The dissent voting behaviour of central bankers: what do we really know?

We examine the determinants of the dissent in central bank boards voting records about monetary policy rates in the Czech Republic, Hungary, Sweden, the UK and the US. In contrast to previous studies, we consider 25 different macroeconomic, financial, institutional, psychological or preference-related factors jointly and use Bayesian model averaging (BMA) to formally assess the attendant model uncertainty. We find that the rate of dissent is between 5% and 20% for the examined central banks. Our results suggest that most of the examined regressors, including factors that capture the effects of inflation and output, are not robust determinants of voting dissent. This result suggests that unobserved characteristics of central bankers and different communication strategies drive the dissent, rather than the level of macroeconomic uncertainty.     

Mixed systems with minimal and maximal lifetime variances

We consider the mixed systems composed of a fixed number of components whose lifetimes are i.i.d. with a known distribution which has a positive and finite variance. We show that a certain of the k-out-of-n systems has the minimal lifetime variance, and the maximal one is attained by a mixture of series and parallel systems. The number of the k-out-of-n system, and the probability weights of the mixture depend on the first two moments of order statistics of the parent distribution of the component lifetimes. We also show methods of calculating extreme system lifetime variances under various restrictions on the system lifetime expectations, and vice versa.     

Patriotic name bias and stock returns

Companies whose names contain the words “America(n)” or “USA” earn positive abnormal returns of about 6% per annum during World War II, the Korean War, and the War on Terrorism. These abnormal returns are not realized immediately upon the outbreak of each of the wars but are accumulated gradually during wartime. Given that no such effect is observed for the Vietnam War, we hypothesize that major, victorious wars arouse investors' patriotic feelings and cause them to gradually and perhaps subconsciously gravitate toward stocks whose name has a patriotic flavor.     

Financial distress of companies in Poland

The study examines main determinants of financial distress of companies in Poland during the recent transformation period. Data compose a sample of 1995–97 annual financial statements of 200 unlisted companies in Poland. Degree of financial distress is expressed either by the binomial variable or by the trinomial ordered variable. The attempted models (binomial and trinomial logit) explain the distress variable for 1997 by the financial indicators evaluated on the basis of financial statements from previous years. The results are sensitive to the choice of explanatory variables in the models. The forecast accuracy of the estimated models lies in the range of 80–90 percent. In the second half of the 1990's, the financial condition of companies in Poland was determined by the degree of liquidity, profitability, and the financial leverage variables.     

Front Line Work In the ‘New Model Service Firm’: Australian and Japanese Comparisons

This article assesses the claims of the management literature regarding two important aspects of front line service work; job content and relations with the immediate supervisor. It does this, firstly, by examining the relevant research literatures and, secondly, by presenting evidence from two firms based in Australia and from one based in Japan. These firms were chosen as approximating to the ideal type of the ‘new model service firm’. Evidence on knowledge, skills and creativity in the three sites suggests important commonalities with, and differences from, the ‘routine worker’ ideal type. the major difference lay in the considerable amount of internal contextual knowledge that was required in the role. Relations with the immediate supervisor were examined by focusing on the social relations of control and learning. the evidence on control and learning, cumulatively, indicated a tendency towards the supervisor adopting less of a direct control role and adopting more of a hierarchical teaching role.     

Continuous-time term structure models: Forward measure approach

The problem of term structure of interest rates modelling is considered in a continuous-time framework. The emphasis is on the bond prices, forward bond prices and so-called LIBOR rates, rather than on the instantaneous continuously compounded rates as in most traditional models. Forward and spot probability measures are introduced in this general set-up. Two conditions of no-arbitrage between bonds and cash are examined. A process of savings account implied by an arbitrage-free family of bond prices is identified by means of a multiplicative decomposition of semimartingales. The uniqueness of an implied savings account is established under fairly general conditions. The notion of a family of forward processes is introduced, and the existence of an associated arbitrage-free family of bond prices is examined. A straightforward construction of a lognormal model of forward LIBOR rates, based on the backward induction, is presented.     

Evaluating changes in the monetary transmission mechanism in the Czech Republic

We investigate the evolution of the monetary policy transmission mechanism in the Czech Republic over the course of the 1996–2010 time period through the use of a time-varying parameters Bayesian vector autoregression model with stochastic volatility. We evaluate whether the response of GDP and the price level to exchange rate or interest rate shocks has changed over time, focusing on the period of the recent financial crisis. Our results suggest that prices have become increasingly responsive to monetary policy shocks. However, in terms of credible intervals, the stability of the monetary policy transmission mechanism in the Czech Republic cannot be rejected. Furthermore, it is demonstrated that the exchange rate pass-through has largely remained stable over time.     

On the persistence and dynamics of Big 4 real audit fees: Evidence from the UK

Despite the huge audit pricing literature, there is a dearth of evidence on the temporal dynamics of audit fee adjustments and the persistence of audit fees. Based on a sample of 76,867 panel observations for a sample of UK companies audited by the Big 4 over the period 1998 to 2012, we employ consistent lagged dependent variable panel estimators to provide new evidence on the persistence and dynamics of real Big 4 audit fees. Contrary to extant research, which assumes that audit fees adjust immediately in a single period, our empirical results indicate that Big 4 real audit fees are persistent, being partly dependent on their previous realisations. We conclude that static audit fee models omit a potentially important temporal dimension of audit pricing behaviour and that further research is warranted into dynamic audit fee models across other jurisdictions.     

External Financing Constraints and Firm Innovation

We investigate the effect of individual banks affected by the recent financial crisis of 2008/2009 on the innovation activities of their business customers. Firms associated with a bank that relies strongly on the interbank market are more likely to be exposed to a credit supply shock during the financial crisis and therefore face external financing constraints. Exploiting both the extensive and the intensive margin, our difference‐in‐differences results imply that those firms which have a business relation to a bank with higher interbank market reliance reduce their innovation activities during the financial crisis to a higher degree than other firms. Tests for additional expenditures reveal that marketing expenditures show a lower or even no sensitivity to bank financing during the financial crisis.     

Thinking Outside the Block: Projected Phases of Blockchain Integration in the Accounting Industry

This paper aims to propound a thorough and circumspect analysis of the implications of blockchain technology in the accounting profession and its broader industry. The analysis begins with a summary of early developments by first movers and how they are harnessing blockchain technology to improve business practices. Concomitantly, the paper will go on to discuss how this technology will streamline accounting processes, specifically as the technology approaches critical mass. Finally, a discussion of its long‐term implications will follow through a more philosophical and conceptual dialogue. Throughout the paper, criticisms will be raised to address concerns regarding blockchain's widespread use.