Institutional investors and opportunistic seasoned equity offerings in the Korean stock market

This study examines the impact of institutional monitoring on opportunistic seasoned equity offerings (SEOs) in the Korean stock market. With a firm’s accrual quality as a measurement for the degree of information asymmetry between managers and investors, we hypothesize that the managers of firms with poor accrual quality are likely to engage in opportunistic SEOs, but such opportunistic activity is weak in firms strongly monitored by institutional investors. The empirical findings indicate that opportunistic SEOs tend to be deterred by institutional monitoring.     

Analyst earnings forecast revisions and the persistence of antidumping relief

Panel corrected standard errors with instrumental variables and effects are invoked to assess the significance of earnings forecast revisions around critical dates in non-steel AD petitions filed in 1985–1987. These petitions were filed between two important US trade law revisions (1984 and 1988), and the period encompasses significant stock market advances and declines. Event studies have been invoked to assess the value of AD petitions. However, they do not estimate the temporal distribution of any abnormal returns. Because analysts make quarterly earnings forecast revisions over several horizons, we can assess the short and long run value of petitions. We find that AD petitions tend to depress earnings forecasts in the year of the petition. However, second year earnings forecasts tend to be revised upwards. There is no effect on five year (long term) earnings growth forecasts. Hence any benefits of protection do not persist. There is evidence that analysts anticipate the filing by revising forecasts in the three months in advance of the filing. We also find that AD petitions do not affect the accuracy of forecasts.     

An international comparison of analysis' earnings forecast accuracy

A major task of financial analysts working for stockbrokers and investment firms is to forecast future earnings of listed companies. The usefulness of their work crucially depends on the accuracy of the forecasts. A great many studies have examined the accuracy, bias, and other characteristics of profit forecasts made in the U.S. In contrast, however, there is very little research on forecasting accuracy in other countries despite the increasingly global nature of investing. This paper examines the accuracy of corporate earnings forecasts in 34 different countries. In addition, a model is developed that seeks to explain differences across companies and countries. The findings show that eight countries have better forecast accuracy than the U.S. This cross-sectional model shows that with the inherent difficulty in forecasting for a specific company (proxied by the change in its earnings), risk and the number of analysts following the stock are the major factors in explaining earnings forecast accuracy.     

An analysis of capital gains tax-induced earnings management

Since 1974, there have been four changes in the corporate tax rate on net capital gains. In each instance a firm had an incentive to alter its capital gains taking in order to maximize its after-tax cash flows. This paper presents a longitudinal analysis of firms' responses to the four rate changes and in doing so provides additional evidence regarding tax-induced earnings management. Most studies analyze firms' responses to tax law change in one tax act (e.g., The Tax Reform Act of 1986), yet firm response to one act might not be the typical response. Results from this study confirm such a phenomenon. The results also provide additional evidence on the association of firm characteristics with tax-induced earnings management.     

The impact of COVID-19 on seasoned equity offering: Evidence from China

This study examines the impact from the COVID-19 pandemic on the association between Chinese firms' SEO announcements and market reaction afterwards. Our findings indicate that market investors would respond more negatively to the SEO announcements and undergo more SEO underpricing for firms from regions significantly affected by the pandemic than those from the less-affected regions. Furthermore, higher CSR scores and more involvements in accounting conservatism could mitigate these effects. The main mechanism of the moderating effect from CSR performance and accounting conservatism is that CSR investment and accounting conservatism could lessen information asymmetry between the SEO announced firms and outside investors. Finally, we document that the main motivation of SEO issuance during the pandemic is market timing.     

Child Labour's effect on long-run earnings: An analysis of cohorts

The effect of child labour on wages in adulthood is conceptually ambiguous. Children who work learn responsibility and work-ethic, increasing adult earnings. However, working children have less time for play and homework, hindering cognitive development, resulting in lower earnings. The limited existing empirical work is similarly confounding. This paper assesses the nexus between child labour and adult earnings using unique data from an Ecuadorian 2015 labour market survey. It applies novel instrumental variable regression techniques that account for earnings, education and child labour being jointly determined. The sample is divided into age cohorts (20s, 30s, 40s and 50+) to ascertain the long-run consequences of child employment at different stages of life. The results suggest that former child (and teenage) workers earn significantly less per hour. The analysis of cohorts reveals that the effect is stronger for older workers. This gives impetus to the hypothesis that child work hinders cognitive development, which becomes more evident when workers reach full maturity. The study concludes with policy recommendations.     

Accounting practices,earnings volatility,and earnings forecast: The case of the oil and gas producing companies

International Advances in Economic Research -     

Regional policy design: An analysis of relocation, efficiency and equity

Despite substantial regional expenditure at both national and community level, European regional policies do not appear to deliver. Evidence suggests that neither efficiency gains nor reduced regional inequalities result. If there is any positive impact at all, then it is at most a redistributional one. If transfers are mainly redistributional in nature, would policies based on non-distortionary financing be a better route to follow? We consider the alternatives to a distortionary regional policy that forces the delocation of activities. Are non-distortionary policies always relatively more efficient than distortionary ones? We analyse these questions employing a new economic geography model, which also takes into account the importance of knowledge spillovers for productivity, industry location and policy. We show that the effectiveness of different regional policies depends on (i) intra-industry knowledge spillovers, (ii) inter-industry knowledge spillovers and (iii) trade costs. Our analysis suggests that the European approach to the elimination of regional inequalities may, relatively, be the more costly alternative.     

Four decades of Asian American women's earnings: Japanese, Chinese, and Filipino American women's earnings 1960–1990

This article examines the earnings progress of Asian American women from 1960 through 1990 by comparing their actual hourly wage and salary earnings to simulated earnings. The simulated earnings are obtained by using parameter estimates obtained from human capital models of white women corrected for sample selection bias. Data come from the decennial census Public Use Micro Samples data. American-born Asian American women appear to have made dramatic gains in the 1970s. The 1980s and 1990s show some fluctuations in actual earings relative to simulated earnings between Asian American and white women. These fluctuations may be due to problems measuring experience as opposed to differences in discrimination over time.     

A longitudinal analysis of earnings change in Canada

Abstract.  We use tax‐based longitudinal microdata for 1982–99 to (i) examine how earnings distributions have shifted, (ii) identify changes in earnings mobility patterns, and (iii) replicate and update Beaudry and Green's cohort analysis of age‐earnings profiles. We find: (i) increased polarization of men's earnings and marked decline in real earnings of workers aged 20–4; (ii) general decline in men's earnings mobility, while women's mobility has increased for young and prime‐age workers; and (iii) upward drift in earnings profiles of 1960s–1970s entry cohorts and downward shifts for 1980s–1990s cohorts (largely confirming Beaudry and Green's findings), but suggestive of steepening profiles for the 1990s cohorts. JEL classification code : J31,O33     

Is debt conservatism the solution to financial constraints? An empirical analysis of Japanese firms

ABSTRACT

This paper investigates why firms choose the conservative financing strategy known as non-positive net debt policy, which is a more recent prevalent trend among Japanese firms. The analysis reveals that Japanese firms are more likely to be financially conservative if they are smaller, older and more profitable and have fewer growth opportunities and tangibility. The survival analysis further investigates the duration of conservative debt policy and ordinary debt policy. The evidence shows that firms adopt/abandon the conservative policy with different motivations and preferences over debt conservatism. In particular, we argue that the more financially constrained firms abandon the conservative debt policy sooner than their counterparts, while less financially constrained firms abandon the ordinary (less conservative) debt policy sooner than their counterparts. The results suggest that a firm uses a conservative debt policy in terms of net leverage as a temporary buffer to mitigate financial constraints.     

The equity premium in a small open economy and an application to Israel

We show that the preferences suggested by Greenwood, Hercowitz and Huffman (GHH), which are quite common in real business cycle (RBC) models of small open economies, are not suited for reproducing both the business cycle and the equity premium facts of a small open economy. We show that by assuming a moderate degree of a wealth effect on labor supply, together with some limitations on labor supply (in the form of real wage rigidity), we can increase the volatility of the stochastic discount factor (SDF), thereby increasing the equity premium and improving the fit of the business cycle moments. We also find that under the aforementioned assumptions, a shock to the realized return on foreign bonds can help in reproducing the equity premium.     

保险资金运用的新途径：私募股权基金

中国保险业发展迅速,积累了大量的富余资金.但是,这部分规模庞大的资金的运用却不尽合理,存在着较为严重的"资金浪费".本文从我国保险资金运用的现状出发,论述了保险资金投资于私募股权基金的合理性,并结合当前我国实际情况,阐述了发展私募股权基金的有利条件以及限制性因素,最后提出发展私募股权基金的建议.     

Financial characteristics of Australian initial public offerings from 1994 to 1999

A variety of financial characteristics of Australian initial public offerings (IPOs) for the period 1994–1999 are explored. A number of previous Australian studies have investigated the initial day underpricing and longer term underperformance of IPOs and this study updates those papers. This paper partitions the IPO data into no liability/limited liability; share option/no share option; underwriter option/no underwriter option and dividend reinvestment/no dividend reinvestment characteristics to better understand the types of IPOs that list on the Australian Stock Exchange. The data supports the findings of previous studies in that IPOs are underpriced at the time of listing and underperform the market in the first year following their listing.     

Work-limiting health,earnings, and employment: an analysis with SIPP data

ABSTRACT

This study examines the role of work-limiting health conditions on employed people’s earnings, employment status, and working hours, and distinguishes between the different degree and severity of predictable shocks. Using data from the 2004 Survey of Income and Program Participation (SIPP), we evaluate the impact of any work-limiting health condition as well as a subset of health conditions that appear to arrive largely exogenously on post-onset earnings, employment, and working hours. We find that people who report being employed and later experience the onset of any work-limiting health condition tend to have lower subsequent earnings, a reduced probability of being employed, and fewer working hours per month compared to those who remain healthy. The adverse impact is even greater for people with health conditions that arrive less predictably. We use a difference-in-differences regression model with person and year fixed effects as the primary estimation method.     

Private equity characteristics and performance: An analysis of North American venture capital and buyout funds

The paper investigates the relationship between fund performance and fund characteristics of North American private equity (PE) funds, by analyzing the interactions of fund size, fund sequence, and past fund performance on traditional fund return measures. The empirical evidence is based on both linear and polynomial regressions, on a sample of 345 venture capital (VC) and 411 buyout (BO) funds with vintage year over the period 1995–2010. We document a concave relationship between fund size and performance, persistence in PE performance, as well as a convex relationship between fund sequence and performance. We suggest both the optimal fund size and the optimal fund sequence number. Economic implications for investors and general partners are discussed as well.     

Spatial panel data analysis with feasible GLS techniques: An application to the Chinese real exchange rate

Recent panel data approaches stress the importance of the location interdependence. Little has been done in the Balassa-Samuelson literature accounting for spatial dependence in the panel data context that allows for spatial autocorrelation. By utilising the recently developed Kapoor et al. (2007) spatial panel feasible GLS methods, we find that the Balassa-Samuelson effect in the Chinese economy during 1985 until 2000 generally does not appear to hold. However, the black market exchange rate tends to be more compatible with the theory.     

日本经济的两大痼疾及其治理前景

20世纪90年代初，日本经济的泡沫破灭之后，便陷入了一场长达十余年的经济萧条，其间经历了若干次起伏，但至今仍没有出现明显的复苏迹象，尽管日本政府几乎已经穷尽了刺激经济的所有对策，但是1993—2002年这十年间GDP的平均增长率只有0.4%。尤为严重的是，到目前为止，诸多困     

Methods in open policy analysis: An application to California's building energy codes

Have building energy codes lowered energy consumption, and have their benefits outweighed costs? Using 2000 Census data, I estimate household energy expenditures by decade of home construction, controlling for household and home characteristics. I find homes built in the 1980s used $35 less in electricity and $46 less in natural gas, per year, compared to 1970s era homes. For Sacramento, energy codes pass a cost-benefit test when low-end policy costs are used, but fail with base-case costs. This study also clarifies how a cost-benefit analysis (CBA) for a representative household fits into a comprehensive CBA.