Indirect tests of the Haugen-Lakonishok small-firm/January effect hypotheses: window dressing versus performance hedging

Equity mutual fund data from 1976–1993 is used to test hypotheses that distinguish window dressing from performance hedging. No significant difference is found pre/post 1983 in the number of funds choosing non-December fiscal year ends or in the percentage of dollars invested when comparing December/non-December fiscal year ends. Significant differences are found in both January returns for mutual funds with December/non-December fiscal year ends and in one month returns for funds with/without a fiscal year end in the previous month. Therefore, if the small-firm/January effect is portfolio manager related, performance hedging, not window dressing, is the more probable source for the “excess” returns.     

Experimental research in financial accounting

This paper uses recent experimental studies of financial accounting to illustrate our view of how such experiments can be conducted successfully. Rather than provide an exhaustive review of the literature, we focus on how particular examples illustrate successful use of experiments to determine how, when and (ultimately) why important features of financial accounting settings influence behavior. We first describe how changes in views of market efficiency, reliance on the experimentalist’s comparative advantage, new theories, and a focus on key institutional features have allowed researchers to overcome the criticisms of earlier financial accounting experiments. We then describe how specific streams of experimental financial accounting research have addressed questions about financial communication between managers, auditors, information intermediaries, and investors, and indicate how future research can extend those streams. We focus particularly on (1) how managers and auditors report information; (2) how users of financial information interpret those reports; (3) how individual decisions affect market behavior; and (4) how strategic interactions between information reporters and users can affect market outcomes. Our examples include and integrate experiments that fall into both the “behavioral” and “experimental economics” literatures in accounting. Finally, we discuss how experiments can be designed to be both effective and efficient.     

The Effects of Negatively Valenced Emotional Expressions in Online Reviews on the Reviewer,the Review,and the Product

The authors examine the effects of negatively valenced emotional expressions (NVEE; e.g., intense language, all caps, exclamation points, emoticons) in online reviews and reveal important boundary conditions for their effects. Specifically, Study 1 showed that NVEE directly promote review helpfulness and damage attitude toward the product when used by experts. In contrast, for novices, their use of NVEE was considered a poor reflection on them and failed to directly affect attitude toward the product. Further, attributions of reviewer rationality and trustworthiness were positively associated with review helpfulness and attitude toward the product. Interestingly, language complexity is a trigger to reverse the effects, as found in Study 2. For novices (experts), the adverse effect on trustworthiness is eliminated (introduced) but the adverse effect on attitude toward the product is introduced (eliminated) when they include more complex language accompanied by NVEE in their online reviews. Both studies uncover when source discounting is active for experts and novices, making them equally influential in some cases. Theoretical and managerial implications are provided.     

An impact assessment perspective in research planning: the case of a research institute in China

This paper address the planning process for a Chinese Tecnological Research Institute. We suggest broadening the scope of planning to encompass wideranging impacts. This orientatin facilitates product selection and research utilization.     

DUAL CLASS SHARES: ARE THERE RETURNS DIFFERENCES?

We examine dual classes of shares with identical dividends and liquidation treatment, but with different voting rights. We extend previous dud class studies by examining bid-ask adjusted prices and by examining returns after controlling for bid-ask spread and market value differences between voting classes. We establish that voting right differences, although related to price differences between superior and restricted voting shares, do not impact on average returns behavior. These findings are consistent with previously forwarded voting premium hypotheses.