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Geographic proximity between parties increases personal interactions and enhances the exchange of tacit information vital to success in collaborative innovation. In a sample of 582 joint R&D ventures, we observe that the distance between partners varies widely. Controlling for the self-selection among partners, we find that more geographically proximate parties tend to establish longer contract duration ex ante to address contracting risks associated with the increased sharing of tacit information. We argue that partner proximity in joint R&D leads to the creation of relationship-specific capital. Thus, the operative governance mode when partners are geographically proximate is organizational in nature.JEL Classification: D23; L24

New accounting standards change the treatment of payments made to underwriters by advisers of closed-end funds. The authors discuss the impact of this change upon the financial services industry.

Everywhere, people are talking about accounting. We can't remember another time when there's been more discourse about the lack of quality and transparency in corporate financial reporting than today. And [...]

This paper finds that additional coursework, or increasing the credit hours requirement from 128 to 150 for taking the CPA exam is inefficient input for candidates and that scholastic aptitude measured by college entrance exam scores is the the strongest marginal factor for CPA exam success with exam review as the second.

What does the phenomenal growth of limited liability companies and partnerships mean for U.S. business? Finding an organizational form response to the increasingly litigious environment, while preserving or enhancing desirable [...]

We discuss two strategies sponsors have used successfully to introduce new equity funds and promote the performance of the funds after their introduction. The strategy of 'incubation' allows funds that compile a favorable track record in private to be marketed to the public at a later opportune time. The strategy of 'selective attention' directs favorable allocations of 'special situations' into new funds that are open to the public. Introduction strategies are most apparent among aggressive growth funds, where first-year performance has increasingly become superior. Incubator funds remain small while private, but once opened, they quickly increase in size and revert to median performance. The first-year success of selective attention funds also attracts large amounts of cash, which undermines their subsequent performance. (Reprinted by permission of the publisher.)

An analysis of the performance and costs of several equity mutual funds was conducted to test the validity of the theory of information pricing. The theory asserts that the benefits from acquiring expensive stock trading information are often offset by the costs. The results showed that the returns of high-cost and low-cost stocks are not significantly different during a 10-year performance horizon. Moreover, the introduction of controls for size and age variables did not significantly change the results. Such findings tend to support the theory of information pricing which was first introduced by Sanford Grossman and tested by Mark Grinblatt and Sheridan Titman.

Organizational forms such as limited liability companies (LLCs) and limited liability partnerships (LLPs) are emerging as desirable alternatives for many businesses. While LLPs are a popular choice for CPA firms, [...]

As readers of the business press are aware, the Financial Accounting Standards Board issued an exposure draft of a proposed statement, Accounting for Stock-Based Compensation, replacing Accounting Principles Board Opinion [...]

I. Introduction II. Unbundling Tunneling A. Cash Flow Tunneling B. Asset Tunneling C. Equity Tunneling III. Principal Laws and Rules that Affect Tunneling A. Cash Flow Tunneling B. Asset Tunneling [...]

Mutual funds change their names quite often. We observe 920 name changes, about one-eighth of the open-end fund universe, over the 1995-1997 period. Should investors care about fund name changes? [...]