Banks’ deferred tax assets during the financial crisis

Review of Quantitative Finance and Accounting - Prior studies have demonstrated that the net deferred tax liabilities of industrial firms are valued by market participants in a manner consistent...     

Reconciling Alternative Theories for the Safety of Owner–Operators

Motor carrier safety is an important concern of shippers, carriers, policy makers, consignees, insurance providers, and the motoring public. One aspect of carrier safety that has garnered substantial attention is whether carriers making greater use of owner–operators are more or less safe vis‐à‐vis carriers making greater use of employee drivers. Currently, conflicting theoretical predictions exist regarding the direction of this relationship. In this article, we offer a reconciliation of the alternative theoretical predictions by developing a coherent theory that merges sociological rational choice theory and theory regarding motor carrier safety. We subject our theory to empirical testing by fitting a series of seemingly unrelated regression models to a vector of safety measures tracked as part of the Federal Motor Carrier Safety Administration's Compliance, Safety, and Accountability program. Our results are consistent with our proposed theory of owner—operator safety and provide meaningful theoretical and managerial implications and directions for future research.     

Measurement distortion and missing contingencies in optimal contracts

Summary Theory suggests that optimal contracts should include many contingencies to achieve optimal risk sharing. However, in practice, few contracts are as complex as theory suggests. This paper develops a model which is consistent with this observation. The lack of risk sharing results from the interplay of two factors. First, contingencies must be based on information produced by measurement systems, which may be manipulable. Second, when two parties to a contract meet, they often have incomplete information. The type of contract offered may reveal information about the party who proposes it. Different types of agents have different preferences over contingent contracts, because they have different abilities to manipulate the measurement system. These differences in preferences allow the parties to signal their types through the contracts they offer. Noncontingent contracts may be chosen in equilibrium because they are the only contracts which do not give any type an incentive to distort the measurement system and, hence, do not reveal information about the party proposing the contract.We have benefited from conversations with Oliver Hart, Rick Lambert, Michael Riordan and Jean Tirole and the comments of Michel Habib, Nick Yannelis and two anonymous referees. Financial support from the National Science Foundation under grants SES-8920048 and SES-8720589 is gratefully acknowledged.     

CHILD SUPPORT IN THE U.S.: CAN FATHERS AFFORD TO PAY MORE?

This paper presents up-to-date estimates of the ability of non-resident fathers to pay child support. While no nationally representative data exist on the incomes of fathers, this issue has become more pertinent in recent years, as child support has become an important national issue. We find that fathers on average are able to pay nearly five times more in child support than they currently pay, and also that low income fathers can afford to pay substantially more than they actually pay. We also find that changes in nonmarital childbearing and the returns to education have had only minimal effects on trends in fathers' incomes.     

Exchange Rate Pass‐through: The Role of Regime Changes

We consider the effect on the degree of exchange rate pass‐through of the exchange rate regime in operation. We test the hypothesis that pass‐through will be lower under a float as firms may be reluctant to pass appreciations or depreciations on to their customers when there is a strong chance that they will be subsequently reversed. Taylor’s hypothesis that pass‐through will be lower in a low‐inflation environment is also considered. Both hypotheses are assessed in relation to the price of manufactured imports into New Zealand and we find that, whereas the shift to a float dramatically lowered the degree of pass‐through, the later shift to a low‐inflation regime has no significant additional effect on the pass‐through relationship.     

Hazardous waste disposal: A comparative analysis of regulation,taxes and subsidies

This paper contains a critique of existing legislation which deals with hazardous waste disposal and expands on the efforts made by the Office of Technology Assessment and other economists to develop a public policy which will deal effectively with the problems associated with hazardous waste generation and disposal. A new policy is set forth here which encourages both waste reduction and safe disposal while providing revenue to pay for cleanups at Superfund sites.     

Action Teams That Work

A growing awareness of workplace hazards and identification of airborne contaminants, coupled with a changing safety and health regulatory environment, created an unexpected demand for new and innovative respirators in the early 1980s. 3M's Occupational Health and Environmental Safety Division broke new ground by taking the team concept further than ever before in the company. The division's Action Teams successfully designed, built and introduced products in less than half the time it would have taken previously. Robert Hershock, Charles Cowman and Douglas Peters describe how 3M learned important lessons about team selection, training, performance and motivation, the importance of project sponsors, and the role of middle management.     

REGULATORY NEGOTIATION IN AUTOMOBILE INSURANCE REFORM

Tort reform of the motor accident insurance compensation scheme in the Australian state of New South Wales in 1999 came about as a result of an untested experiment in regulatory negotiation. This article is a first-hand account of the successful attempt to craft a consensual modification of the scheme through deliberations among a working group of service provider representatives. The author, a Canadian lawyer, investigated the prospects for change, acted as chief negotiator, and observed the legislative process that led to the final law reform.