FOOL THE MARKETS? CREATIVE ACCOUNTING,FISCAL TRANSPARENCY AND SOVEREIGN RISK PREMIA

We investigate the effects of official fiscal data and creative accounting signals on interest rate spreads between bond yields in the European Union. We find that two different measures of creative accounting indeed both increase the spread. The increase of the risk premium is stronger, if financial markets are unsure about the true extent of creative accounting. Moreover, fiscal transparency reduces risk premia. Instrumental variable regressions confirm these results by addressing potential reverse causality problems and measurement bias.     

Keeping Their Cards Close to Their Chests: How Non‐Delegating CEOs Avoid Forced Career Ends

It is a common belief that CEOs must delegate to be successful. We hesitate to support this generalization and investigate how the distribution of responsibility within top management teams (TMTs) can influence the likelihood of a CEO’s dismissal. Consistent with an agency theory perspective, our results indicate that CEOs may choose not to delegate their responsibilities to other executive TMT members, so as to benefit from an increased information asymmetry vis‐à‐vis the board of directors. Taking the resource‐based view as a complementary theoretical perspective, we find that non‐delegating CEOs benefit from their greater firm‐specific knowledge, which the board of directors considers as a valuable resource that should be retained. Our work also demonstrates that a more intense CEO–TMT interaction weakens the relation between non‐delegation and the likelihood of CEO dismissal. In sum, our research shows that the CEO’s delegation decision does not necessarily lead to a competence distribution that is in the firm's best interest; rather, it reflects a complex interplay between the potentially opportunistic career interests of the CEO, the involvement of other TMT members and the board of directors. © 2015 Wiley Periodicals, Inc.     

Gender diversity in academic publishing—comment on Galak and Kahn (2021)

Marketing Letters - Galak and Kahn (Marketing Letters, 2021) report that females and underrepresented minorities face a less favorable organizational climate within academic marketing as compared...     

Modelling the dependency between currency and debt crises: An option based approach

The interrelation between currency and debt crises is considered in a model relying on option pricing theory. By capturing uncertainty and time aspects in this stochastic and dynamic framework we analyze parameters that determine the probabilities and dependencies of these crises.     

Analysen und Berichte

Enste and Wicher suggest that political regulation is always wealth-reducing. However, their analysis neglects various relevant determinants of the wealth indicator. Economic wealth cannot be estimated from the quantity of regulation, as quality and other aspects matter. Hence, political acumen is required. Enste and Wicher reply to criticism of the regulation index and the analysis of the impact of regulation on education. They argue that they neither ignore the positive effects of regulation (taken into account with the data on good governance indicators) nor demand a zero regulation policy. Instead, the main goal of the analysis is to provide an international comparison for “better regulation”.     

Football spectator no-show behaviour in the German Bundesliga

Despite an extensive literature on stadium attendance demand, our understanding of those factors shaping spectator no-show behaviour is rudimentary at best. Here, we explore such behaviour by using a comprehensive two-step approach: First, we examine the determinants of no-show behaviour in the German Bundesliga between the four seasons 2014–15 and 2017–18; Second, because our initial results imply that spectator no-show behaviour is more prominent among season ticket holders (STHs), we exploit additional survey data to understand individual STH no-show appearances better. Our results suggest that club managers interested in reducing the no-show rate should rethink existing season ticket strategies.     

Analyzing determinants of bond yield spreads with Bayesian Model Averaging

This paper analyzes determinants of country default risk in emerging markets, reflected by sovereign yield spreads. The results reported so far in the literature are heterogeneous with respect to significant explanatory variables. This could indicate a high degree of uncertainty about the “true” regression model. We use Bayesian Model Averaging as the model selection method in order to find the variables which are most likely to determine credit risk. We document that total debt, history of recent default, currency depreciation, and growth rate of foreign currency reserves as well as market sentiments are the key drivers of yield spreads.     

What do deficits tell us about debt? Empirical evidence on creative accounting with fiscal rules in the EU

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. [Milesi-Ferretti, G., 2003. Good, bad or ugly? On the effects of fiscal rules with creative accounting, Journal of Public Economics, 88, 377–394] develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this depends on the reputation cost for the government and the economic cost of sticking to the rule. We provide empirical evidence of creative accounting in the European Union. We find that the SGP rules have induced governments to use stock-flow adjustments, a form of creative accounting, to hide deficits. The tendency to substitute stock-flow adjustments for budget deficits is especially strong for the cyclical component of the deficit, as in times of recession the cost of reducing the deficit is particularly large.     

Firm resources and joint ventures: what determines zero‐sum versus positive‐sum outcomes?

In this study, we are concerned with the resources that are brought to joint ventures, and whether or not the way in which those resources are combined can improve parent‐firm performance. We are also interested in whether or not the exposure of valuable resources through the permeable membrane of the joint venture can have an adverse effect on performance. These questions are explored using a sample of 74 domestic, dyadic joint ventures, and our findings suggest that the strategy can have zero‐sum and positive‐sum outcomes. Copyright © 2000 John Wiley & Sons, Ltd.