Cash Flows and Net Realizable Values: Further Evidence of the Intuitive Concepts

This paper reports the results of a survey of students with and without prior knowledge of accounting with a view to identifying any differences in their perception of the relevance of current prices of assets.
The combination of cash flows and net realizable values appears to have an intuitive appeal to students with no prior exposure to accounting concepts or practices. In the process of learning about accounting, it seems that students learn to abandon net realizable values in favour of historical costs.     

A MODEL OF SELF‐FULFILLING FINANCIAL CRISES*

This paper combines the structural weakness and the self‐fulfilling panic view to explain the cause of the East Asian crises. In this model economy, the diversification strategies induce conglomerate firms to overinvest. They accumulate losses due to their unprofitable sectors and then compensate by obtaining bank loans. Domestic banks, which borrow from foreign banks, lend money as long as the total amount of accumulated loans remains within the firms’ collateral value. The model shows that if the debt to collateral value ratio belongs to a certain range a self‐fulfilling crisis can occur due to the self‐fulfilling expectations of foreign investors.     

Financial Integration in Emerging Asia: Challenges and Prospects

Using both quantity‐ and price‐based measures of financial integration, the paper shows an increasing degree of financial openness and integration in emerging Asia. Assessing the impact of a regional shock relative to a global shock on local equity and bond markets, the findings suggest that the region's equity markets are integrated more globally than regionally, although the degrees of both regional and global integration have increased significantly since the 1997/1998 Asian financial crisis. However, emerging Asia's local currency bond markets remain generally segmented, being neither regionally nor globally integrated. There are potential benefits from increased regional integration of financial markets. Financial integration at the regional level allows for the region's economies to benefit from allocation efficiency and risk diversification. Policymakers in the region must strike the right balance between maximizing the net benefits from regional and global financial openness, and minimizing the potential costs of financial contagion and crisis.     

中国股票市场政策演进:公共选择视角

我国中央政府在股票市场中存在双重利益目标:国有企业筹资和资金使用效益最大化,且前者优先。基于此,中央政府对股票市场做出了初始政策安排。但在政策运行中,地方政府、上市公司、市场中介、投资者等经济主体出于各自利益目标,采取了不同行动策略,从而降低了资金使用效益,减少了国有企业筹资额,使得股票市场初始政策安排的收益不断“缩水”。     

Investor Sentiment and the Closed-End Fund Puzzle

This paper examines the proposition that fluctuations in discounts of closed-end funds are driven by changes in individual investor sentiment. The theory implies that discounts on various funds move together, that new funds get started when seasoned funds sell at a premium or a small discount, and that discounts are correlated with prices of other securities affected by the same investor sentiment. The evidence supports these predictions. In particular, we find that both closed-end funds and small stocks tend to be held by individual investors, and that the discounts on closed-end funds narrow when small stocks do well.     

Business Groups and Tunneling: Evidence from Private Securities Offerings by Korean Chaebols

We examine whether equity‐linked private securities offerings are used as a mechanism for tunneling among firms that belong to a Korean chaebol. We find that chaebol issuers involved in intragroup deals set the offering prices to benefit their controlling shareholders. We also find that chaebol issuers (member acquirers) realize an 8.8% (5.8%) higher (lower) announcement return than do other types of issuers (acquirers) if they sell private securities at a premium to other member firms, and if the controlling shareholders receive positive net gains from equity ownership in issuers and acquirers. These results are consistent with tunneling within business groups.     

A Model of Monetary Policy Shocks for Financial Crises and Normal Conditions

Deteriorating economic conditions in late 2008 led the Federal Reserve to lower the target federal funds rate to near zero, inject liquidity through novel facilities, and engage in large‐scale asset purchases. The combination of conventional and unconventional policy measures prevents using the effective federal funds rate to assess the effects of monetary policy beyond 2008. We employ a broad monetary aggregate to elicit the effects of monetary policy shocks both before and after 2008. Our estimates align well with major changes in the Fed's asset purchase programs and yield responses that are free from price, output, and liquidity puzzles that plague other approaches.     

Strategies and Tactics in Union Organizing Campaigns

This study assesses the effects of employer and union organizing tactics on union election wins versus losses, the percentage of votes, and the time between election and first contract signing. The data were obtained from the organizing staff of a large international union. The results showed that some tactics resulted in expected election outcomes, but others resulted in unexpected outcomes.     

Longitudinal rank tests for detecting location shift in the distribution of abnormal returns: An extension*

Abstract. We extend Chandra and Rohrbach (1990) to explain how to develop a longitudinal rank test (r-test) analogous to any t-test used in the event study literature. We compare all analogous pairs using market model residuals. The r-test is more powerful than the t-test in each pair. This suggests that if the researcher intends to use any t-test then, for more power, the comparable test should be preferred. These results should be useful to the researcher in selecting an r-test for event study because now the same flexibility of choosing an r-test as a t-test is available. Résumé. Les auteurs poussent plus loin les travaux de Chandra et Rohrbach (1990) pour expliquer comment mettre au point un test de rangs logitudinaux (test r) analogue aux différents tests t utilisés dans les ouvrages portant sur l'étude d'événements. Ils comparent toutes les paires analogues en utilisant les résiduels des modèles de marché. Le test r est plus puissant que le test t dans chacune des paires, de sorte qu'on peut penser que si le chercheur prévoit utiliser un test t pour sa puissance, il aurait avantage à recourir au test r comparable. Ces résultats devraient être utiles aux chercheurs dans la sélection d'un test r pour l'étude d'événements puisque, dorénavant, le choix d'un test r peut offrir la même souplesse que celui d'un test t