Auditing in the Presence of Outside Sources of Information

We examine how an auditor's ability to terminate a multi-period client relationship provides the auditor with a real option whose value depends on the nature of informational asymmetry between the incumbent and other potential auditors. In particular, we isolate conditions under which the auditor's private and public sources of information behave as complements rather than substitutes. In such circumstances, increasing the likelihood of publicly provided information induces the auditor to expend more (rather than less)resources in private information gathering activities.     

Food choice models and their relation with food preferences and eating frequency in the Polish population: POFPRES study

A sample of 9339 subjects aged 13–75, living in the six macro-regions of Poland rated the preferences of 140 various food products, eating frequency and factors influencing food choice. Four groups of consumers were found: “consumers susceptible to advertising and seeking novel healthy products” (33.2% of the sample), “consumers not taking care of their health” (25.4%), “consumers not susceptible to advertising and taking care of their health” (32.5%), and “consumers insensitive to sensory attributes of fruit and vegetables” (9.0%). Among factors influencing the food choice, sensory and functional factors were significant, and health and price – moderate. Advertising was generally denied as an important factor in food choice. The food choice motives were highly dependent on age and gender, and to a lower extent – on region of residence, size of place of residence, economic condition and education level. Women/girls more often showed pro-health behaviours in food choice, choice motives, preferences and food intake.     

Sul premio dell'assicurazione mista in presenza di tare

Con procedimento analitico si determina la formula di Lidstone per l'assicurazione mista su due teste tarate, qualunque sia il tipo di sopramortalità Si esaminano poi i casi di sopramortalità crescente, costante e decrescente e si deducono le formule che forniscono il premio puro mediante gli analoghi premi su teste normali, assegnando l'espressione dell'errore che si commette applicando tali formule.

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Through analytical methods we obtain Lidstone's formula for a mixed insurance on two extra risks.We also give an expression of the related approximation error.

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Pervenuto il 15-3-82     

On the corporate use of green bonds

When do wholesalers issue green bonds to finance their socially responsible activities instead of charging a premium for the products they produce? We show that in less competitive retail markets when retailers can “skim” more of the premium that end consumers pay for socially responsible products, green bonds provide additional funds to help cover the cost of a wholesaler's socially responsible activities. Similar incentives arise if the wholesaler's input is a small component of the end consumers’ product, or if it is difficult for end consumers to identify the wholesaler's socially responsible activities.     

Reg-FD and the competitiveness of all-star analysts

We examine the impact of Regulation Fair Disclosure on the competitive advantage of All-Star analysts as measured by turnover in the rankings. Institutional Investor All-Americans, chosen by votes of institutional investors based on overall helpfulness, experienced a significant increase in turnover as Reg-FD was implemented. Non-US analysts and US analysts ranked solely on the basis of public stock recommendations did not. Within a few years, however, All-American turnover returned to pre-Reg-FD levels, suggesting that the new All-Americans built a competitive advantage stressing aspects of performance less dependent on privileged communication.     

Selling to Socially Responsible Consumers: Competition and The Private Provision of Public Goods

We model firms as competing for socially responsible consumers by linking the provision of a public good (environmentally friendly or socially responsible activities) to sales of their private goods. In many cases, too little of the public good is provided, but under certain conditions, competition leads to excessive provision. Further, there is generally a trade-off between more efficient provision of the private and the public good. Our results indicate that the level of private provision of the public good varies inversely with the competitiveness of the private-good market and that the types of public goods provided are biased toward those for which consumers have high participation value.     

Stock repurchase as a takeover defense

We develop a model in which stock repurchases serve as a defenseagainst takeovers by signaling the manager's private informationabout the value of the firm. The manager repurchases sharesto block a takeover only if the cost of doing so is not toohigh. Since the cost is inversely related to the value of thefirm under his management, a repurchase signals that the valueof the stock is high, blocking a takeover. While a repurchaseincreases the expected value of the stock, it also makes tostock riskier. The model also implies that there are too fewtakeovers for efficiency.     

Family firms, debtholder�Cshareholder agency costs and the use of covenants in private debt

We ask whether the private debt contracts of family firms contain more restrictive covenants tied to accounting numbers than those of non-family firms. Our examination of Dealscan data indicates that credit agreements of Standard and Poor (S&P) 500 family firms are more likely to include accounting-based covenants that limit the lender(s)’ risk that managers will divert cash or assets to shareholders than those of S&P 500 non-family firms. The likelihood is further increased by presence of a dual class stock system that includes supervoting shares. Our results suggest that lenders are more willing to rely on accounting-based covenants to solve the shareholder–private lender agency problem in family firms given that the reporting quality is higher due to better alignment of owner and manager interests in such firms.     

Analyst estimation revision clusters and corporate events, Part II

Summary In Part I of this study, we evaluated the relative usefulness of information in alternative corporate information events (CIEs) to analysts by examining the frequency with which they trigger clusters of analysts’ earnings estimate revisions. In Part II, we examine investor response to various CIEs and their revision clusters. We find that stock prices react most strongly and adjust most quickly to revision clusters that accompany CIEs that focus on financial statement information. CIEs that offer strategic information take longer for analysts and investors to assimilate, and investors appear to rely heavily on later analyst revisions following such events.