POLITICAL DEMOCRATIZATION AND KMT PARTY‐OWNED ENTERPRISES IN TAIWAN

This article will study how the existence of KMT party‐owned enterprises (POEs) and their development are related to Taiwan's democratization. POEs are profit‐making enterprises managed by the KMT, the former ruling party. All previous studies about the relationship between democratization and POEs only draw attention to the economic resource aspects of POEs. But the POEs were also KMT political resources in the form of enterprises and became policy tools to the ruling party. This study will argue that the existence of the POEs was a factor that maintained the KMT government and supported its stable management during the process of democratization. Moreover, POEs as political resources enabled Lee Teng‐hui as KMT chairman to demonstrate strong leadership and push ahead with the completion of democratization. But Lee's political mobilization of POEs expanded money politics and perpetuated these enterprises as one of the “authoritarian legacies” in Taiwan's democratic politics.     

DO GOVERNMENT SUBSIDIES STABILIZE OR DESTABILIZE AGRICULTURAL MARKETS?

This study examines the effect of government intervention on output fluctuations in agricultural markets. It uses a simple model of supply and demand (i.e., a cobweb model), in which the government supports producers for agricultural goods in the form of subsidies. Within this framework, this study demonstrates that government intervention is a two-edged sword: it not only prevents the output dynamics from explosive oscillations but also causes highly irregular and persistent fluctuations somewhat like the one observed in the actual data.     

CARTELISING GROUPS IN DYNAMIC HYPERBOLIC OLIGOPOLY WITH ANTITRUST THRESHOLD

Empirical evidence, and theoretical results have shown that, in an industry, higher concentration index indicates higher price‐cost margin. In order to detect collusive behaviour the antitrust authorities often monitor the Herfindahl‐Hirschman Index. We consider N‐firm oligopolies where a group of firms partially cooperate with each other, and monitor the Herfindahl‐Hirschman Index as well. After suspecting that the authorities might notice the violation of antitrust regulations, they stop their cooperation. The group will not cooperate again until the Index moves back to the legal domain. This flip‐flop dynamical model is formulated, the equilibria are determined, and the asymptotic properties of the system are examined.     

Favorable versus Unfavorable Recommendations: The Impact on Analyst Access to Management-Provided Information

This study examines recent regulatory and practitioner concerns that managers provide more (less) information to analysts with more (less) favorable stock recommendations. We examine the relative forecast accuracy of analysts before and after a recommendation issuance under the assumption that increases (decreases) in management‐provided information will increase (decrease) analysts' relative forecast accuracy. We find that analysts issuing more favorable recommendations experience a greater increase in their relative forecast accuracy compared with analysts with less favorable recommendations. Additional tests on the change in frequency with which analysts issue forecasts independent of or in conjunction with other analysts after their recommendation change yield corroborating results. In addition, we find that the greater increase in relative accuracy for analysts with more favorable recommendations exists prior to the passage of Regulation FD but not after. The combined results are consistent with analysts receiving relatively more management‐provided information following the issuance of more favorable recommendations.