year. The areas with extremely cold or scorching climates are large, and significant amounts of energy are getting used in these areas for heating, cooling, and ventilation. The general purpose of this study is to investigate the possible relationship between the climatic characteristics of the Esfahak, a village located in the hot desert region of Iran, and the physical characteristics of its built environment.

The method of this research is qualitative and somewhat descriptive-analytical. In this regard, the architectural features of Esfahak village are compared with the principles mentioned in the Mahoney tables to determine the degree of compliance of the architecture of this village with the climatic condition.

The results show that design principles have been used in all indicators discussed in the Mahoney tables. By applying these principles, not only did the acute weather conditions not prevent the initial settlement in the village location, they have not caused inhabitants to leave the site over time as well.

The impacts of bioclimatic design strategies on thermal comfort in hot desert regions are seldom studied. This research provides evidence-based and informed design recommendations that can help building designers and city authorities integrate bioclimatic design strategies at the earliest conceptual design phases in hot desert climates.

Public information disclosure is a manifestation of transparency and contributes to governance-by-disclosure. Also, better financial reporting can improve the credibility and integrity of public finances and contribute to a better management of public resources. A survey was carried out in Cyprus of users’ of public financial reports concerning an expectation gap about the types of information included in such reports (information needs expectation gap) as well as the quality of such information (information quality satisfaction gap). The paper aims to discuss these issues.

Two focus groups of users and preparers of public financial reports were used to construct the questionnaire. Users of such reports, who belonged to all three categories of public sector financial reporting identified by IPSASB, were surveyed. The quantitative data obtained was analysed using SPSS and quadrant analysis to answer the research questions posed.

Data from 101 respondents confirmed that each of the information needs identified in the IPSASB Consultation Paper (2008) was rated as being a significant information need. Data analysis also showed that both types of expectation gap exist, especially as far as local authority and semi-public organisations are concerned.

The response rate in the self-administered survey was admittedly rather low but it was not unexpected mainly due to the survey’s very specialised nature and the tendency by people in Cyprus not to critique public bodies.

Deficient financial public sector reporting means the auditor general is not able to adequately express an opinion on public spending at the local government level. This, in turn, means taxpayers do not get the quality of services they pay for. At the same time, the lack of information transparency means corrupt practices are not eradicated. One answer to the problem would be legislating the content of public financial reports.

The lack of governance-by-public exposure means that services to the local community cost a lot more, due to corruption and inefficiency. In addition, it contributes to lowering market confidence and eventually contributes to financial crisis at the national level.

The survey conducted was the first of its kind in Cyprus to investigate financial public sector reporting and document both manifestations of the expectation gap. In addition, information needs identified in the IPSASB Consultation Paper (2008) was rated as significantly needed and this is the first time it has been done in Eurozone member state and in a country facing a financial crisis.