A FURTHER UNDERSTANDING OF STOCK DISTRIBUTIONS: THE CASE OF REVERSE STOCK SPLITS

In this study we analyze reverse stock splits and demonstrate that the total risk of returns to reverse splitting securities declines after the split, yet systematic risk remains essentially unchanged. In general, securities have negative abnormal stock returns at reverse split announcements, though smaller companies have stronger negative reactions. Companies forced to reverse split have positive wealth effects.     

Strategies to increase agricultural productivity and reduce land degradation: evidence from Uganda

This paper estimates a structural econometric model of household decisions regarding income strategies, participation in programs and organisations, crop choices, land management, and labour use, and their implications for agricultural production and soil erosion; based upon a survey of over 450 households and their farm plots in Uganda. Many factors have context-specific impacts and involve trade-offs between increasing production and reducing land degradation. Government agricultural extension and training programs contribute to higher value of crop production in the lowlands, but to soil erosion in the highlands. By contrast, non-governmental organization (NGO) programs focusing on agriculture and environment help to reduce erosion, but have less favourable impacts on production in the lowlands. Education increases household incomes, but also reduces crop production in the lowlands. Poverty has mixed impacts on agricultural production, depending on the nature of poverty: smaller farms obtain higher crop production per hectare, while households with fewer livestock have lower crop production. Population pressure contributes to agricultural intensification, but also to erosion in the densely populated highlands. Several household income strategies contribute to increased value of crop production, without significant impacts on soil erosion. We find little evidence of impact of access to markets, roads and credit, land tenure or title on agricultural intensification and crop production and land degradation. In general, the results imply that the strategies to increase agricultural production and reduce land degradation must be location-specific, and that there are few 'win-win' opportunities to simultaneously increase production and reduce land degradation.     

Exploring the role of memory for self‐selected ad experiences: Are some advertising media better liked than others?

Advertising media are associated with different degrees of self‐selected versus intrusive ad experiences. The role of such media differences in attitudes toward advertising was explored in a nationwide survey. The survey provides a national picture of attitudes toward specific ad media ranging from advertising media that deliver highly self‐selected ad experiences (catalogs and business classifieds) to highly intrusive ones (TV). A total of 2,514 adults were surveyed regarding their opinions about ads in (1) TV, (2) radio, (3) catalogs, (4) business classifieds, (5) out‐of‐home, or (6) advertising in general. Media that allow for self‐selected experiences, where perceived interest in an ad is the basis for attention to it, were evaluated much more favorably than more intrusive advertising media. Catalogs and business classifieds elicited the most favorable opinions; TV advertising elicited the least, and these media differences generally cut across demographic lines. Also, although more educated and affluent consumers generally held less favorable views of advertising, preliminary results suggested that this did not hold true for media that allow for self‐selected processing. An additional study suggested that memory for advertisements plays a significant role in the evaluation of a self‐selected ad medium (catalogs). That is, consumers' strongest memories are for those ads to which they paid the most attention, and consequently these engaging ads have a disproportionate influence on opinions toward the ad medium. © 2004 Wiley Periodicals, Inc.     

A new look at the New South Wales Corps, 1790–1810

This paper shows the New South Wales Corps as a changing entity with a considerable impact on the New South Wales economy until 1810. Findings include the large number of men (1,645) who served in New South Wales, while the total population was less than 5,000, and the importance of the Corps as a source of free settlers in the period before free immigration. Convicts were recruited locally and as a group outweighed arrivals from the Savoy Military Prison, cited in the past as the bad element in the Corps. The Corps contained a reasonably high proportion of skilled men who contributed formally and informally to the colony’s productivity both before and after discharge. The study shows that the officer group was relatively stable before 1800 but that turnover was fairly high thereafter. Finally it is shown that the influence of the New South Wales Corps did not cease with its recall, for well over half the regiment remained in the colony, some seventy–one as settlers and 356 as troops under Macquarie’s command — including a special Veteran Corps.     

Internal governance structures and earnings management

This paper investigates the role of a firm's internal governance structure in constraining earnings management. It is hypothesized that the practice of earnings management is systematically related to the strength of internal corporate governance mechanisms, including the board of directors, the audit committee, the internal audit function and the choice of external auditor. Based on a broad cross‐sectional sample of 434 listed Australian firms, for the financial year ending in 2000, a majority of non‐executive directors on the board and on the audit committee are found to be significantly associated with a lower likelihood of earnings management, as measured by the absolute level of discretionary accruals. The voluntary establishment of an internal audit function and the choice of auditor are not significantly related to a reduction in the level of discretionary accruals. Our additional analysis, using small increases in earnings as a measure of earnings management, also found a negative association between this measure and the existence of an audit committee.     

Public Predisclosure Information, Firm Size, Analyst Following, and Market Reactions to Earnings Announcements

Abstract:   This study examines the effects of public predisclosure information on market reactions to earnings announcements. We develop an empirical measure of public predisclosure information impounded in price prior to earnings announcements by cumulating abnormal returns on public news release dates during the quarter. Consistent with prior literature, we document a negative association between this measure and market reactions to subsequent earnings announcements. Moreover, we find that after controlling for this measure, firm size and analyst following are significantly positively associated with market reactions to earnings announcements. Contrary to prior empirical evidence, our results suggest that, after controlling for actual predisclosure information impounded in price, market reactions to earnings announcements are greater in magnitude for larger, more widely-followed firms than for smaller, less widely-followed firms.     

How do auditors respond to low annual report readability?

We show that increased audit effort is associated with lower annual report readability to compensate for a perceived increase in the risk of financial misstatement for United States (US) firms. In particular, we find that lower annual report readability is associated with longer audit delays and higher audit fees for Form 10-K for US auditors, suggesting that auditors spend more effort auditing clients when annual reports have lower readability. We also find that low readability increases the likelihood of auditors using more explanatory language in unqualified audit reports.     

Who are the essential and frontline workers?

Business Economics - Identifying essential and frontline workers and understanding their characteristics is useful for policymakers and researchers in targeting social insurance and safety net...