Disclosure Overload? An Empirical Analysis of International Financial Reporting Standards Disclosure Requirements

Despite the positive effects of the adoption of International Financial Reporting Standards (IFRS) noted in the literature, standard setters have issued reports suggesting that the required disclosures in IFRS have become too burdensome and should be reduced. We examine this disclosure overload problem by testing whether the disclosure reduction recommendations of the Excess Baggage Report issued by professional accounting bodies from Scotland and New Zealand in 2011 are associated with companies’ disclosure incentives and are value relevant for a sample of 196 Australian listed companies. The Excess Baggage Report classifies current IFRS disclosure requirement items into three categories: Retain; Delete; and Disclose if Material. We find that Retain items are disclosed the most, followed by those classified as Disclose if Material, and then by Delete items. Only Retain items are significantly associated with companies’ disclosure incentives. We also find that these disclosure categories are value relevant, especially for below-median profitability firms. Our findings may provide input to the IASB’s ongoing Disclosure Initiatives project.     

Corruption control,shadow economy and income inequality: Evidence from Asia

Developing countries often suffer from high corruption, high income inequality and poor institutional arrangements that give rise to large shadow economies. Earlier evidence shows that shadow economies moderate the negative effects of corruption on income inequality in highly unequal South American countries. For Asia, we show that the persistence of shadow economies raises inequality even if corruption control is strong. Supported by static and dynamic panel data analyses of 21 countries in Asia between 1995 and 2015, we show that in order to combat rising inequality, corruption control must be complemented by the ability to translate secondary and tertiary school enrolment into industrial and, more importantly, service sector jobs. Countries with low corruption but high inequality can reduce inequality by committing to higher public consumption expenditures. Further, combining greater trade openness with low corruption lowers inequality, except for countries in South Asia.     

Job security,wage bargaining and duopoly outcomes

This paper develops a model where labour supply is constrained because training new workers is costly and redundant workers cannot be fired. An entrant draws labour from an incumbent firm through a wage contest while wages in the latter are bargained with its unionized workers. In a Cournot equilibrium, the union's bargaining power has a positive effect on the incumbent's output, but a negative effect on the industry output. Social welfare under duopoly may fall short of the monopoly level. The distribution of bargaining gains within the incumbent firm is sensitive to whether wage and output choices are made sequentially or simultaneously.     

Predicting the Price Effect of Mergers with Polynomial Logit Demand

We propose a polynomial logit model to quantify the price effects of mergers in a static Nash setting. The proposed model is parsimonious in parameters and is shown to have excellent predictive power, rivaling the in-sample and out-of-sample predictive accuracy of the widely-used AIDS model.The analysis, using actual scanner data on bread sales, demonstrates that a linear logit model is likely to over-estimate the merger price effect.     

Excess Entry in the Absence of Scale Economies

It is well-known that with free entry, more firms than is socially optimal typically enter provided there are economies of scale. This paper investigates the possibility of excess entry in the absence of scale economies We thank Simon Anderson, Tom Holmes, the late Arijit Mukherji, and Xavier Vives for helpful comments. We also thank the participants at the July 2001 Australasian Meetings of the Econometric Society in Auckland, June 2002 University of Melbourne-National University of Singapore Symposium and seminar participants at the University of Sydney and University of New South Wales for useful suggestions. We are especially thankful to an anonymous referee whose meticulous comments have helped us to improve the paper     

Physical activity and childhood obesity

More than one-third of American children and teenagers are considered overweight or obese. Unfortunately, obesity is often a persistent and dangerous health condition that is costly to manage. It is one of the leading causes of preventable death and combating the condition has become a national priority. To this end the two most common recommendations are: eat a healthier diet and increase physical activity. Using data from both the National Longitudinal Survey of Youth 1979 (NLSY79) and the NLSY79 Children and Young Adult files, this study examines the relationship between physical activity and the persistence of childhood obesity. More specifically, Cox-proportional hazard techniques are used to quantify the impact a child’s physical activity has on the likelihood that they exit an overweight or obese state. Results indicate that being physically active reduces the probability that an overweight or obese child remains overweight or obese. Strikingly, there is not a significant difference between children who are active daily and those who are active a few times per week, suggesting that being active may be more important than the frequency of activity.     

Small asymmetric fractional factorial plans for main effects and specified two-factor interactions

Fractional factorial plans represented by orthogonal arrays of strength two are known to be optimal in a very strong sense under a model that includes the mean and all the main effects, when all interactions are assumed to be absent. When a fractional factorial plan given by an orthogonal array of strength two is not saturated, one might think of entertaining some two-factor interactions also in the model. In such a situation, it is of interest to examine which of the two-factor interactions can be estimated via a plan represented by an orthogonal array, as also to study the overall efficiency of the plan when some interactions are in the model alongwith the mean and all main effects. In this paper, an attempt has been made to examine these issues by considering some practically useful plans for asymmetric (mixed level) factorials with small number of runs.     

Bilateral Delegation in Duopoly Wage and Employment Bargaining

We study bilateral delegation in wage and employment bargaining between firms and unions in a Cournot duopoly. Incentive delegation creates frictions for each party between its objectives of within‐firm rent extraction and market/job stealing from the rival firm. The net effect is restraint in production, resulting in a larger bargaining pie. But each player's payoff will be inversely related to his bargaining power. We also show that if players are given a choice to delegate, they will not resort to delegation when their bargaining power is sufficiently high. This is in contrast to the scenarios commonly assumed in many models. Copyright © 2016 John Wiley & Sons, Ltd.     

An Assessment of Gender Discrimination in Household Expenditure on Education in India

Gender discrimination in household expenditure on education has led to unsatisfactory progress in educational attainment for women in many countries across the world. It has been observed that households across different states in rural and urban India prefer to incur more expenditure on education for male members than for females. Kingdon (2005) [Where has all the bias gone? Detecting gender bias in the intra-household allocation of educational expenditure, Economic Development and Cultural Change, 53(2), 409–452] has observed significant gender bias in household educational expenditure in a number of Indian states utilizing the household survey data of the National Council of Applied Economic Research, New Delhi. Other researchers, such as Chaudhuri & Roy (2006) [Do parents spread educational expenditure evenly across the two genders? Evidence from two North Indian states, Economic and Political Weekly, 41, pp. 5276–5282] and Lancaster et al. (2008) [Household expenditure patterns and gender bias: evidence from selected Indian states, Oxford Development Studies, 36(2), 133–157], have also confirmed the presence of significant gender bias in the expenses incurred on education by households in India. However, few of these studies are based on the analysis of sufficiently large, contemporary datasets, and hence they are unable to provide a picture of gender discrimination at the disaggregated level, i.e. at the state level. Since there is wide variation in social, cultural, anthropometrical, economic and many other factors among Indian states, it is important to analyse gender disparity in India at the level of the state. Here, utilizing individual-level data on educational expenditure from the 64th round of the National Sample Survey, an attempt is made to assess the current scenario in gender inequality in household educational expenditure in India at both the national and state level. It is observed that significant gender disparity exists in intra-household educational expenses and that this discrimination is not confined to the “backward” or developing states in India.     

MIXED OWNERSHIP,MANAGERIAL INCENTIVES AND BANK COMPETITION

We consider deposit competition between two banks, where prior to competition one bank is subjected to a nationalization decision and the other bank chooses managerial incentives. The government who maximizes a modified form of social welfare (with greater weight on profit than depositor surplus) chooses only partial nationalization, which still hurts the rival private bank. But by offering deposit‐linked managerial incentives the private bank recovers its lost profit and induces even less nationalization, leaving social welfare unchanged. However, under interest rate competition for differentiated deposits the private bank offers profit‐linked managerial incentives while the other bank may be completely nationalized.