The relationship between the smoothing of reported income and risk-adjusted returns

This paper uses risk-adjusted returns for the firms in the S&P 500 to test whether the stock market response to accounting performance measures is related to the smoothness of companies’ reported earnings. Three income models, increasing in their measure of smoothness, test the hypotheses using cumulative average abnormal returns. The results indicate that companies that report smooth income have significantly higher cumulative average abnormal returns than firms that do not. When size is considered, market returns are higher for small companies than for large companies. There is also a significant relationship between the type of industry and income smoothing.     

Assessing the Economic Implications of Reduced Water Availability and Better Management Practices on Representative Farms in Southern Alberta

Water for irrigated crops in Southern Alberta is under pressure. Consecutive years of drought at the turn of the century led to a rationing of the province's water supply and has raised concerns about the sustainability of the current water use system. In this paper, we develop a representative farm model for six irrigation districts in the South Saskatchewan River Basin to evaluate water use and improved water application efficiency for a scenario that reduces irrigation water availability by 10%. Irrigation districts with relatively greater area of sugar beets and potatoes, that have the most inelastic water demand, will be most affected by a reduction in water availability with relatively large adjustments in irrigation water applied to all other crops. A reduction in water availability also will lead to changes in the relative returns per hectare for irrigated crops, with producers having economic incentives to increase their areas devoted to canola production while reducing that devoted to wheat and barley production. Further, we find that representative farms can largely circumvent reduced water availability by relatively small increases in the efficiency with which water is applied in the field. The results have important policy implications for both producers and water policy makers in Canada. L'eau destinée aux cultures irriguées du sud de l'Alberta se trouve sous pression. Les années successives de sécheresse au début du siècle ont mené au rationnement de l'approvisionnement provincial de l'eau et soulèvent des inquiétudes au sujet de la durabilité du système actuel d'utilisation de l'eau. Ce document propose un modèle agricole représentatif pour six districts d'irrigation du bassin de la rivière Saskatchewan Sud (BRSS) pour évaluer l'utilisation de l'eau et l'amélioration de l'efficacité de l'application d'eau selon un scénario réduisant la disponibilité de l'eau irriguée de 10 pour cent. Les districts d'irrigation avec des zones relativement plus grandes de betteraves à sucre et de pommes de terre ayant la plus inélastique demande en eau seront le plus affectés par une réduction de la disponibilité de l'eau nécessitant des ajustements relativement importants à l'application d'eau irriguée aux autres cultures. Une réduction de la disponibilité de l'eau mènera aussi à une modification du rendement par hectare pour les cultures irriguées, les producteurs ayant des incitatifs économiques pour l'augmentation des terres vouées à la production de canola et la diminution de celles destinées au blé et à l'orge. De plus, nous observons qu'il est possible pour les fermes représentantes de contourner, en grande partie, la réduction de la disponibilité de l'eau en augmentation relativement minimalement l'efficacité avec laquelle l'eau est appliquée aux cultures. Les résultats ont des répercussions politiques importantes à la fois pour les producteurs et pour les décideurs politiques en matière d'eau au Canada.     

A Spatial Real Options Approach for Modeling Land Use Change: Assessing the Potential for Poplar Energy Plantations in Alberta

Land use change models based on historical behavior have proven useful in predicting and understanding determinants of change. Such approaches are not possible where land use change data are absent. In this paper, we develop a normative spatial model that considers option values associated with land conversion between agriculture and forestry and their differing time scales. The model is applied in a case study regarding the potential for a cellulosic biofuel industry in Alberta. Results indicate the importance of future patterns of prices in influencing decisions to switch from agriculture to bioenergy production, and suggest that cellulosic plantations are not likely to prevail over agricultural land uses. Les modèles de changement d'affectation des terres basés sur les comportements historiques se sont avérés utiles pour la prédiction et la compréhension des facteurs de changements. Ces approches sont impossibles là où les données concernant les changements d'affectation des terres sont absentes. Cet article présente un modèle normatif spatial qui tient compte des valeurs d'option associées à la conversion des terres agricoles en terres forestières et à leurs différentes échelles de temps. L'application du modèle se fait dans une étude de cas au sujet du potentiel pour une industrie du biocarburant cellulosique en Alberta. Les résultats montrent l'importance de l'influence des futures structures de prix sur le choix de passer de l'agriculture à la production de bioénergie, et suggèrent que les plantations cellulosiques ne l'emporteront pas sur les affectations agricoles des terres.     

How Disclosure Features of Corporate Social Responsibility Reports Interact with Investor Numeracy to Influence Investor Judgments

Firms’ Corporate Social Responsibility (CSR) reports typically frame their strategies in terms of either community or global efforts (i.e., “strategy frame”). Further, the style used to depict CSR performance in reports often highlights either pictures or words (i.e., “presentation style”). These two prominent disclosure features of CSR reports promote a natural fit or misfit in the focus (relatively low‐level or high‐level focus) investors adopt when thinking about the firm and its CSR efforts. Further, these disclosure features likely have different effects on investors depending on their numeracy or, in other words, the way that they naturally process numerical information. In this study, we predict and find that a fit between the strategy frame and the presentation style of a firm's CSR report causes less numerate investors to be more willing to invest than when a fit is not present. Specifically, we find that a fit leads less numerate investors to experience subjective feelings of processing fluency and, in turn, positive affect that serves as a cue that the positive CSR performance information can be relied upon, which positively influences willingness to invest. Our results have implications for both CSR reports as well as other types of firm disclosures that increasingly vary along similar disclosure characteristics. Our results also contribute to both the growing literature on presentation effects in accounting, as well as the broader business literature on CSR reporting.     

Factors impacting accounting research output in developing countries: An exploratory study

The objective of this paper is to identify the factors that impact accounting research output in one of the developing regions of the world, Anglophone Sub-Sahara Africa (Anglophone SSA). Adopting an institutional theory framework, the paper uses a sequential research process comprising an original questionnaire and semi-structured interviews. Four research questions were developed to achieve the research objectives. The region's low research output is explained by a host of individual, departmental and/or university, country and international factors; of these, departmental and/or university factors appear to have the strongest impact. The study also found that factors that constitute the regulative (coercive) pillar that promote research tend to be weaker in this region's universities, while factors that constitute the normative and cultural-cognitive pillars which tend to promote teaching appear to be stronger. Thus, the institutional pressure stemming from factors that constitute normative and cultural-cognitive elements dictate the conduct of an accounting academic positioned in Anglophone SSA's universities. That is, research activities of accounting academics in the region are disempowered by the more potent, normative and cultural-cognitive pressures and are inadequately sanctioned by the regulative pressure.     

Do state-owned enterprises benefit more from China's cereal grain tariff-rate quota regime?

In 2016, the United States launched a formal dispute with the World Trade Organization (WTO) concerning China's wheat, corn, and rice tariff-rate quota (TRQs) administration. A formal panel was requested in August 2017, with several major grain exporters, including Canada, joining as third-party members. This study employs two unique micro-level datasets to investigate the role of state-owned and non-state-owned enterprises’ (SOE and non-SOE, respectively) in China's agricultural imports. Results suggest that SOEs are noticeably more active in importing quota-bound commodities compared to quota-free imported commodities. Moreover, the larger role of SOEs in China's cereal grain imports is negatively correlated with China's food security targets, as measured by estimated prior year stocks-to-use ratios. Conversely, above average food security targets in China's cereal grain market leads to an important extensive margin adjustment of non-SOE import participation. Finally, we find very little compelling evidence that China's September reallocation of unused TRQ has any economic or statistically significant impact on non-SOE entry into importing or the intensity with which their imports occur.     

Farmers,institutions and technology in agricultural change processes: outcomes from Adaptive Research on rice production in Sulawesi,Indonesia

International agricultural research centres use approaches which aim to create effective linkages between the practices of farmers, introduced technologies and the wider environment that affects farming. This paper argues that such new approaches require a different type of monitoring as a complement to conventional approaches that tend to favour a quantitative assessment of adoption and impact at the farm level. In this context, we examined monitoring data from an Adaptive Research (AR) project highlighting complementary qualitative analysis. Our emphasis is to capture the improvisational capacities of farmers and to reveal social and institutional constraints and opportunities in a broader innovation system. Our approach provided clear insights into how rice farmers adjusted their practices and how actors involved linked (or not) with others in the innovation system. We also demonstrated how institutions such as policies, religious rituals or service provider arrangements pose conditions that establish or constrain practices aligned with introduced technologies. A broader perspective in monitoring AR therefore provides important additional insights into the factors which shape outcomes in farming communities. To expand outcomes, AR projects should also pay attention to designing and testing new institutional arrangements that create enabling conditions for agricultural innovation.     

Using design science to improve web search innovation in real estate

We analyze 14 leading real estate websites, seven residential and seven commercial. They exhibit limited demographic and geographic information systems (GIS) data display capability. They exhibit economic data display capability except one, and lack demographic, economic, and GIS data search capability. Real estate web searching is inefficient, time consuming, and inflexible. To overcome these limitations, we use design-science to create three search modes (Sc2, Sc3, and Sc4). Sc2 uses demographic data, Sc3 economic data, and Sc4 GIS data.