Value-relevance of pension transition adjustments and other comprehensive income components in the adoption year of SFAS No. 158

In the present study, we examine the value-relevance of pension transition adjustments and other comprehensive income (OCI) components in the initial adoption year of Statement of Financial Accounting Standard (SFAS) 158—Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. Using a sample of 697 Standard and Poor (S&P) firms with the fiscal year ending on December 31, 2006, we perform several cross-sectional regression analyses to test the value-relevance of transition adjustments and OCI components in presence of various earnings measures. The results indicate that there is a negative relationship between both the level and change in stock returns and the magnitude of pension transition adjustments. We also find earnings measures and some OCI components are significantly associated with stock returns. When analyzed separately, we find our main results are mostly confined to the sample large S&P 500 firms. We do not find any result for the S&P mid-cap and small-cap firms. The overall results suggest the stock market negatively reacts to the adverse impact of SFAS #158 pension transition adjustments on net worth and future cash flows when the impact is substantial in its magnitude in dollar terms. The study further provides useful insight into the information processing by documenting that the market evaluates accounting information more effectively when such information is recognized in the financial statements rather than disclosed only in the financial footnotes.     

Optimal and competitive programs in reachable multi sector models

Summary. We show that in multi-sector optimal growth models, where the technology satisfies a simple reachability condition, infinite horizon programs which satisfy the competitive conditions are optimal. We provide examples of a variety of production models where the reachability condition is satisfied. An example is also provided where the reachability condition is not satisfied and there are competitive programs which are not optimal. The results of the paper are of interest from the standpoint of decentralization in intertemporal economies. Received: March 24, 1994; revised version: October 10, 1998     

Disability and household economic wellbeing: evidence from Indonesian longitudinal data

A health shock in general, and a disability in particular, may expose households to material insecurity due to out-of-pocket health expenditures and reduced earnings. Studies on the impact of disability on household welfare in developing countries are scarce, although the expected impact is large given the absence of social protection programmes. Using a unique Indonesian longitudinal dataset with individuals followed over a 17-year period, this study analyses the economic impact and coping mechanisms adopted by households following a physical disability. Fixed effects estimations reveal that households experience rising health expenditures and reduced labour income. Households cope by reducing their food, non-food and education expenditures, selling assets and receiving more remittances. While all household groups are affected by disability, only the poorest households become significantly more likely to cut their food expenditures.     

Managerial overconfidence,ability, firm-governance and audit fees

Review of Quantitative Finance and Accounting - Prior studies document that managerial overconfidence potentially increases the risk of financial misstatements, and that overconfident managers...     

Modelling risk factors for fatal pedestrian crashes in Kolkata,India

Abstract

In developing countries, pedestrian safety is an issue of major concern. Although an extensive body of literature is available on the identification of elements related to the pedestrian’s risk; the studies are primarily conducted in urban areas of developed countries. The findings from these studies may only be partially relevant to the cities of an emerging country such as India. The present study analyzes historical crash records obtained from the “Kolkata Police” and identifies the risk factors at the road network level for the hazardous corridors posing a high risk to the pedestrians. The study findings reveal that pedestrians’ fatalities at intersections are associated with a high vehicular volume, higher pedestrian-vehicular interaction, high approach speed, overtaking tendency of vehicles, certain land-use type, encroachment of footpath, inadequate sight distance, inaccessible pedestrian crosswalk, wider minor carriageway, the absence of a pedestrian signal head, and lack of enforcement. On the other hand, the models outcomes reveal that pedestrians’ fatalities at midblock road segments are associated with low pedestrian volume, high approach speed, overtaking tendency of the vehicle, encroachment of footpath, on-street parking, wider road width, certain land-use type, inadequate sight distance, insufficient lighting, and inadequate pavement markings.     

Transnational remittances and state protection of human rights: A case for caution

This paper explores the impact of transnational remittance receipts on state respect for human rights, identifying the latter with the CIRI Index of Physical Integrity Rights which aggregates information on disappearances, extrajudicial killings, political imprisonment, and torture. Based on sample of 106 developing economies considered over the period 1981–2011, we find that remittances have a strong negative impact on state respect for physical integrity rights, the results being robust to alternate specifications and estimation methods. Our results underline the need for caution in evaluating the developmental consequences of remittance inflows, especially on institutional quality.     

Hysteresis in unemployment: Fact or fiction?

A stylized fact of European unemployment dynamics is one of extreme persistence and possible unit root behavior. This has led to a major reconsideration of the natural rate paradigm. We apply the Kalman filter to estimate the natural rate of unemployment for Germany and France. When the moving natural rate model is tested against the alternative of a unit root process, the unit root hypothesis is resoundingly rejected.     

Knowledge spillovers and high-impact growth: Comparing local and foreign firms in the UK

This paper is concerned with entrepreneurial high-impact firms, which are firms that generate ‘both’ disproportionate levels of employment and sales growth, and have high levels of innovative activity. It investigates differences in the influence of knowledge spillovers on high-impact growth between foreign and local firms in the UK. The study is based on an analysis of data from UK Innovation Scoreboard on 865 firms, which were divided into ‘high-impact firms’ (defined as those achieving positive growth in both sales and employment) and low-impact firms (negative or no growth in sales or employment). More precisely, the paper investigates the influence of knowledge spillovers on high-impact growth of foreign and local firms, from regional, sectoral and firm size perspectives. The findings suggest that (1) firms’ access to regional knowledge spillovers (from businesses and higher education institutions) is more significantly associated with high-impact growth of local firms in comparison to foreign firms; (2) because knowledge spillovers are more likely to occur in high-tech sectors (compared to low-tech sectors), firms in high-tech sectors are more associated with high-impact growth. Nonetheless, the relationship is stronger for local firms compared to foreign firms; (3) because small firms have greater need for knowledge spillovers (relative to large firms), there is a negative relationship between firm size and high-impact growth, but the negative relationship is greater for UK firms in comparison to foreign firms. Implications are drawn for policy and research.     

Mode substitution effect of urban cycle tracks: Case study of a downtown street in Toronto,Canada

With the growing environmental and health concerns associated with automobile dependence, municipalities across the Western world are investing in cycling facilities to encourage drivers and transit users to take up cycling as a mode of transportation, a process that is known as the travel mode substitution. This study explored the potential impact of cycle tracks on short-term travel mode substitution behavior. We present a case study of Sherbourne Street, located in downtown Toronto, Canada, that was redeveloped in 2012 to include a cycle track that replaced an existing bicycle lane. A street intercept survey was conducted in Fall, 2014, to record quantitative data on current and retrospective travel behaviors of cyclists (n = 214). A mode substitution effect was observed, with 38% of the respondents reporting that they would use travel modes other than cycling before the Sherbourne Street redevelopment, for making a trip to their current destination; the majority of them were previously transit users. Binary logistic regression models indicated that younger cyclists were less likely to substitute a car trip for a cycling trip. Those who did not use Sherbourne Street previously were more likely to substitute their travel mode. Improved safety was the most commonly reported reason for mode substitution. This study contributes to a limited literature by providing much needed insights into the impacts of cycle tracks on travel behavior in a North American context. This paper can also inform the development of easy-to-implement survey/audit tools to be used by professionals at the community level.