The impact of PPS legislation on the systematic risk of hospitals

In 1983 the government passed legislation implementing a new method of paying hospitals for Medicare inpatient services, the Prospective Payment System (PPS). Under this system the changes in economic incentives to hospitals affected the market conditions under which hospitals operate. This article investigates the impact of PPS on the financial riskiness of hospitals. Using the capital asset pricing model (CAPM), this study analyzes the systematic risk of a portfolio of four publicly traded acute care hospitals in the pre-PPS and post-PPS periods, as well as four control portfolios. It covers a pre-PPS period from 1976 to the passage of the Tax Equity and Fiscal Responsibility Act (TEFRA) and a post-PPS period through 1988. The systematic risk for publicly traded acute care hospitals increased significantly in the post-PPS period. However, the control groups also showed significant changes in systematic risk.     

‘The bull is half the herd’: property rights and enclosures in England, 1750-1850

Common fields reduced the transaction costs for commoners’ cow keeping by lowering the cost of insemination. After enclosure, cow keeping fell among small owners who, unlike large farmers, could neither jointly own the bull and the cow nor lease the male easily. The minimum acreage required to restore cow keepers to their pre-enclosure economic position indicates that many commoners who were given some land at settlement were inadequately compensated for the change in property rights.     

Multilateral Bargaining Problems

In many situations in economics and political science there are gains from forming coalitions but conflict over which coalition to form and how to distribute the gains. This paper presents an approach to suchmultilateral bargaining problems. Asolutionto a multilateral bargaining problem specifies an agreement for each coalition that is consistent with the bargaining process in every coalition. We establish the existence of such solutions, show that they are determined by reservation prices, and characterize these reservation prices as the payoffs ofsubgame perfect equilibrium outcomesof a non-cooperative bargaining model.Journal of Economic LiteratureClassification Numbers: C71, C72, C78.     

Flexibility in cash-flow classification under IFRS: determinants and consequences

International Financial Reporting Standards (IFRS) allow managers flexibility in classifying interest paid, interest received, and dividends received within operating, investing, or financing activities within the statement of cash flows. In contrast, U.S. Generally Accepted Accounting Principles (GAAP) requires these items to be classified as operating cash flows (OCF). Studying IFRS-reporting firms in 13 European countries, we document firms’ cash-flow classification choices vary, with about 76, 60, and 57% of our sample classifying interest paid, interest received, and dividends received, respectively, in OCF. Reported OCF under IFRS tends to exceed what would be reported under U.S. GAAP. We find the main determinants of OCF-enhancing classification choices are capital market incentives and other firm characteristics, including greater likelihood of financial distress, higher leverage, and accessing equity markets more frequently. In analyzing the consequences of reporting flexibility, we find some evidence that the market’s assessment of the persistence of operating cash flows and accruals varies with the firm’s classification choices and the results of certain OCF prediction models are sensitive to classification choices.     

Segmental Disclosure Practice: Thirteen Years On

In an age of financial disclosure directed by professional standards, the changes in practice voluntarily undertaken by companies are sometimes difficult to detect. By focusing on a period prior to the introduction of SSAP 25, the segmental disclosure issue offers an opportunity to consider whether practice has voluntarily changed. An examination of the extent and quality of segmental disclosure, for a specific group of companies over an extended period, offers an indication of the need for a standard or further regulation. If it can be demonstrated that disclosure practice has improved under a primarily self-regulatory framework, the need for a standard like SSAP 25 may be questioned. The segmental disclosure practices of the same group of seventy companies are compared for the reporting years 1975–6 and 1988–9. Whilst an underlying improvement in respect to business activity disclosure is revealed, the same cannot be claimed for geographic segmental disclosure. Not only has the number of companies reporting profit by geographic segment declined but also the consistency with other aspects of the annual report has reduced.     

Managing human resources in the Latin American context: the case of Chile

In this article several aspects of human resource management (HRM) in Chile will be examined. Initially Chile will be analysed in the context of Latin American culture and history, as it shares a number of common features with the rest of the countries of the region. Secondly, the arrival of HRM to Chile is explored, as well as how it is affected by the particular characteristics of the country. Thirdly, HRM research literature in the specific context of Chile is reviewed and analysed. Finally, some consequences are discussed, and it is concluded that Chile shares a unique history, culture, social particularities and problems with the other countries of the region, affecting the way in which HRM is deployed in organisations. It is also concluded that more research in this context is urgently needed.     

‘Taking on almost everyone?’ Migrant and employer recruitment strategies in a booming labour market

This paper explores the recruitment strategies of employers in the Irish Celtic Tiger boom labour market. It explores Irish employers' turn towards immigrants rather than pursuing other strategies such as raising productivity or mobilising alternative sources of labour. It demonstrates that during the boom years a more casualised approach to recruitment was favoured, privileging soft skills and competencies above credentialised skills. Immigrants became the employees of choice, not least because of issues of costs and obedience, but also because they brought new skills, in particular soft skills. Indeed, employers in some sectors developed a categorical preference for migrant workers as they recruited for attitude, work ethic and potential.