Maintaining a Reputation for Consistently Beating Earnings Expectations and the Slippery Slope to Earnings Manipulation

This paper investigates whether maintaining a reputation for consistently beating analysts' earnings expectations can motivate executives to move from “within GAAP” earnings management to “outside of GAAP” earnings manipulation. We analyze firms subject to SEC enforcement actions and find that these firms consistently beat analysts' quarterly earnings forecasts in the three years prior to the manipulation period and continue to do so by smaller “beats” during the manipulation period. We find that manipulating firms beat expectations around 86 percent of the time in the 12 quarters prior to the manipulation period (versus 75 percent for control firms) and that manipulation often ends with a miss in expectations. We document that executives of manipulating firms face strong stock market and CEO pressure to perform. Prior to the manipulation period, these firms have high analyst optimism, growing institutional interest, and high market valuations, along with powerful CEOs. Further, we find that maintaining a reputation for beating expectations is more important than CEO overconfidence and is incremental to CEO equity incentives for explaining manipulation. Our results suggest that pressure to maintain a reputation for beating analysts' expectations can encourage aggressive accounting and, ultimately, earnings manipulation.     

Gender Differences in the Giving and Taking Variants of the Dictator Game

We run between‐subject dictator games with exogenously specified “give” or “take” frames involving a balanced pool of male and female dictators and constant payoff possibilities. We find the following: Females allocate more under the taking frame than under the giving frame. Males allocate more under the giving frame than under the taking frame. In the taking frame females are more generous than males. But in the giving frame both are equally generous. Finally, when the combined population of males and females is considered, giving is found to be equivalent to “not taking,” because the opposing gender effects offset each other.     

“楼宇经济”生存环境及发展的实证研究

“楼宇经济”当前成为经济发展的亮点,吸引着许多城市不断推出发展“楼宇经济”的规划。“楼宇经济”是经济、社会发展到一定阶段的产物,是知识与经济相结合、企业经营方式转变的结果,具有集聚性、辐射性、“体制外性”、流动性等特点。“楼宇经济”形成和发展所依靠的不仅仅是建筑,需要有一定的经济、文化沉淀的环境和金融、交通、信息、人才、社会等综合“区域生态”因素的支撑。本文以上海静安区的“楼宇”调研为主要依据,对“楼宇”及“楼宇经济”形成的条件、特点以及完善,进行粗浅的探索。     

社会冲突的消解与释放：基于冲突治理结构的分析

目前,我国社会冲突的治理结构是由政府单一主体把控,从中央到地方强调"谁主管,谁负责"的模式,市场与社会力量尚未有效参与到社会冲突治理当中来。这是一种缺乏结构洞、密度极大、群集度极端聚焦的社会冲突治理网络结构,会使处于中心位置的公共部门出现对社会资源的"虹吸现象"。为了有效应对高度复杂的现代社会风险,我们应从注重政府监管转变为注重政府引导,将大部分社会冲突的治理放权给社会组织,从而形成一个饱含结构洞、密度分散、结构扁平的社会冲突治理网络。通过社会组织架设的信息沟通桥梁,促进冲突双方的信息对称性和彼此关注程度,从而引导各群体在社会冲突策略选择中由"对抗策略"或"漠视策略"向"问题解决策略"或"让步策略"转变。     

Is the “smoke-filled room” necessary? An experimental study of the effect of communication networks on collusion

We investigate how well firms can collude with partial communication in relation to full communication. We find that firms vary their communication strategies with network structures. In the networks that have either an isolated firm or full communication, more players send “pure promises” suggesting everyone select the collusive actions unconditionally. In the network with leadership, more players send a “promise and threat” which includes a reward for collusion and a punishment for deviating. Because of the inability to communicate in the network with the isolated firm and the high frequency of deviation and punishment in the network with leadership, the full communication network achieves significantly higher payoff than partial communication.     

屏蔽非主流型旅游资源的理论与实例研究

非主流旅游资源是广泛存在的一类旅游资源,由于其旅游资源显性质量不佳,或结构规模不理想等诸多原因常常被忽视,屏蔽非主流型旅游资源是非主流旅游资源中典型的一类。本文首先界定了屏蔽非主流型旅游资源的定义,在此基础上分析了其特征属性,以“资源遮蔽”与“资源叠加”作为核心理论进一步作了理论上的分析,并以少华山森林公园为例进行了实例研究。     

Can anti-corruption help realize the “strong” Porter Hypothesis in China? Evidence from Chinese manufacturing enterprises

The existing research on the “strong” Porter Hypothesis has largely ignored the impact of the institutional environment. In this paper, we take the high-intensity anti-corruption campaign in China as a policy shock to explore the internal mechanism of anti-corruption as a moderator for the relationship between environmental regulations and enterprise financial performance, and investigate whether anti-corruption can help realize the “strong” Porter Hypothesis. Through empirical tests, we find that the environmental regulations implemented in China have significantly undermined the financial performance of manufacturing enterprises. However, by creating a fairer institutional environment, anti-corruption not only significantly improves the manufacturing enterprises’ financial performance, but also weakens the negative impact of environmental regulations. The above results still hold true upon a battery of robustness tests. Moreover, we further analyze the heterogeneous moderating effect of anti-corruption on different types of enterprises and find significant differences on the enterprises with different ownership natures or pollution levels. Therefore, we believe that the anti-corruption campaign is complimentary to the environmental policies in inhibiting rent-seeking activities and providing innovation incentives for enterprises facing environmental regulation, so as to realize the “strong” Porter Hypothesis and improve enterprise financial performance.     

“Flying geese” in China: The textile and apparel industry's pattern of migration

China has large regional variations in both factor endowments and levels of economic development. In principle, some industrial enterprises will relocate to the inland regions from the coastal regions to take advantage of lower wage rates and land prices, provided that the regions are different enough. However, few studies have empirically tested whether this kind of “flying geese” pattern of domestic industrial relocation has occurred on the ground or not. Using data from the textile and apparel industry from 1998 to 2011, this paper shows the existence of the “flying geese” pattern of industrial relocation. Data show that before around 2005, the textile and apparel industry was clustered in the eastern region of China, but it has since shifted toward the central and western regions.     

Neo-liberal Korea and Still Developmentalist Japan: Myth or Reality?1

Abstract

In the “varieties of capitalism” debate, scholars have paid considerable attention to the question of whether Korea and Japan have left behind their interventionist political economy for neo-liberal reform. In this paper, we re-examine the scholarly consensus that Korea has become a neo-liberal state, while Japan has not changed much. On the basis of our comparison of the extent of the two countries’ neo-liberal reforms using the “business systems framework” developed by Witt, we demonstrate that neo-liberal reforms observed in Korea and Japan are not substantially different enough to warrant the view that the two countries have taken divergent paths of institutional development. With this finding, we call for further empirical study, including the development and use of more qualitative data. We suggest that the future direction research should take on this issue in order to make theoretical contributions to the existing literature on institutional change and continuity in “non-liberal” capitalist countries. We do this by offering some methods in which future researchers could identify necessary and sufficient causes of Korea's and Japan's neo-liberal (or non-neo-liberal) shift.     

Forecasting regional cellular communication markets

The paper examines the problem of modeling of regional cellular communication markets. It analyzes the situation in several regions to reveal common patterns, because knowledge of the dynamics of more advanced regions can be used as the basis of forecasts for other regions. A model is proposed to refine forecasts if some special changes are detected in the regional market behavior. The notion of “allied” market is introduced and a forecast based on the “allied” regional market path is offered using Kurgan oblast as a case study.     

Changing Graph Use in Corporate Annual Reports: A Time‐Series Analysis

Graphs in corporate annual reports form part of a powerfully designed annual report package that offers considerable potential for “impression management.” The primary purpose of this paper is to determine whether graph use depends on corporate performance. Time‐series analysis, not previously used in the financial graphs literature, allows discretionary changes in graph use by companies to be identified and related to changes in individual companies' corporate performance over time. Based on the prior financial graphs and accounting choice literature, we develop two hypotheses that relate changes in graph use to changes in corporate performance. These hypotheses focus on the aggregate and individual company levels. We base our analysis on the corporate annual reports of 137 top UK companies that were in continued existence during the five‐year period from 1988 to 1992. At both the aggregate and individual company levels, we find the decision to use key financial variable (KFV) graphs, the primary graphical choice, to be associated positively with corporate performance measures. This finding is consistent with the manipulation hypothesis ‐ that is, that financial graphs in corporate annual reports are used to “manage” favorably the reader's impression of company performance, and hence that there is a reporting bias.     

中加双边贸易产品国际竞争力分析与比较

入世以来,中加双边贸易发展迅速,四年中双边贸易额增加1.6倍。中加双边贸易规模扩大潜力何在?本文对此进行了探讨。文内分别运用中加两方的统计数字,从“类”与“章”两个层次,对2002~2005年的贸易产品逐一进行贸易竞争力指数(TC)的测算。结论是两国间的国际分工主要建立在资源(要素)禀赋的基础上,主要体现的是作为资源大国的加拿大与作为劳动力资源丰富的中国之间的分工格局,加拿大作为技术大国的优势在双边贸易中并未充分体现。中加经贸规模要扩大,应重视发挥各自优势,扩展产业内的贸易分工,增加投资,扩大技术贸易与技术合作。     

Is Economics Useful for Public Policy?

Economists have always played an important role in major public policy debates. Even so, I believe that the role of economists in these public policy discussions has often been misguided because it has typically relied upon “best practices,” stated in the form of “general guidelines” or even “universal principles.” However, “best practices” are not best if the specific situation does not conform with the assumptions that underlie the advice. So my first conclusion is a cautionary, and negative, one: Specific circumstances differ so profoundly across individuals, firms, markets, countries, and time that most any attempt to define “best practices” that apply in all circumstances will lead to profoundly misleading public policy recommendations. However, even if economics cannot identify “the” truth, it can often identify “a” truth. So my second conclusion is a more positive one: Economists should continue to develop multiple theories that inform public policies, but we should also focus our efforts on identifying and testing the critical assumptions that drive the results of these theories, recognizing that the validity of any assumptions will depend intimately on specific circumstances. I illustrate these two main conclusions with specific examples from my own work. I conclude with some “best practices” recommendations of my own, recognizing the obvious irony of such an effort.     

Economics as Theology: Adam Smith's Wealth of Nations

Adam Smith's Wealth of Nations may be read as a work of natural theology similar in general style to Newton's Principia. Smith's ambiguous use of the word “nature” and its cognates implies an intended distinction between a positive sense in which “natural” means “necessary” and a normative sense in which “natural” means “right.” The “interest” by which humans are motivated is “natural” in the first sense, but it may not bring about social outcomes that are “natural” in the second sense. It will do so only if the social institutions within which agents seek their own “interest” are well formed. Smith provides a large-scale, quasi-historical account of the way in which well-formed institutions gradually develop as unintended consequences of private “interest.” In so doing, he provides a theodicy of economic life that is cognate with St. Augustine's theodicy of the state as remedium peccatorum. “If a great book such as Smith's Wealth of Nations is read repeatedly, on even a fifth or a tenth reading one continues to learn new things. I doubt whether anyone will ever fully apprehend all the things that Smith wished to express, and there is even more to learn from an interesting mind than its owner wished to teach us.” George Stigler (1982, p. 108)     

Race and the Dynamics of Men’s Mobility into Management from Working Class Jobs

Within the context of the “particularistic mobility thesis” we examine African American/White differences in the incidence, determinants and timing of mobility into management at a refined level, namely, when groups share similar “rank and file” and “elite blue collar” working class jobs. Findings from a Panel Study of Income Dynamics sample of men support theory and indicate that from both job categories, African Americans, relative to Whites, have lower rates of mobility, reach management through a route that is relatively formal and structured by a traditional range of stratification-based causal factors and take longer to reach management. Further, as predicted by theory, racial disadvantage experienced by African Americans are greater among those tracked from rank and file than elite blue collar jobs. Discussed are implications of the findings for understanding African American disadvantage in the American labor market on both an intra-and inter-generational basis.     

Market In efficiency in Person‐to‐Person Betting: Examining ‘Known Loser’ Insider Trading on the Exchanges

Applying the Shin z measure of market efficiency to the relatively new person‐to‐person internet betting exchanges, Smith, Paton, and Vaughan Williams found “significantly lower market biases” compared to bookmaker‐dominated markets. A reduced favorite‐longshot bias is interpreted as evidence that insider trading on the exchanges “is not widespread” and “not as commonplace … as is sometimes portrayed in the media.” Given that the Shin measure assumes “betting with bookies,” whereas the exchanges represent “betting without bookies,” the present study employs the notion of ‘significant mover’ to empirically test for the presence of ‘known loser’ insider trading on the exchanges where traditional notions of bookmaking do not apply. Findings indicate that, far from being less problematized by insider trading compared to racetrack betting, activity aimed at profiting from “known losers” may be potentially commonplace on the exchanges. This includes profiting from horses that are unplaced. This study offers new insight into the efficiency of betting markets.     

China＇s Economy in 2005： At a New Turning Point and Need to Fix Its Development Problems

I. High Growth, Higher Stakes China’s economy in 2005 experienced another year of surging growth, with its total GDP(based on recent revision) expanding at 9.9 percent to reach 18.23 tn yuan (US$2.26 tn).1 Growth in 2005 was slightly lower than the 10.1 percent in 2004; but it was nonetheless very high. Sustained high growth is accompanied by potential high risks, and it inevitably raises the issue of future sustainability of high growth. Although the Chinese economic policy-makers in 200…     

Detecting currency manipulation: An application of a state-space model with Markov switching

Following an idea of Milton Friedman's “plucking model,” we propose to use a state-space model with Markov switching as an auxiliary tool for detecting currency manipulation. Without imposing any a priori restrictions, our model tests if fluctuations of a country's exchange rate are symmetric or if there exists a time-varying support level or resistance level of exchange rate. Using weekly and monthly data of countries on the “monitoring list” of the US Treasury as of April 2017, we find that exchange rates of China, South Korea, Switzerland, and Taiwan rarely fall below their time-varying trends, but are plucked upward from time to time by transitory shocks, suggesting that the FX (foreign exchange) authorities of these countries may have been intervening more actively against appreciation shocks. Our sub-sample analysis reveals that our model accurately captures the period of Switzerland's minimum exchange rate policy with probability of one and Japan's exchange rate rarely falls below its trend after implementing Abenomics. We discuss the difficulties of detecting FX intervention along with the relative advantage of our approach.     

从租客到铺东:清至民国城市店铺产权形态的演变

在性质上,“铺底权”与我们熟知的“田面权”相似,指的是在租赁过程中铺客投资于他人之土地及其建筑物上而生出之物权。但是,“铺底权”的内涵却远比“田面权”复杂,其主要包括以下三个核心要素:一是不动产铺房的永久租赁使用权;二是商铺装修与经营添置的动产,包括家具、设备、货物、门窗、牌匾等;三是商铺经营形成的无形资产,包括商业信誉、顾客群体、招牌字号等。在清代,铺底尚属民间的商业习惯,铺底的倒卖与转让无须向国家纳税,证明铺底之存在的关键凭证是一系列的民间交易契约。进入民国之后,在延续旧有习惯的基础,上,大理院、司法院的判例都对“铺底权”给予了正式承认,视其为一种具有效力的法律物权。然而,现代国家并不总是从“财政汲取”的立场来保护和维持“铺底权”,反而为了建立更为“清晰和简单”的产权治理体系,对此习惯物权采取了消极态度,不仅逐渐限制“铺底”的创设,而且还禁止铺底的买卖、租赁等市场行为。