The accuracy of earnings forecasts in IPO prospectuses on the Kuala Lumpur Stock Exchange

This paper examines the accuracy of earnings forecasts made by managers of Malaysian initial public offerings (IPOs) during the period 1984–1995. It is a mandatory requirement for Malaysian IPOs to furnish earnings forecasts together with the opinions thereon of the auditors and the lead underwriter in their prospectuses. Their accuracy is measured by forecast errors, absolute forecast errors, squared forecast errors and standardised forecast errors. The results suggest that, on average, managers under-forecast earnings by 33.37%. A comparison with the naive no change model in earnings suggests that 96 out of 122 companies outperform this model. A number of company specific characteristics (size, age, forecast interval, gearing, proportion of shares retained by owners, auditor reputation and industry) are tested. The results reveal that both the age and industry classification of the company are statistically significant, and that management earnings forecasts are particularly inaccurate where firms experience a decline in earnings. Key words: accuracy of prospectus earnings forecasts, initial public offerings, accounting in Malaysia.     

The impact of regulatory focus on adolescents’ evaluation of targeted advertising on social networking sites

This article examines whether individual differences in chronic regulatory focus (prevention vs. promotion focus) among adolescents influences the way they evaluate targeted advertising on social networking sites. Study 1 (survey) reveals that adolescents with a promotion focus (who are oriented toward achieving positive outcomes) have a more positive attitude and a higher purchase intention toward targeted advertising, as compared to prevention-focused adolescents (who are dispositioned toward avoiding negative outcomes). Study 2 (experiment) investigates how adolescents’ chronic regulatory focus can alter their attitude and purchase intention on a mock social networking site that includes a targeted advertisement. Results show that a low personalized targeted ad is better evaluated (in terms of a more positive attitude and higher purchase intention) among prevention-focused adolescents, whereas a high personalized targeted ad results in better advertising outcomes among promotion-focused adolescents. Contributions to theory and implications for advertising practice are discussed.     

A cost-analysis model for anticoagulant treatment in the hospital setting

Background:

Rivaroxaban is the first oral factor Xa inhibitor approved in the US to reduce the risk of stroke and blood clots among people with non-valvular atrial fibrillation, treat deep vein thrombosis (DVT), treat pulmonary embolism (PE), reduce the risk of recurrence of DVT and PE, and prevent DVT and PE after knee or hip replacement surgery. The objective of this study was to evaluate the costs from a hospital perspective of treating patients with rivaroxaban vs other anticoagulant agents across these five populations.

Methods:

An economic model was developed using treatment regimens from the ROCKET-AF, EINSTEIN-DVT and PE, and RECORD1-3 randomized clinical trials. The distribution of hospital admissions used in the model across the different populations was derived from the 2010 Healthcare Cost and Utilization Project database. The model compared total costs of anticoagulant treatment, monitoring, inpatient stay, and administration for patients receiving rivaroxaban vs other anticoagulant agents. The length of inpatient stay (LOS) was determined from the literature.

Results:

Across all populations, rivaroxaban was associated with an overall mean cost savings of $1520 per patient. The largest cost savings associated with rivaroxaban was observed in patients with DVT or PE ($6205 and $2742 per patient, respectively). The main driver of the cost savings resulted from the reduction in LOS associated with rivaroxaban, contributing to ～90% of the total savings. Furthermore, the overall mean anticoagulant treatment cost was lower for rivaroxaban vs the reference groups.

Limitations:

The distribution of patients across indications used in the model may not be generalizable to all hospitals, where practice patterns may vary, and average LOS cost may not reflect the actual reimbursements that hospitals received.

Conclusion:

From a hospital perspective, the use of rivaroxaban may be associated with cost savings when compared to other anticoagulant treatments due to lower drug cost and shorter LOS associated with rivaroxaban.     

Spillover effects of FDI inflows on output growth: An analysis of aggregate and disaggregated FDI inflows of 13 MENA economies

This paper examines the effect of foreign direct investment (FDI) inflows on overall growth, as well as its sector-specific spillovers in the Middle Eastern and North African region during the period from 2000 to 2020. Our major innovation is our ability to disaggregate FDI into primary, secondary and tertiary and examine their individual impact on growth, as well as their sector-specific spillovers by using dynamic panel GMM methodology. We find prima facie evidence that total FDI significantly stimulates growth. However, when we turn to the disaggregated FDI data, primary sector FDI adversely affects the gross domestic product (GDP) growth in the service sector and overall GDP growth. On the other hand, secondary FDI has a ‘double-edged’ effect, benefiting its own sector (the service sector's GDP growth), but not other sectors. In contrast, service sector FDI stimulates GDP growth in mining, manufacturing and service sectors, thereby enhancing overall economic growth. Our findings have important policy implications regarding the incentives provided by governments to encourage FDI, which need to be fine-tuned to attract certain types of FDI (tertiary), with less focus on the primary sector