Earnings Management Surrounding New Debt Issues

We examine whether firms manage earnings before issuing bonds to achieve a lower cost of borrowing. We find significant income‐increasing earnings management prior to bond offerings. We also find that firms that manage earnings upward issue debt at a lower cost, after controlling for various bond issuer and issue characteristics. Our results are consistent with studies that report earnings management around equity issuance. The results indicate that, like equity holders, bondholders fail to see through the inflated earnings numbers in pricing new debt.     

Internationalizing audit education

Audit education is typically offered only to accounting majors. We argue that auditing provides a way of thinking that could serve as a framework for an accounting curriculam. We describe two parts of a course content that could be incorporated into an existing auditing course or a begining accounting course. The first section emphasizes accountability; the second emphasizes the role of the auditor in the accountability process. The concepts are best taught within an international paradigm that permits examination of various institutional environments.     

Unleash innovation in foreign subsidiaries

In multinational corporations, growth-triggering innovation often emerges in foreign subsidiaries from employees closest to customers and least attached to the procedures and politeness of the home office. But too often, heavy-handed responses from headquarters squelch local enthusiasm and drive out good ideas--and good people. The authors' research into more than 50 multinationals suggests that encouraging innovation in foreign subsidiaries requires a change in attitude. Companies should start to think of foreign subsidiaries as peninsulas rather than as islands--as extensions of the company's strategic domain rather than as isolated outposts. If they do, innovative ideas will flow more freely from the periphery to the corporate center. Basing their arguments on a rich array of examples, the authors say that encouraging such "innovation at the edges" also requires a new set of practices, with two aims: to improve the formal and informal channels of communication between headquarters and subsidiaries and to give foreign subsidiaries more authority to see their ideas through. The challenge for executives of multinationals is to find ways to liberalize, not tighten, internal systems and to delegate more authority to local subsidiaries. It isn't enough to ask subsidiary managers to be innovative; corporate managers need to give them incentives and support systems to facilitate their efforts. The authors suggest four approaches: give seed money to subsidiaries; use formal requests for proposals as a way of increasing the demand for seed money; encourage subsidiaries to be incubators for fledgling businesses; and build international networks. As part of the last approach, multinationals also need to create roles for idea brokers who can link entrepreneurs in foreign subsidiaries with other parts of the company.     

Nationality,social network and psychological well-being: expatriates in China

Expatriate social networks constitute an under-emphasized area in expatriate literature. The current study contributes to the expatriate adjustment literature by empirically testing the relationship between expatriate personal networks and psychological well-being. The current study also investigates the hypothesis that expatriates from different cultural backgrounds will establish different social networks and adjust differently in China. A survey of 166 expatriates in China from North America, Europe and other countries in Asia showed significant support for the hypothesis that expatriate network characteristics have a direct and significant influence on expatriate psychological well-being. In addition, as predicted, expatriates in China from different cultural backgrounds (Overseas Chinese, other Asian, North American and European) established personal networks with different characteristics.     

Competitive balance versus competitive intensity before a match: is one of these two concepts more relevant in explaining attendance? The case of the French football Ligue 1 over the period 2008–2011

The aim of this article is to investigate the determinants of attendance at French football Ligue 1 matches over the period 2008–2011 with an emphasis on examining the effects of both competitive balance and intensity before a match. Competitive balance is measured by the point difference between the two teams concerned by a match in the championship. Competitive intensity is measured by the point difference for the home team in relation to ranks with sporting stakes. Results show that competitive balance has an insignificant impact whereas competitive intensity has a significantly positive impact. Implications are drawn.     

Indecision Theory: Weight of Evidence and Voting Behavior

In this paper, we show how to incorporate weight of evidence, or ambiguity, into a model of voting behavior. We do so in the context of the turnout decision of instrumentally rational voters who differ in their perception of the ambiguity of the candidates' policy positions. Ambiguity is reflected by the fact that the voter's beliefs are given by a set of probabilities, each of which represents in the voter's mind a different possible scenario. We show that a voter who is averse to ambiguity considers abstention strictly optimal when the candidates' policy positions are both ambiguous and they are “ambiguity complements.” Abstaining is preferred since it is tantamount to mixing the prospects embodied by the two candidates, thus enabling the voter to “hedge” the candidates' ambiguity.     

中国失衡时代是否已终结

过去十年,全球性不均衡问题逐渐成为各国宏观经济政策的中心议题。本文重点分析了当前中国的外部失衡问题,研究了2008年后促使中国经常账户盈余下降的影响因素,预测了中国外部顺差的走向。本文认为,未来几年中国的经常账户盈余将保持适度。外部失衡不能反映当今中国国际收支的主要特征。随着中国国内经济越来越依赖投资的拉动,内部失衡问题将愈发明显。     

Interdependence and the location of economic activities

This paper deals with the ability of a decentralized price system to sustain an optimal assignment of activities assuming complete interdependence among them. There are two goods, each of which is used in its own production and in the production of the other, along with land. An infinitely elastic final demand exists for both goods at given market prices, and either good may be imported. It is demonstrated that a decentralized price system will sustain an optimal allocation of land, and that a nonoptimal allocation of land will not be sustained.