Estimation of trade elasticities in the presence of trade barriers, multinationals and imperfect competition

Recent research highlights the role that multinational trading companies may play in impeding price transmission. In markets characterised by imperfect competition, an estimate of the partial elasticity of demand may be of limited practical value if no account is taken of the reaction of competitors. In this paper, we demonstrate the potential for market structure to affect price transmission and trade elasticities, and challenge the presumption that only government intervention can impact upon price transmission, with examples supporting why theory would suggest otherwise.     

The governance of privatized firms: authority,reposnisbility and disclosure1

In any market economy, a fundamental question is how to make management accountable to shareholders and also to the requirements of law. This paper raises selective, critical issues of corporate governance that are particularly relevant to problems of the accountability of boards of directors to their shareholders in transition economies. These issues include the separation of ownership and control and the duties of directors; the need for disclosure given that separation; and the corporate charter as a vehicle for the direct participation of shareholders in governance. The paper suggests that one of the best models of corporate governance that transition economies can use is that employed by the leveraged-buyout (LBO) and venture capital funds operating in the West. It argues that weaknesses in corporate governance may undermine the entire privatization process. Economics and law are too often seen as separate disciplines. In reality, they come together in transition economies perhaps with greater impact than elsewhere.     

An Experimental Study of Auditor Analytical Review Judgements

This paper provides evidence as to how five factors highlighted in the current UK auditing standard are taken into account by auditors in analytical review (AR) judgements. While the relative importance of particular cues was generally found to be consistent with the standard, certain factors were taken into account only to a marginal extent. Little evidence of configural cue usage was identified. The study also provides evidence of a tendency towards conservatism in the way auditors approach AR. The results suggest both that the potential to substitute AR for other substantive procedures may be realised only imperfectly and that the issue of configural reasoning should be addressed in the auditing standard.     

PRODUCTIVITY GROWTH IN THE HUNGARIAN ECONOMY1

This paper analyses productivity growth in the Hungarian economy over the two decades between 1950 and 1970 with the aim of establishing what help can be provided in such analyses by the use of total factor productivity index numbers. After the introductory sections the paper deals first with the rates and factors of Hungarian productivity growth, and then with some methodological lessons of the investigation.     

The dynamics of the management-shareholder conflict

This article investigates the distribution of equity ownershipbetween entrenched management and dispersed outsiders when managementhas the ability to manipulate the cash flows and when it iscostly for equity holders to prove managerial wrongdoing incourt. Management chooses the distribution of equity ownershipso as to maximize private benefits against the risk of potentialcontrol challenges. When shareholders are long-term oriented,then outside shares trade at a premium over the value to management,and management is inclined to sell off its equity stake to dispersedoutsiders. When shareholders are short-term oriented, then outsideshares trade at a discount below their value to management,and disciplinary pressure can be substantially reduced via strategicshare purchases. Changes in the cost of capital drive a wedgebetween entrenched management's and dispersed outsider's valuationof shares. Management exercises its option to buy (sell) shareswhen the option is in the money: when management values sharesmore (less) than outsiders do.     

Auditing Standards in China—A Comparative Analysis with Relevant International Standards and Guidelines

The continuing and deepening economic reforms in China have brought many changes both socially and economically to the society. The primary function of auditing in China has begun to shift away from the traditional tax compliance assessment towards the credibility lending to financial statements. The economic reforms and the development of the Accounting Standards for Business Enterprises have necessitated the parallel development of auditing standards in China. While some significant differences exist, the new Chinese auditing standards are, in a number of important aspects, similar to the professional standards promulgated by the International Federation of Accountants. The development of a comprehensive body of standards, auditor independence, the role of certain auditing techniques, and certified public accountant (CPA) population are the major areas that China needs to improve. Opening up the Chinese accounting industry will trigger significant advances in the implementation of Chinese standards and the development of the Chinese accounting profession.