Verdoorn's law and increasing returns to scale in the UK regions, 1968-91: some new estimates based on the cointegration approach

The Johansen approach to estimating long-run cointegration vectorsis used with 1968–91 UK region by industry data to estimatereturns to scale. Thus, this approach has the advantages ofincluding a measure of capital, it overcomes the simultaneityproblems associated with the single-equation Verdoom law, andit involves estimating a correctly specified dynamic model inwhich is embedded the long-run solution(s). The results indicatethat there is substantial evidence that increasing returns arethe norm for the majority of manufacturing industries in Britishregions.     

The initiation of audit committee interlocks and the contagion of accounting policy choices: evidence from special items

Review of Accounting Studies - We document that the initiation of audit committee interlocks is associated with contagion in reported special items. We argue that this is, in part, attributable to...     

Foreign Ownership and Productivity in the United Kingdom Estimates for U.K. Manufacturing Using the ARD

Review of Industrial Organization - There is a general assumption in much of the literature on FDI that foreign owned plants have higher productivity. The purpose of this paper is to answer the...     

A Public Choice Analysis of the Evolution of Tort Law:

A bstract . Economic analysis has generally concluded that most loss shifting under current standards of personal injury liability is allocatively non- Pareto optimal. The economic and legal arguments that support this conclusion are reviewed and an explanation is offered of why our legal system has evolved over time into an inefficient institution. It is argued that state sponsored lotteries and current personal injury liability laws have enough In common to be similarly viewed as a system of income redistribution demanded by the citizenry and supplied by the public sector.     

Property Tax Circuit-breakers: Good Causes but Bad Economics

A bstract . Since 1965, 30 states and the District of Columbia have enacted programs designed to reduce the effective rate of property taxation for some low income households and for the elderly. Most often this relief is provided by so-called "circuit-breakers." It is contended that the economic arguments favoring circuit-breakers are empirically unproven and theoretically suspect. The tax may be progressive , not regressive , and the device may transfer income from low to high income households. Any short run redistribution of income to favor the poor or the elderly would, in the long run, merely shift the timing of their tax payments. Circuit-breakers encourage over-consumption of housing and misallocation of housing resources. Reducing the tax base, they produce higher rates and so increase the tax burden.     

Program trading and intraday volatility

Program trading and intraday changes in the S&P 500 Indexare correlated. Futures prices and, to a lesser extent, cashprices lead program trades. Index arbitrage trades are followedby an immediate change in the cash index, which ultimately reversesslightly. No reversal follows nonarbitrage trades. The cumulativeindex changes associated with buy-and-sell trades and with arbitrageand nonarbitrage trades all are similar. Price decompositionssuggest that the results are not due to microstructure effects.Program trades in this 1989-1990 sample do not seem to havecreated major short-term liquidity problems. The results arestable within the sample.     

The Effects of Taxes,Agency Costs and Information Asymmetry on Earnings Management: A Comparison of Public and Private Firms

The realization of securities gains and losses to manage earnings in publicly-traded bank holding companies has been documented in a large number of studies, but very little is known about why managers engage in this behavior. Two possible explanations for earnings management put forth by Warfield, Wild, and Wild (1995) are that managers engage in this behavior either to circumvent accounting-based contracts designed to mitigate agency problems, or to reduce information asymmetry.We compare public and private banks' realizations of securities gains and losses to determine how their earnings management differs. We find that public banks consistently engage in more earnings management than private banks, and that the portion of their current period securities gains and losses attributable to earnings management is more positively associated with next period's earnings before securities gains and losses. These findings are consistent with earnings management occurring due to greater information asymmetry in public firms, and suggest that earnings management may not necessarily lead to the erosion in the quality of earnings suggested by Levitt (1998).     

Exporting, R&D, and absorptive capacity in UK establishments

This paper models the determinants of exporting (both in termsof export propensity and export intensity), with a particularemphasis on the importance of absorptive capacity and the endogenouslink between exporting and undertaking R&D. Based on a mergeddataset of the 2001 Community Innovation Survey and the 2000Annual Respondents Database for the UK, our results suggestthat establishment size plays a fundamental role in explainingexporting. Meanwhile, alongside other factors, undertaking R&Dactivities and having greater absorptive capacity (for scientificknowledge, international co-operation, and organizational structure)significantly reduce entry barriers into export markets, havingcontrolled for self-selectivity into exporting. Nevertheless,conditional on entry into international markets, only greaterabsorptive capacity (associated with scientific knowledge) seemsto further boost export performance in such markets, whereasspending on R&D no longer has an impact on exporting behaviouronce we have taken into account its endogenous nature.