Modelling firm‐size distribution using Box–Cox heteroscedastic regression

Using the Box–Cox regression model with heteroscedasticity (BCHR), we re‐examine the size distribution of the Portuguese manufacturing firms studied by Machado and Mata ( 2000 ) using the Box–Cox quantile regression (BCQR) method. We show that the BCHR model compares favourably against the BCQR method. In particular, the BCHR model can answer the key questions addressed by the BCQR method, with the advantage that the estimated quantile functions are monotonic. Furthermore, estimation of the BCHR model is straightforward and the confidence intervals of the BCHR regression quantiles are easy to compute. Copyright © 2006 John Wiley & Sons, Ltd.     

Meeting the broadband access infrastructure demands: The promise of Gigabit Ethernet

Global Internet traffic growth continues to create bandwidth demand in the telecommunications network. As 100 Mb/s Ethernet and Gigabit Ethernet LANs are widely installed in enterprises, the Intranet bandwidth grows quickly. With active adoption of ADSL and cable modem broadband accesses in the SOHO and residential markets, more data traffic is generated in these markets as well. Presently, most telecom carriers use synchronous optical network/synchronous digital hierarchy (SONET/SDH) equipment to “aggregate” data traffic in the metropolitan area network (MAN) before accessing the Internet backbone network. Because of the intrinsic limitations of SONET/SDH equipment in transporting data traffic, especially in terms of bandwidth scalability and provisioning efficiency, there is a need to find a broadband access solution that can overcome the drawbacks of SONET/SDH. Because the inherent simplicity of the technology, Ethernet offers cost effectiveness, ease of networking, packet-based IP friendly protocol, and rapid provisioning advantages while competing with other networking technologies. These advantages coupled with the newly developed gigabit WAN capability have well-positioned Gigabit Ethernet as a compelling technology to break the bandwidth bottleneck in the MAN environment. In this paper, we review the enhancement of Gigabit Ethernet technology and discuss the pros and cons of using Gigabit Ethernet technology in the MAN. We also address the implications of this technology evolution on telecom carriers.     

Characteristics of demand for pharmaceutical products: an examination of four cephalosporins

We model demand for four cephalosporins and compute own- and cross-price elasticities between branded and generic versions of the four drugs. We model demand as a multistage budgeting problem, and we argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products, in particular the prescribing and dispensing stages. We find quite high elasticities between generic substitutes and also significant elasticities between some therapeutic substitutes.     

Capital structure decisions: old issues,new insights from high-tech small- and medium-sized enterprises

Using panel data models and this study analyses the capital structure decisions of high-tech small- and medium-sized enterprises (SMEs) and non-high-tech SMEs. The results suggest that the capital structure decisions of high-tech SMEs are closer to what is predicted by the Pecking Order Theory. However, the results also suggest a modified version of the Pecking Order Theory for high-tech SMEs that have relied on venture capital. These firms prefer equity issues to debt, when internal finance is exhausted. The empirical evidence suggests that problems relating to information asymmetry as well as technological and market uncertainty influence the capital structure decisions of high-tech SMEs.     

Innovation,Imitation and Intellectual Property Rights in Developing Countries

This paper sets up a vertically related market model in which imitation and innovation are endogenously determined to study the impact of intellectual property rights (IPR) protection on less‐developed countries. It shows how a less‐developed country switches from imitation to innovation as it develops. It is also found that the relationship between IPR protection and economic development is U ‐shaped. The IPR protection tends to go down and then go up as income rises. This finding also conforms with that in the empirical literature on IPR protection.     

Social benefit expenditures and stagflation: evidence from the United States

Stagflation refers to the terrible economic malaise associated with declining growth, hyperinflation and high unemployment. Unlike previous cost-push explanations such as an overheated labour market and oil prices, this article suggests that social benefit expenditures are a potential cause of stagflation. We investigate the impact of social benefit expenditures on stagflation in the U.S. over the 1950–2014 period by employing an autoregressive distributed lag (ARDL) bounds testing approach to cointegration, which was developed by Pesaran, Shin, and Smith. The influence of social benefit expenditures on economic growth and inflation and unemployment rates is estimated. The empirical results from the U.S. suggest that economic growth responds negatively to social benefit expenditures, while inflation and unemployment rates are both positively associated with social benefit expenditures. Thus, government-led rigid welfare could contribute to stagflation in the U.S. Instead of increasing people’s happiness, the over-burdened welfare system could push people into economic malaise. This stagflation risk shouldn’t be ignored. These results are important for U.S. policymakers and can inform other governments characterized by high levels of well-being.     

Discretionary Loan Loss Provisions and Systemic Risk in the Banking Industry

This study examines the relation between earnings management through discretionary loan loss provisions (LLPs) and systemic risk in the U. S. banking sector using a large sample of commercial banks from 1996 to 2009. We find that earnings management increases a bank's contribution to systemic crash risk and systemic distress risk, consistent with the notion that earnings management increases information opacity, facilitates bad news hoarding, co‐moves with macroeconomic conditions, and exhibits cross‐sectional correlation and herding in earnings management. However, the effect of earnings management through discretionary LLPs on systemic risk disappears during the crisis period, consistent with weakened earnings management in crisis times. We also find that the same effect strengthens with bank uncertainty and homogenous loans, and weakens in the post‐SOX period, and when banks are audited by Big 4 auditors.     

The use of analytical procedures by external auditors in Canada

The Enron debacle and other scandals highlight the issue of whether analytical procedures (APs) or more traditional audit approaches based on substantive testing are more appropriate. This paper surveys the use of APs by Canadian external auditors and augments understanding of the impact of auditing standards on professional practice. Our results demonstrate that APs are extensively applied in practice, particularly by larger firms, and that their use dominates the final review stage of the audit regardless of firm size. While standards do not appear to be an important influence upon practice for audit firms in general, this is not the case for smaller firms. Though auditors place more reliance on APs to reduce tests of detail, there are limits to this reliance. Our results indicate that while auditors may have increased their use of APs with the expectation of efficiency gains, these may be realized at present only partially.     

The effects of tone at the top and coordination with external auditors on internal auditors’ fraud risk assessments

Prior research suggests that internal auditors’ judgements are subject to management influence resulting in compromised risk assessments. This study investigates the effects of the tone at the top and coordination with external auditors on internal auditors’ fraud risk assessments. Results of an experiment involving 64 internal auditors indicate that when the tone at the top is poor, rather than favouring management, internal auditors report a higher risk of intentional misstatements and that coordination with external auditors can further reduce expectations of the incidence of intentional misstatements.     

太空经济及其社会影响

越来越多的国家都在开发和应用空间系统,太空部门的发展催生了新兴的太空经济,太空产业及其下游活动产生了广泛而深刻的社会经济影响.2005年,世界范围的民用和军用空间计划预算总额约为480亿美元,空间产品与服务的商业收入大约为872亿～1132亿美元,太空经济的增长趋势日益显现.太空经济的下游应用活动通常远大于上游制造活动,2005年,空间产品制造(如卫星、火箭)和发射收入估计为350亿～360亿美元,空间相关服务(如卫星电视、GPS)估计为522亿～772亿美元.2007年全球太空经济收入总额达到2510亿美元,比2006年增长11%.在现代社会长期而重大的问题管理方面,空间基础设施的效益越来越明显,及时的卫星图像和通信联系有助于降低生命和经济损失.