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.     

全国煤炭交易中心运营模式研究

全国煤炭交易中心的设立对规范我国煤炭交易市场规则、实施能源宏观调控、提升我国煤炭国际定价话语权具有重要意义。在分析全国煤炭交易中心功能定位和业务的基础上,设计中长期合同邀约、现货挂牌、现货竞价、现货招投标4种交易模式及业务流程,提出依托国家重大战略争取政策支持、加强各方沟通完善综合物流体系、建立银企合作机制与信用体系、完善煤炭交易中心协调机制、增强信息服务与风险防控能力等对策建议。研究成果对优化煤炭供给结构、规范煤炭交易市场和保障国家煤炭能源安全提供了支撑。     

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.     

Investigating the causal configurations of cost-efficient firms at the bottom of the pyramid

This study highlights how social and commercial enterprises with local and global presence, balance their economic and social goals, to sustainably serve the bottom-of-the-pyramid (BoP) markets, predominantly in emerging economies. Employing the lens of transaction cost economics and configurational theory, we propose that successful venturing into the BoP markets, sensitize firms to create appropriate governance mechanisms for reducing transaction costs, resulting in creation and capture of values. Further, these mechanisms enable those firms to attain cost efficiency and sustainability in the process of fulfilling their social objectives. To that end, we employed the case survey method to analyse 42 cases, from the Harvard Business School repository, on multinational enterprises (MNEs) in emerging economies. Further, we used qualitative comparative analysis to uncover the various causal governance configurations that enabled those firms to sustainably serve the BoP markets.