The effects of analyst forecasts and earnings trends on perceptions of management forecast credibility

We examine whether analyst forecasts influence investors’ perceptions of the credibility of a good news management earnings forecast. We hypothesize that the effect of analyst forecasts will depend on whether the analyst forecast confirms management’s forecast and the extent to which management’s forecast is consistent with the prior earnings trend. Findings indicate that the positive effect of a confirming analyst forecast is greater when the management forecast is trend inconsistent than when it is trend consistent. The negative effect of a disconfirming analyst forecast does not differ based on management forecast trend consistency.     

Durability Versus Concentration as an Explanation for Price Inflexibility

We document the extent of price rigidity across United States manufacturing industries in the 1980s and early 1990s and compare rigidity across different phases of the business cycle. We measure price rigidity in three ways – each under four different sets of assumptions. We take an approach that relies on disaggregated data; we look at price patterns for over 4000 individual manufactured commodities. Both durability and seller concentration are found to be important factors explaining differences in price rigidity across industrial product classes. Using our data, we replicate the regression results found in Carlton (1986) that were based on actual transaction prices from the 1960s.     

The impact of corporate governance on Internet financial reporting

This study examines the association between corporate governance mechanisms and disclosure transparency measured by the level of Internet financial reporting (IFR) behavior. We measure corporate governance by shareholder rights, ownership structure, board composition, and audit committee characteristics. We develop a disclosure index to measure the extent of each sample firm’s IFR by presentation format, information content, and corporate governance disclosures. Results indicate that firms with weak shareholder rights, a lower percentage of blockholder ownership, a higher percentage of independent directors, a more diligent audit committee, and a higher percentage of audit committee members that are considered financial experts are more likely to engage in IFR. The findings suggest that corporate governance mechanisms influence a firm’s Internet disclosure behavior, presumably in response to the information asymmetry between management and investors and the resulting agency costs. Additional exploratory analysis indicates that the association between corporate governance and IFR varies with firm size. Our results suggest that new regulatory guidance in corporate governance leads to improved disclosure transparency via IFR.     

Pricing behavior in United States manufacturing industries: A statistical study using disaggregated data

We investigate the relationship between industrial market structure and price flexibility (the administered-pricing hypothesis) across United States manufacturing industries by embedding market-structure variables in a model relating relative price variability (dispersion) and inflation. While we find support for a positive relationship between variability and inflation, we do not find that high seller concentration lessens the impact of inflation on price variability. We do find that the larger the efficient-sized plant, the lower the impact of inflation on variability. We also find strong effects of input prices and degree of product durability on relative price variability.     

Economic outcomes with the conversion of insulin delivery methods in hospitals

Purpose: To evaluate the insulin wastage and associated acquisition costs when switching from individual patient supply (IPS) of 3-mL pens of rapid-acting insulin (RAI) aspart to floor stock (FS) dispensing of 3-mL vials of RAI lispro, and with conversion from IPS of 3-mL pens to centralized unit dose (CUD) of 10-mL vials of basal insulin detemir.

Methods: Data from September 2010 to December 2012 from three hospitals in the Roper St. Francis Healthcare (RSFH) were used: Roper Hospital (368 beds), Bon Secours St. Francis Hospital (204 beds), and Roper St. Francis Mt. Pleasant Hospital (85 beds). Insulin wastage and associated acquisition costs were estimated using regression models.

Results: The conversion from IPS of 3-mL pens of insulin aspart to FS of 3-mL vials of lispro was associated with a significant decrease in insulin wastage (204,042 IUs; p?p?p?p?Conclusions: Switching RAI from IPS of 3-mL pens of insulin aspart to one-time unit dose insulin lispro dispensed from FS 3-mL vials as needed significantly reduced insulin wastage and associated acquisition costs at the three combined hospitals. Conversion of basal insulin from IPS of 3-mL pens of insulin detemir to CUD of 10-mL vials of insulin detemir was associated with a significant reduction in insulin wastage and associated acquisition costs at three hospitals combined.     

Methodological Expectations for Studies Using Computer Simulation

Simulation is often used in papers and studies across diverse fields like logistics, supply chains, health care, manufacturing, and defense. But simulations must be properly done, including input and model building, designing/analyzing the simulations, and model verification/validation. Unfortunately, simulation studies are not always done well, even though great effort could have gone into the model building and coding. This paper specifies, in brief outline, what authors and researchers need to do, when using simulation as a main tool, to build a convincing case for their findings and conclusions. Considerations on the input side of the model are enumerated, including specification of input distributions and processes; nonstationarity; random‐number generation; and generating realizations of random variables and random processes. On the output side are issues of statistical analysis of simulation output; comparison, selection, and ranking of simulated scenarios; variance reduction; and optimum seeking. Involving matters on both the input and output sides are the essential activities of verification and validation. The intent is to establish expectations on what acceptable papers need to do if using simulation, and to serve as a guideline to applied simulation studies. Such papers and studies will then be more valid, more precise, more useful, and ultimately more convincing.     

Earnings behavior in food and tobacco manufacturing

This paper examines and empirically evaluales various relationships between product and labor market characteristics and industrial earnings and productivity behavior in the food and tobacco manufacturing sector. Both higher earnings and larger increases in those earnings over time are observed for more concentrated product classes; further, these classes show no appreciably larger productivity increase over time. Other significant factors in earnings and earnings change determination appear to be plant size distribution, industrial geographic dispersion, and industrial percentage of male employees.