Selection from Many Investments with Managerial Private Information*

We investigate capital investment problems when a manager knows the costs of a set of available projects, while the owner only holds probabilistic beliefs about these costs. With mutually exclusive projects, an optimal policy can be defined by a series of cost targets, one for each of the possible projects. The project with the lowest reported cost relative to the target is chosen, and funded as if the cost were equal to the target. The optimal investment policy can deviate from a traditional policy of selecting the project with the highest, positive net present value (NPV) in a number of ways. First, under-investment arises to limit the manager's ability to capture the economic rents. Second, when investment takes place, it is not always the project with the highest NPV that is implemented. Third, projects with lower cost variability can be favored. We extend the analysis to non-mutually exclusive projects. With two independent projects, batch processing is superior to individual appraisal whenever both optimal individual appraisal cost targets are interior. Individual appraisal ignores the impact of individual targets on incentives to report the costs of other potential projects. Batch processing can improve individual assessment by cost effective switching of investment away from the individual projects and into the batch as a whole. The results suggest that the common practice of analyzing batches of capital requests in an annual capital budgeting cycle provides advantages in the organization's attempt to deal with asymmetric information and incentive problems.     

经济转型条件下的民营企业演进:一个文献综述

通过梳理主流经济学与社会学对我国非国有经济的研究,为转型条件下我国民营经济研究提供一个比较完整的视角。对我国民营经济的早期形式——乡镇企业的相关文献进行梳理,得到关于我国民营企业制度环境和经营上的特征。参考社会学提供的研究视角,发现引入社会学中诸如社会资本、权威等概念和理论可有助于对民营企业的研究。现有的将经济学与社会学相结合的一些研究观点也为我国民营企业研究提供了新的思路。     

Private Predecision Information,Performance Measure Congruity,and the Value of Delegation*

We use a linear contracting framework to study how the relation between performance measures used in an agent's incentive contract and the agent's private predecision information affects the value of delegating decision rights to the agent. The analysis relies on the idea that available performance measures are often imperfect representations of the economic consequences of managerial actions and decisions, and this, along with gaming possibilities provided to the agent by access to private predecision information, may overwhelm any benefits associated with delegation. Our analytical framework allows us to derive intuitive conditions under which delegation does and does not have value, and to provide new insights into the linkage between imperfections in performance measurement and agency costs.     

Disclosure of Predecision Information in a Duopoly*

Abstract. This paper analyzes the differential impact of the firm-specific versus industry-wide common components of a firm's information on its voluntary disclosure policy. The firm may or may not receive a private signal, which is related to both firm-specific and industry-wide common uncertainty. The cost and benefit of disclosure are modelled in an imperfectly competitive product market where an uninformed opponent's reaction to a disclosure affects the manager's expected profit. The results indicate that the nature of a privately informed firm's equilibrium disclosure policy depends on whether the signal is relatively more informative of firm-specific or industry-wide uncertainty. Unfavourable news is disclosed, and favourable news, withheld, if the signal is more informative about an industry-wide shock. On the other hand, favourable news is disclosed and unfavourable news is withheld if the signal is more informative about firm-specific shock. Thus disclosure and nondisclosure of specific subsets of signals can each be consistent with profit maximizing behaviour. Comparative statics show that disclosure increases with (1) an increase in the probability that the firm receives private information, (2) an increase in the variance of the prior uncertainty, and (3) a decrease in the precision of the private signal. Furthermore, whether more of the favourable or unfavourable signals are disclosed is sensitive to whether the private signal is more informative about firm-specific or industry-wide factors. The results in this paper may explain the inconsistent findings in several empirical studies of voluntary disclosure. Résumé. L'auteur analyse l'incidence marginale sur la politique de l'entreprise en matière d'informations facultatives des éléments d'information courante qui sont propres à l'entreprise par rapport à ceux qui sont propres à l'ensemble du secteur. L'entreprise peut ou non recevoir des indices privilégiés, reliés aux incertitudes actuelles touchant l'entreprise aussi bien que le secteur dans son ensemble. Les coûts et les avantages de l'information sont modélisés sous la forme d'un marché de produits où la concurrence est imparfaite, dans lequel la réaction d'une entreprise rivale non informée à la publication d'information influe sur les bénéfices espérés du gestionnaire. Les résultats indiquent que la nature de la politique en matière d'informations, en situation d'équilibre, d'une entreprise détenant de l'information privilégiée dépend du caractère de l'indice, à savoir s'il est relativement plus informatif au sujet de l'incertitude propre à l'entreprise ou propre à l'ensemble du secteur. L'information défavorable est publiée et l'information favorable est retenue si l'indice est plus révélateur en ce qui a trait à l'impact sur l'ensemble du secteur. D'autre part, l'information favorable est publiée et l'information défavorable est retenue si l'indice est davantage révélateur en ce qui a trait à l'impact sur l'entreprise elle-même. Ainsi, la publication et la non-publication de sous-ensembles précis d'indices peuvent être, de part et d'autre, inspirées par le désir de maximiser les bénéfices. L'analyse comparative des conditions d'équilibre démontre que la publication d'information croît avec i) la hausse de la probabilité que l'entreprise reçoive de l'information privilégiée, ii) l'augmentation de la variance dans l'incertitude préalable et iii) la diminution de la précision de l'indice privilégié. En outre, le fait que l'indice privilégié soit plus informatif au sujet des facteurs propres à l'entreprise ou propres au secteur dans son ensemble influe sur la quantité des indices favorables ou défavorables qui sont publiés. Les résultats exposés ici peuvent expliquer la divergence des observations notées dans plusieurs études empiriques relatives aux informations facultatives.     

建立实物收入税基 完善个人收入所得税制度

实物收入是人们收入的重要组成部分之一.文章分析了实物收入免税的不利因素.指出实物收入征税,应符合税收的收入原则、公平原则、效率原则、社会福利原则、调节经济的原则、中性原则和最适原则.     

Rethinking Economic Growth in a Globalizing World: An Economic Geography Lens*

Abstract: This paper argues that cumulative causation processes are fundamental to understanding growth and development. Such processes derive from spatially concentrated increasing returns to scale including thick market effects, knowledge spillovers, sectoral and urban clustering, and self‐reinforcing improvements in physical and social infrastructure. These sources of agglomeration have been extensively analyzed in the economic geography literature. They imply that spatial unevenness in economic activity and incomes is an equilibrium outcome. Growth tends to be ‘lumpy’, with some sectors in some countries growing fast while other countries lag. The policy challenge is to lift potential new centers of economic activity to the point where they can reap the productivity and investment climate advantages of increasing returns and cumulative causation.     

Economic effects of a mandated audit in a contingent-claims production economy*

Abstract. This paper considers the effects of a mandated audit when the firm operates in a contingent-claims production economy. An adverse selection problem is introduced by assuming that random state realization and resulting productive outcome is not observable to consumer-investors, but is observable to the firm manager. This raises the possibility that managers may cheat by reporting a lower outcome than actual, and appropriating the difference. Such behavior is controlled, but not eliminated, by the presence of a costly mandated audit, which may detect such cheating. Managers compete for positions in a competitive managerial labor market, and managerial effort is assumed to be observable. Despite this, cheating managers do not deliver a first-best level of effort in the model and this is a second cost to society of the assumed information asymmetry. The economic impact of changes in audit intensity on manager and investor decision making is examined. Résumé. L'auteur étudie, dans l'article qui suit, les conséquences de la vérification demandée par les instances supérieures de l'entreprise lorsque cette dernière ?uvre dans une économie de production de titres de créance conditionnels. Un problème qui complique la sélection tient à l'hypothèse selon laquelle la réalisation aléatoire de l'état de la nature et le rendement qui en découle ne peuvent être observés par les consommateurs-investisseurs, mais peuvent l'être par le gestionnaire de l'entreprise. Ainsi est-il possible pour les gestionnaires de tromper les consommateurs-investisseurs en faisant état d'un rendement inférieur au rendement réel et en s'appropriant la différence. Ce genre de comportement peut être contrôlé, mais non supprimé, grâce à une vérification demandée par les instances supérieures de l'entreprise, opération coûteuse mais qui peut permettre de détecter les fraudes. Les gestionnaires se disputent des postes administratifs dans un marché concurrentiel. L'on suppose que l'effort qu'ils fournissent est observable. Malgré cela, les gestionnaires qui fraudent ne fournissent pas un effort de tout premier ordre à l'Intérieur du modèle, et c'est un second coût pour la société que l'asymétrie supposée de l'information. L'auteur analyse l'incidence économique de la modification de l'intensité de la vérification sur la prise de décisions des gestionnaires et des investisseurs.     

Private Information Production,Public Disclosure,and the Cost of Capital: Theory and Implications*

Both private information production by market traders and public disclosure by firms contribute to dissemination of financial information in the capital market. However, the motives and economic consequences of the two are quite different. In general, private information production is intended by investors to increase their trading profit, which has the effect of widening the information gap between informed and uninformed investors and increasing the firm's cost of capital. On the other hand, public disclosure can be used to narrow this information gap and to lower the cost of capital. This paper provides a theoretical model to examine the economic incentives behind these two forms of information dissemination and their consequences on the cost of capital. By simultaneously considering the firm's and the information traders' decisions, the paper derives an equilibrium in which the amount of private information production, the level of public disclosure, and the cost of capital are all linked to specific characteristics of the firm, of information traders, and of the market. In contrast to conventional beliefs, the paper predicts that, across firms, the cost of capital can be either positively or negatively related to the firm's disclosure level, depending on the specific factors that cause the variation within a particular sample. Similarly, the extent to which investors follow a firm and the firm's disclosure level can be either positively or negatively related to each other. Implications for empirical research are discussed.     

The Effectiveness of Alternative Risk Assessment and Program Planning Tools in a Fraud Setting*

This study examines the impact of alternative risk assessment (standard risk checklist versus no checklist) and program development (standard program versus no program) tools on two facets of fraud planning effectiveness: (1) the quality of audit procedures relative to a benchmark validated by a panel of experts, and (2) the propensity to consult fraud experts. A between‐subjects experiment, using an SEC enforcement fraud case, was conducted to examine these relationships. Sixty‐nine auditors made risk assessments and designed an audit program. We found that auditors who used a standard risk checklist, structured by SAS No. 82 risk categories, made lower risk assessments than those without a checklist. This suggests that the use of the checklist was associated with a less effective diagnosis of the fraud. We also found that auditors with a standard audit program designed a relatively less effective fraud program than those without this tool but were not more willing to seek consultation with fraud experts. This suggests that standard programs may impair auditors' ability to respond to fraud risk. Finally, our results show that fraud risk assessment (FRASK) was not associated with the planning of more effective fraud procedures but was directly associated with the desire to consult with fraud specialists. This suggests that one benefit of improved FRASK is its relation with consultation. Overall, the findings call into question the effectiveness of standard audit tools in a fraud setting and highlight the need for a more strategic reasoning approach in an elevated risk situation.     

A Laboratory Investigation of Verification and Reputation Formation in a Repeated Joint Investment Setting*

This paper describes an experiment in which subjects, acting as division managers, exchanged privately held information before making intrafirm investment decisions. Social efficiency required that managers honestly disclose their private information, but managers had individual incentives to send biased messages. These features of the model created an important role for ex post verification, the main manipulation in the experiment. The matching protocol was also manipulated, using both random and continuous matching of subjects. This second manipulation was intended to examine whether an important institutional attribute — the frequency of interaction — would affect the usefulness of verification. The results of the experiment indicate that verification significantly increased the relative frequency of honest messages and the level of social efficiency. However, the improvements from verification were greater in settings where subjects did not interact repeatedly. The data also indicate that, in the continuous matching treatments, responses depended on the history of behavior of the message sender. However, this behavior was not observed in the random matching treatments. Thus, both the efficacy of verification and the extent of reputation formation depended on the institutional setting.     

Earnings,Book Values,and Dividends in a Stewardship Setting with Moral Hazard*

The paper addresses the following question: in a multiple-date agency setting, under what conditions will the dividend policy be of no incentive relevancy? It is shown that if the accounting data—earnings, book values, and dividends — satisfy standard owners' equity accounting constructs, and if these indicate that paying dividends is a zero NPV activity, then dividend policy incentive irrelevancy applies. The basic idea is to ensure that the (history of) abnormal (residual) earnings summarize the relevant information and the solution to the incentive problem. The paper also compares classical value irrelevancy with incentive irrelevancy, and the analysis shows that conditions for incentive irrelevancy are more stringent.     

重庆民营经济发展迎来新的春天——访重庆市工商业联合会党组书记徐登全

重庆民营经济发展迎来的新春天《今日重庆》:7月19日,重庆市委书记、市人大常委会主任汪洋及市领导率19个市级部门和渝中区的负责人到洪崖洞民俗风貌区进行考察调研,并做重要讲话,表示要毫不动摇地支持民营经济的发展。汪洋到洪崖洞的讲话精神对重庆民营经济的发展意味     

Income Smoothing and Discretionary R&D Expenditures of Japanese Firms*

During the recent recession (1991 to present), Japanese firms decreased their spending on R&D for the first time since World War II. The decreases have raised concerns that Japanese managers may be making suboptimal allocations to R&D. We test whether Japanese managers adjust R&D based on short‐term performance. Our results show that Japanese firms in several industries adjust their R&D budgets to smooth profits. Interestingly, adjustments to R&D are larger in expansion years. These results, similar to those documented with U.S. managers, point to myopic decision making by Japanese managers.     

经济增长与收入分布对新疆城市居民贫困变动的影响

本文采用相对贫困线方法研究新疆城市居民2000年与2003年的贫困变化程度,利用FGT(Foster-Greer-Thorbecke)贫困指数分析了新疆城市居民的贫困率、贫困差距、贫困深度的变化,通过贫困指数FGT变化的分解分析,说明经济增长提高可支配收入有助于减少贫困,收入分布差距的减少也是减少贫困程度的重要因素之一。