Product market competition and conditional conservatism

Based on pooled cross-sectional analysis, we find a robust positive relation between product market competition and conditional accounting conservatism. We also find evidence of an inter-temporal increase in conditional conservatism following industry deregulation and increased antitrust case filings. Distinguishing further between two dimensions of competition, we find conditional conservatism is greater when there is a higher threat of new entrants as well as stiff existing competition. Moreover, we find these results largely hold for industry followers as opposed to industry leaders, suggesting that strategic considerations shape the extent to which product market competition affects conditional conservatism.     

Independent director incentives: Where do talented directors spend their limited time and energy?

We study reputation incentives in the director labor market and find that directors with multiple directorships distribute their effort unequally based on the directorship's relative prestige. When directors experience an exogenous increase in a directorship's relative ranking, their board attendance rate increases and subsequent firm performance improves. Also, directors are less willing to relinquish their relatively more prestigious directorships, even when firm performance declines. Finally, forced Chief Executive Officer departure sensitivity to poor performance rises when a larger fraction of independent directors view the board as relatively more prestigious. We conclude that director reputation is a powerful incentive for independent directors.     

Bounded rationality,expectations, and child labour

This paper develops a model with overlapping generations, where the household's optimal fertility, child labour, and education decisions depend on the parents’ expectations or beliefs about the return to education. It is shown that there exists a range of parental income where the fertility rate is high and children participate in the labour market and receive an incomplete education if a parent believes the return to education is low. The act of participating in the labour market reduces the child's ability to accumulate human capital; thus, the action of sending a child into the labour market is sufficient to ensure that the parents’ initially pessimistic expectations are fulfilled. It is then shown that a one‐time policy intervention, such as banning child labour and mandatory education, can be enough to move a country from the positive child labour equilibrium to an equilibrium with no child labour.     

The U.S. Television Set Market

The U.S. television set market is projected to reach the $27 billion mark by 2010, up from $25 billion in 2006. The bulk of this growth will come from the flat-panel television set segment, which is projected to grow 65 percent from 2006-2010. The transition to digital television continues to be a major underpinning of the television set market in the United States. Additionally, consumers are increasingly looking to use their television sets for a myriad of non-traditional activities including accessing the Internet, checking e-mail, and watching content accessed from hardware devices like digital video recorders. JEL Classification L63     

通胀压力下亚洲经济体将出现分化

【香港《亚洲时报》7月22日】面对成本推动型通胀的沉重压力，亚洲众多石油进口国的处境出现了分化。相对而言，一些国家能够较好地应对全球油价攀升导致的宏观经济挑战，而另一些国家则受到了油价高涨的沉重打击。     

Consumption, Housing Rents and Housing Price: A Test Of A Real Estate Pricing Model Using Hong Kong Data

The present study investigates whether Hong Kong's volatile real estate market is consistent with a non–linear consumption–based–asset–pricing model. It finds that the asset–pricing model is not rejected for some types of properties. However, the differentials between the returns to residential properties and risk–free rate are too large to be explained by the model.