How arbitrary are international accounting classifications? Lessons from centuries of classifying in many disciplines,and experiments with IFRS data

The process of classification is central to the daily task of doctors and librarians; and it is the foundation of study and research in chemistry and biology. Double-entry bookkeeping and the preparation of financial statements are classification activities of accounting practice. Classifying national accounting systems has long been an aspect of accounting research. This paper seeks to extract lessons for accounting researchers from anthropology, biology, chemistry, cosmology and medicine. In particular, we examine how the classifiers themselves and the characteristics that they choose can affect classification. We observe that objectivity is neither possible nor desirable in classification. Despite the arbitrariness, some classifications can be more reasonable or more useful than others. For previous accounting classifications, we analyze the classifiers, the scope, the characteristics used, the data and the classification techniques. We report various problems. We then empirically investigate the sensitivity of classifications to such issues as the characteristics chosen, and the countries and sectors included. For this, we hand pick data on the practices of large listed companies from 12 jurisdictions relating to 14 accounting topics under International Financial Reporting Standards. We show how different researchers could produce different classifications, particularly depending on which accounting topics are used to represent the countries.     

The size and scope of government in the US states: does party ideology matter?

We investigate empirically how party ideology influences size and scope of government as measured by the size of government, tax structure and labor market regulation. Our dataset comprises 49 US states over the 1993–2009 period. We employ the new data on the ideological mapping of US legislatures by Shor and McCarty (Am. Polit. Sci. Rev. 105(3):530–551, 2011) that considers spatial and temporal differences in Democratic and Republican Party ideology. We distinguish between three types of divided government: overall divided government, proposal division and approval division. The main result suggests that Republican governors have been more active in deregulating labor markets. We find that ideology-induced policies were counteracted under overall divided government and proposal division.     

Efficiency analysis of German electricity distribution utilities – non-parametric and parametric tests

This study applies non-parametric and parametric tests to assess the efficiency of electricity distribution companies in Germany. Traditional issues in electricity sector benchmarking are addressed, such as the role of scale effects and optimal utility size, as well as new evidence specific to the situation in Germany. Labour, capital, and peak load capacity are used as inputs, and units sold and the number of customers as output. The data cover 307 (out of 553) German electricity distribution utilities. A data envelopment analysis (DEA) is applied with constant returns to scale (CRS) as the main productivity analysis technique, whereas stochastic frontier analysis (SFA) with distance function is the verification method. The results suggest that returns to scale play but a minor role; only very small utilities have a significant cost advantage. Low customer density is found to affect the efficiency score significantly, in particular in the lower third of all observations. Surprisingly, East German utilities feature a higher average efficiency than their West German counterparts. The correlation tests imply a high coherence of the results.     

Quality of service,efficiency and scale in network industries: an analysis of European electricity distribution

Quality of service (QoS) is of major economic significance in natural monopoly infrastructure industries. In this article, we present an efficiency analysis of electricity distribution networks from seven European countries. We apply the stochastic frontier analysis method to multi-output translog input distance function models to estimate cost efficiency and scale economies. We show that introducing the quality dimension into the analysis affects estimated efficiency significantly, especially that smaller utilities’ efficiency seems to decrease. Our results emphasize that QoS should be an integrated part of efficiency and economic analysis of regulated natural monopolies.     

Subjective performance appraisal and inequality aversion

Making use of a subjective performance appraisal system, it is a well-established fact that many supervisors tend to assess the employees too good (leniency bias) and that the appraisals hardly vary across employees of a certain supervisor (centrality bias). We explain these two biases in a simple theoretical model and discuss determinants of the size of the biases.     

Decentralization and the shadow economy: Oates meets Allingham–Sandmo

This article studies the impact of decentralization on the shadow economy. We argue that decentralization may decrease the size of the shadow economy mainly through two transmission channels: (1) decentralization enhancing public sector efficiency (efficiency effect), and (2) decentralization reducing the distance between bureaucrats and economic agents, which increases the probability of detection of shadow economic activities (deterrence effect). Using various measures of fiscal, political and government employment decentralization in a cross-section of countries, we find the deterrence effect to be of more importance. The deterrence effect is stronger, the lower the degree of institutional quality. We find no robust evidence of the efficiency effect.     

Reference Process Flows for Telecommunication Companies

The telecommunication market is experiencing substantial changes. New business models, innovative services, and technologies require reengineering, transformation, and process standardization. Enterprise Architecture Frameworks support the transformation by specifying methods, procedures, and reference models. With the Enhanced Telecom Operation Map (eTOM), the TM Forum offers an international de facto reference process framework, based on specific features and requirements of the telecommunication industry. However, this reference framework only offers a hierarchical collection of processes on different levels of abstraction; a control view in terms of a sequential ordering of tasks and hence a real process flow as well as an end-to-end view on the customer are missing. In this paper, we extend the eTOM reference model by reference process flows, in which we abstract and generalize the knowledge about processes in telecommunication companies. With reference process flows, we aim to assist companies in achieving a structured and transparent re-structuring and re-design of their processes. We demonstrate the applicability and usefulness of our reference process flows in two case studies, and evaluate them by means of criteria for reference model evaluation. Our reference process flows have been accepted as a standard by the TM Forum and published as part of eTOM version 9. We further elaborate on those components of our approach which can be applied outside the telecommunication industry.     

Moment-based estimation of extendible Marshall-Olkin copulas

Associated with any parametric family of Lévy subordinators there is a parametric family of extendible Marshall-Olkin copulas, which shares the dependence structure with the vector of first passage times of the Lévy subordinator across i.i.d. exponential threshold levels. The present article derives a strongly consistent and asymptotically normal estimator for the parameters in such models. The estimation strategy is to minimize the Euclidean distance between certain empirical and theoretical functionals of the distribution. As a byproduct, the covariance structure of the order statistics of a d-dimensional extendible Marshall-Olkin distribution is computed.     

Exchange rate regimes and national price levels

This paper explores the role of exchange rate regimes in explaining deviations from the classic theory of purchasing power parity. Examining a broad panel of countries, I find that developing countries with fixed exchange rate regimes have national price levels that are 20 percent higher than those with flexible regimes. For industrial countries, the relation between regimes and price levels is qualitatively similar but weaker. I investigate several explanations for this pattern, and find that exchange-rate overshooting in floats, inflation inertia in pegs and expansionary policies can explain only 5 percentage points of the observed differences. I also show that even though the observed pattern could be the outcome of a class of open economy models pioneered by Obstfeld and Rogoff, the data provides limited empirical support for the predictions of this model.     

Bewertung und Steuerung von Gasspeichern bzw. Gasspeicherscheiben

In this paper you find a brief introduction to the German gas market as well as a draft of the resulting storage requirements in Germany. In the following different storage usages are looked into from an economical perspective. Additionally the presented evaluating methods in this paper are specified. This paper then introduces stochastic optimization methods which give the possibility to assess the storage against the spot price as well as against to the whole forward curve. For this models to evaluate the market price are illustrated and calibrated on the basis of empirical data.After this a sample storage slice is rated with the Least-Square-Monte-Carlo method based on a stochastic multi factor spot price model. Then the hedging evaluation against the whole forward curve is presented. Concluding you find a comparison of the two methods.