Book Reviews

Geoffrey Jones. The Evolution of International Business. An Introduction.
Hugo Armstron and Dick Gross. Tricontinental: The Rise and Fall of a Merchant Bank.
Bob Catley. Globalising Australian Capitalism.
Peter Groenewegen. A Soaring Eagle: Alfred Marshall 1842–1924.
Michael Schneider. J. A. Hobson.
Roy MacLeod and Deepar Kumar (eds). Technology and the Raj: Western Technology and Technical Transfers to India 1700–1947.
Tirthankar Roy (ed.). Cloth and Commerce. Textiles in Colonial India.
Deborah Oxley. Convict Maids.     

Executive Compensation and Earnings Persistence

Governing boards utilize executive compensation contracts in an attempt to align executive actions with corporate goals. The objective is to ensure that executive performance provides value to the organization in terms of successful outcomes. A key performance criteria typically specified in CEO compensation contracts is earnings targets. However, using earnings as a performance evaluation may be problematic because some firms exhibit robust and sustained earnings over time (high earnings persistence), and other firms, such as high growth oriented firms, exhibit weak or sometimes negative earnings over time (low earnings persistence). Our study reveals that the effect of high earnings persistence results in firms that focus more heavily on cash compensation (salary and bonus) rather than on equity compensation (stock options, etc.) to compensate executive performance. Additionally, for firms characterized by low earnings persistence, our study indicates that cash flows from operations act as a supplementary performance measure to accounting earnings, and become increasingly important as a means to justify executive cash compensation.     

Crisis costs and debtor discipline: the efficacy of public policy in sovereign debt crises

Recent debate on the reform of the international financial architecture has highlighted the potentially important role of the official sector in crisis management. We examine how such public intervention in sovereign debt crises affects efficiency, ex ante and ex post. Our results shed light on the scale of capital inflows and the implications for debtor country output of such a regime. The efficacy of measures such as officially sanctioned stays on creditor litigation depend critically on the quality of public sector surveillance and the size of the costs of sovereign debt crises.     

Fertility,social class,gender, and the professional model: statistical explanation and historical significance

In 2012 Barnes and Guinnane published a revised statistical analysis of the critical evaluation of the official 1911 social class model of fertility decline that was presented in chapter 6 of Szreter's Fertility, class and gender in Britain, 1860–1940 (FCG). They argue that the official model of five ranked social classes is, after all, a satisfactory statistical summary of the fertility variance found among the married couples of England and Wales at the famous 1911 fertility census, and so they conclude that, pace Szreter, the official model provides a satisfactory account of the nation's fertility decline as one of social class differentials. It is acknowledged here that Barnes and Guinnane have deployed superior statistical techniques. However, it is pointed out that FCG identified fundamental problems with the design of the 1911 official model. It was a social evolutionary model privileging male professional occupations, not a modelling of recognized social class theory at the time or since. In FCG it was therefore termed ‘the professional model’. The central historiographical claim of FCG is re‐affirmed: that in order to study fruitfully the historical relationship between social class and fertility decline, an alternative approach is needed which explicitly integrates gender relations with social class.     

Evidence of Industry Scale Effects on Audit Hours,Billing Rates,and Pricing

Using a proprietary data set consisting of all private firm audit engagements in 2000 from one Big 4 firm in Belgium, we investigate (i) whether audit office industry scale is associated with a reduction of total, partner, and staff audit hours and thus with efficiency gains triggered by organizational learning from servicing more clients in an industry and (ii) whether the extent of efficiency pass‐on from the auditor to its clients depends on the audit firm's market power. We find that auditor office industry scale is associated with efficiency gains and a reduction of the variable costs (i.e., fewer total audit hours, partner hours, and staff hours), ceteris paribus. Our results also suggest that, on average, realized efficiencies are entirely passed on, as evidenced by a nonsignificant effect of auditor industry scale on the auditor's billing rate. Furthermore, we find that the extent of the efficiency pass‐on decreases with the market power of the audit firm in the industry market segment as we document a higher billing rate for auditors with high market power (versus low market power). In addition, we find that the lower audit hours associated with auditor industry scale do not compromise audit quality.     

Fiscal Stabilization Policy and Fiscal Institutions

In this paper we analyse counter-cyclical fiscal policy withinthe context of a microfounded analysis of business-cycle stabilization.We show that tax and spending instruments can have a usefulcounter-cyclical role, even after allowing for the distortionarynature of the instruments and the need for debt sustainability.A critical barrier to the use of fiscal instruments may be politicaleconomy concerns, and we survey recent suggestions involvingalternative fiscal policy institutions. Footnotes ¹ E-mail addresses: c.b.leith{at}socsci.gla.ac.uk; s.wren-lewis{at}exeter.ac.uk     

Beliefs of and attitudes toward political advertising: An exploratory investigation

The major goals of this study were to identify voters' belief structures about political advertising, develop a scale to measure beliefs, and examine how the identified beliefs are related to overall attitudes toward political advertising. The reliabilities, factor structure, and validity tests indicate that five belief dimensions—information, veracity, cynicism, money politics, and entertainment—have sound and stable properties. The scale demonstrates that voters assess political advertising at the instrumental level (e.g., information, veracity, and entertainment) as well as the institutional level (e.g., cynicism and money politics). The results showed that not all beliefs predicted overall attitudes. Furthermore, the results indicated that political involvement was a significant factor in influencing both beliefs and attitudes. © 2009 Wiley Periodicals, Inc.