The Accounting Review Vol. 47 No. 1 1972
Estimating the Relationship Between Technical Change and Reported Performance.
Abstract
The results of this study indicate that a significant part of the variation in changes in performance not explained by the other variables in the model is explained by changes in productivity for the three firms studied. To the extent that the particular specification of variables is successful, this relationship indicates that the expected relationship between technical change and performance can be discerned empirically. Also, it appears that on the average the expected positive effects on earnings due to management decisions to make technical changes are being realized. While this favorable result is encouraging, it does not mean that this result can be extended to other firms even if they are drawn from the same industry. Several additional favorable replications of the experiment in the electric power industry chosen to include firms that used hydro-generated power, that are from other geographical regions, and that are of different sizes than the firms included in this study would be required to make generalized statements about the industry as a whole. An extension of this study that would make its results potentially useful for evaluating technical change decisions would be to develop a means of estimating the relationship between these decisions and measured technical change. This extension may be relatively difficult because of the likelihood of considerable time lags between the decisions and their physical outcome. If successful, a manager might then be able to evaluate on average both the effectiveness with which the technical change decisions are carried-out and the effect of that outcome on reported earnings.
- DOI
- 10.2308/tar-4486773
- Volume
- 47
- Issue
- 1
- Pages
- 52-63
- Language
- en
- Sources
- openalex crossref