CEO mobility and corporate policy risk

Career concerns can limit a manager's willingness to take risks, which can lead to excessive policy conservatism. An increase in a CEO's ability and willingness to change jobs (CEO mobility) can diversify her human capital and reduce her conservatism. We derive several CEO mobility measures and relate them to a policy riskiness index that captures the overall risk embedded in a firm's corporate policies. We find a strong positive relation between CEO mobility and the riskiness of corporate policies. We also link external regulatory shocks that constrain labor mobility to significant drops in corporate risk-taking.     

Education and social mobility

This paper shows that the design of education policy involves a potential conflict between welfare and social mobility. We consider a setting in which social mobility is maximized under the least elitist public education system, whereas welfare maximization calls for the most elitist system. We show that when private education is available, the degree of elitism that maximizes social mobility increases, while the welfare-maximizing degree of elitism decreases. The ranking between the welfare- and mobility-maximizing degrees of elitism may even be reversed. Utilitarian welfare is always higher when private supplementary education is available, but social mobility may be reduced.     

Housing and the labor market: Time to move and aggregate unemployment

Conventional macro-search models (Mortensen and Pissarides) with unemployment benefits and taxes have been able to account for the variation in unemployment rates across countries but do not account for the role geographic mobility or commuting time might play. We build a model in which both unemployment and mobility rates are endogenous. Our findings indicate that an increase in unemployment benefits and in taxes does not generate a strong decline in mobility but does increase unemployment as in the standard model. We find that with higher commuting costs the effect of housing frictions plays a large role and can generate a substantial decline in mobility.     

The Bologna process: how student mobility affects multi-cultural skills and educational quality

We analyze the two goals behind the European Bologna process of increasing student mobility: enabling graduates to develop multi-cultural skills and increasing the quality of universities. We isolate three effects: (1) a competition effect that raises quality, (2) a free-rider effect that lowers quality, and (3) a composition effect that influences the relative strengths of the two previous effects. The effects lead to a trade-off between the two goals. Full mobility may be optimal only when externalities are high. In this case, student mobility yields inefficiently high educational quality. For moderate externalities, partial mobility is optimal and yields an inefficiently low quality of education.      

A migration approach for USA banks' capitalization: Are the 00s the same with the 90s?

We conduct a comparison of the two past decades in terms of US banks' capitalization mobility and persistence, adopting a Markov Chain setup, based on the FDIC discretized version of capital ratio. We document several substantial differences in the anatomy of the two periods. In particular, system mobility has shown a step increase in the 00s, and what is more important, mobility takes the form of increased probability of capitalization deterioration. Moreover, the vulnerability of Critically and Significantly Undercapitalized banks has markedly increased, as shown by the corresponding default transition probabilities.     

Financial Reporting Environments and International Capital Mobility

We examine whether differences in international capital mobility across countries are related to country‐specific differences in financial reporting environments. We hypothesize that countries where financial accounting environments lead to greater disclosure of value‐relevant accounting information are more likely to have higher international capital mobility. The results of empirical tests are consistent with our hypothesis.     

Regional capital mobility in China: 1978-2006

We examine cross-region capital mobility in China and track how the degree of mobility has changed over time. The effects of fiscal and redistributive activities of different levels of government in China on private capital mobility are taken into account. Our results indicate that there was a significant improvement in capital mobility over time in China, particularly for private capital in the more developed regions. The central and provincial governments, via their taxation, spending, and transfers, loosen the relationship between private saving and investment and appear to promote capital mobility, particularly for less developed regions. There are considerable differences between more and less developed regions in terms of the degree of capital market integration and the improvement in capital mobility over time. The results have important policy implications on global re-balancing as well as regional development gap and risk-sharing within China.     

MIAC: A mobility intention auto-completion model for location prediction

Location prediction is essential to many commercial applications and enables appealing experience for business and governments. Many research work show that human mobility is highly predictable. However, existing work on location prediction reported limited improvements in using generalized spatio-temporal features and unsatisfactory prediction accuracy for complex human mobility. To address these challenges, in this paper we propose a Mobility Intention and Auto-Completion (MIAC) model. We extract those mobility patterns that generalize common spatio-temporal features of all users, and use the mobility intentions as the hidden states from mobility dataset. A new predicting algorithm based on auto-completion is then proposed. The experimental results on real-world datasets demonstrate that the proposed MIAC model can properly capture the regularity of a user's mobility by simultaneously considering the spatial and temporal features. The comparison results also indicate that MIAC model significantly outperforms state-of-the-art location prediction methods, and also can predicts long range locations.     

Mobility and the Role of Education as a Commitment Device

In closed economies, human capital investment faces a hold-up problem of excessive redistributive taxation. Increased international labor mobility, however, changes the constraints which affect optimal education and tax policy. We show that in a non-altruistic, gerontocratic world, investments in human capital which increase the mobility of the young generation can be interpreted as a commitment device overcoming the hold-up problem. This is in line with Kehoe (1989) who derives a similar result with respect to capital mobility.     

CEO mobility and corporate payouts

We examine how chief executive officer (CEO) mobility affects corporate payouts. We exploit US state courts’ staggered adoption of the inevitable disclosure doctrine (IDD) to obtain exogenous variation in mobility. We report several findings. First, we find that firms in IDD-adopting states increase dividend payouts, whereas the effect of IDD on share repurchases is insignificant relative to firms not in IDD-adopting states. Second, the increase in dividends is concentrated on firms run by CEOs having high ability. Third, CEOs increasing dividends are less likely to be forced to leave their jobs. Fourth, the increase in dividends is concentrated on firms run by early-career CEOs rather than retiring CEOs. Last, CEOs increasing dividends receive more favorable shareholders’ say on pay votes for higher pay. Our evidence supports the notion that restricted mobility induces CEOs to choose a dividend policy that enhances their positions with their shareholders.     

Institutional quality and capital taxation

We describe the preferred taxation regime in a small economy with uncertain institutional quality. We obtain that a preferential taxation regime in which taxes can be matched to the mobility of the tax base may be worse off than a non-preferential taxation regime in which taxes are constant across bases with distinct mobility. Since the small economy takes foreign taxes as given, our result is not driven by a downward pressure on revenues caused by unconstrained tax competition. It is instead related to the ability of a non-preferential taxation regime to credibly convey information about the institutional quality of the small economy. We present some empirical evidence which corroborates our results.     

Housing Tenure and Mortgage Choice

This paper examines the relationship between housing tenure and mortgage contract. We present a model showing that, given expected mobility, borrowers will have incentive to self-select into the appropriate mortgage product such that their fixed-rate period is directly related to their probability of moving. We empirically test this hypothesis using housing tenure data derived from a large national database of repeat mortgage transactions. After controlling for borrower characteristics, the mobility hazards of 3/1, 5/1 and 7/1 ARMs, compared to a 30-year fixed rate, are estimated to be 28%, 14% and 11% higher, respectively     

Labor mobility and antitakeover provisions

How do firms protect their human capital? We test whether firms facing an increased threat of being acquired strengthen their antitakeover provisions (ATPs) in order to bond with their employees. We use the adoption of the Inevitable Disclosure Doctrine (IDD) by US state courts, which exogenously decreases knowledge-worker mobility, thus elevating takeover risk and reducing employee incentives to innovate. Firms respond to the IDD adoption by strengthening ATPs that defend against hostile takeovers, especially when they have greater ex-ante employee mobility and human capital and place greater importance on employee relations. We find no evidence that managers strengthen ATPs for entrenchment or takeover bargaining purposes in this setting. Our findings show that ATPs can be used to credibly commit to employees in order to protect long-term value creation.     

义务教育能提高代际流动性吗？

提高代际流动、促进机会均等对经济社会健康发展至关重要。本文基于2013年中国家庭收入调查数据和2005年全国1%人口抽样调查数据,利用1986年颁布的义务教育法在省份间的实施时间差异作为外生冲击,使用双重差分方法探究义务教育政策对代际流动的影响及其作用机制。研究发现,义务教育显著提高了代际之间的教育流动性,原因在于父母教育水平、职业层次、收入水平较低的孩子,受教育年限提升得更多。本文的政策含义在于,应当进一步发挥公共政策在提高代际流动性方面的作用,通过教育机会均等化来促进社会公平正义。     

Education, Mobility of Labour and Tax Competition

We show that wage-taxfinanced subsidies encourage investment in risky education andoffer welfare gains. Tax competition and labour mobility maylead to substantial erosion of regional taxation. On the otherhand, mobility insures against region-specific shocks encouraginginvestment in education. Thus, welfare effects on the educatedand the owners of the fixed factor may go in either direction.Tax competition is especially fierce if the governments careabout the owners of the fixed factor. Elimination of their interestsfrom the governments' objective functions results in a Pareto-improvementin a federation with tax competition.     

Deprivation,social class and social mobility at Big Four and non-Big Four firms

Using the work of Bourdieu and Savage, this paper investigates social class and social mobility among chartered accountants who qualified with The Institute of Chartered Accountants of Scotland in 2009. We find that these accountants tend to come from privileged backgrounds and that those who qualified with Big Four firms possess more economic, social and cultural capital than those who qualify with other firms. Our study provides fresh insights into how elements of social class interact with social background. In contrast with the prevailing view that there is limited social mobility in the accountancy profession, we find some evidence of social mobility, suggesting that current debates are based on contestable assumptions. We also find that chartered accountants from more deprived backgrounds as indicated by childhood postcode often have a father who has a professional or managerial occupation, so are not deprived on all measures. Where those from more deprived backgrounds accessed chartered accountancy careers, this was at the expense of people whose parents held lower rather than higher professional or managerial jobs. This suggests that the most advantaged maintain access to chartered accountancy but those from more middling professional homes are displaced when those from more deprived backgrounds gain access.     

The COVID-19 pandemic: How important is face-to-face interaction for information dissemination?

Does face-to-face interaction still facilitate information transfer despite proliferating communication technologies? We use the COVID-19 collapse in such interactions to examine their influence on information flow in the stock market around earnings announcements. Using daily, county-level abnormal mobility of U.S. residents to proxy for face-to-face interaction, we find that firms located in counties with lower abnormal mobility experience a weaker immediate price reaction to earnings announcements and a larger post-announcement drift. Our findings suggest that lower face-to-face interactions dampen price discovery in financial markets, and that investor attention is a potential mechanism of this effect.     

The Effect of Regulatory Harmonization on Cross‐Border Labor Migration: Evidence from the Accounting Profession

The paper examines whether international regulatory harmonization increases cross‐border labor migration. To study this question, we analyze European Union initiatives that harmonized accounting and auditing standards. Regulatory harmonization should reduce economic mobility barriers, essentially making it easier for accounting professionals to move across countries. Our research design compares the cross‐border migration of accounting professionals relative to tightly matched other professionals before and after regulatory harmonization. We find that international labor migration in the accounting profession increases significantly relative to other professions. We provide evidence that this effect is due to harmonization, rather than increases in the demand for accounting services during the implementation of the rule changes. The findings illustrate that diversity in rules constitutes an economic barrier to cross‐border labor mobility and, more specifically, that accounting harmonization can have a meaningful effect on cross‐border migration.     

The Current Account in Developing Countries: A Perspective from the Consumption-Smoothing Approach

According to the consumption-smoothing view, a high degree ofcapital mobility implies that agents are able to fully smooththeir consumption in the face of shocks. This article developsa framework to test whether, indeed, the current account indeveloping countries acts as a buffer to smooth consumptionin the face of shocks to national cash flow, which is definedas output less investment less government expenditure. Usingvector autoregression analysis, we estimate the optimal consumption-smoothingcurrent account with data from a sample of forty-five developingcountries. We find that for a majority of the countries, thehypothesis of full consumption smoothing cannot be rejected,suggesting that capital mobility may after all be quite highin this group of countries.     

The effect of audit market structure on audit quality and audit pricing in the private-client market

This study examines whether audit market structure affects audit quality and audit pricing. We analyze two conceptually distinct dimensions of market structure: audit market concentration and client mobility. Focusing on the private-client segment of the Belgian audit market, we compare the pricing and quality effects of market structure between the segment of small and medium-sized (SME) clients and the segment of large clients to test how audit complexity moderates such effects. We find that market concentration impairs price and quality competition in the SME-client segment. Market concentration is unrelated to audit quality in the large-client segment, where we argue that concentration is endogenous to audit complexity. Furthermore, we find that client mobility stimulates price competition in both segments but improves audit quality only in the large-client segment. We interpret our findings as evidence that (a) audit market concentration impairs competition especially when audits have low complexity and that (b) the large-client market segment, characterized by higher audit complexity and higher market concentration, can also be price and quality competitive if clients are sufficiently mobile, and change auditors relatively frequently.