CEO Overconfidence and Earnings Management During Shifting Regulatory Regimes

This study examines the relationship of CEO overconfidence with accrual‐based earnings management, real activities‐based earnings management, and targeting to meet or just beat analyst forecasts. Following, we measure “overconfidence” based on the CEO's tendency to hold in‐the‐money stock options, as rational expected utility maximizers should exercise early to avoid overexposure to company idiosyncratic risks. The results show that before the Sarbanes Oxley Act of 2002 (SOX), companies of overconfident CEOs were more likely than other CEOs to engage in managing earnings through accelerating the timing of cash flow from operations and achieving analyst forecast benchmarks. After SOX, we find that overconfident CEOs are more likely to have income‐increasing discretionary accruals. They remain more likely to engage in real activities management through abnormally high cash flows, and also have abnormally low discretionary expenses. These results are consistent with overconfident CEOs feeling less constrained by SOX, and suggest that this individual characteristic works against regulators’ attempts to constrain earnings management by corporate executives. In contrast, we find that the tendency of overconfident CEOs to manage to targets decreases after SOX, perhaps due to changes in investor behavior in the new regulatory environment.     

Foreign Aid,Government Spending,and the Environment

Using an endogenous growth model, this paper examines the growth and welfare effects of the allocation of foreign aid in the recipient economy. As public inputs are a productive factor, a rise in the allocation of aid to the public inputs increases growth and hence the welfare of the economy. However, raising the ratio of aid to pollution abatement may not help an economy, because it crowds out public inputs. Since public inputs are also partly financed by income taxation, the welfare‐maximizing income tax rate is larger than the growth‐maximizing rate, because a portion of the aid constitutes a lump‐sum transfer and can increase household consumption and hence welfare.     

Corporate Social Responsibility and Team Performance: The Mediating Role of Team Efficacy and Team Self-Esteem

This study examines the influence of three components of corporate social responsibility on team performance. In the proposed model of this study, team performance is indirectly affected by three dimensions of perceived corporate citizenship (i.e., economic, legal, and ethical citizenship) via the mediation of team efficacy and team self-esteem. Surveying members of 172 teams confirms most of our hypothesized effects. Our results show that economic citizenship influences team performance via the mediation of both team efficacy and team self-esteem. However, legal citizenship influences team performance via team efficacy alone, whereas ethical citizenship influences team performance only via team self-esteem. We discuss the theoretical and managerial implications of our findings.     

Voice behavior and performance ratings: The role of political skill

Making changes work in organizations requires that employees voice their suggestions. However, previous research has found inconsistent results regarding the relationship between voice and performance ratings. Using a sample of employees from a hotel, this study confirms the negative perspective of the relationship. In further exploring the role of political skill between such employees, it is found that this skill not only has a strong effect on performance ratings but also moderates the relationship between voice and performance ratings. Finally, the implications and limitations of the findings as well as some methodological issues are discussed and elaborated.     

透视经营者定价

目前,我国市场上高价格现象十分明显。本文从经营者定价理论入手,对此现象形成的原因进行了深刻的剖析。在以消费者为中心的时代,经营者定价的出发点应该是自己的目标顾客,经营者制定的价格应该是考虑消费者利益的价格,经营者制定的价格应以能为消费者接受为根本。     

Dividend announcements under varying market conditions: The case of specially designated dividends

In this study the author examines differences in the behavior of stock returns surrounding the announcements of the specially designated dividends (SDDs) between bull markets and bear markets. Results show that SDDs declared during bull markets have a significantly higher positive effect on stock prices than those declared during bear markets. This evidence, new to literature, indicates that SDDs declared during bull markets are viewed by the market as more favorable than those declared during bear markets.     

Hong Kong housing markets: Overview,tenure choice,and housing demand

This paper presents an overview of housing markets and a cross-sectional analysis of housing demand in Hong Kong. Disturbances from political events have produced price upheavals in property prices; long-term inflation and low interest rates provide a strong stimulus for a sustained price surge in the housing market. Household income seems to have relatively little bearing on recent development in the market, especially when demand for housing has become more investment-oriented.With the data from the 1991 Population Census of Hong Kong, we find in the cross-section study that permanent and transitory incomes, rather than current income, provide better estimates in the tenure choice equation. The results also indicate that family size and the number of elderly persons affects ownership. Renter expenditure and tenure choice decisions are linked by using the two-stage estimation procedure of Lee and Trost (1978). No correlation was found between renter expenditure and tenure choice. Further, the two-stage approach does not seem to be superior to the OLS approach in the estimation of the rental expenditure equations.     

The evolution of capital asset pricing models

The capital asset pricing models (CAPM) has been the benchmark of asset pricing models and has been used to calculate asset returns and the cost of capital for more than four decades. Many researchers have tried to relax the original assumptions and generalize the static CAPM. We survey the important alternative theoretical models of capital asset pricing and provide a complete review of the evolution of asset pricing models. We also discuss the interrelationships among these models and suggest several possible directions for future research. Our results might be used as a guideline for future theoretical and empirical research in capital asset pricing.