Author: Tomic, Igor M
Date published: July 1, 2012
The financial crisis became a global event that, at the printing of this issue (July 2012), seems to have resulted in another period of slowing growth worldwide. In the last few years the causes of the crisis were examined and reexamined, and the depressed economic climate has influenced political establishments globally. Politicians are likely to be voted out of office as the unemployed exercise their dissatisfaction, and in countries with multiple political parties capitalism will experience serious challenges.
In this time period it is sometime difficult to focus on scholarly research, since typical papers address specific issues often not necessarily global in scope. Yet a house is built brick by brick, and resolving issues, even though they appear small in the global arena, contribute toward understanding policies that would positively contribute to the workings of the capitalist system.
In this issue of our Journal, Amalia Magán-Díaz and José Céspedes- Lorente in "Why are Spanish Companies Implementing Downsizing?" are hinting that it may improve performance, and considering the 20% unemployment in Spain at the present time, this topic is an item that deserves notice. St. John's faculty I. Hilmi Elifoglu, Adrian Fitzsimons, and Benjamin Silliman are concerned with a larger picture in "Separate Financial Reporting Standards and Standard Setting for Private Companies," due to the urgent and growing systemic issues with respect to private companies' financial statements. Saira Latif and Yi Yang rightly question market efficiency in "Do Investors Care about Earnings Management?" One would think they do, but some items remain obscure and deserve more transparency.
In today's business environment much discussion is aimed at regulation in general. Katherine Barker, Carl Pacini, and Dave Sinason in "The Foreign Corrupt Practices Act: A Law Worth Revisiting" show that compliance is not always followed, creating a dangerous situation for firms. Most people who study regulation would agree that the best practice with respect to any regulation is to revisit it and make changes, if necessary, as when rules are being drafted no one can perfectly foresee all the possible impacts a regulation can have. Continuing with regulatory issues and specifically related to Dodd-Frank Wall Street reform, Thomas A. Hemphill updates us in "The U.S. Shareholder Say-on-pay Vote: What are the First Year results?" Robert F. Salvino revives the discussion of the real estate crisis and takes a different look at the real estate market in "Overinvestment in Residential Real Estate: An Analysis of the Impact Across Levels of Economic Diversification." Our Australian colleagues Brett Freudenberg and Mahmood Nathie examine "Chasing Islamic Finance: A Framework to Assess the Potential Benefit of Australian Tax Reform to Facilitate Islamic Finance."
Beena George and Faiza Khoja focused on social benefits of businesses in "Doing Good and Making Profits: A Case Study of Affordable Business Solutions." John Malindretos, together with colleagues Augustine C. Arize, Peter Harris, Krishna M. Kasibhatla, and Moschos Scoullis, tests the stability of money demand by a co- integration technique in "The Values of the Determinants and Tests of Stability of the Money Demand Function of the United States."
Igor M. Tomic, Ph.D.
Editor, Review of Business