Exploring Ambiguity and Familiarity Effects in The “Earnings Game” Between Managers and Investors

Prior evidence suggests that managers and investors play an earnings game in which managers bias their earnings forecasts downward as the earnings announcement date approaches. Knowing managers’ incentives to provide biased guidance, investors still revise their expectations downward helping to create “positive earnings surprises.” Using a 2 (ambiguity) × 2 (familiarity) between subject randomized experimental design where MBA students playing the roles of manager and investor answer a series of questions related to earnings guidance, we investigate whether earnings environment ambiguity and manager-investor familiarity influence behavior during the “earnings game.” In general, results from this study suggest that ambiguity contributes to managers’ propensity to mislead and investors’ propensity to follow, and a false sense of familiarity may amplify investors’ reliance on managers’ guidance.     

The Effects of Competition on Banks’ Risk Taking

We consider the joint effect of competition and deposit insurance on risk taking by banks when bank risk is unobservable to depositors. It turns out that the magnitude of risk taking depends on the structure and side of the market in which competition takes place. If the bank is a monopoly or banks are competing only in the loan market, deposit insurance has no effect on risk taking. Banks in this situation tend to take risk, although extreme risk taking is avoided. In contrast, introducing deposit insurance increases risk taking if banks are competing for deposits. Then, deposit rates become excessively high, thereby forcing banks to take extreme risks.     

The Effects of Electricity Costs on Firm Re-location Decisions: Insights for the Pollution Havens Hypothesis?

Electricity costs are partly driven by environmental policy choices. In this paper, the effects of variations in electricity costs—as measured by end-user electricity prices–on firm relocation decisions are investigated. Using a discrete choice model and a data base that has not previously been exploited to study this problem, we investigate the effects of variations in electricity costs on the intensive and extensive re-location decisions of European firms. We find that electricity costs play a significant role in determining relocation destinations. This effect is asymmetric between firms moving into and out of a country, and between high and low energy intensity sectors. The findings of the paper have implications for the Pollution Havens Hypothesis, since they show the extent to which the effects of climate policy on domestic electricity costs can be expected to impact on firm relocation decisions both into and out of a country.     

The effects of education on spouses’ satisfaction in Europe

This article identifies the effects of both own and spouses' education levels on individual economic satisfaction for European households. To that end, it estimates several specifications based on the family collective approach, for each of the 14 EU countries, by using the eight waves of the European Community Household Panel, 1994–2001. After demonstrating that the IV Hausman–Taylor procedure is the selected estimation method in the majority of cases, the empirical results show that male and female income satisfaction significantly increases when the husband achieves higher education qualifications in the majority of European countries. However, the positive effect of the wife's higher education on female income satisfaction only appears in a very limited number of countries. Additionally, increases in individual wage and nonwage incomes generally lead to higher satisfaction levels.     

Firm’s tax evasion in a principal-agent model with self-protection

Gatekeepers have an increasing role in taxation and regulation. Whereas burdening them with legal liability for misconducts that benefit those who resort to their services actually discourages wrongdoings—as will be clarified in the article—an alienation effect can also arise. The gatekeeper might become more interested in covering up the illegal behavior. This article studies the problem with respect to tax evasion by firms in a principal-agent framework. It highlights the role of legal rules pertaining to liability for tax evasion in shaping the choices of the parties, as concealment costs vary according to whether the risk-neutral principal or the riskaverse agent is held responsible when tax evasion is detected. The main result of the analysis is that there is a simple ex post test that can be carried out to infer whether harnessing the agent was socially beneficial.     

The Research about Earnings Management Incentives of Listed Companies in China

This paper overviews earnings management incentive of listed companies and finds the incentives of cost in transactions with stockholders, a comparative performance advantage and a rational response to that market behavior which is anticipated. This paper tells us that even if there were no agency problems, earnings management should exist all the time.     

Effects of European integration on Austria’s economy

High expectations were placed on the project of European economic integration and Austria’s participation in it. Economists had expected that the Single Market would provide a positive supply shock, i.e. rising productivity, resulting in more growth. The optimistic forecasts for neither the EU nor for Austria were borne out by actual economic trends. Economic growth as well as productivity growth decelerated, while unemployment increased. Monetary union was implemented with an economic policy framework, the Stability and Growth Pact (SGP) that geared monetary policy only to price stability and at the same time prescribed restrictive fiscal policies. The SGP therefore reveals a deflationary bias. The existing literature on the effects of EU accession on the Austrian economy by design fails to account for the restrictive effects of the SGP. The paper presents simulation results allowing for supply shocks as well as demand shocks. The simulations are based on a medium‐sized macroeconometric model. The results indicate that recent studies overestimate the positive effects of European integration. A simulation of the restrictive demand‐side effects of the SGP, with the assumption that around half of the fall in public consumption growth in the Euro countries can be attributed to the SGP, produced significant negative growth effects. The net effect suggests a negative quarter percentage point p.a. during the period 1995–2004.     

The effect of a wife’s retirement on her husband’s mental health

This article examines the effect of wives’ retirement on their husband’s mental health in Australia. By exploiting the exogenous variations in women’s retirement induced by the age pension qualifying ages, we find that spousal retirement status has a positive impact on the mental health of older men. This beneficial impact is found to strengthen with wives’ time spent in retirement. We show that wife’s retirement affects the constituents of her husband’s mental well-being in different ways. We also have identified four channels for the positive linkage between older women’s retirement and the mental health of their spouse.     

An Investigation into the Positive Effect of an Educated Wife on Her Husband’s Earnings: The Case of Japan in the Period between 2000 and 2003

We analyze the effect of a wife??s human capital on her husband??s earnings, using individual-level data for Japan in the period 2000?C2003. We find a positive association between a wife??s education and her husband??s earnings, which can be attributed to the assortative mating effect as well as the positive effect of an educated wife on her husband??s productivity. We divide the sample into those couples with non-working wives and those with working wives, and also employ an estimation strategy proposed by Jepsen (Review of Economics of the Household 3:197?C214, 2005), attempting to control for the assortative mating effect. Our regression analysis provides suggestive evidence that educated wives increase their husbands?? productivity and earnings only when they are non-workers and have sufficient time to support their husbands.     

The effects of the take-option in dictator-game experiments: a comment on Engel’s (2011) meta-study

In this paper, we report a replication of Engel’s (Exp. Econ. 14(4):583–610, 2011) meta-study of dictator game experiments. We find Engel’s meta-study of dictator game experiments to be robust, with one important exception: the coding of the take-option (List in J. Polit. Econ. 115(3):482–493, 2007; Bardsley in Exp. Econ. 11(2):122–133, 2008; Cappelen et al. in Econ. Lett. 118(2):280–283, 2013). While Engel reports this as having no statistically significant effect, in our replications, we find an economically and statistically significant negative effect on giving in line with the relevant literature.     

The Regional and Industrial Effects of FDI on Chinese Manufacturing Sector

This paper investigates the regional and industrial effects of FDI on Chinese manufacturing sector since China entered WTO. We find that FDI plays a different role in the development of different areas and industries through a comparison with state-controlled industrial enterprises in China. More establishments of smaller foreign funded enterprises and less foreign capital with a high level of management should promote the competition to stimulate manufacturing growth in eastern area, while fewer establishments of foreign funded enterprises with a large capital should make a great stimulus to the western manufacturing development. Both foreign capital and the establishment of foreign industrial enterprises have a great effect on the whole manufacturing sector by industry.     

The Recent Development of International Exchange Market and its Effects on China

1. The Key Points of Recent Development of International Exchange Market The unusual fluctuation of international exchange market lies in the following three facts： firstly, there are irreconcilable contradictions in current international monetary system, caused by USA which is the core of cttrrent int#rnational monetary system and has been carrying out irresponsible economic policies for a long time. Secondly, thel economic structure of USA loses balance seriously. Thirdly, the balance of payments （BP） becomes a tough problem for the USA government.     

The effect of lender and loan type on a borrowing firm’s equity return

Past empirical studies appear to support the idea that banks and finance companies do not differ in their ability to resolve adverse selection problems associated with issuing new debt. In this article, we find there is a difference. More specifically, using an event study we find larger abnormal returns for secured loan disclosures to lower quality borrowers when the lender is a finance company versus a bank. This suggests the market views finance companies as more effective than banks in evaluating/monitoring lower quality borrowers obtaining secured loans. We posit this is due to finance companies’ greater expertise in this type of lending, resulting from specialization. Our findings extend the literature on how lender identity can influence signals about firm value from loan disclosures. Our results also support recent findings that positive abnormal returns to borrowing firms may not be a general feature across the loan population, but may be restricted to smaller, lower quality borrowers. Finally, we are the first to provide evidence that the market takes loan type into account, not just lender and borrower type, when considering the information embedded in loan disclosures.     

The Risks and Earnings of Chinese Commercial Banks＇ Cross - business in Insurance -Empirical Research Based on Simulated Merger Method

商业银行跨业经营保险在理论上具有规模经济效应、范围经济效应和协同效应,但也可能带来经营风险的增加。采取模拟合并法,利用2005～2009年的数据对我国商业银行跨业经营保险的风险收益状况进行实证分析,结果表明：银行跨业经营保险具有风险分散效果,且一定比例的产险业务对于银行跨业经营保险达到最佳效果是必需的,建议通过对保险业务资产比重进行限制来防止银行因追求收益而增加自身的风险。     

The effects of inflation targeting on Okun’s law

This article provides the first empirical evidence that the adoption of inflation targeting (IT) matters for the extent of tradeoff between unemployment and output, that is Okun’s law. Our full sample results indicate that IT leads to a more negative Okun’s coefficient, suggesting that, for a given reduction of output, the introduction of IT is associated with a higher unemployment rate. Subsample analyses reveal that the whole sample results are mainly driven by the industrial subsample outcomes, not the developing counterparts. Our findings point out that IT not only influences macroeconomic variables per se but also affects the relationship between/among macroeconomic variables.     

The Analysis on a Phenomenon in Chinese IT Listed Company

1.Introduction Stock prices of IT listed companies in Chinese stock A market have slumped by a big margin since their sudden rise in early 2000.Since then,the performance of almost all these companies isn t very good,and the stock prices of the majority have greatly dropped down.In the meantime,when these companies are observed,we often find that the incomes of the staff in these companies are still very high even if the corporate performance may be just ordinary. As far as this phenomenon…     

The effect of science and technology parks on a firm’s performance: a dynamic approach over time

We argue that the benefits provided by locations inside science and technology parks evolve over time. Firms inside parks can improve performance due to certain advantages related to knowledge spillovers and shared resources that can be particularly useful in earlier stages of the industry life cycle. In these industries, local knowledge sharing is particularly useful because no standards are clearly established, as we have confirmed in a sample of 12,800 firms from the PITEC database, located either on- or off-park. We also find that young firms can benefit more from the park than more established businesses in terms of both business growth and innovative capacity. Although older firms have greater experience and investments that would increase their capacity to absorb external knowledge, their associated rigidities prevent them from incorporating changes into their structures.     

The Study on Optimization of Energy Structure in China

In the paper, the author analyzes the dependence of economic growth upon energy with the method of GRA （gray related analysis）. Through studying statistical figures, the author finds out the problems in energy structure. Finally, putting forward some advice to optimize energy structure.     

A Critical Analysis of Peltzman’s “The Effects of Automobile Safety Regulation”

Karl Polanyi considered that the relationship between the markets and their societies was a central feature of any social order. He studied what he called "ancient societies," to compare them with his own times, in an effort to understand that subject. This paper aims to show, following Polanyi's work on Classical Greece, that it is possible to make a clear analogy between the Athenian state and economy with the modern Welfare State. First, we present Polanyi's study of the early Athenian economy, focusing on the coexistence of a kind of state economic planning and a market. Second, we show how this relates to Polanyi's emphasis in the comparison of different societies and times. Third, we characterize the contemporary Welfare State to make an analogy between these two forms of economic organization. We conclude by underlining the relevance of this analogy in understanding the societies of today.