Earnings Management and the Post‐earnings Announcement Drift

We posit that the post‐earnings announcement drift (PEAD) is related to earnings management. Accordingly, we find that firms with large negative (positive) changes in operating cash flows manage accruals upward (downward). Most importantly, we find that PEAD is concentrated largely among those firms that are most likely to have smoothed their reported earnings and is generally associated with discretionary accruals as opposed to nondiscretionary accruals. There is no evidence of a positive (negative) PEAD for those firms with large positive (negative) earnings changes that are least likely to have managed earnings downward (upward).     

Forecast output coincidence and biproportion: two criteria to determine the orientation of an economy. Comparison for France (1980–1997)

The method of forecast output coincidence used to determine if sectors are demandsided or supply-sided in an input-output framework mixes two effects, the structural effect (choosing between demand and supply side models) and the effect of an exogenous factor (final demand or added-value). The note recalls that another method is possible, the comparison of the stability of technical and allocation coefficients, generalized by the biproportional filter: if for a sector, after biproportional filtering, column coefficients are more stable than row coefficients, then this sector is declared as not supply-sided (but one cannot decide that it is demand-sided anyway), and conversely.     

Post-merger performance in the software industry: The impact of characteristics of the software product portfolio

This article studies the impact of the characteristics of software product portfolios on the performance of firms involved in a merger of software companies. The short-term financial results reveal that markets generally seem to neglect the characteristics of software product portfolios when the merger is announced. Nevertheless, such portfolios appear to have a positive impact on the price/book value ratio of merged software firms. The empirical evidence presented in this paper suggests that, in the long term, the performance of business combinations in the software industry is related to certain factors that are attributable to virtual network effects.     

Targeted savings and labor supply

Substantial evidence suggests that savings behavior may depart from neoclassical optimization. This article examines the implications of raising the savings rate—whether through social security, retirement plans, or otherwise—for labor supply, where labor supply is determined by behavioral utility functions that reflect the non-neoclassical character of savings behavior. Under one formulation, raising the targeted savings rate increases labor supply regardless of the slope of the labor supply curve; under a second, raising the targeted savings rate has the same effect on labor supply as that of raising the labor income tax rate; and under a third, raising the targeted savings rate has no effect on labor supply. Effects on labor supply are particularly consequential because of the significant preexisting distortion due to labor income taxation.     

Market Definition and the Merger Guidelines

The recently issued revision of the US Horizontal Merger Guidelines, like its predecessors and mirrored by similar guidelines throughout the world, devotes substantial attention to the market definition process and the implications of market shares in the market that is selected. Nevertheless, some controversy concerning the revised Guidelines questions their increased openness toward more direct, economically based methods of predicting the competitive effects of mergers. By contrast, this article suggests that, as a matter of economic logic, the Guidelines revision can only be criticized for its timidity. Indeed, economic principles unambiguously favor elimination of the market definition process altogether.     

International tourism in Cuba: Can capitalism be used to save socialism?

Following the fall of the Soviet Bloc in 1989, a somber Fidel Castro informed the Cuban people that their Revolution hovered on the brink of disaster. Faced with an unprecedented economic crisis and few options, the Cuban government, reluctantly returned to international tourism as the foundation for economic salvation. Since then international tourism has multiplied fifteen-fold. While reintroducing tourism may have saved Cuba from a political and economic catastrophe - foreign tourists, mostly from capitalist countries, have enabled Cuba and the Revolution to survive - this use of capitalism to save socialism has also produced formidable challenges. In particular, the emergence of a consumer culture and the subsequent “dollarization” of the economy, pose a grave threat to Cuban society as products are increasingly evaluated, purchased, and consumed on the basis of their symbolic content and meaning for social status. Nonetheless, it will be argued in this paper that since Cuban society remains anchored by highly functional, stable, well-organized neighborhoods and a flourishing, innovative informal economy, embedded values of cooperation may serve as a counteractive force to the rise of a culture of consumerism and materialism. Based on this premise, the paper concludes with an examination of three possible scenarios for the future of tourism in Cuba.     

Insider trading returns and dividend signals

The literature shows that insider trading activities and dividends contain information content and serve as signals to firm value. If insider return is a proxy for information asymmetry, we should expect a positive relation between dividends and insider returns. Using a sample of unambiguous (good and bad) news concerning earnings and dividend announcements from Hong Kong firms, we show that information asymmetry is stronger for bad news firms with insider sales than good news firms with insider purchases. In addition, we improve the methodology of Khang and King [Khang, K., & King, T. H. D. (2006). Does dividend policy relate to cross-sectional variation in information asymmetry? Evidence from returns to insider trades. Financial Management, 35, 71–94] and provide evidence that dividend is a credible signal for measuring information asymmetry.     

霓虹灯到处闪烁 霓虹灯迎来了21世纪

尽管标识照明的选择越来越多,在标识制作者心中霓虹灯仍然备受关注。霓虹灯仍然照亮着很多美国高楼大厦的标识。鲁迪穆罕斯特恩(1937-2006),现在霓虹灯的伟大倡导者,把霓虹灯作为一种艺术,一个庄严的标识在推广。他梦想着让世界在霓虹灯的照耀下大放光彩。