Precautionary Demand for Education, Inequality, and Technological Progress

This paper offers an explanation for the evolution of wage inequality within and between industries and education groups over the past several decades. The model is based on the disproportionate depreciation of technology-specific skills versus general skills due to technological progress, which occurs randomly across sectors. Consistent with empirical evidence, the model predicts that increasing randomness is the primary source of inequality growth within uneducated workers, whereas inequality growth within educated workers is determined more by changes in the composition and return to ability. Increasing randomness generates a precautionary demand for education, which we show empirically to be significant.     

领先财富管理的运营思路——BCG中国财富管理市场研究报告摘要

波士顿咨询公司(BCG)发布的有关中国财富管理市场的最新报告探讨了在中国建立领先的财富管理业务的关键因素.BCG授权本刊撷取其精要,希望能给予致力于提升中国财富管理水平的机构和理财从业人员有益的启示.     

Implications of Components of Income Excluded from Pro Forma Earnings for Future Profitability and Equity Valuation

Abstract:  This study addresses three research questions relating to total exclusions, special items, and other exclusions. Are each of these pro forma exclusion components forecasting irrelevant? Are each of the exclusion components value irrelevant? Are the valuation multiples on the exclusion components justified by their ability to forecast future profitability as predicted by the Ohlson (1999) model? Findings are generally consistent with the market-inefficiency results presented in Doyle et al. (2003) . Total exclusions are valued negatively by the market despite the prediction that total exclusions will be valued positively. Valuation results also suggest that stocks with positive other exclusions are overpriced.     

Income Tax Accounting Policy Choice: Exposure Draft Responses and the Early Adoption Decision by Canadian Companies*

We extend prior literature through a detailed examination of the relationship between lobbying behavior and subsequent accounting standard adoption timing, using changes to a Canadian accounting standard with a prolonged transition period. We develop a model linking lobbying and adoption timing. We test hypotheses based on recontracting costs, information production costs, efforts to manage investor perceptions, and corporate governance practices to assess the ability of these factors to explain corporations' choice of adoption timing. We examine responses to the Income Taxes exposure draft using content analysis to identify trends in lobbying behavior. We evaluate the accounting standard adoption decision for Toronto Stock Exchange (TSE) 300 firms using a LOGIT model. Our findings indicate that early adoption appears to be most prevalent for firms that benefit from improved financial statement performance. In contrast, late adopters tend to be firms that have lobbied standard‐setters regarding the out‐of‐pocket costs of the standard and that rate highly on certain corporate governance measures.     

The effect of deposit-rate ceilings on bank risk: A comment

In a recent issue of this journal, Mingo (1978) analyzed the effect of deposit-rate ceilings on bank risk. The analysis showed that deposit-rate ceilings increase a bank's total risk. The purpose of this note is to examine a different but related question: Is systematic risk affected by Regulation Q ceilings ceteris paribus? The results of our empirical test indicate that systematic risk is not affected by deposit-rate ceilings. Taken together then, Mingo's and the present results show that removal of deposit-rate ceilings would not increase bank risk.     

Islamic finance and market segmentation: Implications for the cost of capital

This paper considers the impact of full Islamic shari’ya compliance on developing stock exchanges in their effective provision of development capital. Evidence from a unique study focussing on the Sudan telecommunications company and its listings on the Khartoum as well as Arabian Gulf stock exchanges reveals that costs of capital are considerably higher in the former than latter markets. While there are firm governance benefits arising from Islamic finance monitoring costs are substantial and the banking system is better placed to administer financing arrangements. Larger firms are better placed to circumvent this segmentation through cross-listing on regional exchanges.     

A Performance Comparison Between Cross-Sectional Stochastic Dominance and Traditional Event Study Methodologies

In this study, the performance of cross-sectional stochastic dominance (SD), first proposed by Falk and Levy (FL) (1989), is compared with three traditional event study methodologies: the Mean Adjusted model, the Market Adjusted model, and the Market and Risk Adjusted Returns model. The comparison technique we use is a simulations approach similar to that of Brown and Warner (BW) (1980). BW show that the Mean Adjusted and Market Adjusted Returns models perform as well as the more sophisticated Market and Risk Adjusted Returns model. FL, however, provide a very compelling argument against the three traditional event study methodologies. The problem, they note, is not the theoretical need for risk adjustment; it is the definition and measurement of risk. FL assert that the observed abnormal returns (or lack thereof) may be due to omitted variables, a market proxy effect, or other specification errors in implementing the traditional event study methodologies.The present research finds that SD analysis without the bootstrap method for statistical testing is not very useful at any level of abnormal return. However, when the bootstrap method of statistical testing is employed, SD is found to perform as well as, and sometimes better than, the three traditional models in detecting simulated abnormal performance at all test levels. The results are consistent with FL\'s assertion that the improved performance may result from the SD methodology being free from the specification errors inherent in the three traditional event study models.     

Monitoring and Motivation in Principal-Agent Relationships: Some Issues in the Case of Local Authority Services

This paper examines a number of issues concerning the effects of monitoring on principals and agents involved in the provision of local authority services subject to competition. It examines, and then extends, existing theoretical work indicating the potential for sub-optimal outcomes which result from the principal introducing monitoring schemes which focus upon the measurable aspects of the agent's performance. The paper then departs from the received principal-agent paradigm in order to consider whether monitoring and competitive regimes more generally have negative effects on the welfare and performance of principals and agents in both theory and practice.     

The Economics of Grain Cleaning on the Prairies

In the Canadian grain marketing system, grains have typically been cleaned to very tight levels at port elevators. In recent years, changes in rail rates, livestock production and grain handling technology are pressuring the system for change. A mathematical programming model of vertical marketing functions in western Canada is developed to determine optimal locations for cleaning. Cleaning margins are positive in all regions of the prairies. Grain cleaning is found generally to be more efficient on the prairies than at the ports. However, grain cleaning will continue at ports to some extent because of inadequate capacity at country positions and sunk costs at port facilities and because primary elevators will likely clean only the dominant grains. Dans le système canadien de commercialisation des céreales, les grains passent généralement par un nettoyage très rigoureux aux silos portuaires. Ces dernières années, les changements affectant les tarifs ferroviaires, les productions animales et la technologie de manutention des céréales rendent cependant nécessaire un changement du système. Les auteurs utilisent un modéle mathématique de programmation des fonctions verticales de mise en marché pour déterminer les emplacements idéaux pour le nettoyage du grain. Les marges commerciales des nettoyeurs étaient positives dans toutes les régions des Prairies et le nettoyage était généralement plus efficient dans cette partie di pays qu'aux situations portuaires. Il continuera cependant à sefaire à ces derniers endroits dans une certaine mesure, en raison du manque de capacités suffisantes aux emplacements de campagne, des coûts irrécupérabies aux installations portuaires et du fait que les élévateurs primaires ne nettoieront vraisemblablement que les céréales commercialement le plus importantes.