Book Reviews

Yujiro Hayami and Toshihiko Kawagoe, The Agrarian Origins of Commerce and Industry: A Study of Peasant Marketing in Indonesia (with a foreword by Peter Timmer), St Martins Press, New York, 1993, pp. 208.

J. Thomas Lindblad, Between Dayak and Dutch: The Economic History of Southeast Kalimantan 1880–1942, Verhandelingen van het Koninklijk Instituut voor Taal-, Land- en Volkenkunde No. 134, Foris Publications, Dordrecht, 1988, pp. x + 282. Dfl. 30.-.

Mark Cleary and Peter Eaton, Borneo: Change and Development, Oxford University Press, Singapore, 1992, pp. ix + 271. A$44.95

James Spillane, Komoditi Kopi: Peranannya dalam Perekonomian Indonesia [Coffee: Its Role in the Indonesian Economy], Kanisius, Jakarta, 1990, pp. 259.

United Nations Industrial Development Organization, Indonesia: Growth and Diversification, Industrial Development Review Series, Economist Intelligence Unit (EIU), London, 1993, pp. xxiii + 255. £95.     

Strip Clubs, “Secondary Effects” and Residential Property Prices

Municipalities regulate sexually oriented businesses (SOBs) through the “secondary effects” doctrine, which justifies limiting First Amendment speech protections inside SOBs. Negative effects of SOBs on nearby neighborhood quality are a frequently cited secondary effect. Little empirical evidence exists that SOBs generate such negative externalities. If SOBs generate negative externalities, then nearby property prices should decrease when a strip club opens. We estimate regression models of housing prices to determine the effect of new clubs on nearby residential property prices in Seattle, exploiting the termination of a 17‐year moratorium on openings and find no evidence that strip clubs have “secondary effects.”     

Strategic Interaction in a Repeated Game: Evidence from NCAA Football Recruiting

We analyze decisions to comply or cheat on NCAA recruiting regulations in the context of repeated interactions. Teams possess private information about resources devoted to football programs, recruiting effort made by rival programs, and rival program behavior. We test for evidence that the behavior of NCAA Division IA football programs conforms to predictions from repeated game theoretic models using panel data from IA football over the period 1978–2005. We find anecdotal and empirical support for strategic interaction. The presence of in-conference rivals under NCAA sanctions increases the probability of a team being placed under future sanctions.     

Early adoption,experience, and farm performance of GM corn seeds

The current article explores the characteristics that distinguish early from late adopters of GM corn and measures the productivity impacts of early adoption, for a sample of farmers in Minnesota and Wisconsin. The results of the adoption analysis confirm that size, education as well as specialization are positively correlated with early adoption. In addition, these results also show that farms that are mostly worked by family labor but hire some off‐farm labor are more likely to adopt GM seeds earlier in the diffusion process. The productivity analysis demonstrates the superiority of stacked varieties. At the same time, we find no evidence of a direct impact of experience on yields. Given the previously documented impact of early adoption on the use of stacked varieties, we conclude that experience plays a role through the adoption of these new technologies but does not play a role in allowing the producer to use the technology more efficiently, once it has been adopted.     

The Employee Engagement Scale: Initial Evidence for Construct Validity and Implications for Theory and Practice

Interest in the employee engagement construct has gained increasing attention in recent years. Measurement tools focused on nuanced areas of engagement (i.e., job engagement and organizational engagement) have been offered; however, no measure of employee engagement has been advanced despite persistent calls in the research. We present the development, method, and results of a three‐dimensional employee engagement measurement tool developed for use in the human resource and management fields of study. Across four independent studies, the employee engagement scale (EES) was found to consist of three subfactors (cognitive, emotional, and behavioral) and a higher‐order factor (employee engagement). Across a series of four studies, we explored the factor structure and reliability of the EES (Study 1), then refined the scale, confirmed the factor structure, and examined reliability and both convergent and nomological validity evidence (Study 2). Next (Study 3), we completed a final reduction in scale items and examined additional evidence of reliability and nomological validity as well as evidence of discriminant validity. Finally (Study 4), we tested for evidence of incremental validity. In the implications for theory and practice section, we discuss the importance of an employee engagement measure aligned alongside an agreed‐upon definition and framework. Limitations and future directions for research—such as the need for further psychometric testing and exploring issues of measurement invariance—are discussed. © 2016 Wiley Periodicals, Inc.     

Noise trading and prime and score premiums

This paper documents that a common element drives the time-series variation of the premium pricing of Primes and Scores. I argue that this common element is noise trading. The noise trading model of Delong, Shleifer, Summers and Waldmann (1990) predicts that returns on assets that are predominantly traded by noise traders will be correlated, since the misperceptions of noise traders are cross-sectionally correlated. Consistent with the noise trading hypothesis, changes in the average premium of Primes and Scores, which are predominantly traded by individual investors, are correlated with both changes in average discounts of closed-end funds and small firms returns. These empirical facts provide additional evidence that noise traders can affect security prices.     

Discretionary accounting choices and the predictive ability of accruals with respect to future cash flows

Using a sample of restatement firms and a meet-or-beat model to classify firms as making discretionary accounting choices for opportunistic meet-or-beat (OP-MB) reasons, we show that originally reported earnings and accrual components are less predictive of future cash flows relative to the restated numbers. We find the opposite is true for firms classified as making discretionary accounting choices for non-OP-MB reasons. We consider a number of competing explanations for these latter results. Our findings are most consistent with the informational hypothesis, weakly consistent with conservative-motivated efficient contracting hypotheses, but inconsistent with opportunistic contracting and misapplication/errors of GAAP explanations.