The effects of a relative value reimbursement scheme on the medical market: Lessons from medicaid

One question which has been the subject of debate, without resolution, in the health economics literature is whether physicians face distorted incentives. This paper examines the possible effects of an attempt to correct the incentives facing physician firms: namely the use of a relative valued fee schedule. Though a type of relative value scale is currently under implementation for the Medicare system, little is known about the effects of such mechanisms. This paper attempts to glean information from natural experiments by several state Medicaid programs that have used relative value scales in the past.The author would like to express his appreciation to Karen Smith Conway, Thomas Hoerger, and Torsten Schmidt for their helpful comments and suggestions. Valuable research assistance was provided by Sharon Kunz. All remaining errors are, of course, the sole responsibility of the author.     

The effect of tax-motivated income shifting on information asymmetry

We examine whether tax-motivated income shifting by U.S. multinational corporations affects information asymmetry. Using a new firm-year measure of income shifting and a two-stage least squares approach, we find income shifting is positively associated with four measures of information asymmetry. Cross-sectional tests reveal that this effect is more pronounced for firms with large differences between foreign and domestic earnings growth. Using SFAS 131 to improve identification and establish evidence consistent with a causal relation between income shifting and information asymmetry, we demonstrate that the adverse impact of income shifting on information asymmetry is concentrated in firms that discontinue geographic earnings disclosures. Overall, our study provides evidence that significant consequences of information asymmetry are associated with tax-motivated income shifting.     

Analyst Behavior Following IPOs: The "Bubble Period" Evidence

We examine over 7400 analyst recommendations made in the yearafter going public for IPOs from 1999 to 2000. Initiations ofcoverage at the end of the quiet period come almost exclusivelyfrom affiliated analysts, whereas initiations afterward arepredominantly from unaffiliated analysts. Contrary to previousfindings, we find no evidence that the market discounts recommendationsfrom affiliated analysts once we control for recommendationcharacteristics and timing. Moreover, analyst coverage in thefirst year is not affected by underpricing, and after the flurryof initiations at the end of the quiet period, the number ofanalysts covering a firm during the following 11 months is unrelatedto the number of managing underwriters. (JEL G12, G14, G24)     

Financial and external reporting research: the broadening corporate governance challenge

This study provides a critical examination of contemporary financial and external reporting research from a corporate governance perspective. Adopting Hines' social constructionist approach to financial reporting, the study investigates research into accounting publishing patterns, published reviews of major subject areas within financial and external reporting research, and interviews a sample of accounting professors in British universities. The findings reveal a strong North American economics and finance-based positivist influence, a largely uncritical acceptance of accounting's subservience to the demands of the market, a reluctance to engage major policy questions and broader reporting constituencies. These appear to be conditioned to a large degree by internal features and pressures within the academic research community. Evidence is presented for greater attention to major environmental shifts impacting accounting and communities globally, a reinvigoration of researchers' direct engagement with reporting constituents in the field, a revisiting of major accounting, business, social and environmental policy questions, and a preparedness to address today's major corporate governance concerns of communities and governments.     

Civil service reform,self‐selection,and bureaucratic performance

I use a formal model to analyze the effect of civil service protections on bureaucratic performance. In a two‐period model, a public manager observes a bureaucrat's actions for a period and decides whether to retain or attempt to remove the bureaucrat. Bureaucrats vary in terms of their intrinsic motivation and choose between careers in government or the private sector. I show that bureaucratic performance is greater in any separating equilibrium in which motivated bureaucrats choose government than in all equilibria in which they do not. Stronger civil service protections reduce the amount of effort that motivated bureaucrats must exert to distinguish themselves from their unmotivated peers in order to ensure retention. This strengthens incentives for motivated bureaucrats to choose careers in government. Stronger civil service protections, however, also reduce the ability of public managers to remove unmotivated bureaucrats. These competing effects yield a non‐monotonic and discontinuous relationship between civil service protections and bureaucratic performance. I use the model to analyze recent reforms to U.S. state and federal personnel management that have significantly rolled back traditional job protections.     

The effect of corporate governance on credit ratings: Evidence from China's bond market

This paper examines the association between firms’ corporate governance and credit ratings (both bond ratings and issuer ratings) in China. In addition to considering the financial attributes of bond issuers, we ask to what extent do credit rating agencies consider the corporate governance attributes of issuers? In concept, bondholders are concerned with the financial effects of how corporate governance resolves the agency conflicts between bondholders and managers, majority and minority shareholders, and shareholders and bondholders. We find that corporate governance affects bond issuer credit ratings in China. After controlling for firms’ financial attributes, we find that issuer ratings are positively related to dual‐listing, whether the firm is a state‐owned enterprise, the ownership of the second to the tenth largest shareholder; and negatively related to the relative scale of audit fees. We attribute the positive association between dual‐listing and credit rating to higher quality and transparency of information reported by the dual‐listed firm. The value to bondholders of the implicit government guarantee of debt payments more than offsets the negative association between firm value and being an SOE. Bond rating agencies expect that the change in agency costs with a reduction in the ownership of the largest shareholder benefits bondholders. To credit rating agencies, the scale of audit fees (relative to total assets of the accounting firm) signals interest binding between the client firm and the accounting firm that threatens the independence of auditing and the quality of financial reporting. We also find that bond‐specific attributes: collateral and issue size, are positively related to bond credit ratings.     

Is Talk Cheap?

For the steel import quota bill of 1999, each word in the Congressional Record costs $39 in campaign contributions from the steel industry. Consequently, our answer is "Yes, talk is cheap!"     

The environment and the entrepreneurial city: searching for the urban ‘sustainability fix’ in Manchester and Leeds

There is evidence that the politics of economic development in the post‐industrial city is increasingly bound up with the ability of urban elites to manage ecological impacts and environmental demands emanating from within and outside the urban area. More than simply a question of promoting quality of life in cities in response to interurban competition and pressures from local residents, the greening of the urban growth machine reflects changes in state rules and incentives structuring urban governance as part of an evolving geopolitics of nature and the environment. The adoption of principles and practices of ecological modernization potentially represents a dramatic shift in the social regulation of urban governance away from unconstrained neoliberalized modes. In this article we explore how different demands on and for urban environmental policy have played out vis‐à‐vis changing modes and practices of governance in two English post‐industrial cities. We explore differences in the ways that entrepreneurial urban regimes have sought to incorporate the green agenda (Leeds), or insulate themselves from ecological dissent (Manchester). We further attempt to conceptualize evolving urban economy‐environment relations in the UK in terms of an ensemble of governance practices, strategies, alliances and discourses that enables the local state to manage, though not necessarily resolve, seemingly conflicting economic, social and environmental demands at different scales of territoriality. Here we propose the notion of an ‘urban sustainability fix’ to describe the selective incorporation of ecological objectives in local territorial structures during an era of ecological modernization. Dans les villes post‐industrielles, la politique de développement économique semble liée de plus en plus étroitement à l'aptitude des élites urbaines à gérer les impacts écologiques et les exigences environnementales venus de l'intérieur et de l'extérieur. Au‐delà de la simple défense d'une qualité de vie en ville, répondant à la concurrence interurbaine et aux pressions des habitants, l'intégration de la cause Verte dans la machine de croissance urbaine reflète les nouvelles règles et mesures d'encouragement étatiques qui structurent la gouvernance des villes dans le cadre d'une géopolitique évolutive de la nature et de l'environnement. L'adoption de principes et pratiques de modernisation écologique pourrait traduire un revirement dans la régulation sociale de la gouvernance urbaine, en remplaçant la totale latitude des réponses néolibérales. L'article explore comment les demandes variées de et en politique urbaine d'environnement se sont exercées dans le contexte changeant des modalités et pratiques de gouvernance de deux villes post‐industrielles anglaises. Il s'intéresse aux différences de démarches qu'ont adoptées des régimes urbains ayant l'esprit d'entreprise pour incorporer le programme vert (Leeds) ou s'affranchir de la dissidence écologique (Manchester). De plus, il s'efforce de conceptualiser les relations évolutives économie‐environnement dans le cadre urbain britannique en tant qu'ensemble de pratiques de gouvernance, stratégies, alliances et discours permettant à l'État local de gérer (sans toujours les satisfaire) des exigences économiques, sociales et environnementales apparemment contradictoires, et ce aux différents échelons de territorialité. La notion de ‘solution de durabilité urbaine’ est proposée pour décrire l'intégration sélective d'objectifs écologiques dans les structures territoriales locales pendant une phase de modernisation écologique.     

A Comparative Analysis of Recombinant Bovine Somatotropin Adoption across Major U.S. Dairy Regions

Trends and determinants in the adoption of recombinant bovine somatotropin are examined using data from across the United States. The core findings are: ( a ) moderate adoption rates and relatively small impacts on national milk production; ( b ) substantial disadoption, farmers who have tried the technology but stopped using it; ( c ) no significant differences in characteristics between adopters and disadopters; and ( d ) major differences between nonadopters and farmers who have tried the technology, with the latter group having significantly higher use rates of complementary, productivity-enhancing technologies and larger herd sizes. This last result holds across states with distinctive herd size distributions.