Risk-return associations: paradox or artifact? An empirically tested explanation

Article Abstract:

The causes of E.H. Bowman's risk-return paradox were studied on the basis of the existence of trends in return data. The analysis involved the evaluation of A. Fiegenbaum and H. Thomas' hypothesis that the risk-return paradox was caused by evaluating risk by variance in data containing trends. T-tests were used to evaluate the differences between trend firms and static firms in terms of the variance in returns, average returns, and mean sum of squared errors. The results indicated that the risk-return paradox did not result from trends in data. Trends in return on assets and return on equity were not able to explain the risk-return findings of previous research.

Research, Risk (Economics), Return on investment, Rate of return, Financial research, Bowman, E.H., Fiegenbaum, A., Thomas, H.

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The deterrent to dubious corporate behavior: profitability, probability and safety recalls

Article Abstract:

The effects of stock market returns and reactions as a deterrent to unethical behavior in the production of defective automobiles are examined. Results indicate that the percentage of abnormal stock reactions, when examined on an event-by-event basis, is no different than the percentage that would appear by chance. Results also show that in many cases the market reacted positively to the production of defective automobiles, and that there is little evidence to support the proposition that the stock market reaction to recalls is a sufficient deterrent.

Stock-exchange, Stock exchanges, Automobile industry, Ethical aspects, Corporations, Industry regulations, Government regulation of business, Trade regulation, Corporate corruption

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Embedded ties and the acquisition of competitive capabilities

Article Abstract:

The external acquisition of competitive capabilities through the embedded ties that firms form in networks and alliance is explored. A set of case studies and a survey supports that joint problem-solving arrangements play a prominent role in capability acquisition by promoting the transfer of complex and difficult-to-codify knowledge.

United States, Evaluation, Strategic planning (Business), Competitive advantage

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