Press freedom and jumps in stock prices

Press freedom varies substantially across countries. In a free environment, any news immediately becomes public knowledge through mediums including various electronic media and published materials. However, in an unfree environment, (economic) agents would have more discretionary powers to disclose good news immediately, while hiding bad news or releasing bad news slowly. We argue that this discretion affects stock prices and that stock markets in countries with a free press should be better processors of economic information. Using an equilibrium asset-pricing model in an economy under jump diffusion, we decompose the moments of the returns of international stock markets into a diffusive risk and a jump risk part. Using stock market data for a balanced panel of 50 countries, our results suggest that in countries with a free press, the better processing of bad news leads to more frequent negative jumps in stock prices. As a result, stock markets in those countries are characterized by higher volatility, driven by higher jump risk and more negative return asymmetry. The results are robust to the inclusion of various controls for governance and other country- or market-specific characteristics. We interpret these as good stock market characteristics because a free press improves welfare and increases economic growth.     

Do accounting standards matter to financial analysts? An empirical analysis of the effect of cross-listing from different accounting standards regimes on analyst following and forecast error

This paper explores whether the effects of cross-listing on analyst following and forecast error differ among firms with different accounting standards. The results reveal a higher increase in the number of analysts for cross-listed firms that follow their home country's GAAP prior to cross-listing and reconcile or switch to IAS/US GAAP or UK GAAP after cross-listing, compared to those that adopt IAS or US GAAP prior to cross-listing. We find that firms that switch to IAS/US GAAP have a higher increase in analyst following after cross-listing compared to firms that reconcile to IAS/US GAAP. In addition, we find a higher increase in analyst following after cross-listing for firms from low-level accounting standards environments compared to firms from high-level accounting standards environments. Our results show evidence of an increase in the magnitude of analysts’ forecast error after cross-listing for firms that follow their home country's GAAP pre-cross-listing but reconcile post-cross-listing to IAS/US GAAP or UK GAAP. On the other hand, we report a decrease in forecast error for firms that switch to IAS/US GAAP.     

What drives global B2B e-commerce usage: an analysis of the effect of the complexity of trading system and competition pressure

The purpose of this paper is to examine the conditions in which B2B e-commerce is most likely to diffuse widely at the country level. This paper examines the role of trading system complexity and pressure of competition on B2B EC diffusion by controlling Gross domestic product (GDP) per capita and Information and Communication Technology (ICT) infrastructure. Our sample comprises a pool of country-year dataset from 143 countries over a three-year period (2014–2016). The data were collected from Network Readiness Index Report and Global Competitiveness Report. The findings provide evidence that greater the complexity of trading relationships with the global economy and high level of pressure from the competition are the main forces for B2B use across countries. Consequently, the authors suggest that having a strong trade relationship with developed countries with matured B2B e-commerce practice is helpful in sustaining B2B e-commerce use across countries.     

The role of financial literacy in describing the use of professional financial advisors before and during the COVID-19 pandemic

Journal of Financial Services Marketing - This paper documents the effect of the COVID-19 pandemic on the use of profession financial advisors across a broad sample of financial decision makers...     

A real option approach to the protection of a habitat dependent endangered species

We use a real option approach to determine when a social planner has to stop or resume logging in situations where an endangered species relies on forest habitat for its survival. Logging affects the stochastic process followed by the habitat of the endangered species, which disappears irreversibly if its habitat reaches a critical extinction level. As long as the endangered species is still in existence, the social planner manages logging in such a way as to balance the risk of extinction against the benefits from commercial wood exploitation. The model incorporates economic, ecological, and social features. It is solved analytically to characterize the optimal forest management rule. Then it is applied to the case of the Rangifer tarandus caribou, an endangered species in Central Labrador (Canada). The parameters of the habitat process are estimated by Monte Carlo methods. The policy implied by the model – alternatively banning and resuming logging according to appropriate habitat threshold levels – turns out to be quite attractive; it does not require long banning periods while it drastically reduces the extinction risk and increases forest value.     

Network defense and behavioral biases: an experimental study

Experimental Economics - How do people distribute defenses over a directed network attack graph, where they must defend a critical node? This question is of interest to computer scientists,...     

Socialism,Liberalism and Inequality: The Colonial Economics of the Saint-Simonians in 19th-Century Algeria

This article examines the foundations of the colonial economics of the Saint-Simonians that were developed in Algeria after the French invasion in 1830. Saint-Simonian colonial economics may be seen as a leading contributor to the development of French orientalism. This article illustrates the ambiguous position of Saint-Simonian economics in the colonial project, especially in relation to the role of equality. According to the Saint-Simonians, collective socialism was the best economic system for Algeria. This article notes, however, the contradiction inherent in the Saint-Simonians' project with regard to the racial argument they used to justify their position.     

Great Galway Goslings: Organizational Context of Managerial Accounting*

This case seeks to enhance student understanding of the relationship between accounting information and the order fulfllment and production activities of a manufacturing frm, Great Galway Goslings. Great Galway Goslings manufactures goose sculptures and has been suffering losses in recent years. Students draw on the skills they learned in financial accounting to analyze the company's order fulfllment activities, identify economic transactions, and prepare journal entries. The case provides a link to managerial accounting topics as students use segment financial statements to create contribution margin income statements, perform break‐even analyses, and recommend whether Great Galway Goslings should keep its retail business segment. Students will become familiar with the key features of business process management (BPM) and the extensive, real‐world activities that a manufacturing entity engages in to fll an order. Students will analyze the company's existing order fulfllment process and apply their knowledge of BPM to recommend process improvements for Great Galway. This case contributes to the accounting case literature by serving as a bridge from financial accounting to managerial accounting, intertwining many topics from managerial accounting into one cohesive case, and providing real‐world business process knowledge. Student feedback indicates that, overall, the case met its stated learning objectives. Great Galway Goslings is appropriate for an undergraduate introductory managerial accounting course but can be adapted to the equivalent graduate‐level course or an accounting information systems course.