Pricing and Mispricing Effects of SFAS 131

Abstract:  We investigate the effects of the introduction of Statement of Financial Accounting Standards No. 131 (SFAS 131) on the market's valuation of foreign earnings. Thomas (1999) documents that investors discount the value of foreign earnings for US multinational companies. He conjectures but does not test the possibility that this finding is due to poor disclosure related to foreign operations. We find strong evidence that the introduction of the standard is positively associated with the pricing of foreign earnings. In addition, we use both the Mishkin (1983) test and a zero-investment hedge portfolio test and find that investors' mispricing of foreign earnings lessens (and in fact disappears) after SFAS 131. This study is one of the first attempts to show that improved disclosure reduces mispricing.     

The hospital based staffing agency

Before a hospital considers creating an internal staffing agency, a detailed business plan must be developed. By addressing marketing and operational issues in advance, nurse executives can avoid unnecessary business problems.     

Values,beliefs, and welfare recipiency: Is there a connection?

Relationships between values/beliefs and welfare recipiency and work attachment are examined using a sample of black and white women. The concept of self-efficacy, i.e. perceived ability to produce and regulate events is used to model paths of influence between values/ beliefs and observable behaviors. No racial differences are found in the determinants of current labor force status and previous work history. Race is also found to have no significant impact on the probability of receiving public assistance. The explanatory power of measures of self-efficacy is found to be minimal with respect to receipt of public assistance or the duration of receipt of assistance.     

FACTOR ENDOWMENTS, TRADE LIBERALIZATION, AND THE FUTURE OF APEC TRADE PATTERNS

The heads of state of Asia-Pacific Economic Cooperation (APEC) nations have committed member nations to remove all barriers to trade both among themselves and with respect to the rest of the world by 2020. The present paper uses a simple econometric model of bilateral trade flows based on country size, relative factor endowments, and trade barriers of importing as well as exporting countries to estimate the shares by country of origin in imports of each of the 16 major APEC countries and the rest of the world for each of 45 commodity groups comprising world trade in commodities. The estimates reveal that APEC trade would be expanded by 13% with complete liberalization of tariff barriers, by an additional 5% if nontariff barriers are also removed, and by another 4% if the rest of the world would also remove all barriers to trade. Variants on this base scenario show that such trade expansion could be substantially reduced were trade liberalization, capital growth, or both to be reduced in the countries affected by the Asian financial crisis. ( JEL Fl, F17)     

Boekbesprekingen

Ohne Zusammenfassung     

Delaying retirement in Spain

We study the reform of the Spanish public pension system in a multiperiod, general equilibrium, overlapping generations model economy populated by heterogeneous households. Our households differ in their place of birth, in their age, in their education and, endogenously, in their employment status, in their wealth, and in their pension entitlements. They receive a stochastic endowment of efficiency labor units each period. And they face a disability risk and a survival risk. They understand the link between the payroll taxes that they pay and the public pensions that they receive. And they decide how much to consume and to work, and when to retire from the labor force. We calibrate this economy to Spanish data, and we use it to study the consequences of delaying three years the statutory retirement ages in 2010. We find this reform is sufficient to solve the sustainability problems that plague the current Spanish public pension system. Our model economy predicts that under the current rules, the pension system fund will run out in 2028 and in the reformed economy it will last until 2050. We also find that it is moderately expansionary, and that it improves social welfare from the year 2015 onwards. We conclude that policymakers should seriously consider delaying the statutory retirement ages in Spain sometime in the near future.     

Fair Trade Managerial Practices: Strategy,Organisation and Engagement

The number of distributors selling Fair Trade products is constantly increasing. What are their motivations to distribute Fair Trade products? How do they organise this distribution? Do they apply and communicate the Fair Trade values? This research, based on five case studies in Switzerland, aims at understanding and structuring the strategies and the managerial practices related to Fair Trade product distribution, as well as analysing if they denote an engagement with Fair Trade principles. The results show a high heterogeneity of strategies and engagement. In general, strategies implemented by mainstream actors contribute to increase Fair Trade global sales but do not convey the transformative message of Fair Trade through their engagement. The latter is rather communicated through alternative channels. Problems and potential solutions to this issue are discussed.