The Power of Voice: Managerial Affective States and Future Firm Performance

We measure managerial affective states during earnings conference calls by analyzing conference call audio files using vocal emotion analysis software. We hypothesize and find that, when managers are scrutinized by analysts during conference calls, positive and negative affects displayed by managers are informative about the firm's financial future. Analysts do not incorporate this information when forecasting near‐term earnings. When making stock recommendation changes, however, analysts incorporate positive but not negative affect. This study presents new evidence that managerial vocal cues contain useful information about a firm's fundamentals, incremental to both quantitative earnings information and qualitative “soft” information conveyed by linguistic content.     

Monetary Expansion in an Open Economy of Intermediate Size*

This paper introduces a monetary asset, perceived as an addition to wealth, into a two-country neoclassical model of accumulation. As domestic monetary expansion changes, demand for the investment good is shifted. This alters the terms and level of trade as well as production and shifts the balanced growth paths of both economies. For a non-specialized world it is found that an increase in domestic monetary expansion will increase the domestic overall capital intensity, decrease the foreign overall capital intensity, and worsen the terms of trade for the country importing the investment good.     

Empirical comparison of subjective probability elicitation methods*

Abstract. The direct magnitude and bisection subjective probability elicitation methods are compared based on the environmental (relative frequency) accuracy of the resulting probabilities and the acceptability of the elicitation methods. Each subject utilized, and provided acceptability indications for, both methods. Interactive elicitation software, including histogram-like graphical displays of the probabilities for both elicitation methods, were provided to aid the subjects and provide for a more refined comparison of the methods. Second-year graduate business students, knowledgeable about both the task context and subjective probabilities, completed the experiment. Direct elicitation of probabilities provided significantly more accurate subjective probabilities than did the bisection method and the former method also was significantly more acceptable to the subjects.     

The sensitivity of financial distress prediction models to departures from normality*

Abstract. This research empirically investigated the effect of nonnormality on financial stress prediction. The analysis included the application of probit, logit and multiple discriminant analysis to prediction models found in previous literature, and also involved separate samples for both bankrupt and problem-status companies. Finally, the statistical techniques were evaluated under extreme conditions of nonnormality. Two basic procedures were used to modify the ratio distributions to achieve normality. These included a square-root transformation procedure and an outlier deletion procedure. Results were compared using both a univariate and a multivariate technique to identify and remove outliers. The results indicate the general sensitivity of the multiple discriminant analysis technique to departures from normality and the sensitivity of the logit and probit techniques to extreme nonnormality. The data indicate that researchers interested in assessing classification accuracy might benefit by testing for distributional sensitivity using procedures outlined in this research. Resumé. Les auteurs ont procédé à une analyse empirique de l'incidence des écarts par rapport à la normalité sur la prévision des contraintes financières. L'analyse comporte l'application du probit, du logit et de l'analyse à discriminants multiples aux modèles prévisionnnels que l'on trouve dans des publications, et l'on a eu recours à des échantillons distincts tant pour les sociétés en situation de faillite que pour les sociétés en difficulté. Enfin, les techniques statistiques ont été évaluees dans des conditions extrêmes d'écart par rapport à la normalité. Deux méthodes fondamentales ont été utilisées pour modifier les distributions de ratios de façon à parvenir à la normalité. Ces méthodes comprennent un procédé de transformation de la racine carrée et un procédé d'élimination des éléments isolés. Les résultats obtenus ont été comparés à l'aide d'une technique univariée ainsi que d'une technique multivariée pour repérer et supprimer les éléments isolés. Les résultats indiquent la sensibilité générale de la technique d'analyse à discriminants multiples aux déviations par rapport à la normalité et la sensibilité des techniques logit et probit aux écarts extrêmes par rapport à la normalité. Ces données révèlent que les chercheurs qui s'intéressent à l'évaluation de l'axactitude de la classification pourraient tirer profit d'une vérification de la sensibilité de la distribution au moyen des méthodes décrites par les auteurs.     

Comment on: “Distinguishing the two forms of the constant percentage learning curve model”

Abstract. Several points relating to the use of learning curves in management accounting are discussed and clarified. There is no underlying general theory that suggests that learning should follow a particular model in a particular situation. A number of more sophisticated models which are conceptually satisfying and have given good results in practice, but are not discussed in the management accounting literature, are briefly described. Some limitations on the methods suggested to identify the learning curve model and determine its parameters in a particular application are discussed. Some potential limitations in using derived models for estimation in practice are also presented. Résumé. L'auteur analyse et clarifie plusieurs points reliés à l'usage des courbes d'apprentissage en comptabilité de management. Aucune théorie générale sous-jacente ne suggère que l'apprentissage doive se conformer à un modèle particulier dans une situation particulière. L'auteur décrit brièvement des modèles plus raffinés, satisfaisants sur le plan conceptuel et ayant donné de bons résultats dans la pratique, mais que n'abordent pas les écrits en compatabilité de management. Il traite également de certaines des limitations des méthodes suggérées pour cerner le modèle de la courbe d'apprentissage et en déterminer les paramètres dans une application particulière. Enfin, il présente des limitations potentielles à l'usage de modèles dérivés aux fins d'estimation dans la pratique.     

The English coastal coal trade, 1691-1910: how rapid was productivity growth?1

As to coal, the normal price of its shipment is unfortunately lost among the general expenses of coal trading … ² 2 Davis, English shipping industry, p. 392.
     

Stock Price Movements in Response to Stock Issues under Asymmetric Information

This paper characterizes the function relating the number of new shares issued by a firm to the resulting change in the firm's stock price, when insiders are asymmetrically informed. We show that, in equilibrium, the stock price will be a decreasing function of the issue size; moreover, the rate of decrease can be so rapid to cause “equity rationing.” We also show that there will be underinvestment relative to the symmetric information case.     

Coupon Redeemers: Are They Better Shoppers?

Previous studies report that coupon redeemers have both greater income and more education than nonredeemers. One explanation for this association is the efficiency hypothesis. This hypothesis holds that higher income/education households are better shoppers, and thus better able to take advantage of the discounts coupons offer. An alternative explanation is the preference/opportunities hypothesis. This hypothesis holds that higher income/education households are more apt to purchase the higher priced brands that offer coupons, and are likely, therefore, to redeem more coupons. Panel data on household purchases of paper towels are used to evaluate these two hypotheses. Evidence in support of both is found.     

Collectors and Collecting: A Social Psychological Perspective

Collecting is a pervasive behavior in our culture, yet it has received little attention in the psychological literature. We examine eight aspects of the collecting process, drawing on existing ideas and research in social psychology as well as existing research on collectors and collecting to describe the motivations that underlie collecting behavior. We suggest that collectors are drawn to collecting as a means of bolstering the self by setting up goals that are tangible and attainable and provide the collector with concrete feedback of progress.