The sensitivity to key data imputations of recent estimates of income poverty and inequality in South Africa

Existing literature using South African censuses reports an increase in both poverty and inequality over the 1996 to 2001 period. This paper assesses the robustness of these results to a number of weaknesses in the personal income variable. We use a sequential regression multiple imputation approach to impute missing values and to explicitly assess the influence of implausible income values and different rules used to convert income that is measured in bands into point incomes. Overall our results for 1996 and 2001 confirm the major findings from the existing literature while generating more reliable confidence intervals for the key parameters of interest than are available elsewhere.     

Stochastic Modeling of Federal Housing Administration Home Equity Conversion Mortgages with Low-Cost Refinancing

Federal Housing Administration-insured reverse mortgages, known as Home Equity Conversion Mortgages (HECMs), did not originally have a provision for low-cost refinancing. If a borrower's house value increased faster than expected, the borrower could not tap that additional equity without terminating the first loan and originating a new HECM loan with full closing costs. We test several low-cost refinancing options using a stochastic simulation model that allows interest rates and house prices to vary in historically accurate patterns. Low-cost refinancing decreases the net value of the fund by 54% to $98.5 million, but it remains positive in 80% of the trials.     

Product Liability and Strategic Delegation: Endogenous Manager Incentives Promote Strict Liability

Review of Industrial Organization - We derive the socially optimal allocation of liability for product-related accidents when firms delegate their output and safety choices to managers under a...     

Display rule perceptions and job performance in a Chinese retail firm: The moderating role of employees’ affect at work

This study investigates the relationship between emotional display rule perceptions and job performance. Building on theories of emotional labor and ego-depletion, we cast employees’ positive and negative affective states at work as crucial moderators. Results obtained in a sample of 245 frontline service employees and their 63 immediate supervisors from a retail firm in China demonstrate that display rule perceptions were positively related with task and contextual performance among employees experiencing little positive affective states at work, but not among employees experiencing highly positive affect. Moreover, display rule perceptions were positively associated with one aspect of contextual performance (voluntary learning) among employees with little negative affect, whereas highly negative affect buffered this linkage. Taken together, this study highlights performance consequences of employees’ display rule perceptions and uncovers key boundary conditions for these relationships.     

Rights Offerings and Expropriation by Controlling Shareholders

We investigate rights issues and open offers in Hong Kong. We observe that the greater the severity of firms’ management‐agency problems, the more unfavourably shareholders tend to react, leading to more negative cumulative abnormal returns or rights forfeiture. Controlling shareholders do not forfeit rights, and may increase their percentage ownership at deep price discounts by underwriting rights offerings. Our results suggest that, although certain rights offerings can be described as value‐enhancing, many other rights offerings closely resemble the expropriation activities of controlling shareholders.     

Do the prices of stock index futures in Asia overreact to U.S. market returns?

We extend the overreaction study to interaction of international markets and find that intraday price reversals exist in Asian index futures markets following extreme movement in U.S. market. Profitable opportunities exist after considering transaction cost. We show that the reversal cannot be explained by rational arguments such as risk, liquidity and bid-ask spread. We further observe that a magnitude effect exists. Overreaction is more prominent in the latter period than in the initial period. After calm-down periods, overreaction is greatly reduced. These observations support the explanation that the source of price reversals lies in behavioral biases.     

Age diversity and firm performance in an emerging economy: Implications for cross‐cultural human resource management

This study tests the effect of age diversity on firm performance among international firms. Based on the resource‐based view of the firm, it argues that age diversity among employees will influence firm performance. Moreover, it argues that two contextual variables—a firm's level of market diversification and its country of origin—influence the relationship between age diversity and firm performance. By testing relevant hypotheses in a major emerging economy, that is, the People's Republic of China, this study finds a significant and positive effect of age diversity and a significant interactive effect between age diversity and firm strategy on profitability. We also find a significant relationship between age diversity and firm profitability for firms from Western societies, but not for firms from East Asian societies. The paper concludes by discussing the implications of this study's findings. © 2011 Wiley Periodicals, Inc.     

Asia's Decoupling: Fact,Fairytale or Forecast?

Standard measures of economic co‐movement between Asia‐Pacific economies and those elsewhere had been observed to follow a downward trend, leading some commentators to suggest that the region was decoupling. However, this process reversed in response to the 2008 international financial crisis, and co‐movement increased to historically high levels for some economies. We examine co‐movement patterns and show that these are very sensitive to changes in macroeconomic volatility over time. Controlling for this, however, co‐movement is closely linked to underlying trade and financial integration. If international links continue to strengthen in future, co‐movement will strengthen in tandem. Decoupling is more a fairytale than a fact or a forecast.     

Effect of the Sarbanes–Oxley act on CEOs’ stock ownership and pay-performance sensitivity

The main purpose of this paper is to provide evidence on the effect of the Sarbanes–Oxley Act on stock ownership and the various measures of pay-performance sensitivity of CEOs’ wealth. The Sarbanes–Oxley Act (SOX) provides a natural experiment for examining how stock ownership and executive pay structure adapt to a change in regulatory environment. Using annual compensation data of S&P 1,500 firms in 1994–2005, we examine the impact of SOX on stock ownership and pay-performance sensitivity of CEOs. Consistent with our expectations, we find that in light of SOX: (1) stock ownership and (2) the total pay-performance sensitivity of CEOs have decreased substantially, indicating that SOX induces a weaker incentive alignment between shareholders and CEOs. In contrast, we find that after SOX stock ownership and the total pay-performance sensitivity of CEOs have remained unchanged in the regulated industries.     

Effects of perceptions on LMX and work performance: Effects of supervisors’ perception of subordinates’ emotional intelligence and subordinates’ perception of trust in the supervisor on LMX and, consequently, performance

There are few studies on how the perception of supervisors by their subordinates contributes to high-quality leader-member exchange (LMX). We thus propose that the trust perception of supervisors by their subordinates can help explain the development of high-quality LMX. Furthermore, the trust perception may interact with supervisor-rated emotional intelligence to influence the quality of LMX, and, consequently, work performance. Using a longitudinal study on a sample of 285 supervisor-subordinate dyads from a manufacturing firm in China, we found that (1) supervisor-rated emotional intelligence of subordinates (Time 1) positively predicts the quality of LMX (Time 2); (2) this relationship is stronger when subordinates highly trust their supervisors (Time 1); (3) LMX (Time 2) positively predicts work performance (Time 3); and (4) LMX (Time 2) fully mediates the interactive effect of emotional intelligence (Time 1) and trust in the supervisor (Time 1) on work performance (Time 3).