An Experimental Assessment of the Effects of Two Alcoholic Beverage Health Warnings Across Countries and Binge-Drinking Status

In recent years, alcohol-related problems on college campuses have been well documented. This research examines how two different alcoholic beverage health warnings placed on the label of a fictitious brand of beer influence alcohol-related risk perceptions, attitudes and intentions, and characterizations of problem-drinking behaviors of binge and non-binge drinkers in Australia and the United States. The consumer welfare implications of our findings, which show that the dependent measures are influenced by both main and interaction effects, are discussed.     

The Effect of Limited Liability on the Informativeness of Earnings: Evidence from the Stock and Bond Markets*

Previous empirical research on the informativeness of earnings has focused on stockholders, and has not examined differences in earnings' informativeness for stockholders and bondholders. Because stockholders are residual claimants and bondholders are fixed claimants, the informativeness of earnings should differ for these two types of investors. When a firm's default risk is low, changes in its financial condition should be of limited relevance to bondholders, but should be relevant to stockholders. In contrast, as the likelihood of financial distress increases, stockholders' limited liability allows them to abandon the firm to the bondholders (Fischer and Verrecchia 1997). Accordingly, as a firm's default risk increases, changes in its financial condition should be increasingly important to bondholders and less important to shareholders. Because earnings provide information on firm value, the stock return-earnings association should decrease as the firm's financial strength declines, while the bond return-earnings association should increase. We use two measures of a firm's financial strength: the firm's bond rating and its reporting of a loss. Consistent with our hypotheses, we find that the association between stock returns and changes in annual earnings decreases as bond ratings decline, while the association between bond returns and changes in annual earnings increases. These results suggest that as the company's financial condition deteriorates, earnings become less relevant for stock valuation and more relevant for bond valuation. When we partition firms based on their loss status, we find a stronger association between stock returns and annual earnings changes for firms with positive earnings (profit firms) than for firms with losses, consistent with earlier studies. In contrast, we find that the association between bond returns and earnings changes is greater for loss firms than for profit firms. These results suggest that losses reduce the informativeness of earnings for stockholders but increase informativeness for bondholders, suggesting that investors view losses as indicating increased credit risk.     

Towards a Unifying Model of Systems of Law, Corporate Financing, Accounting and Corporate Governance

Several authors have observed a relationship between a country's type of legal system and its style of financial reporting. Generally, the causality is presumed to be from legal system to accounting system. However, one model of accounting differences suggests that the type of accounting is an influence on the regulatory system rather than vice versa. This helps to explain why the Netherlands has Roman law but approximately Anglo-Saxon accounting. It also allows for the extensive use by European companies of US or international rules. This paper expands on these themes, and extends the model to include corporate governance.     

Husbands' and wives' household work: moving towards egalitarianism?

Whether husbands are increasing their time in household tasks, especially when their wives are employed, has been a topic of debate in recent years. Several studies have found that husbands are participating in more child care now than in the past. But are husbands also doing other tasks now? Is there any relationship between the amounts of time that husbands and wives allocate to various household tasks? Are there any weekday versus weekend differences? A small sample of husbands and wives recorded their time spent in various activities for 7 consecutive days. The findings reveal that wives spent more time in general doing household tasks than did their husbands. Employed wives and their husbands both decreased their total time in household work, compared with full-time homemakers and their husbands. At weekends, however, both employed wives and homemakers decreased their overall time in household work while the husbands increased theirs. The t-test revealed that at weekends there were no significant differences in the times allocated to various household tasks by employed wives and their husbands, and significant differences only in time spent in child care and food preparation/clean-up by homemakers and their spouses. There appears to be a more egalitarian approach by husbands and wives to household tasks at weekends than on weekdays, even when the wives are not employed. Although these findings should not be generalized to the population, they indicate an intriguing possible trend which deserves further investigation.     

ANOTHER LOOK AT THE RELATIONSHIP BETWEEN INNOVATION PROXIES*

Shortcomings in the treatment of intangible investment in company accounts imply that there is no statistical collection for innovative activity which abides by the logic used for other economic activity data. As a consequence, analysts rely on innovation proxies derived from administrative and survey data. However, it is still unclear exactly how the different proxies are correlated, and whether the choice amongst different proxies matters. In the light of the innovation measurement, this paper takes another look at the relationship between different proxies of firm innovation. The results show that firm‐level correlations between survey‐based indicators and other proxies for innovation are highest for manufacturing firms and for product innovations.     

Book Reviews

Technological Collaboration in Industry; strutegy, policy and internationalization in innovation
Corporate Venturing: Creating New Businesses within the Firm
Handbook of Innovation Management
Technology and enterprise in a historical perspective
Intellectual Property for Engineers
The Ernst & Young Business Plan Guide
crnagement as a New Technology
Mass Customization: The New Frontier in Business Competition