Long-Term Earnings Forecasts in the Electric Utility Industry: Accuracy and Valuation Implications

This paper integrates research on the accuracy of alternative long-term earnings forecasts, the gain in accuracy achievable from combining various forecasts, and the power of different long-term earnings forecasts to explain stock prices. The tests are performed on 82 electric utility firms because of the relative homogeneity of accounting data in that industry and because of the importance of the findings for the determination of the cost of capital in a regulatory proceeding. The results are consistent with earlier research findings that analyst forecasts of long-term earnings growth are more accurate than forecasts from extrapolative models. Combined forecasts applied to out-of-sample data, however, did not result in markedly improved forecasting accuracy. Finally, valuation tests of alternative forecasting techniques offered strong evidence that investors place the greatest weight on forecasts from Value Line.     

The wisdom of demagogues: institutions,corruption and support for authoritarian populists

This article analyses the drivers of support for authoritarian populist parties in Europe. Such parties claim to represent the interests of ordinary people against greedy and out‐of‐touch elites. Simultaneously, they reject conventional constraints on democratic policymaking. In recent years, such parties on the political left and right have been gaining influence in countries across Europe. Using a panel data set from 1980–2016, we use semiparametric Tobit models with country fixed effects to explain support for authoritarian populists. We find that large vote shares of right‐wing – but not left‐wing – authoritarian populists are associated closely to corruption. Other commonly cited explanations such as unemployment, inequality and immigration perform poorly in predicting support for populist political platforms on the political right. While a full theoretical explanation of the link between corruption and right‐wing populism remains beyond the scope of this article, we suggest that the mechanism involves political trust. Corruption weakens trust in political institutions, which populists exploit. Curbing the rise of right‐wing authoritarian populism in Europe will thus require restoring trust in the integrity of politics.     

Cold Glory

Earlier this year, Andy England was deposed for eight hours by the Department of Justice. The CMO of Coors Brewing was one of many top-level executives grilled about a variety of potential antitrust issues leading up to the merger of MolsonCoors and rival SABMiller.     

Gender and managerial coaching across cultures: female managers are coaching more

Despite the increasing popularity of managerial coaching in organizations worldwide, little is known with regard to how gender and culture may affect managerial behavior. The present study is the first empirical study on managerial coaching on a global scale. Based on social role theory, role congruity theory, and cross-cultural theory, we first expect female leaders to engage in more coaching behavior than male leaders. Second, we expect that male leadership, particularly coaching behavior, is more influenced by societal culture than female leadership. Survey data were obtained from more than 600,000 employees, assessing coaching behavior of more than 130,000 practicing managers from 51 countries/areas. Results support both expectations. Taken together, this study has advanced our empirical and theoretical understanding of managerial coaching on a global scale.     

The interaction between national and organizational cultures in accounting firms

This paper reports the results of an empirical study of the interaction between national and organizational cultures at the firm level. Using Hofstede's Value Survey Module, the concept of culture was operationalized in six accounting firms in The Netherlands. Three of these firms were local offices of international “Big Eight” accounting firms with a strong U.S.-orientation in their organizational philosophies and policies, whereas the other three firms were Dutch in origin and organization. All six firms work virtually entirely with Dutch employees. We were specifically interested in any influences of the U.S. culture upon the Big Eight firms. For two Hofstede's four cultural dimensions, i.e. Uncertainty Avoidance and Masculinity, significant effects of the U.S. culture upon the organizational cultures of the Big Eight firms were found. Further analysis showed that these results may rather be due to (self-)selection than to socialization mechanisms.     

Distribution and growth reconsidered: empirical results for six OECD countries

We analyse the relationship between functional income distributionand economic growth in Austria, France, Germany, the Netherlands,the UK and the USA from 1960 until 2005. The analysis is basedon a demand-driven distribution and growth model for an openeconomy inspired by Bhaduri and Marglin, which allows for eitherprofit- or wage-led growth. We find that growth in France, Germany,the UK and the USA has been wage-led, whereas Austria and theNetherlands have been profit-led. In the case of Austria a domesticallywage-led economy changes to profit-led when including the effectof distribution on external trade. The Netherlands, however,are already profit-led without external trade. Our results sofar only partially confirm Bhaduri and Marglin's theoreticalconclusion that wage-led growth becomes less feasible when theeffects of distribution on foreign trade are taken into account.