Gambling Attitudes and Financial Misreporting

We investigate whether attitudes toward gambling help explain the occurrence of intentional misreporting. Similar to gambling, some financial reporting choices involve taking deliberate, speculative risks. We predict that in places where gambling is more socially acceptable, managers will be more likely to take financial reporting risks that increase the likelihood the financial statements will need to be restated. To test this prediction, we exploit geographic variation in local gambling attitudes and find that restatements due to intentional misreporting are more common in areas where gambling is more socially acceptable. This association is even stronger in situations where management is under greater pressure to misreport, including when the firm is close to meeting a performance benchmark, experiencing poor financial performance, or under investment‐related pressure. Furthermore, these results are robust to numerous tests to address omitted variables and endogeneity. Collectively, these findings suggest gambling attitudes help explain the incidence of intentional misreporting.     

The Role of Happiness in Financial Decisions: Evidence from Financial Portfolio Choice and Five European Countries

This paper investigates the role of happiness in portfolio choices. Previous literature has only emphasized the reverse association. An additional novelty of the paper is that the analysis focuses on a wider country sample, while the literature has mainly focused on the U.S. and U.K. economies. Based on micro data from five European countries, i.e., France, Germany, Italy, the Netherlands, and the U.K., spanning the period 2009–2014, the results show that higher levels of happiness lead to higher shares of risky assets in financial portfolios. The findings survive a number of robustness tests. When asset holdings are disaggregated by the extent of the risk associated with them, this effect remains only for safe and low-risk assets, whereas the effect for assets with higher risks is the reverse.

     

Employee Attitudes,Earnings and Fixed-Term Contracts: International Evidence

We explore the relationship between employee attitudes, earnings and fixed-term contracts using data from the British Social Attitudes Survey and International Social Survey Programme. We find that workers employed under such contracts receive significantly lower earnings than their permanent contract counterparts, even after controlling for a plethora of personal and job characteristics. This may be indicative of wage discrimination against fixed-term contract employees. Our results also allude to possible asymmetries in the role of education across this two-tier system, with educational attainment playing a more prominent signaling role in the case of ‘permanent’ contract employees. We also find significant evidence of attitudinal effects, with workers employed on permanent contracts more likely to be both satisfied and secure with their job, but also more likely to find work stressful and exhausting and, perhaps as a consequence, to engage in absence. JEL no. J24, J31, J33     

Financial development and economic growth: Evidence from China

This paper investigates the relationship between financial development and economic growth for the case of China over the period 1952–2001. After considering the time series characteristics of the dataset, a multivariate vector autoregressive (VAR) framework is used as an appropriate specification and the long-run relationship among financial development, growth and other key growth factors is analyzed in a theoretically based high dimensional system by identification of co-integrating vectors through tests of over-identifying restrictions. The empirical results suggest that there exists a unidirectional causality from economic growth to financial development, conclusions departing distinctively from those in the previous studies.     

金融发展与经济增长:基于两部门模型的中国实证研究

有关金融发展与经济增长关系的研究越来越深入,本文的研究侧重于金融发展与经济增长关系的微观经济基础和关联机制,通过两部门模型揭示金融发展影响经济增长的两个方式：外部性和边际生产力差异。中国的实证检验结果表明,以M2为测度指标的金融发展与经济长期增长存在显著的正向关系,并且金融发展是经济增长的Granger原因。     

The Relationship Between Price Stability and Financial Stability: Evidence From Major Emerging Economies

We examine the relationship between price stability and financial stability for major emerging economies using a Markov regime-switching model. Empirical results suggest that monetary policy is consistent with the Taylor rule in all countries except for India and all countries followed both low and high inflation targeting monetary policy regimes. Low inflation targeting regime seems to be more persistent and has higher duration than high inflation targeting regimes except for Indonesia and South Africa. All countries seem to have had financial stability concerns when they formulated their monetary policy as the coefficient of the financial stress index is statistically significant at least in one regime. Overall the results suggest that Taylor rule-based monetary policies have been implemented to various degrees in major emerging economies to achieve economic stability, price stability, and financial stability.     

Strategic Financial Disclosure: Evidence from Labor Negotiations

Abstract. Evidence of strategic behavior in public financial disclosure is provided by analyzing 673 disclosures that were made before, during, and after four Canadian labor strikes. Financial disclosures included quantitative and qualitative information about the sampled companies that appeared in print media during the periods of interest. Strategic behavior involved the naming of one actor by another in the disclosures. The analyses showed that disclosure frequency was much higher during and immediately preceding the strikes than in other periods. Network-analytic techniques were employed to examine the linkages among seven groups of actors that were named in the disclosures. The disclosure networks increased in density during the strikes but became less centralized. Our analysis supports the view that strategic interactions in disclosures are multilateral and dynamic. Thus, any attempt to model financial disclosure during labor negotiations as a bilateral single-period game would appear to be simplistic. Disclosure management in this setting seems to occur within a complex economic and social setting.     

Premarital Birth Among Young Hispanic Women: Evidence from Semiparametric Competing Risks Analysis

The existing literature on welfare effects on marriage and fertility has largely focused on groups of white and black women. By contrast, Hispanic women have received little attention. This paper examines the effects of welfare generosity on a sample of young Hispanic women’s premarital fertility and marriage choices. A bivariate competing risks duration model framework allows us to identify the process of young women’s premarital fertility and the process of marriage, effectively controlling for observed characteristics and unobservables. Our findings indicate a 10% increase in welfare generosity results in a 10% increase in premarital births and a 7% decrease in marriages by age 24; both effects are significant.

Financial Incentives and Herding: Evidence from Two Online Experiments

Social conformity and information-based herding have been studied extensively in the social sciences, but there is little experimental evidence on how financial incentives impact the likelihood that an individual will follow the crowd. We present the results of a pair of two-stage online experiments where we use answers to and confidence about trivia questions—with and without information about the choices of others—to test the impact of financial incentives on an individual's likelihood of engaging in herd behavior (i.e., switching their answer to the most popular answer when it is revealed). We find strong evidence that individuals are more likely to herd when there are financial incentives to be correct, suggesting that individuals are less likely to rely on their own beliefs and judgments when the stakes are higher. We also exploit the unique design of our experiments to show that in the absence of information about others' choices, men report higher levels of confidence than women.     

金融发展与中间品离岸水平:基于制造业外部融资依赖度的实证分析

在国际生产网络不断扩张与深化的背景下,一国较高的金融发展水平会降低成本,提高本土产品的竞争力,进而影响企业的国际生产网络布局。文章在要素禀赋理论的框架下,采用美国制造业数据,考察贸易伙伴国金融发展对中间品离岸水平的影响,并进一步引入引力因素进行实证检验,结果表明,贸易伙伴国金融发展水平的提高会促进美国各产业离岸水平的提升,这种促进作用在外部融资依赖度高的产业上更为显著,即企业会将更多的生产环节布局在金融发展水平较高的国家。在考虑了不同计量技术、指标并分样本后上述结论依然稳健。     

Financial Development,Financial Structure,and the Growth Effect of Monetary Policy: International Evidence

This paper investigates how financial development and financial structure affect the growth effect of monetary policy using panel data from 49 countries over the period 1980–2014. We find robust evidence that financial development has a significantly negative impact on the growth effect of monetary policy. We also find that the growth effect of monetary policy tends to be more pronounced as the financial structure of a country becomes more market-based. These results not only add interesting new evidence to the recent literature on the growth effects of monetary policy, but also provide some important insights into the financial determinants of monetary policy effects on economic growth, which have largely been ignored in the previous literature.     

Strategic Tax and Financial Reporting Decisions: Theory and Evidence*

This paper examines the effect of book‐tax differences on the probability that a transaction is audited and the probability that additional taxes are collected. It constructs a stylized model in which the taxpayer reports both financial accounting income and taxable income. The government observes both reports before deciding whether to conduct an audit. The analysis of the equilibrium yields two hypotheses. First, the probability that the government will audit a transaction is higher if the transaction generates a positive book‐tax difference (e.g., an expenditure that is deducted for tax purposes but capitalized for financial reporting purposes) than if the transaction generates no book‐tax difference. Second, conditional on being selected for audit, transactions with and without book‐tax differences are equally likely to have detected understatements of tax liability. These hypotheses are tested using Internal Revenue Service (IRS) data from the Coordinated Examination Program. The empirical tests are consistent with the predictions of the strategic tax compliance model.     

金融波动性变化对投资率的影响——来自地级市层面的证据

文章先是通过理论分析发现金融波动通过影响企业投资项目成功概率的途径来影响投资率的高低。进而基于2001-2015年中国286个地级市数据对金融波动性和投资率之间的关系进行了实证检验。通过分析我们发现：第一，金融波动性与投资率之间负相关。第二，金融波动对投资率的影响呈非线性：随着金融波动剧烈程度的增加，金融波动对投资率的抑制效应逐渐减弱。第三，无论是在东部地区还是在非东部地区，金融波动对投资率的抑制效应都很显著。但是金融波动对投资率的非线性影响在东部地区显著，在非东部地区则不显著，这可能是由东部地区和非东部地区经济发展不平衡所致。     

资本账户开放与我国银行体系风险

文章从理论和实证角度分析了我国人民币资本账户开放与银行体系风险的相互影响关系。研究发现,资本账户开放水平越高,越容易加剧国内银行体系风险;同时,银行体系风险的加剧反过来又会延缓资本账户开放进程。文章提出强化国内银行体系审慎监管,完善监管法制建设等政策建议。     

The Regionalization of Knowledge Flows in East Asia: Evidence from Patent Citations Data

This paper investigates the extent to which East Asia has become a source of international knowledge diffusion and whether such diffusion is localized to the region. Using citations made by US Patent and Trademark Office (USPTO) granted patents to other USPTO patents as an indicator of knowledge flow, I investigate the patterns of knowledge diffusion in East Asia by estimating a model of international knowledge diffusion. While OECD countries remain the dominant sources of knowledge, I find evidence of increasing regionalization of knowledge flow in East Asia.     

Assessing Vulnerability to Financial Crisis: Evidence from Indonesia

This paper examines the view that the recent Indonesian crisis was largely unforeseen. The broadest macroeconomic indicators were of virtually no help in presaging the crisis; neither were high-frequency financial indicators. But warnings were there, just below the surface, in some of the macro indicators and in certain structural weaknesses that were long recognised as threats to financial stability. That said, none of these warnings suggested crisis of the magnitude that eventually occurred. The Indonesian experience indicates that macroeconomic stability should never be taken for granted. Signs of vulnerability to financial instability include: the degree of reliance on gross private capital inflows (taking into account maturities and the implications for rollovers); the extent of unhedged foreign exchange positions; and certain indirect indicators, such as policy slippages and key personnel changes. Finally, in a world of volatile capital flows, crisis will tend to occur before standard economic data suggest that crisis is imminent.