Based on empirical research in two of China's biggest and most important manufacturing sectors: Auto and Electronics, this study develops an analytical framework to understand, how firms in newly industrialising economies (NIEs) develop their technological capabilities, and how this is affected by the situation of finance and the practice of corporate governance (CG). Particularly, by further adaption of the theory to the Chinese context, it attempts to answer the questions: 1) 'What is the situation of technological capabilities in the firms in the Chinese Auto and Electronics Industries?'2) 'How has the development process of technological capabilities been?' 3) 'What is the situation of corporate governance and finance in Chinese Auto and Electronics firms?' and 4) 'How can the capabilities developed be explained from the finance/corporate governance aspect?' Two frameworks are developed on the basis of previous research on technological capabilities and corporate governance. Three Propositions are derived from these frameworks. Five case studies are conducted in both sectors, and seven hypotheses are then generated from the findings of case studies. They are tested through a questionnaire survey of 195 firms in the Chinese electronics industry. This thesis makes several theoretical contributions and has several policy implications. Primarily, this study contributes to the literature on the development of technological capability in NIEs by: 1) creating a better understanding of firm-level technological capability in the Chinese auto and (especially) electronics sectors; 2) providing a thorough account and explanations of how Chinese firms with typically flawed corporate governance (CG) fail to develop dynamic capabilities; how those with better CG succeed, and why there are not more of them. In addition this study has adapted the theoretical framework (the effect of corporate governance on technological development) to the Chinese situation and enriched it. It will enlighten future applications of such theory to the wider context of NIEs in general. For policy makers, the crucial implication is that any improvement in the governance factors studied in this study will significantly boost the development of technological capability.

Within the rubric of the New Public Management, performance management has become a routine part of both the rhetoric and the toolkit of modern governments. The concept of performance auditing has emerged since the 1970s, and international standards for performance management and auditing in the public sector have been developing. The attendant proliferation of audit practices in the public sector has led supreme audit institutions (SAls), to include in their mandates concerns regarding economy, efficiency and effectiveness of government undertakings. In the European Union institutional arrangements, the external audit body of the EU budget, the European Court of Auditors, has included in its remit sound financial management issues from the beginning of its creation and over the past few years has devoted an increasing amount of attention to performance audit along with its traditional audit practice. Concurrently, the academic literature has started to incorporate issues of management for results during the implementation of public sector budgets and there is a rapidly emerging literature on performance auditing practices. However, one area where there is little specific and extended analysis, is that regarding performance arrangements in EU budget management and policy implementation, where shared management engagements exist between the European Commission and the member states, such as in the case of most of the Common Agricultural Policy (CAP). This thesis aims to contribute to filling the gap in research over the use of performance management techniques in this area and the possibility of measuring and auditing the performance of policy implementation in the EU. The objective of this thesis is to demonstrate whether the preconditions of sound implementation exist and where they may be lacking regarding the institutional actors implementing the EU's CAP budget. The thesis adds to the literature on the performance of EU programme management and opens new ground for research in the areas of performance management and performance auditing of a set of inadequately researched management bodies. The research employs a descriptive case study approach and draws on interdisciplinary literature research and on empirical fieldwork of an EU policy. Empirical fieldwork based on participant observation and elite interview techniques is used to draw a set of sub case reports. The thesis provides an original contribution to knowledge by identifying some of the factors influencing sound financial management during the implementation of the EU budget, and showing the role that public sector audit could play in achieving it. The unit of analysis provides an illustration of the limitations in existing management arrangements at the European Commission and the member state agencies to deliver optimally the results expected by the policy making bodies. Namely, the limitations that are imposed by the role of the Commission as a policy entrepreneur with a lack of incentives to adequately manage policies and, the role of the Member State-Commission combination in setting policy and also implementing it in a multi-actor setting with conflicting interests. The main conclusions are that proper performance management frameworks are not in place at all levels of implementation, thus imposing severe limitations to results-oriented reforms and that there is a positive role that properly aimed audit practice could play at ensuring policy goal attainment in this process.

Managerial overconfidence, as a particular form of managerial irrationality, concerns that some managers are less than completely rational and tend to overestimate the outcome of the investment projects under their control. This study focuses on the impact of managerial overconfidence on corporate policy decisions. There are two main objectives. First, it explores the consequences of managerial overconfidence for investment decisions and the cash holding policy by emphasizing the role of financial constraints. Second, it investigates the potential role of managerial overconfidence in determining debt maturity. Using an original and very detailed dataset for a large sample of UK listed firms, we show that investment by overconfident managers tend to be more sensitive to internal funds in financially constrained firms identified by leverage, dividend, age and cash. Meanwhile, a cash holding policy can be associated with investment decision by overconfident managers. We argue that, though investment can increase cash flow sensitivity of cash in financially constrained fines identified by leverage and dividend, managerial overconfidence can reduce this positive relationship. Moreover, managerial overconfidence can induce a biased debt maturity structure. It seems that overconfident managers can take advantage of short-term debt to signal their perceived firms' quality to the market. Hence, firms with managerial overconfidence tend to increase the negative relationship between long-term debt and firms' quality. Finally, we find that the impact of managerial overconfidence on corporate decision can also vary with different corporate governance mechanisms. We show that the impact of managerial overconfidence on corporate policies in firms with weak corporate governance mechanisms (i. e. lower ratio of non-executive directors in boards, lower blockholders' ownership) is pronounced, whereas, in firms with good corporate governance mechanisms, it turns to be insignificant.

The audit of financial statements is set out as a two person game to illustrate the influence of damages imposed by society on the strategic choice of both auditee and auditor. It is assumed: (1) that society can influence the damages regime for the auditee and the auditor; (2) that society might be prepared to restrict damages if the auditor can demonstrate due diligence; (3) that the auditee can vary his level of care as regards the accounting process; (4) that the auditor controls his choice of qualitative and quantitative audit tests and the form of audit report; and (5) that there is uncertainty about material error. There are costs and damages involved. The expected cost is the direct cost of preparing and carrying out the audit of the financial statements plus possible damages incurred by both auditee and auditor whenever the quality of the financial statements and audit are challenged. The highest damages are for the issue of a non-qualified audit report on materially inaccurate financial statements, and the primary focus of the dissertation is to demonstrate how these particular damages influence the strategy of the auditee and the auditor. Two types of game are considered. The first illustration is of a game in which the auditee and the auditor cooperate to find the combined strategy that minimizes the total expected cost. The second illustration is of a game in which the auditee and the auditor do not cooperate. In this case, the joint strategies are found by using the concept of Nash equilibrium. These illustrations demonstrate that: (1) for both cooperative and non-cooperative games, the level of damages determines the auditee and the auditor strategies; (2) if society wishes to give an inducement in the form of restricting damages in order to encourage maximum effort, the size of the required inducement is less for a cooperative than for a non-cooperative game; and (3) there are some levels of inducement which encourage maximum effort irrespective of whether the auditee and the auditor cooperate.

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This study concentrates on the implications of the separation of ownership from control, associated with the dispersion of share ownership, for business motivation and company performance. The first part of the study examines the determinants of executive remuneration in the United Kingdom. This is an important subject in its own right but has acquired special significance in relation to managerial theories of the firm which used evidence showing that executive incomes were related to company size but not to profitability in formulating their views on business motivation. There are several reasons why such a study was needed at this time: first, information on executive remuneration had only recently become available for UK companies and this was the first study to use this information; second, the data was sufficiently comprehensive, covering well over one thousand UK quoted companies, to permit, for the first time, a consideration of inter-industry and inter-size-class differences in the structure of executive remuneration; and third, a recent study of executive incomes in US companies had cast doubt on the findings of earlier work. The results obtained suggest that the fixed remuneration (i.e. non stock based income) of executives, particularly in large companies, provides little incentive for the pursuit of increased profitability. The second part of the study investigates the value of shareholdings and stock income of executives in three industries drawn from the original sample. This study shows that it would be wrong to regard the executives of most companies as being 'propertyless' and that, in several companies, the stock income of executives forms a significant proportion of their total remuneration (i.e. fixed stock income). The impact on the earlier results of the use of this wider definition of executive remuneration is examined and it is found that profitability is a more important determinant of total executive remuneration than it was of fixed executive remuneration. The implications of these results for the theory of the firm are discussed. Finally, the information concerning executives' incomes and shareholdings is used to distinguish between management-controlled firms and owner-controlled firms. This information is then used to investigate both the extent of the divorce of ownership from control and, using multivariate discriminant analysis, its impact on company performance.

Theoretical auditing models have recently changed from a single-person to a multi-person setting. This change has been prompted by the inability of decision theory to recognise that the manager has the potential to influence the outcome of the audit. One of the motivating factors for audit work is the auditor's uncertainty about the rate of error or fraud occurrence. This is incorporated in the Audit Risk model in the "inherent risk" term, which has only been considered in a decision-theoretic setting. A game theoretic consideration leads to a signalling game. Two models of the audit are developed to consider settings of both error detection and fraud prevention. In the model of error detection the players' actions include the effort put into maintaining the internal control system and investigation of these controls by the auditor followed by substantive testing and qualification. The efforts of changes in the players' outcome costs on the number and type of equilibrium pairs is investigated. The model is shown to have the following properties; Costly information acquisition can form part of a pure strategy equilibrium, and the manager can send signals that are conditional upon the inherent chance of errors occurring. An example is given to illustrate the above properties. This also shows that raising an outcome cost to encourage hard work can be counter-productive. Fraud and its detection do not occur in isolation. A model is therefore developed where fraud detection occurs against a background of unintentional errors. The auditor must divide his resources between error detection and fraud prevention. The manager is classified into two types by his difficulty in committing a fraudulent act. The manager has a choice over the level of effort to put into maintaining the internal control system and whether or not to commit a fraudulent act. The auditor chooses the level of substantive testing and subsequent in depth testing to carry out before issuing an audit report. It is shown that no equilibrium exist where the manager always reveals his type to the auditor.

There has been considerable interest in the public sector changes in New Zealand, as they were seen as characterising an international reform trend. This thesis employs a critical change model to evaluate the development and impact of accounting-led reform in the New Zealand public sector. By combining an analysis of the reform initiatives in health and education, and longitudinal-case studies of schools and GP practices, this study examines the question of how teachers and the doctors managed new forms of financial control and visibility. The critical theoretical model used here was derived from the Laughlin and Broadbent research on the accounting-led reform within the UK. The generalisability of their UK research was evaluated by applying their theory and methodology in the New Zealand context. Although New Zealand now constitutes an important site for research, much of the existing literature has focused on the policy proposals for the reform of health and education. There have been few evaluations of the changes in accounting practices and forms of accountability that were implemented. Based on the Laughlin and Broadbent theoretical model it was expected that the New Zealand reforms would be seen as a threat to the autonomy of GPs and teachers and would consequently, be absorbed, protecting the core values and real work of the organisation. The case studies revealed that there were strong similarities between the UK and the New Zealand experiences. However, the findings suggested that the theoretical framework needed modification in a number of ways. Laughlin and Broadbent's conclusion that small groups absorb change was found to be too simple and was extended in the study to recognise that change can also be absorbed at the institutional level. The concept of institutional absorbing structures is and important theoretical contribution of this study and also provides a link between the organisational focus of the Laughlin and Broadbent studies and the supra-organisational level. Another important finding was that while the financial and administrative reforms were absorbed, changes in the core work structures and practices could not be absorbed, indicating that the nature of the change process is under-theorised in the current framework and further work is required.

This thesis reviews the Activity-Based Costing (ABC) literature, and analyzes its origins, nature, and development as a precursor to the case study. In addition, a constructive approach to research is used to develop techniques which integrate ABC theory with traditional methods to enhance its application for continuous improvement in practice. The case study employs a grounded theory research approach based on participant observation to explore the technical and organizational change process as a result of implementing Activity-Based Costing at Calor Gas. In terms of technical change, the case reveals a number of significant issues impacting upon the practicality of ABC systems which are neglected in the literature. The application of grounded theory resulted in the formulation of several hypotheses which are integrated in the construction of conceptual models, and are pertinent to the future study of implementation issues. The models address three main problems. The first problem focuses on the potential conflict between product costing and Activity-Based Management (ABM) objectives. The second deals with establishing criteria for the formulation of activities. The third is concerned with establishing a suitable set of cost objects. Each problem is presented as it was discovered in the context of the case. Diagrams are used to depict critical factors, and to show relationships between variables in order to find more general solutions. In terms of organizational change, an "evolutionary" theory about the process of change is developed. It is a process of change whereby the organization learns to adapt to a new environment and conditions. Organizational changes occur in small increments relative to the pace of learning, and the organization grows and matures in order to accommodate the introduction of new knowledge systems. New skills, language, technical concepts and structures are developed. Some of the changes that occurred in the case were planned, some were unplanned, but all were part of the general evolutionary process of an organization adapting to its environment.