Credit ratings quality: The perceptions of market participants and other interested parties

The global credit crunch of 2008 and related sub-prime mortgage crisis of 2007 have made credit ratings agencies (CRAs) the focus of international attention. In particular, the quality of ratings information and the responsibilities CRAs owe to financial markets have come under intense scrutiny. Specifically, commentators, politicians, and regulators have expressed concern at the involvement CRAs might have had in creating global financial instability. However, the term ratings quality remains largely absent from the academic literature.This paper constructs a measurement instrument to capture ratings quality provided by CRAs, and assesses differences in perceptions of ratings quality amongst four stakeholder groups in public debt markets. Two macro-constructs of ratings quality are identified, labelled Technical Qualities and Relationship Qualities. The two macro-constructs are measured by ten micro-attributes, labelled: Cooperation; Independence; Internal Processes; Issuer Orientation; Methodology; Reputation; Service Quality; Shared Values and Norms; Transparency; and Trust. Each micro-attribute is operationalised into individual items, and then empirically tested using data obtained in the UK from 121 issuers, 75 non-debt issuing financial managers, 90 investors, and 120 other interested parties.The data suggest that ratings quality involves, in order of importance: the CRA's reputation; those values and norms of the CRA shared by users; the methodologies employed by the CRA; the independence of the CRA; and internal processes within the CRA. Multivariate analysis of variance finds no statistically significant variation between the groups for Technical Qualities factors. However, issuers rate Relationship Qualities and its micro-attributes of Trust, Issuer Orientation, and Service Quality higher than other market participants; a finding that reflects the dyadic relationship between the issuer's treasurer and lead analyst of the CRA. The paper concludes with a number of policy-relevant issues.     

Does price reflect emotional,structural or performance quality?

Three denim jeans products from the same manufacturer with differentiated pricing and labels (antiqued, sandblasted, and stonewashed) were used to determine the relationship between price and quality. Both qualitative and quantitative procedures were used to analyse the garments. All three jeans were made of twill weave with 3 × 1 repeat. Both structural and performance characteristics were compared using standardized tests. Analysis of variance was used to compare the selected structural and performance characteristics among the three jeans products. Tukey’s HSD tests were used for post hoc multiple comparisons for three jeans. The findings revealed that despite the fact that all three jeans products were from the same store, and that the fabrics used the same weave, degree and direction of twist, the jeans differed significantly for several structural and performance characteristics. Several possibilities for future research were explored.     

Analysts' Forecasts and the Broker Relationship

Analysts' ability to forecast earnings per share has been the subject of considerable debate. A concern highlighted in previous research is the agency problem which may arise when analysts have a close working relationship with the firms for which they are providing forecasts. This paper provides evidence that this relationship does not improve the accuracy of the earnings forecasts, but stimulates optimistic forecasts. In addition, the paper examines whether firm size is a factor in forecast accuracy or bias.     

Ill-behaviour of transformation-frontiers with environmental quality versus pollution

If one looks at environmental quality N as a renewable natural resource (with its own natural dynamics) which is changed by emissions Z, then one gets a better understanding of the shape of the damage function. In the case of a logistic growth dynamics one obtains a well-shaped transformation frontier N(Z), even in a two-species natural dynamics. For a more general natural interaction in the framework of a prey-predator model one obtains the possibilities of a cusp catastrophe which makes the transformation frontier N(Z) ill-shaped for the standard arguments of economists and their most favoured environmental policy instruments.     

Advertising,Price and Quality in Self–regulating Professions: A Survey

This paper surveys the theoretical and empirical literature on the relationship between advertising, fees and quality in the self–regulating professions. Much of the literature is derived from the perspective of advertising as an information–enhancing device, helping to reduce the information asymmetry between professional and client. This is consistent with the majority of the empirical studies which suggest that advertising tends to have a downward effect on professional fees, with little if any adverse effect on quality. There are, however, important issues of method and measurement which may lessen the force of this conclusion     

Aggregate Dividend Behavior and Permanent Earnings Hypothesis

The study examines the aggregate dividend behavior of U.S. corporations based on the permanent earnings hypothesis. Using annual data of aggregate earnings and dividends from 1871–1993, I find that although managers change dividends proportional to permanent earnings changes, they make revisions with a larger percentage change in dividends than in permanent earnings. The results from the post‐war data show that firms follow a partial adjustment policy with a long‐term dividend payout target in mind and make revisions with a delay. The quarterly data analysis yields results similar to those of the post‐war annual data.     

The role of perceived product quality and overall satisfaction on purchase intentions

The study investigated the effects of perceived product quality and overall satisfaction on purchase intentions. Moreover, the direct and indirect effects of values and involvement on purchase intentions were studied. The study utilized the survey questionnaire and used sport shoes as the product being researched. The sample consisted of 197 students who responded to an anonymous questionnaire. Five hypotheses were tested and four of them were confirmed by the data. Perceived quality had a direct and an indirect effect (through overall satisfaction) on purchase intentions, overall satisfaction had a direct effect on purchase intentions and involvement had an indirect effect on purchase intentions through overall satisfaction and perceived quality. The results of the study provide several theoretical and practical implications.     

试论人文精神在2000版ISO9001质量标准中的蕴涵

近代管理科学的发展,经历了一个以"物"为中心的管理向以"人"为中心管理的转移过程。所谓 "管理的回归本色",其内涵是管理不是单纯的控制,而是一种如何使人的价值在组织的经营活动中得到实现 及如何尊重人的价值。这一理论视角的转换,在改版后的2000版ISO9001标准中得到了鲜明的体现和阐释。     

公司治理结构中经营者盈余管理的博弈分析

本文从经营者与监督者之间的博弈模型入手,讨论了公司治理结构对盈余管理的影响,并在分析了我国目前的公司治理结构存在的问题后,提出了一些措施,最后给出了研究建议。     

Managing Earnings with Intercorporate Investments

Abstract:  We explore to what extent firms deliberately manage their financial reports by exploiting the flexibility of generally accepted accounting principles. Using a sample of Oslo Stock Exchange-listed firms with 20–50% equity holdings in other firms, we find that firms with high financial leverage tend to maximize reported earnings from these investments through their choice between the cost method and the equity method, possibly in an attempt to reduce debt renegotiation costs or to avoid regulatory attention. In contrast, managers do not systematically bias reported earnings to extract private benefits or to signal revised expectations about future cash flows. Firms use different earnings management tools in a consistent way, as the earnings effect of the cost/equity choice is not offset by discretionary accruals.