Using a system of three simultaneous equations, we test the predictions of Datar, Feltham, andHughes 1986 between auditor choice, earnings disclosures, and retained ownership in U.S. firms making initial public offerings of securities. Using a sample of initial public offerings between 1990 and 1997, we find that the demand for high-quality auditors increases with firm risk. Additionally, we find that auditor choice, earnings disclosure, and risk are determinants of retained ownership, which is consistent with the predictions of Datar et al. and Hughes that auditor choice and direct disclosure are substitute signals for ownership retention. Further, our results suggest that the signals chosen (i.e., retained ownership, auditor choice, and disclosure) are related through their cost structures and are chosen jointly to minimize the overall cost to the entrepreneur. fait, que la relation positive prévue entre le choix du vérificateur et le risque n'est apparente que lorsque les honoraires de vérification sont intégrés au modèle de demande, ce qui porte à conclure que les irrégularités observées sont probablement le résultat de l'omission d'une importante variable, celle des honoraires de vérification. Les tests de spécification des auteurs révèlent, de plus, que si les honoraires de vérification sont intégrés aux modèles de choix du vérificateur, la spécification simultanée s'impose si l'on veut éviter tout biais dans les estimations qui en découlent.
We wish to thank Linda Bamber, Michael Bamber, and Randal Elder for their helpful comments on an earlier draft of this paper. We also acknowledge the constructive suggestions of an anonymous referee. Studies that investigate the supply-side determinants of audit fees include Palmrose [
Purpose
– The purpose of this paper is to report the findings of a research study that sought to identify the key dimensions of luxury from a UK consumers’ perspective.
Design/methodology/approach
– The project was empirical in nature and based on a two-stage methodology that involved a series of depth interviews with consumers and a street intercept survey of 131 consumers in the UK.
Findings
– The project found that UK consumers appear to recognise five dimensions of luxury (affect, characteristics, status, gifting and involvement).
Research limitations/implications
– The main limitation was a small sample size and limited statistical significance.
Practical implications
– The paper should usefully focus the attention and efforts of managers of luxury brands, managers of ordinary brands who desire to develop them into luxury brands, and managers who are considering creating luxury brands in the UK. The findings should inform management decisions relating to product development, advertising, promotion and distribution of luxury products and services.
Originality/value
– The paper makes an original contribution to knowledge by reporting the findings of an empirical study of luxury from the UK consumers’ perspective. It has value to academic researchers who are interested in the concept of luxury as well as those involved in or considering luxury brand management.
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