Re‐Examining Advances in Occupational Licensing Research: Issues and Policy Implications

Much has changed in the realms of occupational licensing since BJIR last ran a special issue on the subject in 2010. The number of occupations subject to licensing has been growing, the data available to investigate the incidence and effects of licensing have improved immeasurably, and the policy environment surrounding licensing has changed. This issue reflects these changes with eight papers from North America and Europe covering the incidence of licensing, and its effects on wages, inequality, employment, quality of service provision and rent extraction by the organizations who undertake licensing.     

The contextual relevance effect on financial advertising

The contextual relevance effect is an important factor for the effectiveness of financial services advertising that corresponds to the message effects such as ad recall (R_AD), perceived contextual relevance (PCR), message involvement (MI) and attitude towards the ad (A_AD), created during the process. Thus, this study examines whether the contextual relevance effect increases R_AD, PCR, MI and A_AD. The results reveal that the contextual relevance effect increases R_AD, PCR, MI and A_AD. Moreover, MI mediates PCR on A_AD. Implications based on the findings demonstrate the importance of contextual relevance as a metric for financial services advertising effectiveness.     

The impacts of SOX and SEC investigation on the corporate governance of option backdating firms

This study investigates the combined impact of the Sarbanes-Oxley Act of 2002 (SOX) and the subsequent related Securities and Exchange Commission's (SEC) initiatives on the corporate governance characteristics of firms that had historically backdated stock options. Our results show that backdating firms had both weaker board-level and committee-level corporate governance characteristics than control firms in the pre-SOX period. In contrast, backdating firms dress up their board-level governance to meet regulatory requirements but still feature weaker committee-level corporate governance in the post-SOX era.     

The Dynamics of Liquidity in Commercial Property Markets: Revisiting Supply and Demand Indexes in Real Estate

The Journal of Real Estate Finance and Economics - A common definition of liquidity in real estate investment is the ability to sell property assets quickly at full value, as reflected by...     

Use of Derivatives and Analysts’ Forecasts: New Evidence from Non‐financial Brazilian Companies

This study investigates whether market analysts’ forecasts are influenced by the presence of derivative financial instruments in listed firms. From a sample of firms comprising 1173 derivative users and 7797 non‐users for the 2006–14 period, the results indicate the existence of less error behaviour (bias) on earnings per share forecasts for derivative user firms compared to non‐user firms. This finding suggests that these instruments may be used to protect businesses and provide greater stability in the results of companies that use them. The presence of derivative financial instruments is increasing among listed firms, and management can use them for hedging or speculation (thus mitigating or increasing risk). The literature contains few studies on this issue, and the general understanding relies on the assumption that derivative financial instruments provide relevant information for decision making.     

Bitcoin fluctuations and the frequency of price overreactions

Financial Markets and Portfolio Management - This paper investigates the role of the frequency of price overreactions in the cryptocurrency market in the case of BitCoin over the period...     

Trade credit and supplier competition

This paper examines how competition among suppliers affects their willingness to provide trade credit financing. Trade credit extended by a supplier to a cash constrained retailer allows the latter to increase cash purchases from its other suppliers, leading to a free rider problem. A supplier that represents a smaller share of the retailer’s purchases internalizes a smaller part of the benefit from increased spending by the retailer and, as a result, extends less trade credit relative to its sales. In consequence, retailers with dispersed suppliers obtain less trade credit than those whose suppliers are more concentrated. The free rider problem is especially detrimental to a trade creditor when the free-riding suppliers are its product market competitors, leading to a negative relation between product substitutability among suppliers to a given retailer and trade credit that the former provide to the latter. We test the model using both simulated and real data. The estimated relations are consistent with the model’s predictions and are statistically and economically significant.     

Why not fully spend a conditional block grant?

This paper studies a conditional block grant that Dutch municipalities receive for welfare-to-work programs. Many municipalities do not fully use this grant, although programs are beneficial for them. We argue that municipalities incur expenses to use the grant. If these costs are substantial, then it is optimal not to fully use the grant. Based on municipality-specific data on grants and actual expenditures, we estimate that municipalities have to add about 90 cents from their own resources to spend 1 euro of the grant. As a result, the conditional block grant is de facto a closed-ended matching grant.     

Would a stock by any other ticker smell as sweet?

Some stocks have meaningful ticker symbols; for example, LUV (Southwest Airlines), MOO (United Stockyards), and GEEK (Internet America). Such tickers might be a useful signal of the company's creativity, a memorable marker that appeals to investors, or a warning that the company feels it must resort to gimmicks to attract investors. This paper investigates the performance of stocks with memorable ticker symbols during the years 1984–2005 and finds that, on average, their daily returns are higher than for the overall market.