Subsidies under uncertainty: Modeling of input- and output-oriented policies

Agricultural subsidies play an essential role in agricultural and rural development in many developed economies. Countries have implemented agricultural subsidy policies with a focus on food security and environmental protection. Agricultural production is risky and uncertain, influencing the efficiency of agricultural subsidies. This study develops a theoretical framework to analyze the effects of production uncertainties on the efficiency of agricultural subsidy policies under the double constraints of food security and environmental protection. The basic model is investigated under six different conditions, and expanded research also is presented. Our models show that uncertainty, including output, cost, and price uncertainties, and technology conversion efficiency significantly affects the efficiency of agricultural subsidies. Under high technology conversion efficiency, output-oriented subsidies are appropriate for food security and environmental protection goals. Policymakers should take both uncertainty and production efficiency into consideration when choosing between input-oriented and output-oriented subsidy policies.     

为了指标而竞争*——来自中国煤矿企业的证据#br#

中国矿难治理取得了不可忽视的成就，但总结其成功经验的研究尚显不足。本文认为安全生产的总量指标控制是一种降低中国煤矿企业矿难死亡人数的有效方式。笔者手工搜集了2002—2006年中国煤矿企业矿难死亡人数和省级安全生产控制考核数据，并与工业企业数据库进行匹配，发现单个煤矿事故死亡人数和同地区其他煤矿事故死亡人数之间显著负相关，说明企业间存在指标竞争现象。广义双重差分回归结果显示，在控制指标越少的省份，企业间指标竞争越激烈。异质性分析发现，在超标省份或者主管官员晋升的关键时期，指标竞争更加激烈。最后，单个煤矿企业死亡人数与异省邻市矿难死亡人数不相关，排除了矿难导致监管加强的“威慑效应”。本文的研究结果表明，煤矿安全生产总量指标控制对企业安全生产有显著作用。     

Board diversity reforms: Do they matter for EU bank performance?

We examine the impact of governance reforms related to board diversity on the performance of European Union banks. Using a difference‐in‐difference approach, we document that reforms increase bank stock returns and their volatility within the first 3 years after their enactment. The type of reform matters, with quotas increasing return volatility. The effectiveness of reforms depends on a country's institutional environment. The impact of reforms on return volatility is found to be beneficial in countries more open to diversity, with common law system and with greater economic freedom. Finally, reforms play a bigger role in banks that have ex ante less heterogeneous boards.     

Precision and Manipulation of Non-financial Information: The Curious Case of Environmental Liability

This paper develops a model showing how the environmental liability regime and the precision of the disclosed environmental performance indicator affect managers’ incentives (1) to reduce actual pollution and (2) to manipulate the reported pollution. I assume a company with a separation of ownership and control which can be held liable for environmental damages and distinguish between a negligence regime and strict liability. The results suggest that if there is no manipulation but only a lack of precision of the disclosed environmental performance indicator, a negligence rule induces lower actual pollution levels than strict liability even though a negligence rule is considered to be more lenient. If managers are able to manipulate the disclosed environmental performance indicator, they will do so and actual pollution levels will generally increase. While manipulation makes it easier for shareholders to escape liability under a negligence regime, shareholders suffer from manipulation under strict liability due to higher actual pollution and higher expected damage compensation payments. Therefore, the manipulation level is higher under a negligence regime. My analysis contributes to the environmental performance and disclosure literature by showing that the liability regime is an important determinant affecting environmental reporting and actual pollution decisions.     

Market Reactions to Corporate Governance Ranking Announcements: Evidence from Taiwan

This study examines whether market participants react to the announcements of corporate governance ranking exercises. As a regulatory innovation, the Financial Supervisory Commission in Taiwan initiated and administered two ranking exercises, one in 2015 and the other in 2016, on all publicly listed companies. Adopting anchoring-and-adjustment theory, the study predicts that market participants will react strongly to the second announcement if the ranking obtained in the second exercise turns out to be better than the ranking in the first round. Employing an event study methodology, the study shows that market participants react positively and significantly to firms ranked in the top 50% in the second corporate governance exercise. Their reactions to the announcement are even stronger among those that did not list in the top 20% in the first exercise, but made it into the top 50% in the second one. Overall, our analyses support that anchoring-and-adjustment theory effectively explains market participants’ behaviour. Since the monitoring of the board of directors and investors may not effectively mitigate the potential moral hazard committed by family owners/executives, our empirical evidence demonstrates that a ranking exercise probably can be employed to supplement routine corporate governance disclosures made in annual reports, in order to strengthen the check-and-balance mechanism and reduce the risk of principal–principal conflicts. In conclusion, we discuss the implications of the research findings and propose directions for future studies.     

The effects of board structure on corporate performance: Evidence from East African frontier markets

The effectiveness of the well-known corporate governance practices may not be universal due to fundamental differences in the environments under which firms operate. By using hand-collected data from all the non-financial firms listed on the unexplored East African frontier markets (i.e., Kenya, Tanzania and Uganda), we examine the effect of board characteristics on the performance of firms. Our results show that board size has a negative and significant effect on firm performance. The presences of foreigners and civil servants on the board play positive roles on financial performance, where the agency and resource dependence theories apply. Further, we find that board members with higher education also contribute to firm performance. These findings still hold when we consider the 2008–2009 financial crisis period. Overall, we show that in a business climate where ownership is largely dominated by few shareholders, the conventional governance mechanisms do not work effectively.     

Initial public offer pricing,corporate governance and contextual relevance: Australian evidence

This study examines the relationship between initial public offer (IPO) corporate governance, IPO pricing and possible contextual relevance. A comprehensive inventory of IPO governance attributes is modelled. A positive association is reported between the inventory and IPO initial returns. This relationship is attenuated for IPOs where a diminished price relevance of governance structure is posited: smaller scale firms and/or those with alternative monitoring agents in place. Relevance appears modified and even supplanted by particular corporate priorities or the presence of other monitoring mechanisms. These contexts inform the motivation of key players regarding whether and how to act in response to the governance signal.     

How have US banks adopted the Financial Accounting Standards Board's Level 3 fair value disclosure rules?

We examine how banks have complied with the Financial Accounting Standards Board's disclosure rules on Level 3 recurring fair value measurements. We document widespread noncompliance with the basic disclosure requirements. We also find that the noncompliant banks are smaller in size and are associated with lower audit quality, lower institutional ownership and less effective internal controls. Our results should be of use to regulators, auditors and audit committees in the United States, Australia and other countries for assessing the likelihood of noncompliance with fair value disclosure rules and improving the quality of fair value disclosures provided to investors.     

Working with monsters: counting the costs of workplace psychopaths and other toxic employees

We explore the role of ‘Workplace Monsters’ in the global burden of disease, including the $US1.15 trillion annual cost of depressive and anxiety disorders. We propose the productivity drain created by these individuals is a wicked problem, integrating several disciplines to position workplace monsters as significant corporate governance issues for organisations. Our discussion covers Monster prevalence, impacts on fellow workers and estimates of the costs incurred to business. We classify Monsters as ‘appreciating liabilities’ and call for future research to develop means of accounting for their inherent organisational costs in an effort to prompt action to address their destructive impacts.