Stock market reactions to activity-based costing adoptions

Article Abstract:

A study empirically investigated the performance effects related to the adoption of an activity-based costing system with a focus on the stock market effect of announcements of the installation of an activity-based costing system. Data used in the analysis was obtained from publicly available stock market data on a matched pairs sample of firms. Results indicate that, in general, the announcement of the adoption of an activity-based costing system among US-based firms did not have a significant, either positive or negative, stock market effect.

Cost Control Techniques, Cost Accounting, Management, Economic aspects, Overhead costs, Information storage and retrieval systems, Costs, Industrial, Industrial costs, Cost control

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Return on investment and corporate capital expenditures: empirical evidence

Article Abstract:

A study is conducted to empirically test the proposition that return on investment (ROI) is used by business executives to make capital expenditure decisions. The results provide support for the hypothesis. A significant relationship is found between corporate capital expenditures and maximization or incremental improvement of ROI. This relationship holds even when it is expected to have an unfavorable impact on the value of the company.

Planning, Capital investments, Business planning

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Accounting and economic rates of return: additional Australian evidence

Article Abstract:

The study is conducted to test the validity of using accounting rate of return (ARR) as an effective monitoring substitute for internal rate of return (IRR). Data from a random sample of 44 Australian companies for the period 1968 through 1990 are analyzed using the Kelly-Tippet (1991) technique. The findings are consistent with the results of previous studies. Evidence indicates that ARR is not a reliable proxy for IRR.

Australia

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