Geographic location of audit committee chairs and accruals quality: evidence from China

Review of Quantitative Finance and Accounting - Using a large sample of Chinese firms, we examine if the geographic proximity of audit committee chairs (ACCs) to firms is associated with...     

The impact of litigation risk on the association between audit quality and auditor size: Evidence from China

We examine whether audit quality varies across different sizes of CPA firms under high or low auditor‐specific litigation risk exposure. We measure audit quality by the issuance of modified audit opinions and the audit fees charged to clients, and we use the organizational form of CPA firms as the proxy for auditors’ litigation risk exposure, where a partnership (limited liability) CPA firm represents a high (low) litigation risk exposure. Built on Choi, Kim, Liu, and Simunic's (2008) theoretical framework, we hypothesize that the litigation risk exposure of CPA firm moderates the association between auditor size and audit quality. Our results show that when the auditor's liability is capped (i.e., registered as a limited liability form of CPA firm), larger size CPA firms are associated with higher audit quality when compared to smaller size CPA firms. However, this positive association between auditor size and audit quality disappears for audit firms that are subject to high litigation risk exposures (i.e., registered as a partnership form of CPA firm). Our research provides new insights on the impact of auditor‐specific litigation risks on the relation between audit quality and auditor size. In particular, we show that only when auditor‐specific litigation risk is limited, do large CPA firms appear to perform higher quality audits than small CPA firms.     

ESTIMATING TEMPTATION AND COMMITMENT OVER THE LIFE CYCLE

This article estimates the importance of temptation for consumption smoothing and asset accumulation in a life‐cycle model. We use two complementary estimation strategies: first, we estimate the model‐implied Euler equation; second, we match liquid and illiquid wealth accumulation using the method of simulated moments. In both cases, we find that the utility cost of temptation is one‐quarter of the utility benefit of consumption. Further, temptation is crucial for correctly estimating the elasticity of intertemporal substitution (EIS): EIS estimates are biased downward when ignoring temptation. Finally, the model only matches the share of illiquid wealth if temptation is in the preference specification.     

Estimation and optimal designs for linear Haar-wavelet models

This paper gives an analytical expression for the best linear unbiased estimator (BLUE) of the unknown parameters in the linear Haar-wavelet model. From the analytical expression, we solve for the eigenvalues of the covariance matrix of the BLUE in analytical form. Further, we use these eigenvalues to construct some conventional discrete optimal designs for the model. The equivalences among these optimal designs are demonstrated and some examples are also given.      

Time as a strategic variable: business hours in the gasoline market

A popular argument in policy discussions on the liberalization of business hours proceeds on the assumption that business hours are strategic complements: if some firms open longer hours, competitors will be forced to extend their opening hours too. We provide first empirical evidence on the impact of competition and the form of strategic interaction in business hours between firms by using detailed information on business hours as well as the location of retail gasoline stations in Austria. Our findings reject the presumption of business hours being strategic complements. Firms tend to have longer opening hours in a more competitive environment.     

Children as vulnerable consumers: a first conceptualisation

ABSTRACT

Understandings of consumer vulnerability remain contentious and despite recent developments, models remain unsuitable when applied to children. Taxonomic models, and those favouring a ‘state’- or ‘class’-based approach have been replaced by those attempting to tackle both individual and structural antecedents. However, these are still overly individualistic and fail to progress from an artificial view that these dimensions work separately and independently. In contrast, the new sociology of childhood conceptualises childhood as a hybridised, fluid combination of structure and agency. This paper introduces this approach, new to the consumer vulnerability field, and proposes that it has considerable implications for the way that children’s consumer vulnerability is theorised and researched, and for the formulation of policy.     

Measuring childhood materialism: Refining and validating Schor's Consumer Involvement Scale

This paper examines the measurement of childhood materialism using Schor's ( 2004 ) Consumer Involvement Scale. Schor treated consumer involvement empirically as a unidimensional construct, though she suggested that conceptually it may be multidimensional. Using confirmatory factor analysis procedures on data collected from children in the U.S. and U.K., the psychometric superiority of a three‐factor structure is established, comprising dissatisfaction, consumer orientation, and brand awareness components. Additional analyses demonstrate distinct associations between each of these components and other constructs, including self‐esteem, outside school activities, and child–parent relations. The scale's generalizability across boys and girls is also confirmed. The results suggest that Schor's Consumer Involvement Scale will be useful for researchers interested in studying the important topic of materialism in children. © 2010 Wiley Periodicals, Inc.     

Intrahousehold Welfare in Rural Ethiopia*

We examine the relationship between bargaining power and intrahousehold welfare in rural Ethiopia. The relative nutrition of spouses is associated with differences in cognitive ability, independent income and asset devolution upon divorce. Female empowerment benefits child nutrition and education. Spouses’ health, leisure and consumption of assignable goods show no association with differences in bargaining power. The relative nutrition and health of spouses varies across villages, but not in ways predicted by anthropological accounts of female empowerment. Bargaining variables may be weakly associated with intrahousehold welfare because surveyed households are poor and have little room for disagreement over consumption.