CHILDREN AND THEIR PARENTS: A REVIEW OF FERTILITY AND CAUSALITY

Childbearing decisions are not made in isolation. They are taken in concert with decisions regarding work, marriage, health investments and stocks, as well as many other observable and non‐observable considerations. Drawing causal inferences regarding the effect of additional children on family outcomes is complicated by these endogenous factors. This paper lays out the issues involved in estimating the effect of additional child births on family outcomes, and the assumptions underlying the range of estimators and methodologies proposed in the economic literature. The common pitfalls of these estimators are discussed, as well as their potential to bias our interpretation of the effect additional births have on children and parents, both in the existing literature and in future work in the face of changing patterns of childbearing and child‐rearing.     

Functionality evaluation of mobile hotel websites in the m-commerce era

Many hotel companies have launched mobile versions of their official websites in the m-commerce era. These websites are used as online marketing and communication tools for travelers worldwide. Given that mobile websites are essentially different from their desktop counterparts, a new set of evaluation criteria must be formulated in response to the changing technologies in Internet browsing. This study used the hotels in Hong Kong as samples and produced a revised evaluation instrument for the functionality of mobile hotel websites via focus group discussions. Performance scores were calculated to compare the different types and categories of hotels. Managerial implications were also discussed.     

ARE IMPACTS OF EARLY INTERVENTIONS IN THE SCANDINAVIAN WELFARE STATE CONSISTENT WITH A HECKMAN CURVE? A META‐ANALYSIS

“Early intervention” has been a mantra in recent debates about human capital investment. Strong theoretical models motivate this focus by predicting that investment in children is most cost‐effective when they are young. The “Heckman curve” summarizes this idea visually (Heckman, 2006). However, hardly any reviews scrutinize this hypothesis empirically in modern welfare states such as those in Scandinavia that already invest heavily during early childhood. Any such review is ideally based on interventions conducted as randomized controlled trials (RCTs), set in the same welfare state, and comparable across ages through cost‐standardized effects. This meta‐analysis assembles cost‐standardized effect estimates from 10 RCTs, including a total of 18 intervention arms and 30,578 participants (aged 1.5–24 years), conducted by the same research center in the Scandinavian welfare state of Denmark. These interventions show significant effects relative to their costs, despite the large baseline investment level. Interventions targeted at younger children tend to produce larger effects, consistent with the Heckman curve. However, variation in the effect size within age groups is as large as it is across age groups. This indicates that both the quality and timing of investments matter and that “early interventions” are not necessarily superior to later interventions.     

Valuation Implications of Unconditional Accounting Conservatism: Evidence from Analysts' Target Prices

We examine whether financial analysts understand the valuation implications of unconditional accounting conservatism when forecasting target prices. While accounting conservatism affects reported earnings, conservatism per se does not have an effect on the present value of future cash flows. We examine whether analysts adjust for the effect of conservatism included in their earnings forecasts when using these forecasts to estimate target prices. We find that signed target price errors (actual minus forecast) have a significant positive association with the degree of conservatism in forward earnings, suggesting that target prices are biased due to accounting conservatism. Cross‐sectional analysis suggests that more sophisticated analysts and superior long‐term forecasters adjust for conservatism to a greater extent than other analysts. In additional analyses, we explore the mechanism through which conservatism leads to bias in target prices. We first show that analysts' earnings forecasts are negatively associated with the degree of conservatism; that is, analysts include the effect of unconditional conservatism in their earnings forecasts. Based on alternative earnings‐based valuation models that analysts may use, our evidence suggests that analysts fail to appropriately adjust their valuation multiple for the effect of conservatism included in their earnings forecasts when using these forecasts to derive target prices. As a consequence, we find that, for extreme changes in conservatism, the bias in analysts' target prices due to conservatism leads to a distortion of market prices. The evidence highlights the concern that analysts may not appreciate the valuation implications of conservative accounting which could inhibit price discovery.     

The Impact of Import Competition and Export Opportunities on the Dutch Labour Market

De Economist - We study the impact of rising Chinese and Eastern European import competition and export opportunities between 2001 and 2016 on the Dutch labour market. Both the participation of...     

Domestic value chains as stepping stones to global value chain integration

Identifying the determinants of global value chain (GVC) integration is essential to understand the past expansion and current slowdown in GVCs. In this paper, we study the role of domestic value chains (DVCs) for GVC integration. In the presence of industry‐specific fixed costs of fragmenting production and of switching across input suppliers, DVCs can either be stepping stones or stumbling blocks for subsequent GVC entry. Focusing on backward linkages, that is, the sourcing of intermediates, we provide robust empirical evidence in favour of the stepping‐stone hypothesis. In our benchmark specification, a one standard deviation increase in DVC integration raises subsequent GVC integration by about 0.4%. To identify the mechanisms at work, we exploit two dimensions of industry‐level heterogeneity: product differentiation (a proxy of fragmentation costs) and relationship specificity (a proxy of the costs of switching between suppliers). We find that DVC integration is less conducive to GVC integration in industries that are characterised by relatively high switching costs and relatively low fragmentation costs.     

Audit committees and financial reporting quality: The 8th EU Company Law Directive perspective

In order to increase corporate governance quality, the 8th EU Company Law Directive enacted a mandatory audit committee in publicly listed companies in the EU and defined its tasks and responsibilities. In response to the directive, we examine the incremental value of audit committee monitoring effectiveness and audit committee competencies over the mere existence of an audit committee. We find that audit committee monitoring effectiveness and competencies are positively associated with financial reporting quality, whereas, somewhat surprisingly, the effect of the existence of an audit committee is negative. This finding shows that the existence of audit committees is a necessary but not a sufficient condition for enhancing financial reporting quality. Collectively, the study’s findings suggest that the 8th Directive has had a positive effect on corporate governance quality and, in turn, financial reporting quality in the EU.     

Milking It for All It’s Worth: Unpalatable Practices,Dairy Cows and Veterinary Work?

Journal of Business Ethics - Viewing animals as a disposable resource is by no means novel, but does milking the cow for all its worth now represent a previously unimaginable level of exploitation?...     

The EU Elephant: Europe in the 2021 Dutch General Elections

Intereconomics - For the Netherlands, the single most important EU issue is the future of the eurozone.