Measuring the Foreign Exchange Premium and the Premium for Non‐Tradable Outlays for 20 Countries in Africa

In this paper, we develop an analytical general equilibrium framework to measure the foreign exchange premium and the premium for non‐tradable outlays for a country. The framework allows us to capture in a consistent manner the impacts of the sourcing of funds and their expenditure on tradable and non‐tradable goods and services of investment projects. An application of the model is carried out for 20 countries in Africa. The results show that the foreign exchange premiums range from 2.4% to 9.0% and the premium for non‐tradable outlays from ?0.7% to 2.9%. The empirical values depend on a number of factors, including the indirect taxes, production subsidies and international trade distortions of a country. These premiums should be incorporated into the economic evaluation of investment projects.     

Elementary School Basal Readers and Work Mode Bias

“Students are in constant contact with textbooks and, through these materials, are perhaps influenced by implicit values that eulogize professional and paraprofessional work activities and derogate technical-vocational work activities.” This statement expresses the concern of the authors about the treatment of technical and vocational workers in textbooks used by elementary school children. The study not only gives evidence of bias in the books, but suggests an objective means of analyzing textbooks to determine whether or not bias exists.     

Earnings Conservatism and Value Relevance Across the Business Cycle

Abstract:  Prior research has demonstrated higher value relevance of current earnings during economic expansions relative to contractions. We largely attribute such a result to expected growth prospects being captured in the current earnings coefficient when a direct proxy for expected future earnings is omitted from the returns-earnings model. We demonstrate that the conservatism and value relevance of current earnings is actually higher during economic contractions when including a proxy for future earnings expectations. We further demonstrate that the value-relevance of expected future earnings is higher during expansions, when the association between historical accounting information and future growth opportunities likely weakens.     

The Transitory Nature of Negative Earnings and the Implications for Earnings Prediction and Stock Valuation

The value-irrelevance of losses largely results from the transitory nature of losses and the diminished relationship between current and future earnings. This study develops a sales-based model of future normal earnings that is useful in analyzing future earnings prospects of loss firms. Results indicate that the developed model is associated with future earnings realizations and current stock price and is shown to be incrementally value-relevant (with book value) in price regressions for loss firms. Investigation of the relative valuation role of the prediction model provides evidence that the model is associated with equity value for loss firms expected to survive.     

Unionization,Compensation, and Voice Effects on Quits and Retention

This study explores the relationships among unionization, compensation practices, and employee attachment (quit rates and tenure) among trucking companies to assess the applicability of Freeman and Medoff's exit/voice argument. Unionization was associated with lower quit rates, higher tenure, a better compensation package, and stronger voice mechanisms. The relationship of unionization to quit rates and tenure becomes nonsignificant after accounting for compensation (pay and benefits), and voice mechanisms do not add explanatory variance.