PAY EQUITY AND COMPARABLE WORTH

An important and emerging public policy consideration… generally called equal pay for comparable worth…has received great attention from those who influence or report public policy initiatives. The comparable worth movement is directed at pay equity issues, primarily between men and women. The source of controversy surrounding comparable worth concerns the mechanism for determining wages in the economy…either an unrestricted market process or a subjective valuation process by designated "pay equity experts." Although the pay and allocation mechanisms and their side effects are controversial, other important questions concern the actual method of equity determination to be used in implementing comparable worth. This paper analyzes, from a general public policy perspective, many of the issues and much of the evidence surrounding comparable worth initiatives.     

OWNERSHIP AND EFFICIENCY IN NUCLEAR POWER PRODUCTION

This paper uses Data Envelopment Analysis to examine the relativeproductive efficiency of a sample of 78 publicly- and privately-ownednuclear power plants operating the year 1989. The sample includes13 UK nuclear power plants. Linear programs are used to calculatea variety of plant specific efficiency scores including measureswhich attempt to adjust for vintage effects. Non-parametricand Tobit/OLS analysis is employed to test the null hypothesisthat ownership has no effect on productive efficiency. The resultstentatively suggest that the UK plants could expect to reducecosts through significantly lower staffing levels.     

A Two–Tier Wage Structure in a Nonunion Firm

This study examines the perceptions of nonunion workers in a permanent two–tier wage structure. Consistent with the predictions of equity and justice theories, low–tier employees are found to be more likely to perceive the wage structure as unfair, have lower pay satisfaction and organizational commitment, and report poorer worker–management relations than high– tier employees. These attitudes may make nonunion firms more vulnerable to certification campaigns since they are the same factors that have been repeatedly linked to employee intentions to vote for a union.     

The effects of the planning memorandum,time pressure and individual auditor characteristics on audit managers' review time judgments*

Abstract. This study examines audit managers' review time effort (as reflected in their time estimates for working paper review) and the extent to which this effort is directed by another important audit manager activity: initial audit planning. Initial audit planning is manipulated by identifying certain audit areas as critical in the planning memo. Time pressure and individual auditor characteristics also are examined because auditing literature suggests that they may affect managers' review. The analysis is based on the responses, to an audit case, of 73 audit managers from ten large accounting firms. The results indicate that: 1) the managers exhibit reasonable agreement in budgeting over half of audit management time to review, 2) the initial audit plan directs their subsequent review, 3) time pressure does not significantly affect their estimated review times, and 4) firm affiliation, auditor experience level, and initial planning effort are associated with differences in managers' review practices and perceptions. The paper concludes with a discussion of the implications of these results for practice and further research.     

Diversification,Integration and Emerging Market Closed-End Funds

We study a new class of unconditional and conditional mean-variance spanning tests that exploits the duality between Hansen-Jagannathan bounds (1991) and mean-standard deviation frontiers. The tests are shown to be equivalent to standard spanning tests in population, but we document substantial differences in the small sample performance of alternative tests. Our empirical application examines the diversification benefits from emerging equity markets using an extensive new data set on U.S. and U.K.-traded closed-end funds. We find significant diversification benefits for the U.K. country funds, but not for the U.S. funds. The difference appears to relate to differences in portfolio holdings rather than to the behavior of premiums in the United States versus the United Kingdom.     

Asymmetric Information,Managerial Opportunism,Financing, and Payout Policies

We examine corporate issuance and payout policies in the presence of both adverse selection (in capital markets) and managerial opportunism. Our results establish the importance of the locus of decision control in the firm. When shareholders determine policies, debt financing is always optimal in the presence of either adverse selection or managerial opportunism. However, when both of these problems are simultaneously present, equity issuance can become an optimal signaling mechanism. Shareholders' most preferred signaling mechanism is restricting dividends, followed by equity financing, and finally underpricing securities. When managers determine policies, a reversed hierarchy may be obtained.     

Strategic Financial Disclosure: Evidence from Labor Negotiations

Abstract. Evidence of strategic behavior in public financial disclosure is provided by analyzing 673 disclosures that were made before, during, and after four Canadian labor strikes. Financial disclosures included quantitative and qualitative information about the sampled companies that appeared in print media during the periods of interest. Strategic behavior involved the naming of one actor by another in the disclosures. The analyses showed that disclosure frequency was much higher during and immediately preceding the strikes than in other periods. Network-analytic techniques were employed to examine the linkages among seven groups of actors that were named in the disclosures. The disclosure networks increased in density during the strikes but became less centralized. Our analysis supports the view that strategic interactions in disclosures are multilateral and dynamic. Thus, any attempt to model financial disclosure during labor negotiations as a bilateral single-period game would appear to be simplistic. Disclosure management in this setting seems to occur within a complex economic and social setting.     

A Tax-Tax Clientele for Inde-linked Bonds: A Comment

This comment describes the U.S. federal income tax treatment of corporate bonds that are indexed for inflation and argues that these bonds do not have a tax-tax clientele in the United States.