To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation

Data on corporate governance and disclosure practices reveal wide within‐country variation that decreases with the strength of investors' legal protection. A simple model identifies three firm attributes related to that variation: investment opportunities, external financing, and ownership structure. Using firm‐level governance and transparency data from 27 countries, we find that all three firm attributes are related to the quality of governance and disclosure practices, and firms with higher governance and transparency rankings are valued higher in stock markets. All relations are stronger in less investor‐friendly countries, demonstrating that firms adapt to poor legal environments to establish efficient governance practices.     

TIME UNDER AUTOCRATIC RULE AND ECONOMIC GROWTH

We investigate how the length of time a country's regime was autocratic between 1920 and 2000 is correlated with economic growth and per capita income. We find that the longer a country was within an autocracy, the lower is the country's economic performance, even after controlling for other factors. We also find the length of time a country is not autocratic is positively related to growth and income. We claim this evidence is consistent with the thesis that one reason why some countries have had difficulty adjusting to life after autocracy is that the human and social capital necessary to make markets “work” eroded under autocratic regimes and take time to develop afterward. (JEL O17, O43, P0)     

WAL-MART, LEISURE, AND CULTURE

This essay contributes to the debate about the alleged spillover effects associated with Wal-Mart's growth. Combining county-level data on Wal-Mart entry and location from 1985 through 1998 with individual-level data on leisure activities, we estimate a positive relationship between Wal-Mart penetration and participation in activities involving inputs that can be bought at Wal-Mart. The relationship between Wal-Mart penetration and activities that do not involve inputs that can be bought at Wal-Mart is negative in most cases but may be positive or zero for "cultural" activities such as attending classical music concerts and visiting art galleries. The evidence is consistent with the thesis that deeper Wal-Mart penetration expands consumption possibilities. ( JEL A13, D00, C12, Z11, Z13)     

威尼斯的怀旧神话

隐形的权力操作、混乱的美学和不断增生的嘈杂信息使双年展越来越像波德里亚笔下"超真实"的模型,就像真实的美国越来越接近虚幻的、符号化的迪斯尼乐园,真实的艺术也越来越像威尼斯岛上这两年一度的已经有点让人反胃的视觉游戏[2]。瑞士人丹尼尔·伯恩鲍姆制造的世界延续着这个世界的平庸和惰性,     

Corporate Investments: Learning from Restatements

This study analyzes the information conveyed by the restatements of financial reports. We argue that restatements contain news about the investment projects of the restating firms' competitors. This news causes competitors to revise their beliefs about the projects' value, and to modify their subsequent investment decisions. Accordingly, we hypothesize that changes in competitors' investments after restatement announcements are related to news in the restatements. Consistent with our prediction, we find that changes in competitors' investments following restatement announcements are significantly related to various proxies for news in the restatements, such as competitors' and restating firms' abnormal returns at the restatement announcements. We conclude that restatements convey information about the investment projects of restating firms' competitors.