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Based on fifteen years of data on the annual Academy of International Business (AIB) best dissertation Farmer Award finalists, we find that these dissertations were done at a range of North American universities. Interestingly, dissertation topics differed from the topics covered in the three top IB journals with five‐sixths of the topics in management, organization, economics, or finance and two‐thirds set in a single country or region (U.S., Japan, North America, and Western Europe). Survey research is the most common methodology but analysis of secondary data is growing. As expected, the finalists are on average an extraordinarily prolific group.

This paper contends that, contrary to conventional wisdom, it may be rational to manage translation exposure. Accounting procedures for the translation of foreign currency accounts influence the reported income of a multi‐national firm. With non‐zero agency costs, reported income impacts real costs. In such cases, therefore, it may be rational to hedge translation exposure. Empirical evidence of agency costs and the managerial tendency to report higher levels of translated income, based on the early adoption of Financial Accounting Standard No. 52, is presented.

Justifying new manufacturing technology is usually very difficult since the most important benefits are often strategic and difficult to quantify. Traditional capital budgeting procedures that rely on return measures based on direct cost savings and incremental future cash flows do not normally capture the strategic benefits of higher quality, faster responses to wider ranges of customer needs, and the options for future growth made available by flexible manufacturing technology. Adding to these limitations is the difficulty of using traditional cost accounting systems to generate the information necessary for justifying new manufacturing investments. This paper reviews these problems and recommends procedures useful for assessing investments in flexible manufacturing technology.

This paper reports the results of an empirical study of the determinants of capital structure of large Latin American companies. Variations with regard to the country, industry, and size of a company are examined for a sample of two hundred and thirty large companies located in twentytwo Latin American countries. This study is the first to examine the capital structures of this large set of Latin American companies. The results of this study indicate that while size does not seem to be significant, both country and industry are significant determinants of capital structure in Latin America not only in bivariate tests but also in multivariate statistical tests. Multinational and diversified companies, therefore, cannot assume uniformity of capital structure across countries and industries in Latin America and, they must take these differences into account in developing and setting capital structure, financing, evaluation, and management policies for their subsidiaries.

So far, the overall performance track record for corporate mergers and acquisitions has not been very encouraging. Both the academic and trade literature report that on average the gains to stockholders of acquiring companies tend to be small or non‐ existent.

This study examines empirically the characteristics of the two market indices developed by Amman Stock Exchange (ASE) and their related returns: the equally weighted index (EWI) and the value weighted index (VWI). The monthly‐prices for each index are obtained from ASE for the entire nine‐year period (1992‐2000) to compute market returns for both indices. The study period is divided into seven intervals of different lengths. The results of the test and the nonparametric (Wilcoxon) test indicate that the value weighted market return (VWR) tends to be significantly higher than the equally‐weighted market return (EWR). The variances of the two market returns tend to decrease as the length of the time intervals increases. Inconsistent with prior research findings, the differences between the two market returns variances failed to be significant at the 0.05 level. The study findings may have implications for capital market research that apply the market model in emerging markets, in general, and in ASE in particular.

The purpose of this paper is to look back at the first year of publication of the Journal of Indian Business Research (JIBR) and to provide details of the current issue.

It is time to look back at the first year of launch of the JIBR. After all, it is widely believed in the academic publishing world that the first year of a new journal is the most crucial one. This editorial gives details of the current issue, paper by paper.

Filling a much‐felt gap for a high‐quality publishing outlet on Indian business research, JIBR has attracted the attention of leading scholars in the discipline in the very first year of its existence. Renowned scholars such as Jagdish Sheth, Alok Chakrabarti, Raj Aggarwal, Madhukar Angur, G.K. Kalyanaram and Rajendra Sisodia have published their research and/or viewpoints/commentaries in JIBR in its very first year. This issue begins with “Corporate social responsibility communication in the Indian context” wherein Brigitte Planken, Subrat Sahu, and Catherine Nickerson report on research, which investigates the CSR platforms and the communication surrounding those platforms in India. In the second paper titled “Effectiveness of integrated marketing communications: empirical analysis of two brands in India,” Mehir Baidya and Bipasha Maity utilize quarterly, time‐series data over 2000‐2005 for two competing brands in packaged goods business to assess the impact of marketing communication on sales. Pramila Rao, in the third paper titled “A resource‐based analysis of recruitment and selection practices of Indian software companies: a case study approach” enhances our understanding on senior‐level staffing practices of Indian software companies. The next paper by Federica Collato is a case study titled “Is Bangalore the Silicon Valley of Asia? Analysis of the evolution and the structure of this Indian local economy organization.” The final paper of this issue is a viewpoint article on “Overcoming decision flaws from framing” by V.N. Bhattacharya.

The Editorial provides an overview of the inaugural volume of JIBR.

The financial analysis of international investment decisions is complex. The basic methodology which homes in on incremental cash flows needs to be refined in order to focus upon cash flows which are remittable to the parent company, for it is only these that would logically add shareholder value. Build in the complications of two lots of tax and changing exchange rates and the equation looks anything but simple. But there is another complexity too which renders the traditional discounting methodology less than wholly appropriate. And this applies not just to international investment but to any situation where capital is committed with an option to expand or curtail embedded in it. This is not to say that the typical model cannot be adapted to meet the situation. It can and it is not too difficult.

This chapter explores how scholarly work in the fields of Finance and International Business (IB) can be mutually supportive. First, it is clear that technology has been a major driver of modern developments in both Finance and IB. Second, Finance can provide many insights into IB scholarship since it has much to say about firm operations and strategy. Third, IB scholarship with its focus on culture also provides significant opportunities for a better understanding of the global aspects of Finance. Finally, it is contended that transaction-costs economics provides an excellent theoretical and fundamental basis for bringing together IB concepts and Finance scholarship. However, while the potential for Finance and IB scholarship to contribute to each other is great, such advances must await the removal of cultural barriers between the two disciplines.

The purpose of this paper is to review the reasons for the increased pace of restructuring of Indian industry in response to increasing market efficiencies and declining transactions costs in India.

This paper uses theory of transactions cost economics as the theoretical framework for analyzing the changing structure of Indian industry.

As in many developing countries, the Indian business environment has reflected high‐transactions costs so that Indian companies found it more efficient to diversify and internalize many unrelated activities. Consequently, most large Indian businesses have traditionally been widely diversified with vertically integrated group structures. As economic deregulation and adoption of internet technology reinforce each other, Indian transactions costs are declining and vertical integrated and diversified group structure is likely to become inefficient and a disadvantage.

Declining transactions costs will continue to force significant and sudden restructuring and specialization among the large and major Indian conglomerates with rising volumes of mergers and acquisitions activity in India. This will require managers with new skill sets that include strategic analysis and undertaking successful corporate re‐structuring.

The paper presents an assessment of the impact on Indian business of new technologies and economic deregulation in India.