Earnings conservatism: panel data evidence from the European Union and the United States

This paper focuses on earnings conservatism, and provides new evidence based on procedures that account for variability at the firm level, drawing a comparison between the European Union and the United States. A key finding is that the estimated responsiveness of earnings to bad news is substantially higher when unobserved firm-specific effects are modelled. Furthermore, it is shown that accounting has become more conservative not only in the U.S. but also in the EU when taken as a whole, and there is little evidence of marked differences in the asymmetric timeliness of earnings between the two. Indeed, any changes in this property of earnings are likely to be attributable to a common factor that influences firms similarly in both locations, and not necessarily to the process of economic convergence that has taken place in the EU.     

Catastrophe Risk Financing in the United States and the European Union: A Comparative Analysis of Alternative Regulatory Approaches

The regulation of insurance companies in the United States and the European Union (EU) continues to evolve in response to market forces and the changing nature of risk but with somewhat different philosophies and at different rates. One important area where both economic realities and markets are changing is catastrophe risk and its financing. This article examines and compares regulatory and other government policies in the United States and the EU generally and their approaches to the financing of catastrophe risk specifically. It is important to understand the fundamental differences between the two systems to gain insights into their disparate treatment of catastrophe risk financing. Although policies could be improved in both jurisdictions, we argue that the much greater reform is needed in the United States relative to the EU regulatory policies that are being developed. We offer recommendations on how U.S. policies could be significantly improved as well as comment on issues facing the EU. We conclude with some observations on the needs for further progress in the U.S. and EU regulatory systems.     

Risk perception in Korea: a comparison with Japan and the United States

Using a psychometric paradigm, this study examines cross-cultural similarities and differences in the risk perceptions of three samples (Korea, Japan and the United States), through a comparison of 70 environmental risks. The results show that the three samples have a similar two-factor structure and two higher order factors ­ 'dread risk' and 'unknown risk' ­ structure risk perceptions of the 70 risks. The results also indicate that differences in the perceptions of specific risks are significant. Speculations for these differences are discussed.     

The Effects of Liberalisation on Market and Currency Risk in the European Union

This paper investigates the effects of liberalisation on the pricing of market and currency risk for a number of financial markets in the European Union (EU). An International Asset Pricing Model with a multivariate GARCH‐in‐Mean specification and time‐varying prices of risk is used for the four markets with the largest capitalisation in the EU. Only one price of market risk exists and international investors are rewarded for their exposure to currency risk. The evidence shows that all prices of risk are time‐varying and have been decreasing during the process of liberalisation. There is also evidence that markets react to period of uncertainty in the process toward the completion of liberalisation. In addition, the operation of the European Monetary System has generated lower covariances. As a consequence, total risk premia have declined in the last decade.     

Corporate debt and financial balance sheet adjustment: a comparison of the United States, the United Kingdom, France and Germany

The level of UK corporate debt directly affects financial stability in the United Kingdom because a significant amount of the exposure of the UK financial system is to UK corporates. Our paper provides a comparison of the determinants of corporate debt in the United States, the United Kingdom, France and Germany. The comparison serves to benchmark our findings about the determinants of UK corporate debt. In addition, the UK financial sector is significantly exposed to the corporate sectors in the United States, Germany and France. The model assesses the contribution of investment, acquisitions, cash flows and market-to-book values to the determination of debt, and also the tendency of debt to revert to its optimum level. Debt was found to be positively related to the financing needs of the firm, and the optimum level of debt to be negatively related to the market-to-book ratio. This casts some light on the procyclicality of debt.     

Accountability and risk governance: a scenario-informed reflection on European regulation of GMOs

Regulating risks in the face of scientific uncertainty poses a particular challenge to policy-makers. Such problems are amplified when decisions are taken in a multi-level framework of supranational governance. The genetically modified organism (GMO) regulation in the European Union constitutes an especially salient issue of risk governance in a multi-lateral arena, as the topic is politically highly visible and decision-making is slow and contested. Furthermore, as authority is dispersed among multiple actors, European risk governance is in need of adequate mechanisms ensuring that decision-makers justify and account for their behavior. While legitimacy aspects of GMO governance have widely been examined, accountability relations within the field of GMO risk governance have hitherto only weakly been explored. Hence, this paper analyzes the question of who can be held accountable under the complex system of supranational risk governance. This paper claims that mere adherence by actors to the regulatory procedures during the decision-making process does not necessarily imply that overall accountability can be secured, resulting in ‘organized irresponsibility’. Although certain piecemeal accountability may exist, establishing overall accountability is complicated, precisely as a result of the complex system of interwoven rules.     

Risk assessment of option performance for new product and process development projects in the chemical industry: a case study

This paper presents as a case study, empirical research forming part of a large EPSRC‐funded project to decrease new product and process development times within the UK fine chemicals industry. The work aimed to design a decision support system to evaluate competing options in such development projects. Theoretical and practical contributions from academic and industrial collaborating groups were integrated using Action Research. High levels of risk when bringing new products to market or new processes on line means that risk assessment features significantly when evaluating different project options. A key research target, and the concern of this paper, is the design and use of a risk assessment tool (RAT) to fit the context of the overall decision support system. Collectively the tools enabled the options within individual projects to be evaluated on risk and other performance dimensions. Industrialists provided a number of comprehensive case studies to test the suite of tools. Theoretical and empirical implications are discussed.     

Deterministic nonlinearity in the stock returns of major European equity markets and the United States

By using recently developed statistical tools designed to overcome some of the limitations often associated with financial data, this study attempts to detect low-dimensional deterministic chaos in five major European stock markets and the United States. Country indexes exhibiting low-dimensional deterministic chaos may contain some informational inefficiency; thus, it may be possible to use nonlinear dynamics to predict future stock returns. The results do not provide evidence of the existence of low-dimensional chaotic systems in any of the examined indexes. As such, the notion of market efficiency in the examined indexes is not threatened by the findings of this study.     

Unconventional monetary policy and stock repurchases: Firm-level evidence from a comparison between the United States and Japan

This paper is the first comparative study examining the determinants of stock repurchases during the period of unconventional monetary policy. By constructing a vast firm-level dataset of the U.S. and Japan and conducting multivariate Tobit and probit analyses, this paper presents evidence that during the period of unconventional monetary policy, in both the U.S. and Japan, firms with more free cash flow and lower borrowing costs are more likely to repurchase stock, firms with higher financial leverage are more likely to abstain from stock repurchases, and firms coordinate dividends and stock repurchases to please shareholders. I also find striking contrasts between the results of U.S. and Japanese firms, and show the importance of financial structure in explaining the contrasting results. From a micro perspective, this paper provides new insight and evidence to support the view that financial structure should be thought of as an important factor determining the effects of unconventional monetary policy.     

The role of epistemic policies in regulatory science: scientific substantiation of health claims in the European Union

This paper presents an analysis of the concept of scientific substantiation in European health claims regulation. It focuses on the controversies about the demand for the establishment of cause-and-effect relationships between food consumption and health outcomes in claim substantiation. Our analysis, on the basis of regulatory and scientific documents, identifies two opposing views about the aims of health claims regulation. Each of these two stances links certain regulatory objectives with specific epistemic policies, that is particular sets of scientific methodology, criteria, and procedure. The regulators, in selecting a demanding evidentiary approach based on a hierarchy of methodologies that requires causal data for substantiation of claims, give priority to preventing the authorization of false claims. The opposing view, espoused by the critics of this approach, opts for less demanding requirements for substantiation, implying the market availability of a wider range of products with health claims that may provide individual as well as public health benefits. We argue that one of the objectives that underlie the European regulators’ demand for causal data is to protect their own credibility, by trying to isolate them from value-laden debates about the limitations of scientific methodologies, as well as the societal and policy implications of regulatory decision-making.     

美、英、日财产税税制特征和对我国的启示

本文首先介绍了美国、英国、日本三国财产税的基本情况,并总结了各国财产税税制设计的特征,在此基础上,剖析了我国房地产税制现存的问题,对我国开征物业税提出了相关政策建议。     

欧美网络保险的最新发展及对我国的启示

随着互联网的兴起和快速发展,保险业正经历着一次重大变革。欧美国家的保险公司利用互联网等信息技术解决实际业务问题,为代理人、客户、潜在客户、合作伙伴提供各种服务,大幅降低了成本,并提高了业务效益、内部运营效率和合作有效性。本文主要分析了欧美网络保险的发展状况,并找出我国发展网络保险的差距。我国应该借鉴国外经验,结合国内有利环境,重点解决网络安全、风险控制和网上支付等技术瓶颈,全方位发展网络保险,以促进我国民族保险业的高效、快速发展,使之以全新的姿态积极参与国际保险市场的竞争。     

Letters to the shareholders: A content analysis comparison of letters written by CEOs in the United States and Japan

Previous studies suggest that letters to the shareholders are widely used in investors' decision-making processes. Letters to the shareholders, however, are unaudited and usually not subject to regulation. Hence, CEOs may use them strategically to manage the impressions shareholders have of the company. This paper focuses on letters to the shareholders from Japanese and U.S. companies. The research examines whether U.S. and Japanese CEOs explain the causes of good and bad news in different ways. The findings point to a number of interesting differences between the U.S. and Japanese letters to the shareholders, including: (1) that U.S. CEOs in particular emphasize good news; (2) that Japanese and U.S. letters are statistically indistinguishable with respect to the extent to which CEOs claim responsibility for good news; and (3) that while CEOs in general ascribe bad news to causes beyond their control, this tendency is particularly strong in Japanese letters. The implications of the study for both investors and regulators are discussed.     

Evaluation of psychosocial and organizational factors in offshore safety: a comparative study

This study compares UK and Norwegian offshore workers' evaluations of social and organizational factors that can have an impact upon safety on offshore installations. A total of 1138 Norwegian (87% response rate) and 622 UK workers (40% response rate) responded to a self-completion questionnaire, which was distributed to 18 installations in February/March 1994. The questionnaire contained six scales that were suitable and relevant for the purposes of comparison. These scales measured ‘risk perception’, ‘satisfaction with safety measures’, ‘perceptions of the job situation’, ‘attitudes to safety’, ‘perceptions of others' commitment to safety’ and ‘perceptions of social support’. The data show clear differences in how UK and Norwegian workers evaluate various social and organizational factors that can have an impact upon safety, however, eta² analysis indicated that for most of the scales ‘installation’ explained a greater percentage of the variance than sector. The exceptions to this were scales measuring ‘safety attitudes’ where both sector and installation contributed equally to the effects. Although the results from the ‘safety attitudes’ scales should be interpreted with caution (due to low internal reliability), it is possible that they are tapping into more deeply held beliefs about the nature of safety, e.g. ‘fatalism’ and the ‘causes of accidents’. In contrast, the other scales are measuring factors directly related to the working environment such as perceptions of risk and satisfaction with safety measures on the installation. These may reflect the prevailing ‘safety climate’ or ‘atmosphere’ on the installations surveyed, whereas constructs such as ‘fatalism’, etc. may be reflections of underlying ‘cultural’ values. Recognizing the existence of different ‘safety cultures’ and understanding the processes which lie behind them could have implications for safety management in an industry which is highly international in nature and in which workers' are often required to work in foreign countries for varying periods of time.     

Two paths of risk regulation: the concurrence of scientific and sociocultural decision-making in the European law of agricultural genetic engineering

Future hazards which may result from genetically engineered plants can currently only be anticipated. Therefore, the handling of the potential risks is becoming a crucial political and legal question. The following article describes the differing national regulatory approaches in Europe: an economic, a scientific, and a sociopolitical approach pre-existed the European Union’s deliberate release Directive, which itself follows a primarily science-based approach. The latter is based on objective technological assessments of individual cases. At the same time, however, the Directive contains elements of a sociocultural approach, which is open to value-based judgments and thus, necessarily takes a subjective, general assessment of the use of genetically modified organisms. As a result, the European law of Agricultural Genetic Engineering provides two paths of risk regulation in parallel.     

The Cascade of Fear: Policy Implementation and Financial Management Reform in the European Commission

The complexity of managing European Union (EU) spending programmes is the subject of much comment but relatively little academic analysis. Using a multi‐disciplinary analytical framework drawn from the management, policy and social sciences, this fieldwork‐based case study examines the reform of financial management within the European Commission. In constructing an agent focussed narrative of a specific reform episode, it contributes to a growing literature on public management reform analysed from this perspective and also to the lightly developed field of EU financial management.     

Social risk screening using a socio-political ambiguity approach: the case of organic agriculture in Iran

While ecological sustainability of organic agriculture (OA) has been frequently investigated, there are limited studies on its social sustainability, especially in developing countries. Given significant benefits of OA, screening the potential social risks associated with OA seems necessary. This paper introduces a socio-political ambiguity approach based on a hybrid model of ‘risk and social impact assessment’ for screening the risks of OA. As a case study, the paper focuses on the OA development in Iran using qualitative research to elicit opinions and judgments of farmers, consumers, and policy-makers. The results of the study revealed that there are serious ambiguities and risks associated with OA. This paper demonstrates that risks (especially social risks) of OA have received too little attention and were considered as can be neglected.     

Risk propensity within the military: a study of Swedish officers and soldiers

Issues concerning risks in the military have gained increased attention within the Swedish Armed Forces, particularly relating to the new focus on an all voluntary force participating in international missions. Military activities inevitably include an element of calculated risk-taking, while at the same time the unnecessary taking of risks must be minimized. Within the context of the specific mission and situation, a number of factors relating to demographic variables, traits and beliefs may influence individual inclinations towards risk behaviour. The purpose of this study was to examine the relationship between such factors and individual risk propensity. Data were collected from two samples of Swedish soldiers and officers. Examining demographic variables, negative safety values and risk propensity were found to decrease with age, while men demonstrated a more sceptical view of safety measures and a higher risk propensity than women. The trait known as lack of deliberation, reflecting an inability to think ahead and foresee consequences, was positively related to risk propensity. A more sceptical view of safety was shown to be associated with a higher sense of personal invincibility and together with lack of deliberation predicted variations in danger-seeking scores. The distinction between functional and non-functional risk-taking is discussed on the basis of the relationships found in the study. Implications for recruitment to the military as well as for training and leadership are suggested, emphasizing the need for military leaders to balance their leadership in terms of safety-oriented and risk-promoting behaviours.     

Sustainable economic growth in the European Union: The role of ICT,venture capital,and innovation

Over the past 30 years, the economies in Europe have undergone major transformations that have been powered by diffusion of information and communication technology (ICT), intensification of innovation, and reforms in the financial sector to support innovative endeavors. The primary objective of this study was to examine the causal relationships among ICT diffusion, innovation diffusion, venture capital investment, and economic growth for 25 countries in Europe for the period from 1989 to 2016. Using a vector error‐correction model, the study examines the underlying short‐run and long‐run relationships for the above variables. The empirical analysis shows that in the long run, venture capital investment, ICT diffusion, and innovation diffusion have significant impacts on economic growth in Europe. However, in the short run, the direction of the causality varies depending on the specific measures of ICT diffusion and innovation diffusion that are utilized. Results from this study provide valuable insights into the types of policies that will contribute to sustainable economic growth in Europe.