Demographic change and income inequality in the United States, 1976-1989

"The U.S. economy experienced significant increases in the degree of income inequality over the past two decades.... In this paper we consider the effects of race, age, female headship, and college education on the distribution of family income by developing a multivariate methodology that allows us to gauge the influence of one factor while holding other determinants of family incomes constant. Over the period studied we find that race had only a minor effect on the overall size distribution of income. Age had a somewhat greater effect than race. In contrast, the impact of female heads and college education were quite substantial. The multivariate estimates reveal that the effects of female heads and college education both increase the Gini to a much greater extent than the progressivity of federal income taxes decreases it. The effects of college education and female headed families on inequality have grown larger across time, while the influence of age has declined. We find that the effects of race on inequality have changed little over the 1976 to 1989 period."     

Foreign-currency transactions and the recovery of German industry in the aftermath of the First World War: the case of Schering AG

While historians have for a long time recognized the importance of the First World War to the general flow of history, business economists do not fully appreciate the impact of the war on commercial relationships. The First World War transformed the political, economic, and social context, in which business was done, forcing companies to develop new strategies and activities, some of which were almost unimaginable before August 1914. This article focuses on one aspect of doing business: foreign exchange management. It argues that Schering AG and its parent, like many German companies after the First World War, were obliged to refocus their activities around their foreign exchange exposures and that the management of foreign exchange issues contributed to a much tighter relationship between businesses, government, and business associations than had existed before the war and for which some aspects of Germany's system of corporate control were not well adapted to handle.     

The Association Between Activity-Based Costing and Manufacturing Performance

This study examines the association between activity-based costing and manufacturing performance. Results using a cross-sectional sample of manufacturing plants indicates that extensive ABC use is associated with higher quality levels and greater improvements in cycle time and quality, and is indirectly associated with manufacturing cost reductions through quality and cycle time improvements. However, on average, extensive ABC use has no significant association with return on assets. Instead, we find weak evidence that the association between ABC and accounting profitability is contingent on the plant's operational characteristics.     

Incentive Fees and Mutual Funds

This paper examines the effect of incentive fees on the behavior of mutual fund managers. Funds with incentive fees exhibit positive stock selection ability, but a beta less than one results in funds not earning positive fees. From an investor's perspective, positive alphas plus lower expense ratios make incentive-fee funds attractive. However, incentive-fee funds take on more risk than non-incentive-fee funds, and they increase risk after a period of poor performance. Incentive fees are useful marketing tools, since more new cash flows go into incentive-fee funds than into non-incentive-fee funds, ceteris paribus.     

Strategic Internet application trends in supply chain management

The Internet is evolving as a powerful force in the new marketplace where the nexus of competition has changed from individual firms to efficient supply chain networks both between firms and within industries. This study explores Internet adoption patterns and operational applications in US supply chain networks. The data reveal that the integration of the Internet into supply chain management applications has increased and has moved away from indiscriminate application of novel Internet technologies towards becoming a focused endeavor with precise expectations and measurable goals. Specifically, the study finds that Internet usage within supply chains is maturing as evidenced by enhanced and increased productivity, reduced costs and increased profit for participating firms.     

Measuring the economic benefit from R&D: results from the mass, length and flow programmes of the UK national measurement system

This study sought to measure the economic consequences of reduced expenditure on specific sections of the UK National Measurement System (NMS), part of the state-funded technological infrastructure. A method was developed which can be adapted to any publicly or privately financed R&D of which the benefits and cost-effectiveness are unclear or contested.
The recent interactions between the NMS and industry were investigated empirically. Five mechanisms were found to account for the majority of instances of successful value creation. Several case studies of each mechanism were collected, illustrating their existence beyond reasonable doubt.
Each of the cut projects would have been expected to have encouraged growth and profitability in identified sectors of the economy through one or more of these five mechanisms. The effects of the cuts were modelled over 30 years. Compared to the costs of the cut projects projected over the same period, the benefits to the economy were predicted to exceed the costs.     

Social reporting by islamic banks

The last thirty years have witnessed the appearance and rapid expansion of Islamic banking both inside and outside the Islamic world. Islamic banks provide financial products that do not violate Sharia , the Islamic law of human conduct. The Islamic principles upon which the banks claim to operate give an important role to social issues. Applying these principles, we develop a benchmark set of social disclosures appropriate to Islamic banks. These are then compared, using a disclosure index approach, the actual social disclosures contained in the annual reports of twenty-nine Islamic banks (located in sixteen countries) to this benchmark. In addition, content analysis is undertaken to measure the volume of social disclosures. Our analysis suggests that social reporting by Islamic banks falls significantly short of our expectations. The results of the analysis also suggest that banks required to pay the Islamic religious tax Zakah provide more social disclosures than banks not subject to Zakah .     

In search of a residual dividend policy

We survey 309 sample firms exhibiting behavior consistent with a residual dividend policy and their matched counterparts to learn how they set their dividend policies. The findings reveal that the sample firms are more likely than their counterparts to maintain a long-term dividend payout ratio, use long-run earnings forecasts in setting the dividend, and be unconcerned about the cost of raising external funds. Yet, firms behaving as though they follow a residual dividend policy generally do not profess to follow the policy. At best, the sample firms follow a “modified” residual policy in which they carefully manage their payout ratio and dividend trend. Although it may not be an explicit goal of such a dividend policy, consistently low free cash flow typically results.     

Feedback loops, fair value accounting and correlated investments

This paper presents and tests a model of the price dynamics that arise when investors fail to recognize the redundancy of unrealized gains and losses (“UGLs”) that are correlated with the firm’s past returns. Consistent with the predictions of our model, our experiment shows that a firm’s prices and earnings become highly volatile when correlated investment is large and correlated UGLs are made salient by comprehensive income reporting. The results suggest that including correlated UGLs in performance numbers could induce violations of weak-form efficiency that exacerbate volatility in share prices and earnings.