Shareholder‐ Versus Stakeholder‐Focused Japanese Companies: Firm Characteristics and Accounting Valuation*

Recent research has found that the value‐relevance of accounting variables depends not only on whether a country's accounting rules are code‐law oriented or common‐law oriented, but also on the reporting incentives created by the legal and business environment in which a firm operates. Therefore, for example, the earnings of firms in some countries with common‐law oriented rules but with code‐law incentives have more code‐law‐type characteristics. We further this research by examining whether this is true for firms facing the same accounting regime and institutional environment but different stakeholder‐related incentives. We find significant stakeholder‐related incentives across 23 Japanese firms listed in the United States and 23 Japanese firms not listed in the United States that are matched by industry and size. Although these firms face the same institutional environment and the same accounting regime, consistent with the differences in stakeholder‐related incentives, the earnings and book values of the firms listed in the more shareholder‐oriented U.S. markets have significantly more explanatory power for market value than those for firms not cross‐listed in the United States. These findings are unaffected by whether the reports are based on consolidated or parent‐only accounting or whether they are based on U.S. or Japanese GAAP, emphasizing the potential influence of reporting incentives at all levels on the effect of standardization, conversion, or harmonization of accounting methods globally.     

CAPITAL CONTROLS,TWO‐TIERED EXCHANGE RATE SYSTEMS AND EXCHANGE RATE POLICY: THE SOUTH AFRICAN EXPERIENCE

South Africa's 40 years of experience with capital controls on residents and non‐residents (1961‐2001) reads like a collection of examples of perverse unanticipated effects of legislation and regulation. We show that the presence of capital controls on residents and non‐residents enabled the South African Reserve Bank to target domestic interest rates (and or the exchange rate) via interventions in the (commercial) foreign exchange market. This provides an early rationale for anchoring SA monetary policy via the exchange rate, rather than via domestic interest rates. This suggests not only that the capital controls themselves exhibited substantial institutional inertia, but that this same institutional inertia also applied to the monetary policy regime. A plausible reason for this is that for most of the 20th century in South Africa. (partial) capital controls and exchange rate based monetary policies were like Siamese twins – almost impossible to separate.     

贸易政策与欧美产业界商务外交策略研究

贸易政策是政府与产业界博弈的结果。政府是商务外交的主体,产业界是商务外交的关键角色,欧美产业界以商务外交策略参与政府贸易政策的制定和调整从而实现其国际化目标。中国产业界应当加强与政府的商务外交合作,发挥行业协会的作用,通过商务外交获取政策优势,推动国际化。     

The “hidden” side of the “flying-geese” catch-up model: Japan’s dirigiste institutional setup and a deepening financial morass

Akamatsu’s original “flying geese” (FG) growth model is often used as a frame of reference for both further conceptual elaborations and empirical explorations. So far, only the positive results of FG development have been focused on and emphasized in connection with Asia’s phenomenal growth in the precrisis period. The Japanese economy, supposedly Asia’s lead goose, is in the eleventh consecutive year of stagnation. How has such a once successful lead goose come to be stricken by financial woes? This paper points out that Japan’s once miraculous FG growth was made possible because it established an effective dirigiste catch-up regime in the early postwar period but that Japan’s present financial predicament is paradoxically a path-dependent outcome of this FG strategy. The institutional, especially financial, dimension of FG strategy needs to be taken into account to explain why such a strategy once proved effective but later culminated in a deepening financial morass. The FG model should encompass not only the industrial dimension of catch-up but also its institutional, particularly financial, dimension.     

TRADE LIBERALIZATION AND PRICE‐COST MARGIN IN INDIAN INDUSTRIES

Using panel data for 137 three‐digit industries for 1980/81 to 1997/98, the paper examines the effect of trade liberalization on price‐cost margins in Indian industries. An econometric model is estimated to explain variations in price‐cost margins, taking tariff and nontariff barriers among the explanatory variables. The results indicate that the lowering of tariffs and removal of quantitative restrictions on imports of manufactures in the 1990s had a significant pro‐competitive effect on Indian industries, particularly concentrated industries, tending to reduce the price‐cost margins. The paper notes that despite the pro‐competitive effects of trade liberalization reinforced by domestic industrial deregulation, the price‐cost margin increased in the post‐reform period in most industries and aggregate manufacturing, which is attributed to a marked fall in the growth rate of real wages and a significant reduction in labor's income share in value added in the post‐reform period, reflecting perhaps a weakening of industrial labor's bargaining power.     

PROPOSALS FOR STRENGTHENING THE SARB'S INFLATION TARGETING REGIME

This paper proposes a set of criteria for efficient institutions derived form the New Institutional Economics literature and the IMF's Code of Good Practices on Transparency in Monetary and Financial Policie. These criteria are used to evaluate the institutional framework of South Africa's inflation targeting regime. A test for measuring the comprehensiveness of South Africa's inflation targeting regime is used to verify the results of the institutional evaluation. Finally, a matrix of proposed institutional reforms is constructed to address weaknesses identified by the institutional evaluation.     

UNDERDEVELOPMENT AND INDUSTRIALISATION IN PRE‐WAR THAILAND

Thailand's economy before 1940 was marked by remarkably low long‐term real economic growth, unusually high levels of the population living in rural areas, and limited industrialisation and urbanisation. This paper examines reasons for the lack of diversification, looking in particular at industrial development. We emphasise Thailand's role in the world economy, sources of labour supply, and the concentration of industry in the capital Bangkok. The impact of the world depression of the 1930s on the Thai economy was only moderate, which obviated the need for state policies that might have prompted significant economic change.     

The Effects of Out‐of‐Regime Guidance on Auditor Judgments About Appropriate Application of Accounting Standards

Accountants making judgments with respect to a particular set of standards are increasingly aware of standards from other reporting regimes that offer additional or conflicting guidance. In fact, IFRS encourages reliance on out‐of‐regime standards when IFRS lacks guidance. This paper reports the results of two experiments which provide evidence that auditors in such circumstances are vulnerable to contrast effects, whereby reporting judgments under IFRS are systematically influenced away from the accounting treatment supported by standards from another regime (U.S. GAAP). Contrast effects are observed (i) when out‐of‐regime standards are considered before making a reporting judgment under IFRS, and (ii) when out‐of‐regime standards are applied as local GAAP for a subsidiary of a foreign parent that reports under IFRS. We also find that contrast effects are reduced when auditors believe IFRS lacks guidance. These results have implications for financial statement preparers and auditors in the current incomplete‐convergence environment.     

BASKET PEGS AND EXCHANGE RATE REGIME CHANGE: AUSTRALIA AND NEW ZEALAND IN THE MID‐SEVENTIES*

The adoption of a basket peg by China in July 2005 raised interest in this form of exchange rate regime. This paper explores the emergence of the basket peg in the early 1970s, using New Zealand and Australia as case studies to examine why it was adopted, how it operated, and their policy‐makers' use of it to influence various goals. We highlight the complexity of regime choice following the collapse of Bretton Woods. For Australia and New Zealand, the basket peg was a plausible (although interim) solution when they were reluctant either to peg to a single currency or float.     

Market and institutional forces in industrial relations: the development of national collective bargaining, 1910–1920

This article reviews recent trends in the historiography of British industrial relations, and highlights a growing emphasis on the influence of employers and impersonal economic forces. In response, the article argues for a renewed recognition of trade unions as a proactive force in the development of industrial relations systems. This view is supported by analysis of the influence of market and institutional forces upon the spread of national collective bargaining. The conclusion is that commercial pressures on employers were relatively unimportant in a process driven by human agency, institutional forces, and wider economic pressures.     

COLONIALISM AND LONG‐RUN GROWTH IN AUSTRALIA: AN EXAMINATION OF INSTITUTIONAL CHANGE IN VICTORIA'S WATER SECTOR DURING THE NINETEENTH CENTURY

Institutional change in water rights in the nineteenth century Australian colony of Victoria raised institutional efficiency, which contributed to long‐run economic growth. High‐quality human capital and the extension of voting rights (franchise) were crucial for efficient institutional change in the water sector. Quality human capital (literacy) appeared to increase the rural population's awareness of the economic impact of the existing structure of water rights that may have constrained growth in the agricultural sector and reduced investment incentives. Extension of the franchise allowed the rural population to exert political pressure for enactment of change in water rights, which resulted in efficiency‐enhancing policies and efficient institutions. The findings show these two factors were more important than Victoria's British colonial heritage in determining whether growth‐enhancing institutional change took place.     

The dynamics of outsourcing: From labor cost‐saving to preference‐based outsourcing

Jones's (2000) celebrated book has inspired a generation of work devoted to understanding the causes and consequences of outsourcing. While much of this work has focused on the outsourcing versus domestic production decision of the firm, with labor cost‐saving as the key driver for outsourcing, we further explore how preference‐based outsourcing may arise in a dynamic world equilibrium. We address this problem in a North–South model in which the outsourcing decision depends not only on labor costs but also on information about local preferences that arise with outsourcing. As the South develops, demand for manufactured goods becomes more important, so identifying specific tastes of Southern consumers matters more. As a result, preference‐based outsourcing displaces cost‐saving outsourcing. Our quantitative analysis indicates that, as both agricultural and manufacturing technologies grow over time, the dynamic world equilibrium switches from the export regime to the cost‐saving outsourcing regime, and eventually to the preference‐based outsourcing regime.     

Institutional Quality and CO2 Emission–Trade Relations: Evidence from Sub‐Saharan Africa

This paper examines the roles of trade, institutional quality and their interactions in explaining carbon dioxide emissions in a panel sample of 40 Sub‐Sahara African countries using the system generalised method of moments. We find that institutional reforms are unequivocally environmental improving. Meanwhile, the impacts of trade on the environment tend to depend on the institutional setting of a country. More specifically, trade openness is harmful to the environment in countries with low institutional quality and beneficial to the environment in countries with high institutional quality. This means that institutional reforms are a perquisite for the countries with low institutional quality to actualise the beneficial environment effect of trade. As for the countries with adequate institutional quality, trade and institutions are reinforcing each other in bringing down pollution. From these results, we conclude that trade openness implemented in a sound institutional setting potentially brings better trade, more growth and better environment.     

我国食盐产业链利益分配问题及制度求解

我国食盐产业链合作利益在各环节的分配严重不公平,这造成了整个产业链的效率损失。合作利益的分配问题是由食盐产业链纵向和横向上的不合理的产业组织状况所导致的,而产业组织的不合理性有着包括盐业管理体制问题在内的制度性根源。以市场化为目标的食盐专营制度改革和以投资主体多元化为目标的产权制度改革,将优化盐业产业组织结构,从而提升整个盐业产业链的效率,最终增强我国盐业在国际市场上的竞争力。     

The Political Processes of the Distinctive Multinational Factory Regime and Recent Strikes in Vietnam

Abstract

The period from the mid-2000s to the early 2010s is noteworthy in the history of industrial relations in Vietnam. On the one hand, the number of strikes increased, reaching its peak in 2011. On the other hand, there were much stronger signs that both the management and the workers were not satisfied with their “factory regime”, as a stable and predictable process to resolve labor disputes was yet to emerge. In addition to the previous economic and political explanations focused on macroeconomic conditions and political institutional arrangements at the national level, this article attempts to ethnographically explore and describe the political-economic conditions of both the workers and the managements on a micro level to answer the following questions: Why do some workers have to resort to uncomfortable and troublesome means such as wildcat strikes despite their better working conditions compared to those of workers in other factories? In contrast, what are the reasons that some factories do not offer their workers particularly favorable working conditions and wages and can still avoid strikes? While answering these questions, this article attempts to address the necessity of recognizing the distinctive political structure and processes in the multinational factory regime and to suggest ways of establishing more stable and productive industrial relations more suitable to the particularity of the factory regime.     

Institutional Foundations for Shared Growth in Sub‐Saharan Africa*

Abstract: The paper examines the dynamically evolving triangular relationships between institutions, growth and inequality in the process of economic development, in order to deepen the understanding of institutional conditions for pro‐poor growth and shared growth. In this context, the paper discusses the institutional conditions found in sub‐Saharan Africa, which may have produced the growth pattern that is unequal and against the poor. The analysis shows that sub‐Saharan African countries require transforming institutions for embarking upon and sustaining a development path which would ensure shared growth in years to come. The paper first evaluates the growth‐inequality‐poverty nexus, as found in the recent literature, which increasingly challenges the trade‐off between growth and equity, as postulated in the traditional theories. Various definitions of pro‐poor growth are discussed and a sharper definition of the concept of ‘shared’ growth is provided. Definitions of institutions are then examined, as well as the triangular inter‐relationships between institutions, inequality and poverty. The paper finally analyses specific institutional conditions found in sub‐Saharan Africa that prevent economies from emerging out of low‐equilibrium poverty traps that are characterized by low economic growth, unequal distribution of income and wealth as well as unequal access to resources and power.     

Information‐Processing Costs and Breadth of Ownership

Using the U.S. Securities and Exchange Commission's mandate of eXtensible Business Reporting Language (XBRL) as a natural experiment, this study investigates whether and how the decreased information‐processing costs brought about by XBRL influence firms’ breadth of share ownership. We find that the XBRL mandate is associated with an increase in the total number of a firm's shareholders. This finding is consistent with the notion that XBRL facilitates a more transparent environment and decreases information‐processing costs, thereby attracting more shareholders in general. More interestingly, we find that while XBRL adoption is associated with an increase in share ownership of individual and non‐U.S. foreign institutional investors, it is associated with a decrease in share ownership of U.S. domestic institutional investors. Further evidence shows that this asymmetric shift in share ownership is more pronounced for more complex firms. Our findings, taken together, suggest that the decreased information‐processing costs brought about by XBRL help firms establish a level playing field by reducing the information disadvantages of individual and foreign institutional investors over domestic institutional investors. Our results are robust to potential endogeneity concerns and alternative research designs.     

The causes and consequences of rent-seeking in Northern Ireland, 1945–721

Northern Ireland’s economic performance during the ‘golden age’ was weak. Crafts suggested that rent-seeking was an important determinant of this poor record. This article offers support for such a conclusion. It is suggested that the growth record was shaped by British regulations preventing conflicts of ministerial interest not being made operational until 1963. This institutional divergence tended to promote rent-seeking behaviour, which impeded the pursuit of an industrial policy that could promote economic efficiency. In 1963 the institutional structure and the industrial policy framework changed. These changes stimulated the pursuit of efficiency and contributed to an improved regional economic performance.     

State Fragmentation and Rights Contestation： Rural Land Development Rights in China

The functionalist reasoning of institutional changes builds on individual rationality and explains institutional changes from the demand side. While insightful, a comprehensive understanding also needs to take into account the supply side, The state, as the ultimate supplier of institutional changes, plays the pivotal role of agency; therefore, its willingness and ability decide how such regime change occurs and what partieular form the new regime takes. Since the mid-1990s, the Chinese economy has embarked on a path of rapid industrialization and urbanization. The contestation over rural land development rights in China offers an excellent case to illuminate the importance of state agency in institutional changes. Drawing on case studies in China＇s three major urbanizing regions, this article analyzes how villages brought their own land directly to the land market and reaped handsome profits. We argue that the three successful cases, Nanhai in Guangdong, Kunshan in Jiangsu and Zhenggezhuang in Beijing, all represent a product of active agency on the supply side. The Chinese state＇s fragmented authority provides a favorable institutional environment for such changes.     

A Professional Association as Network and Communicating Node: The Pharmaceutical Society of Australasia, 1857–1918

This paper explicitly examines the communicating processes that conditioned the dynamic interaction between recognized norms and legislative activity affecting the professional development of pharmacists. The Pharmaceutical Society of Australasia successfully developed communication channels, exploited recognized models, and created institutional constructs. In contrast to much of the literature which attributes professionalization to the pursuit of a single aim, this study found that the PSA sought to achieve a wide range of objectives and that having a broad agenda was to its advantage. The PSA succeeded in shaping the public conceptions of the profession in order to influence an emerging regulatory regime.