Total Factor Productivity Growth and Urbanization Economies: A Case of Indian Industries

Based on panel data for fifteen major states in India, this paper provides evidence in favor of the existence of urbanization economies. In eleven of seventeen two-digit industry groups, total factor productivity growth is responsive to urban population or industrial spread. Although the impact of these variables taken to capture agglomeration economies on total factor productivity growth is not monotonic, economic policy would yield a sub-optimal outcome by ignoring the positive effect of the size factor. Urban population or industrial spread benefits firms by possibly improving the quality of labor and enhancing the productive utilization of resources.     

Interactive influence of genre familiarity,star power,and critics' reviews in the cultural goods industry: The case of motion pictures

Academic research pertaining to the marketing of cultural products such as Broadway shows, books, music, and movies has identified a product's genre (or type), star power, and critics' reviews as important factors influencing the market performance of an individual product. Prior research, however, has not investigated the joint influences of these factors. The current study extends previous research by empirically investigating the managerially relevant interactive influences of these factors within the context of the motion‐picture industry. For example, should producers of more familiar genre movies, such as dramas and comedies, feature popular, but expensive, stars? Real‐world data from two distinct time periods are used to test the hypotheses. The findings are consistent across the two time periods and reveal that for more familiar genre movies, star power and the valence of critics' reviews have less impact on the movie's performance in the market. In contrast, for the less familiar genre movies, stronger (vs. weaker) star power and more (vs. less) positive reviews have positive influence on the market performance. Further, for movies with less star power, the valence of critics' reviews has no impact on the performance. In contrast, for movies with greater star power, more (less) positive reviews have positive (negative) influence on movie performance. Managerial and theoretical implications, along with limitations of the findings and directions for future research, are offered. © 2005 Wiley Periodicals, Inc.     

Jury Size and the Free Rider Problem

In recent times, judges in the United States have said that6-person juries are inferior to 12-person juries. But by whatreasoning is a smaller jury inferior? One argument is the Condorcetjury theorem, which says that a larger jury will reach a moreaccurate decision. This, however, assumes that the informationof each juror is independent of the size of the jury. I showthat a juror's information does depend on the size of the jury.In a larger jury panel each juror has less incentive to payattention in the court, even though they are all pledged tohear and deliver a verdict on a trial. Because of the free-riderproblem, a larger jury may actually make poorer decisions. Theresults apply to many environments in which decisions are madeby committees and work teams.     

The Babu and the Boxwallah: Managerial Incentives and Government Intervention in a Developing Economy

In developing economies a firm's strategy is directed more often at the government than at other competing firms. As an initial step towards modeling such interactions this paper considers a situation where a government confronts a monopoly. The latter chooses price and maximizes profit and the former chooses a tax rate and maximizes tax revenue. The government and the monopoly can delegate the final decision-making to, respectively, a bureaucrat and a manager. The incentive equilibrium of the model is characterized. It is shown that this kind of industrial setting is likely to exhibit greater inefficiencies than that which arises in standard models.     

Targeting Sectors for Foreign Capital Inflow in a Small Developing Economy

We argue, in a model with trade and unemployment, that exogenous inflow of foreign capital may deliver the desired result when it flows to a protected intermediate-goods sector. Whether foreign investment should be directed towards an intermediate-goods sector or to a final-goods sector depends on the technological specifications of either type of goods as well as on the existing set of trade policies.     

On Ramsey equilibrium: capital ownership pattern and inefficiency

We provide a sufficient condition on the production function under which eventually the most patient household owns the entire capital stock in every Ramsey equilibrium, called the turnpike property. This generalizes the result in the literature which establishes the turnpike property using the capital income monotonicity condition. We then provide an example of a Ramsey equilibrium in which the most patient household reaches a no capital position infinitely often. This is a strong refutation of the turnpike property on Ramsey equilibria. We also show that the constructed Ramsey equilibrium is inefficient in terms of the aggregate consumption stream that it provides.     

Does late 10K filing impact companies’ financial reporting strategy? Evidence from discretionary accruals and real transaction management

The study investigates how late 10K filers adapt their financial reporting strategy in the post‐late filing period in their response to bad publicity, negative market sentiment, and higher stakeholders’ scrutiny resulting from reporting delays. Both the level and change regressions show that late 10K filers significantly reduce the use of discretionary accruals from pre‐ to post‐late filing year. However, they simultaneously increase real transaction management over the same time period. The trade‐offs between the two earnings management techniques are more prominent when the late filers have a strong incentive to meet or beat earnings benchmarks. Our primary results are robust when late filings are caused by accounting, auditing, and internal control issues, and when the late filers cited no meaningful reason for late 10K filings. It is further evident that late filers with material internal control weaknesses and late filers that subsequently restate their financial statements make relatively higher trade‐offs than the matched non‐late filers. Finally, the trade‐offs between reduced accruals and increased real transaction management are stronger for the accelerated filers, and for the late filers audited by Big 4 auditors.     

CEO tenure and audit pricing

Review of Quantitative Finance and Accounting - We examine the relationship between CEO tenure and audit fees. After controlling for client and auditor attributes in the analyses, we find that...