A SHORT NOTE ON “IS THE EMPHASIS OF CAPITAL BUDGETING THEORY MISPLACED?”

This note relates to Paul King's article (in the Spring 1975 JBFA), which may add little to an earlier contribution by W.W. Haynes and M.B. Solomon, Jnr. Specifically, it is based on a "misplaced" caricature of "the scientific model". There seem to be serious questions as to the empirical status of the model, and more recent contributions to the theory of organisational decision-making also need to be considered.
Dans ce comnentaire, on s'eteńd sur l'article de Paul King paru dans le numéro de Printemps 1975 de ce journal. Son article ne semble fournir guère plus d'informations que la précédente étude présentée par W.W. Haynes et M.B. Solomon, Jnr. I1 insiste avant tout sur un aspect détourné du 'modèle scientifique', ce qui semble poser de sérieux problèes quant aux statuts empiriques attribues au modèle, et demande que l'on s'interroge devant de plus récentes études concernant la théorie de gestion des structures.
Diese Stellungnahme bezieht sich auf die Abhandlung von Paul King (in der Frühjahrsausgabe der JBFA), die wenig zum früheren Artikel von W.W. Haynes und M.B. Solomon, Jnr., beitragen mag. Insbesondere basiert diese Abhandlung aug einer unberechtigen Karikatur des "wissenschaftlichen Modells". Ausserdem ist der empirische Status des Modells höchst fraglich. Darüberhinaus müssen die neuen Beiträge zur Theorie des Organisationsentscheidungsprozesses berücksichtigt werden.     

R&D AND CAPITAL MARKETS

The substantial growth of R&D expenditures over the last two decades, together with the continuous substitution of knowledge (intangible) capital for physical (tangible) capital in corporate production functions, has elevated the importance of R&D in the performance of business enterprises. At the same time, however, the evaluation of corporate R&D activities by investors is seriously hampered by antiquated accounting rules and insufficient disclosure by corporations. Despite the fact that the expected benefits of R&D stretch over extended periods of time, corporate investments in R&D are immediately written off in financial reports, leaving no trace of R&D capital on balance sheets and causing material distortions of reported profitability. After a brief review of statistics documenting the growth and economic importance of corporate R&D in the U.S., the article presents a comparison of R&D disclosure regulations among industrialized nations that shows U.S. rules to be the least flexible in allowing management discretion in how they measure and report R&D. Next the author surveys the large and growing body of empirical research on R&D, which provides strong testimony to the substantial contribution of R&D to corporate productivity and shareholder value. Moreover, despite widespread allegations of stock market “short termism” throughout the 1980s and early '90s, the research indicates “unequivocally” that capital markets consider investments in R&D as a significant value-increasing activity. But if investors clearly demonstrate a willingness to take the long view of R&D, there is also evidence of undervaluation of some R&D-intensive companies—particularly those with low profitability—as well as other potential costs to corporations and investors stemming from inadequate public information about R&D. To help correct the reporting biases and distortions of R&D, the author offers some suggestions for investors and analysts that follow R&D-intensive companies. In particular, he proposes (1) adjustment of reported data to reflect the capitalization and amortization of (instead of expensing) corporate R&D and (2) the use of various quantitative measures for gauging research capabilities and output, including citations of the firm's patents and measures indicating the share of current revenues coming from products developed within recent years.     

Disclosure “Bunching”

This paper studies managers' preferences among information acquisition and disclosure policies when their firms are required to engage in “real‐time” or “continuous” financial reporting. The paper predicts that for many, but not all, processes describing the distribution of their firms' cash flows, when subject to such reporting requirements, managers will engage in disclosure “bunching,” that is, they will bunch the discretionary component of the information they acquire and disclose into a single point in time rather than spread the acquisition and disclosure of that information over time. We show that managers' preferred bunching period depends on managers' strategy for trading in their firms' shares, managers' risk aversion, the risk premium the capital market attaches to firms' shares, and the size of managers' initial ownership stakes in their firms. We also study and characterize how the equilibrium prices of firms' shares vary over time and also how managers' optimal trading strategies vary with their most preferred “bunching” strategies. Several extensions confirm the robustness of the optimality of disclosure “bunching.”     

The Effects of Monetary Policy “News” and “Surprises”

There is substantial agreement in the monetary policy literature over the effects of exogenous monetary policy shocks. The shocks that are investigated, however, almost exclusively represent unanticipated changes in policy, which surprise the private sector and which are typically found to have a delayed and sluggish effect on output. In this paper, we estimate a New Keynesian model that incorporates news about future policies to try to disentangle the anticipated and unanticipated components of policy shocks. The paper shows that the conventional estimates confound two distinct effects on output: an effect due to unanticipated or “surprise” shocks, which is smaller and more short‐lived than the response usually obtained in the literature, and a large, delayed, and persistent effect due to anticipated policy shocks or “news.” News shocks play a larger role in influencing the business cycle than unanticipated policy shocks, although the overall fraction of economic fluctuations that can be attributed to monetary policy remains limited.     

Skinner's “Interpretation Panel”— A Means to Balance “Power”

The rules versus principles debate and the vital importance of context ‐ the circumstances‐specific nature of judgment ‐ are at the heart of Ross Skinner's suggestion for an “interpretation panel". International considerations and developments involving governance and regulation have created imbalances in power, expertise, and impartiality, increasing the importance of and need for such a panel. This analysis considers the nature of the problem, how professional judgment has been characterized, and why a panel would be appropriate to address, among other concerns, the audit committee's dilemma when accounting disputes arise. Evidence is provided that management turnover is higher in cases involving multiple restatements, governance problems, or regulators' sanctions. Although, intuitively, management turnover is likely to be associated with widely publicized restatements, some patterns suggest that it is a function of entity size, scope of management changes considered, and the manner in which the restatement was identified. Specifically, an identifiable source of discovery, as well as external involvement, is associated with a greater propensity for management change. In contrast, restatements linked to changes in available guidance from regulators are less likely to result in such turnover. One implication is that effective control design and monitoring to facilitate internal discovery of errors can decrease the likelihood of multiple restatements and reduce fault finding that leads to management change. The judgmental nature of restatements suggests that an infrastructure supporting “right‐mindedness” does have merit. An interpretation panel would increase the feasibility of principles‐based standards, facilitating timely resolution of accounting‐associated disputes and thereby enhancing the information environment underlying the allocation of capital.     

LOCAL AUTHORITY CAPITAL ACCOUNTING – TOWARDS REFORM

If the reform described in this paper is implemented, it will represent the most significant change in local government accounting for many years. From an awareness of the defects of current methods of capital accounting, an approach which might be broadly described as 'a CCA version of residual income' is developed. This paper has direct practical relevance as CIPFA has recommended that this major change should be adopted and experiments are currently taking place. Moreover, interest is heightened as the private sector has backed off from CCA.     

新形势下产融结合之道

就产融结合来看,东部地区的金融业比较发达,应该重点发展金融主导型的合作模式,而在中西部地区则应该发展产业主导型的合作模式。     

资讯金钱

深发展推出固定利率气球贷,首只结构式私募股权投资信托计划面市,鹏华丰收债券基金发行,招行推出小企业融资新品“点金物流金融”,兴业银行“季季丰”理财产品