Correction: Speaking Truth to Power: Twitter Reactions to the Panama Papers

Journal of Business Ethics -     

MODELING THE TERM STRUCTURE FROM THE ON‐THE‐RUN TREASURY YIELD CURVE

We propose a new model to estimate the term structure of interest rates using observed on‐the‐run Treasury yields. The new model is an improvement over models that require a priori knowledge of the shape of the yield curve to estimate the term structure. The general form of the model is an exponential function that depends on the estimation of four parameters fit by nonlinear least squares and has straightforward interpretations. In comparing the proposed model with current yield‐curve‐smoothing models, we find that, for the data used, the proposed model does best overall in terms of pricing accuracy both in sample and out of sample. JEL classification: E43, G12     

A theoretical framework to evaluate different margin‐setting methodologies

The margin system is the first line of defense against the default risk of a clearinghouse. From the perspectives of a clearinghouse, the utmost concern is to have a prudential system to control the default exposure. Once the level of prudentiality is set, the next concern will be the opportunity cost of the investors, because high opportunity cost discourages people from hedging futures, and thus defeats the function of a futures market. In this article, we first develop different measures of prudentiality and opportunity cost. We then formulate a statistical framework to evaluate different margin‐setting methodologies, all of which strike a balance between prudentiality and opportunity cost. Three margin‐setting methodologies, namely, (1) using simple moving averages; (2) using exponentially weighted moving averages; (3) using a GARCH approach, are applied to the Hang Seng Index futures. Keeping the same prudentiality level, it is shown that the one using a GARCH approach by and large gives the lowest average overcharge. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:117–145, 2004     

Choice of Accounting Method for Valuation of Investment Securities: Evidence from Hong Kong Firms

This study examines whether Hong Kong managers choose “benchmark” or “alternative” valuation method for investment securities, after the Hong Kong SSAP 24 became effective starting with fiscal‐year ending December 31, 1999. Tests are conducted on a sample of 292 firms, out of which 155 Hong Kong firms reported unrealized gains and losses and 128 firms that did not report holding gains/losses, but reported investment securities. The findings indicate that firms with strong relative performance, i.e. current year's EPS higher than that of the last year, chose the alternative valuation method when the investment securities had holding gains and recognized the unrealized holding gains in the equity section of the balance sheet. This finding is consistent with the Cookie Jar hypothesis because these holding gains would be used in the income statement in future periods, when needed. With regard to firms with strong relative performance and holding losses, the findings indicate that the benchmark valuation was used. The losses were reported in the income statement to the extent that they did not reduce the EPS below that of the last year. This finding is consistent with the Income Smoothing Hypothesis, because the use of benchmark valuation reduced EPS of the current year to bring it in line with that of the last year. Evidence on firms with weak economic performance and holding gains or losses provided weak support to the Income Smoothing Hypothesis and Big Bath Hypothesis. Additionally, the results indicate that the firms with high debt‐equity ratio preferred the benchmark method and recorded securities at cost. This treatment provided managers with an opportunity to liquidate or reclassify the securities in future periods and use the accrued gains, when needed. The findings are inconclusive with regard to the impact of bonus plan on the choice of valuation method.     

Golden Parachutes: Incentive Aligners,Management Entrenchers,or Takeover Bid Signals?

In this paper we investigate the effect of golden parachute (GP) adoptions on shareholder wealth. We control for the potential effect a GP adoption has on the probability that a firm will receive a takeover bid by investigating the wealth effects for firms that are in play when the GP is adopted. We find that announcements are wealth neutral when firms are in play and wealth increasing when firms are not in play when a GP is adopted. The results suggest that GPs have no influence on the success of a tender offer, refuting the hypotheses that they either align manager and shareholder interests or that they entrench inefficient managers. The difference in the results for in-play and not-in-play firms is consistent with the hypothesis that GPs signal an increased likelihood that a firm will receive a takeover bid.     

HEDONIC PRICING MODELS FOR VEHICLE REGISTRATION MARKS

Abstract.  This paper attempts to link Chinese numerology to the determination of vehicle registration mark (VRM) prices in Hong Kong through the hedonic pricing analysis. The values of different patterns of the numbers and Roman alphabet letters are examined. We find that there is a very strong preference for the number '8', that visually appealing patterns add great values to a VRM and that the non-transferable VRMs are more expensive than transferable ones. We also show that their prices move in tandem with the Hang Seng Index. The findings suggest that the government can raise revenue by auctioning off intangible assets containing alphanumerical identification marks.     

Productive Efficiency of the Swine Industry in Hawaii: Stochastic Frontier vs. Data Envelopment Analysis

Improving productive efficiency is an increasingly important determinant of the future of the swine industry in Hawaii. This paper examines the productive efficiency of a sample of swine producers in Hawaii by estimating a stochastic frontier production function and the constant returns to scale (CRS) and variable returns to scale (VRS) output-oriented DEA models. The technical efficiency estimates obtained from the two frontier techniques are compared. The scale properties are also examined under the two approaches. The industry's potential for increasing production through improved efficiency is also discussed.     

An investigation into the effect of systematic design methods in craft,design and technology (CDT)

This paper has grown out of a long standing personal concern that the current approaches to design teaching are too narrowly based and that they can distort the very activity that they set out to encourage. A survey of the comments made in Examiner's Reports of pupil's work in public design examinations during 1986 & 1987 provides some insight into the difficulties that pupils experienced in carrying out their design activities.Design activity in schools developed from the beginnings initiated by the curriculum development projects of the late 1960's and early 1970's. These put forward methodical approaches to designing which have become widely used in UK secondary schools and which are now firmly embedded in the publications and project assessment framework of the current national examinations.The present study suggests that, while these methodical approaches clearly work, they imply a logical progression of thought which does not necessarily parallel the pattern of human thinking. It is recognised that pupil's design folios written up at the end of a project can be made to describe a logical, systematic procedure which has more to do with the assessment framework than the actual developments of design ideas during the project. Indeed, teachers and candidates were being actively encouraged to base their work on these structured frameworks:The actual style and quality of the folder presentation is also important. This is particularly so when working to a detailed mark scheme. Certainly it is easier to mark a folder which broadly follows the pattern of the mark scheme than one which is very erratic. Teachers are advised as to the advantages of using the mark scheme as a teaching tool and as a guide for folder presentation. NEA, 1986.Finally, the paper examines some more recent developments in the procedural models of design activity and the way in which professional designers approach their work. These insights provide an indication of the way forward for school design work and its assessment.     

Financing Transit Systems Through Value Capture

A bstract .   Much of the literature on value capture reports empirical findings on the incidence of rising land values related to distance from a transit stop following the installation of rail transit improvements. This annotated bibliography shows that the elevated value effects of transit access are well documented. The authors maintain that it is now time for transit/land-use research to move from hypothesis testing to practical applications of value capture . Longitudinal models can help predict land-value increments over a period of time, yielding estimates of the total capturable revenues that would support the debt financing of transit improvement projects.     

A study of Hong Kong Businessmen's perceptions of the role “Guanxi” in the People's Republic of China

Guanxi is perceived as a major determinant for successful business in China. This research paper investigates the importance of Guanxi from the Hong Kong Businessmen's viewpoint. It confirms previous findings in this area and adds on new dimensions. Therefore, practitioners and academics may further refine their knowledge in this subject.Leung, T. K. P. is an Assistant Professor of Hong Kong Polytechnic University. He specializes in industrial marketing and marketing in China. His current research interests include issues in Guanxi, networking in China, and Chinese negotiation. He has published in referred journals related to the PRC market.Wong, Y. H. is an Assistant Professor at Hong Kong Polytechnic University. He teaches courses in sales management and international marketing. His current research focuses on issues of relationship marketing and Guanxi model. His recent publications include articles in preferred journal and books.Wong, Syson was a lecturer of Hong Kong Polytechnic University and is now a business consultant. She specializes in quantitative methods and China business. Her current consultancy works include a big project in China.