Value versus growth: Australian evidence

The value‐growth effect is one of the most pervasive patterns in stock prices. In this study, the ability of four proxies for value‐growth, book‐to‐market, sales‐to‐price, earnings‐to‐price and cash‐flow‐to‐price to explain equity returns is analysed. The findings show that in aggregate, book‐to‐market best explains cross‐sectional variation in Australian equity returns, which in isolation suggests that it is the superior proxy for value‐growth. The analysis is taken further and the value‐growth effect is examined separately in positive and negative earnings firms. After segregating firms, it is found that in the negative earnings sample, book‐to‐market is the best value‐growth proxy and in the positive earnings sample, cash‐flow‐to‐price has the highest level of significance and is thus the superior value‐growth proxy. The economic significance of this result is telling, as the firms that report positive earnings are much larger than those that report negative earnings.     

Professional scepticism in two economies with cultural differences and the public interest: evidence from China and the United States

Auditors’ professional scepticism is a topical concern for the audit profession and public interest. This study examines professional scepticism among fraud auditors in the forensic accounting profession in China (CN) and the United States (US). Data are collected from 373 and 401 CN and US auditors, respectively, in two economies with cultural differences. The multinomial logistic regression results indicate that both CN and US fraud auditors have higher levels of professional scepticism than general auditors do. There are no significant differences in traits between CN and US fraud auditors. High-ranking fraud auditors have higher levels of professional scepticism than junior-ranking fraud auditors for both CN and US auditors. The results of our sensitivity analysis validate the main results and indicate the findings’ robustness. Results support the normative pillar of the institutional theory (Scott 1995) that asserts actors (fraud auditors) of institutions would share common norms and beliefs in a social system because they are rooted in professional affiliations (accounting bodies) (DiMaggio and Powell 1983). Our findings contribute to the literature in the arena of the interests of the public and the economy.     

Unemployment and Technical Innovation; A Study of Long Waves and Economic Development

The purpose of this paper is to provide further thoughts for promoting the government after reviewing the competing insights of the right-wing public choice school economists and the left-wing institutionalists in the VeblenCommons tradition. This paper points out that big government and big business have indeed become complements to some extent. That is, they are symbiotic and one certainly cannot criticize (or try to remove) big government without checking big business at the same time, and vice versa. To counteract the power of corporate hegemony and to break the control of governments by privileged interests, this paper suggests that it is desirable to initiate institutional change in society toward the movement of more local government planning in promoting the local community. Such a society is not only practically consistent with the progress of sustainable development (under the “think globally, act locally” guideline) but also conceptually compatible with John Stuart Mill’s high-minded mental culture and John Maynard Keynes’S forward-looking vision of economic bliss.     

Economics in Disarray

In 1963, the North Dakota Legislature amended the North Dakota Century Code to ensure that all licensed community pharmacies in the State are majority owned by pharmacists registered in the State. During the 2008-2009 legislative session, a debate arose about whether this law should be repealed. Those in favor of repeal attacked the law using the neoclassical arguments of efficiency, competition and lower prices. Those opposed to the law's repeal argued that pharmacists must own pharmacies in order to protect the public's welfare. This paper explores the arguments made for and against this law and draws two major conclusions. First, the arguments made by both sides are flawed because neither side fully incorporates the historical, physical and cultural characteristics of North Dakota communities into their analyses. Second, North Dakota legislators voted overwhelmingly to retain the law. Moreover, prima fascia evidence indicates that the legislators based their decisions on Institutional considerations.     

An Institutionalist View of Development Economics

Pierre Bourdieu's field and habitus approach to the economy offers rich theoretical presuppositions of the interrelationship between social structure and agency, but they have not yet been sufficiently integrated into economic sociology. This article outlines the key theoretical assumptions of this approach in relation to those of the embeddedness tradition. Bringing the elements of field and habitus to the center of attention helps in examining how cognitive and historical factors matter for explaining individual action. It integrates different notions of uncertainty in economic literature into the discussion of the underlying action principles of the Bourdieuian approach. The study concludes that only a historical perspective which integrates social, structural and cognitive analysis can adequately explain the generation, reproduction, and transformation of individual action itself. The article sketches the broad conception of such a theoretical synthesis in the conclusion.