The Strategic and Effective Dimensions of the Border Tax Adjustment

Between 2001 and 2011, the Kyoto Protocol has experienced defections of two countries that took part in its negotiation and accounted for around 44% of all parties' emissions. The border tax adjustment, a tax levied on imports to reproduce domestic taxation on similar goods, is advocated to prevent such compliance failures as well as to support unilateral pollution regulations by mitigating firms' competitiveness losses and carbon leakages. The paper investigates whether this trade instrument can constitute a decentralized solution to achieve the first‐best in a noncooperative framework. It develops a two‐country two‐firm reciprocal‐market model of trade with global pollution and country heterogeneity. Countries' interactions are studied following a noncooperative game theory approach, for two scenarios defined by the possibility to implement a border tax adjustment to sanction unilateral deviation from the cooperative situation. The paper predicts first that this opportunity modifies the countries' choices of strategies toward more compliance; second that among the strategic and effective dimensions of the border tax adjustment, only the former allows to achieve the first‐best; finally that the border tax adjustment fosters countries' participation in the cooperative international environmental agreement.     

How Disaggregation Enhances the Credibility of Management Earnings Forecasts

An important problem facing managers is how to enhance the credibility, or believability, of their earnings forecasts. In this paper, we experimentally test whether a characteristic of a management earnings forecast—namely, whether it is disaggregated—can affect its credibility. We also test whether disaggregation moderates the relation between managerial incentives and forecast credibility. Disaggregated forecasts include an earnings forecast as well as forecasts of other key line items comprising that earnings forecast. Our results indicate that disaggregated forecasts are judged to be more credible than aggregated ones and that disaggregation works to counteract the effect of high incentives. We also develop and test an original model that explains how disaggregation positively impacts three factors that, in turn, influence forecast credibility: perceived precision of management's beliefs, perceived clarity of the forecast, and perceived financial reporting quality. We show that forecast disaggregation works to remedy incentive problems only via its effect on perceived financial reporting quality. Overall, our study adds to our understanding of how managers can credibly communicate their expectations about the future to market participants.     

The Public Policy Debate on Investors' Need for Disclosure Regulation: Accounting Historians' Help Wanted?*/ LE DÉBAT PUBLIC SUR LES BESOINS DES INVESTISSEURS EN MATIÈRE DE RÉGLEMENTATION DE L'INFORMATION: FAUT‐IL L'AIDE DES HISTORIENS DE LA COMPTABILITÉ?

This paper explores how research in accounting history can contribute to the important public policy debate regarding investors' need for disclosure regulation. Accounting, finance, and economics researchers and practitioners argue for, as well as against, disclosure regulation. The debate remains theoretical, however, because empirical studies are virtually nonexistent. This paper reviews five contexts in which accounting historians can begin a search for empirical insights concerning the costs, benefits, externalities, and effects on stakeholders of disclosure regulation. The paper's investigation of the accounting history literature suggests that accounting historians could improve the quality of the debate and help accommodate broader interests or alternative solutions to financial crises.     

Earnings Trend and Performance Relative to Benchmarks: How Consistency Influences Their Joint Use

Archival research shows that the market reacts to earnings trend as well as to earnings performance relative to analysts' forecasts (i.e., benchmark performance). We conduct four experiments to investigate how and why investors react to these two measures when both are available over multiple time periods. Our results show that investors rely on an earnings measure only when it is consistent over time. When both measures are consistent over time, investors use them in an additive fashion, suggesting that they view them as providing different information about the firm. Further tests show that investors believe that earnings trend and benchmark performance both provide information about a firm's future prospects and management's credibility. Although judged future prospects fully explain the effect of earnings trend on investor judgments, neither judged future prospects nor management credibility completely explains the effect of benchmark performance. Our study has implications for firm managers and researchers.     

INTERNATIONAL AND DOMESTIC INSTITUTIONS IN THE EMU PROCESS

European progress toward monetary union takes place within the highly institutionalized setting of the European Community (EC). This paper examines the ways in which formal institutions and decisionmaking procedures have constrained the Economic and Monetary Union (EMU) process. The EC's structure has both created demands for and facilitated cross-issue linkages, and these linkages characterize the successful bargaining on EMU. However, success also requires ratification. Domestic ratification procedures and changes in the EC's context of linkage have created challenges for the ratification of the Maastricht treaty. Ratification is also tied to concerns about democratic accountability, which arise from current legislative procedures and are the subject of ongoing institutional reform.     

COMPARING THE NEW ENGLAND AND SOUTHERN CALIFORNIA REGIONAL RECESSIONS

During the early 1990s, both New England and Southern California experienced regional recessions that were much more severe than the national recession of 1990–1991. At first glance, these regional recessions appear to be similar phenomena. However, shift-share analysis conducted at the 3-digit Standard Industry Classification (SIC) level indicates that the underlying causes of the recessions were different. During the late 1980s and early 1990s, New England's manufacturing industries did not perform nearly so well as their national counterparts in creating new jobs and preventing job losses. The loss of regional competitiveness was the main factor explaining that region's recession. On the other hand, most of Southern California's industries performed about as well as their national counterparts during the recession. For Southern California, the industry structure of the region—in particular, its heavy reliance on defense-related production—contributed to the recession more than did a loss of regional competitiveness.     

How Do Experienced Users Evaluate Hybrid Financial Instruments?

Hybrid financial instruments contain features of both liabilities and equity. Standard setters continue to struggle with “getting the classification right” for these complex instruments. In this paper, we experimentally test whether the features of hybrid instruments affect the credit‐related judgments of experienced finance professionals, even when the hybrid instruments are already classified as liabilities or equity. Our results suggest that getting the classification right is not of primary importance for these experienced users, as they largely rely on the underlying features of the instrument to make their judgments. A second experiment shows that experienced users’ reliance on features generalizes to several features that often characterize hybrid instruments. However, we also find that experienced users vary in their beliefs about which individual features are most important in distinguishing between liabilities and equity. Together, our results highlight the importance of effective disclosure of hybrid instruments’ features.     

韩国独立空间的终局Ⅰ

2009年3月30日是一个特别的日子。韩国当代艺术的第一家独立空间Ssamzie Space关闭了。最后的晚上,Ssamzie空间有个内部的表演和酒会,这些活动是欢庆自己前10年的贡献。Ssamzie空间的参展艺术家,策展人和入驻艺术家(artist-in-resident)一起回顾了10年的历史。如果没有他们的帮助和后援,Ssamzie空间不能做得到现在     

EXPORT-LINKED EMPLOYMENT IN SOUTHERN CALIFORNIA

This paper examines relevant data sources and develops a methodology based on available data in order to estimate the level of employment for a region that is linked to exports of goods and services. The methodology allows for the estimation of direct and indirect export-related employment at the 2-digit SIC industry level. In addition, the paper describes how the direction of regional trade can be estimated, and how regional employment linked to exports to major trading partners can be calculated. This methodology is then applied using data from the Southern California region. Tables with estimates of total regional export-linked employment (by industry) and the regional employment associated with exports to each of the region's top 10 export trading partners are included. The usefulness of this type of database with regard to economic policy is discussed, as well as regional economic implications of the current economic crisis in Asia. ( JEL F16, R15, R58, R23)