Information accuracy and social welfare under homogeneous beliefs

This paper examines the ‘accuracy’ of information and its effect on social welfare. Information is defined to be more accurate than the existing information if individuals are willing to revise their subjective, homogeneous beliefs based on the new information. In a pure exchange economy where individuals may differ in endowments and tastes, it is shown that, for all utility functions satisfying risk aversion and non-satiation, the receipt of more accurate information does not increase social welfare (in terms of ex-ante Pareto-optimality) even when such information production is costless. This represents a more rigorous analysis on several issues that are not clear in the Marshall (1974) paper. Using the HARA class of utility functions, this paper also addresses the relationship between information and borrowing and lending, and the effect of information on the risk-free rate of interest.     

The emergence of small transnational enterprise in Vancouver: the case of Chinese entrepreneur immigrants

This article examines the small transnational enterprises of recent Chinese entrepreneur immigrants to Vancouver, Canada. These enterprises are part of the globalization process and contribute to the economic and cultural integration of certain regions of Asia with large urban areas of Canada. The entrepreneurs are analyzed utilizing a transnationalism framework which is situated in the ethnic enterprise literature. The article explains how these transnational small Chinese businesses are different from the businesses of earlier Chinese in Canada. A detailed analysis of the Canadian Business Immigration Program illustrates how and why small Chinese transnational enterprises have emerged. The primary data comes from extensive in–depth interviews with 61 Chinese entrepreneur immigrants that allows for the delineation of three transnational business types: (1) Asian production–North American distribution, (2) retail chains and (3) import–export. Quantitative data illustrate the major differences between ‘transnational’ and ‘non–transnational’ enterprises along several variables. Other qualitative data provide insights on how family networks are interwoven with firm relations in small transnational businesses, how entrepreneurs perceive interethnic relations and the extent to which they experience barriers to mobility. Evidence is provided of extensive transmigration and, in contrast to the sojourner identity of earlier Chinese, the data here suggests the emergence of a new transnational and cosmopolitan identity amongst entrepreneur immigrants. Cet article étudie les petites entreprises transnationales des récents immigrants chinois de Vancouver (Canada). Celles–ci s’inscrivent dans le processus de mondialisation et contribuent à l’intégration économique et culturelle de certaines régions d’Asie dans d’importantes zones urbaines canadiennes. L’analyse de ces créateurs d’entreprise est faite à partir d’un cadre d’analyse transnationaliste qui se situe dans la littérature sur l’entreprise ethnique. L’article explique en quoi ces petites entreprises chinoises transnationales diffèrent de celles des Chinois arrivés plus tôt au Canada. Une étude détaillée du Programme canadien d’Immigration des Hommes d’affaires explique comment et pourquoi sont apparues ces petites entités transnationales. Les principales données, tirées d’entretiens approfondis avec 61 entrepreneurs chinois, permettent de définir trois types d’entreprises transnationales: production asiatique avec distribution nord–américaine, chaînes de détaillants, et import–export. Des données quantitatives illustrent les grandes différences entre les entreprises ‘transnationales’ et ‘non–transnationales’ en fonction de plusieurs variables. D’autres données quantitatives révèlent de quelle manière les réseaux familiaux s’entremêlent avec les relations professionnelles dans les petites entités transnationales, comment les chefs d’entreprise perçoivent les relations inter–ethniques et dans quelle mesure ils rencontrent des obstacles à leur mobilité. Une importante transmigration est mise en evidence et, par opposition au caractère temporaire du séjour des premiers Chinois, les données suggèrent ici l’émergence d’une nouvelle identité transnationale et cosmopolite chez les immigrants chefs d’entreprise.     

Population growth and the benefits from optimally priced externalities

"In this article we show that, considering only economic effects, even if population growth, by natural increase or immigration, increases congestion, pollution, and other forms of external costs, that provided pre-existing citizens own the resources giving rise to the externalities, and provided they efficiently price usage of such, that existing citizens must, in net average terms, be better off with population growth than without it. In simple terms the increased revenues they gain from efficient pricing at increased demand levels will be strictly greater than the monetary value of the increased external costs together with the higher tax costs they incur as consumers of the resources."     

The Foreign Exchange Exposure of Japanese Multinational Corporations

We find that about 25 percent of our sample of 171 Japanese multinationals' stock returns experienced economically significant positive exposure effects for the period January 1979 to December 1993. The extent to which a firm is exposed to exchange-rate fluctuations can be explained by the level of its export ratio and by variables that are proxies for its hedging needs. Highly leveraged firms, or firms with low liquidity, tend to have smaller exposures. Foreign exposure is found to increase with firm size. We also find that keiretsu multinationals are more exposed to exchange-rate risk than nonkeiretsu firms.     

Influence of institutional DINESERV on customer satisfaction,return intention,and word-of-mouth

The objectives of the study were to investigate the relative importance of institutional DINESERV factors (i.e., food quality, atmosphere, service quality, convenience, and price and value) that affect customer satisfaction in the university dining facilities and to examine the influence of customer satisfaction on return intention and word-of-mouth endorsement. A web survey questionnaire was distributed to 4659 students at a public university in the Midwest from May 10–24 in 2005. Factor analysis, ANOVA, correlation analysis, and multiple regression analyses were used to analyze the data. The findings showed that all Institutional DINESERV Dimensions had a significant positive effect on overall customer satisfaction and revisit intention. Improving customer satisfaction, which results in increased return intention and positive word-of-mouth endorsement in university foodservice establishments, will in turn not only strengthen customer loyalty, but also improve the dining facility's reputation and generate greater revenue.     

Stochastic dominance and behavior towards risk: The market for Internet stocks

Internet stocks registered large gains in the late 1990s, followed by large losses from early 2000. Using stochastic dominance theory, we infer how investor risk preferences have changed over this cycle, and relate our findings to utility theory and behavioral finance. Our major findings are as follows. First, risk averters and risk seekers show a distinct difference in preference for Internet versus “old economy” stocks. This difference is most evident during the bull market period (1998–2000) where Internet stocks stochastically dominate old economy stocks for risk seekers but not risk averters. In the bear market, risk averters show an increased preference for old economy stocks, while risk seekers show a reduced preference for Internet stocks. These results are inconsistent with prospect theory and indicate that investors exhibit reverse S-shaped utility functions.     

Enrichment of a Sector (Individual/Region/Country) Benefits Others: a Generalization

Ng ( Pacific Economic Review 1 (1996): 93–115) showed that the enrichment of a sector benefits the rest of the world as a whole in its general thrust, by showing the benefit for a benchmark case of a proportionate enrichment with homothetic preferences (for the enriching sector). This note generalizes the analysis to examine the effect of enrichment of one sector on some other sector. A proportionate enrichment with homothetic preferences can still be said to benefit any given sector in its general thrust, but in a somewhat weaker sense.     

An examination of order effects in auditors' inherent risk assessments

While recency effects have been reported in a variety of audit tasks, recent studies suggest that these effects may be mitigated under certain conditions. The importance of investigating order effects in auditors' judgments rests with its potential to impact on the efficiency and effectiveness of audits. Since current studies suggest that recency effects may not impact on all audit situations, it is necessary to identify conditions or variables in the task environment that either induce or mitigate recency.
This study examines the occurrence of order effects in auditors' inherent risk assessments, a task not previously examined. Using a case study administered to 70 auditors, this study found that auditors' judgments were not influenced by the order in which audit evidence was evaluated. Rather, the results suggest that judgments of inherent risk may be biased towards conservatism. This may not be surprising given the negative consequences associated with failing to adequately plan an audit. This may cause auditors to act cautiously and thus mitigate recency effects.