Are Asian Per Capita GDP Stationary? Evidence from First and Second Generation Panel Unit Root Tests

This study examines stationarity characteristics of per capita GDP of a panel of 17 Asian countries and sub-panels. We employed a series of panel unit root tests that assume cross sectional independence and cross sectional dependence. The results of the second-generation tests reveal stationarity of per capita GDP for the entire Asian panel, as well as the East Asian and High Income Asian sub-panels. However, we find weak evidence for stationarity for the South Asian panel. The stationarity properties of the East Asian countries were strongly consistent with the idea that business cycles have stationary fluctuations around a deterministic trend, and vice versa hold for the South Asian panel.     

The Bounded Rationality Bias in Managerial Valuation of Real Options: Theory and Evidence from IT Projects*

Although real options theory normatively suggests that managers should associate real options with project value, little field research has been conducted to test whether they suffer from systematic biases in doing so. We draw on the notion of bounded rationality in managerial decision making to explore this understudied phenomenon. Using data collected from managers in 88 firms, we show that managers exhibit what we label the bounded rationality bias in their assessments: They associate real options with value only when a project's easily quantifiable benefits are low, but fail to do so when they are high. The study also contributes the first set of empirical measures for all six types of real options. The study contributes to managerial practice by identifying the conditions under which managers must be vigilant about inadvertently neglecting real options and by providing a simple approach for assessing real options in technology development projects.     

Toward a Theory of Whistleblowing Intentions: A Benefit‐to‐Cost Differential Perspective*

In order to rescue information technology (IT) projects when they go awry, it is critical to understand the factors that affect bad news reporting. Whistleblowing theory holds promise in this regard and a number of salient factors that may influence whistleblowing intentions have been identified. However, an integrative theory that explains how they influence whistleblowing intentions has been conspicuously absent. In this research, we introduce and test a middle‐range theory of whistleblowing that can explain how and why a variety of factors may influence an individual's whistleblowing intentions. Drawing on the social information processing perspective, we propose that individuals holistically weigh the perceived “benefit‐to‐cost differential” and that this mediates the relationship between whistleblowing factors and whistleblowing intentions. Tests using data collected from 159 experienced IT project managers largely support our theoretical perspective, in which the central explanatory variable (benefit‐to‐cost differential) significantly mediates a majority of the proposed relationships. Implications of these findings for research and practice are discussed.     

Information Systems Project Continuation in Escalation Situations: A Real Options Model

Software project escalation has been shown to be a widespread phenomenon. With few exceptions, prior research has portrayed escalation as an irrational decision‐making process whereby additional resources are plowed into a failing project. In this article, we examine the possibility that in some cases managers escalate their commitment not because they are acting irrationally, but rather as a rational response to real options that may be embedded in a project. A project embeds real options when managers have the opportunity but not the obligation to adjust the future direction of the project in response to external or internal events. Examples include deferring the project, switching the project to serve a different purpose, changing the scale of the project, implementing it in incremental stages, abandoning the project, or using the project as a platform for future growth opportunities. Although real options can represent a substantial portion of a project's value, they rarely enter into a project's formal justification process in the traditional quantitative discounted cash‐flow‐based project valuation techniques. Using experimental data collected from managers in 123 firms, we demonstrate that managers recognize and value the presence of real options. We also assess the relative importance that managers ascribe to each type of real option, showing that growth options are more highly valued than operational options. Finally, we demonstrate that the influence of the options on project continuation decisions is largely mediated by the perceived value that they add. Implications for both theory and practice are discussed.