Earnings Management Using Asset Sales: An International Study of Countries Allowing Noncurrent Asset Revaluation

Bartov (1993) demonstrates that US firms time asset sales to smooth income and affect debt/equity relationships. This study examines earnings management behavior through asset sales in countries that allow asset revaluation: Australia/New Zealand (ANZ) and the United Kingdom (UK). Earnings management behavior differs across these two country groups when their accounting rules differed prior to 1993, but is similar during the 1993–95 period when the UK implemented FRS 3 . The results also find that revaluer companies do not use asset sales to smooth income in ANZ nor in the UK after FRS 3 was implemented in 1993. UK revaluers (prior to FRS 3 ) and both countries' non-revaluers sell assets consistent with income smoothing.     

The orbit of consumer credit choices

Resulting from instability in the UK financial climate in recent times, consumers have increasingly turned to alternative credit sources such as payday loans, logbook loans (car title loans) and pawning. Recognising this increasingly important trend in UK society, this study explores how UK consumers manage and select alternative credit sources, through a Consumer Culture Theory lens. Primary data were sourced through a multi-stage interview process with ten consumers of alternative credit providers. Findings were subjected to a rigorous six-stage thematic analysis, which enabled generation of a three-ring orbit model showing how the consumers migrated between categories of credit sources. Furthermore, it was found that other concepts could be traced on to the orbit model, such as access to other credit sources, time pressures, perceived risk and emotional state. It is expected that the findings from this study will benefit lenders, policy makers and regulatory bodies from greater insights into understanding of the emotional state of their customers and the particularly the pressures they may be experiencing when taking last resort credit sources.     

How does law affect finance? An examination of equity tunneling in Bulgaria

We model and test the mechanisms through which law affects tunneling and tunneling affects firm valuation. In 2002, Bulgaria adopted legal changes which limit equity tunneling through dilutive equity offerings and freezeouts. Following the changes, minority shareholders participate equally in equity offerings, where before they suffered severe dilution; freezeout offer price ratios quadruple; and Tobin's q rises sharply for firms at high risk of tunneling. The paper shows the importance of legal rules in limiting equity tunneling, the role of equity tunneling risk as a factor in determining equity prices, and substitution by controlling shareholders between different forms of tunneling.     

Insider rates versus outsider rates in lending

When information asymmetries exist between lenders, an uninformed outside bank that competes with an informed inside bank faces a winner’s curse. This paper examines a benchmark model’s prediction for interest rates. Although the outside bank wins more bad firms, the inside bank extracts rents from good firms and the outside bank underbids for bad firms. An analytical solution reveals the surprising result that the average interest rate paid to the inside bank following bidding outcomes can be higher than the average interest rate paid to the outside bank.     

Short,Heavy and Underrated? Teacher Assessment Biases by Children's Body Size

We compare non-blind teacher assessments with blind national test scores in maths to examine teacher-test score disparities by children's height and weight. Relative to test scores, shorter and heavier children are rated less favourably by teachers. This teacher-test score discrepancy cannot be explained by the child's behaviours, motivation to learn or cognitive ability. Unobserved student fixed effects across subjects explain the teacher-test score discrepancy by height, but not weight. Our analysis points to biased teacher assessments as the most plausible explanation for the remaining teacher-test score gap by weight. We find harsher teacher assessments are associated with a reduction in both the child's future test performance and liking for maths 4 years later.     

The effect of board structure on firm value: A multiple identification strategies approach using Korean data

Outside directors and audit committees are widely considered to be central elements of good corporate governance. We use a 1999 Korean law as an exogenous shock to assess whether and how board structure affects firm market value. The law mandates 50% outside directors and an audit committee for large public firms, but not smaller firms. We study this shock using event study, difference-in-differences, and instrumental variable methods, within an overall regression discontinuity approach. The legal shock produces economically large share price increases for large firms, relative to mid-sized firms; their share prices jump in 1999 when the reforms are announced.     

‘Street Music’, Urban Ethnography and Ghettoized Communities

Hip‐hop is a definitively urban movement, born in the crisis of the Fordist city and rooted in the 1970s street culture of poor and working‐class African Americans and Latinos in New York City. Engaging with the contributions of Beer and Lamotte, this essay addresses two questions. Firstly, can we understand hip‐hop as a politics of resistance, a social movement rooted in a claim on urban space and a practice of urban citizenship? And secondly, is hip hop, and particularly rap music, a form of urban and regional research? I argue that as a primarily artistic movement and black expressive culture (subject to commercial imperatives), hip‐hop has a layered and complex relationship with the social, political and spatial fabric of urban America. The complexity of this relationship renders problematic attempts to understand hip‐hop as urban ethnography or as a resistance politics. I conclude by discussing the potential of an engagement between hip‐hop and critical urban studies.     

Empirical estimation of agglomeration economies associated with research facilities

This research employs a new technique to estimate agglomeration economies, which are omitted from standard Input-Output (I-O) models. The overall economic impact of an economic entity includes the direct and indirect impacts as well as the agglomeration economies. I-O analysis is employed to assess the direct and indirect economic impacts of a research facility. The overall economic impact is estimated by employing a demographic projection model that estimates employment, population, and income in the region without the facility's contribution to the economic landscape. The difference between the overall economic impact and the direct and indirect impacts are attributed to the agglomeration effects of the facility. The findings indicate that agglomeration economies are significant part of the overall economic impact.     

Estimating the benefits of water quality improvements under the Water Framework Directive: are benefits transferable?

The Water Framework Directive sets an objective of ‘GoodEcological Status’ for water bodies across the EU. Non-pointpollution from agriculture is a major reason for the failureof rivers in the UK to meet this target. In this paper, we usechoice experiment methodology to test the transferability ofbenefit estimates of water quality improvements for two smallcatchments where agricultural-source non-point pollution andirrigation water abstraction are the main threats to ecologicalstatus. We also investigate the most appropriate techniquesto apply to transfer testing, including allowing for correlationbetween preferences for environmental attributes, and testingfor acceptable differences between transferred and originalvalues.