Conditional Mandates on Management Earnings Forecasts: The Impact on the Cost of Debt

Exploiting a unique conditional disclosure mandate on management earnings forecasts (MEFs) in China, we examine the differential effects of voluntary and mandatory MEFs on the cost of debt. We find that firms providing voluntary MEFs have lower cost of debt than do mandatory forecasters and nonforecasters. The results of the channel analyses reveal that voluntary forecasters have greater commitment to voluntary MEFs in future periods than do mandatory forecasters and nonforecasters, and the precision, accuracy, and timeliness of MEFs are higher for voluntary forecasters than for mandatory forecasters. Additional analyses show that the differential effects of voluntary and mandatory MEFs on cost of debt are stronger for voluntary forecasters operating in opaque information environments, issuing high-quality and confirming forecasts, controlled by private shareholders, and operating in highly competitive product markets. Overall, our results indicate that, compared with mandatory MEFs, voluntary MEFs are more informative for credit investors, particularly for firms facing greater information risk and operating uncertainty.     

Persistence of Price–Cost Margin and Technical Efficiency in the Indonesian Food and Beverage Industry

Abstract

This research investigates the persistence of price–cost margin (PCM) and technical efficiency (TE) of firms and the relation between these two factors in 44 subsectors of the Indonesian food and beverage industry in the period 1980–2014. Data envelopment analysis with a bootstrapping approach is applied to estimate TE. An autoregressive model, accounting for endogeneity, is applied to estimate the persistence coefficients of PCM and TE. A cross-sectional regression model is also applied to estimate the relation between the persistence of the PCM and the persistence of TE. The results show that for these food and beverage firms, high PCM and low TE persist. Furthermore, the persistence of PCM negatively affects the persistence of TE in the industry.     

Operating cash flow asymmetric timeliness in Australia

Operating cash flow (CFO) asymmetric timeliness occurs when CFO reflects bad news more quickly than good news. We examine the presence and determinants of CFO asymmetric timeliness in Australia, where substantial differences in reporting requirements of cash flow components, in characteristics of listed companies and in the degree of conservative financial reporting produce contrasting findings to those in the United States. We find supportive evidence for the novel ‘sticky cost behaviour’ explanation and also the product-pricing strategy, but not the life cycle hypothesis. These findings are useful for investors and analysts concerned with forecasting the future values of companies.     

Politically connected boards,family and business group affiliations,and cost of capital: Evidence from Indonesia

We investigate the effect of politically connected boards (both supervisory boards [SBs] and boards of directors [BODs]) on cost of debt and equity capital of listed companies in Indonesia which has established a two-tier corporate governance system. The results, based on 250 firms, suggest that companies with politically connected SBs experience lower cost of debt and equity capital, whereas politically connected BODs have no association with cost of either debt or equity. Furthermore, we find that family firms and firms belonging to business groups with politically connected SBs enjoy lower cost of debt and equity capital. Our main results are robust to alternative measures and to tests for endogeneity.     

Beta and firm age

We document a robust pattern of beta declining over the age of a firm. We find that changes in systematic risk via firm characteristics and life-cycle stages are insufficient to explain this pattern. Moreover, standard proxies for the quantity and quality of information also explain this pattern only partially. To fully explain this pattern we rely on the increasingly important role of familiarity in financial decision making: familiarity is a determinant of beta and firm age is a proxy for the degree of familiarity that investors feel toward individual stocks. To illustrate the implication of our findings, we document that when we control for firm age there is support for the CAPM and its use as an input for the cost of equity capital calculation.     

Multi-criteria analysis of economic complexity transition in emerging economies: The case of Paraguay

Like many emerging economies, the productive structure of the Paraguayan economy is not complex. It relies extensively on low value-added activities in the primary sector such as agriculture and cattle ranching. These activities have a lower return in terms of economic and social benefits than other potential productive activities and do not contribute to increasing capability accumulation. In this paper we present a tool to support the identification of strategic sectors and products which if taken advantage of, could leverage development through the accumulation of productive capabilities. Our guiding question is: Which productive sectors should be promoted to foster economic development in Paraguay through a transition towards a more complex economy? To answer this question, we use concepts from the Economic Complexity theory to identify new products and cluster them based on the Product Space methodology for the determination of potential products and combine it with the Analytic Hierarchy Process (AHP) for multicriteria analysis considering multiple criteria. In doing so, our proposed methodology contributes to both the Economic Complexity and the AHP literature. Through this combination, we tackle the multiplicity of juxtaposed criteria, which should be considered at the prioritization stage in the crafting of economic restructuring measures according to the country's capabilities. Our evaluation showed that the combination of the approaches is useful, and for Paraguay's case, it helped identify sectors, which, if promoted by policymakers, could help boost economic development through complexity and capability accumulation.     

复杂山区铁路客运站自动选址研究

无备选站址条件下的客运站自动选址是线站协同优化的前提和基础,而不局限于车站选址的代价最小化,同时考虑连接车站间区间线路的代价具有重要意义。构建复杂山区铁路客运站自动选址模型,首先,建立综合地理信息模型,基于线站一体化的设计理念,实现单个车站选址,确定站心位置及站坪方向;其次,以公路线形优化模型的改进算法完成站—站间自动选线设计;最后,将车站选址代价与区间线路代价紧密结合起来,计算综合代价,实现站址方案的优选。以山区铁路为例对该方法进行验证,结果表明,该方法能高效生成山区铁路车站方案集,并辅助设计人员进行方案优化。     

基于库存理论的铁路始发直达运输产品设计

将库存理论运用到铁路始发直达运输产品设计,能够有效实现运输服务组织成本与库存成本的有机统一。为实现库存成本在铁路始发直达运输中的加载,在考虑周期非完整情况下的库存成本的同时,将铁路运输和库存成本纳入同一目标函数,在装卸车地库存能力约束下,构建基于库存理论的铁路始发直达运输产品设计模型,确定成本最小的铁路始发直达运输产品设计方案。以赤峰地区至山东省煤炭运输网络为例,设计方案有效降低了成本,有助于吸引客户选择铁路运输,以及辅助铁路运营单位研究调整始发直达运输产品方案。     

Separation of ownership and control for Chinese listed firms: Effect on the cost of debt and the moderating role of bank competition

This research investigates the effect of the separation between firm ownership and control on the cost of debt, with attention to the moderating role of state ownership and bank competition. We make use of a sample of 1744 Chinese A-share firms for the years 2011–2017. We find that separation between ownership and control is positively associated with the cost of debt. This is consistent with the view that separation of control from ownership allows controlling shareholders to engage in tunneling and other behaviors that increase the risk of default. State ownership weakens this positive link because government debt guarantees mitigate the risk of default. Greater competition in the banking industry generally reduces the cost of debt for non-state enterprises while having no effect for state enterprises. At the same time, greater bank competition amplifies the positive effect of ownership and control separation on debt cost for non-state enterprises as banks must still cover the higher default risk. Finally, the global financial crisis raised the cost of debt for non-state enterprises but had no effect for state enterprises.     

改革开放40年持续性产业升级的动力机制与路径——广东迈向高质量发展之路

产业升级是高质量发展的主要目标及核心推力。通过分阶段观测广东改革开放40年产业转型升级进程发现，广东产业转型升级的演化轨迹是一条迈向高质量发展的产业跃升之路，贯穿其中的主线是持续性产业升级。生产要素供给、市场需求、技术创新、政府干预及制度安排等四大动因相互影响、相互作用，形成动态更迭比较优势、推动产业持续升级的耦合动力机制。在国际产业分工的背景下，适应不同的阶段特征及红利条件，通过比较优势的动态化调整，广东产业发展模式由低成本要素驱动、投资驱动向创新驱动转变。站在新时代的历史起点上，广东应以全面创新驱动作为产业转型升级的动力，加快数字经济与实体经济深度融合，抢占全球价值链高端，迈向一个更高质量的发展阶段。