The Disciplining Role of Accounting in the Long-Run

One role of accounting is to discipline softer (more manipulable) sources of information. We use a principal-agent model of hidden actions and hidden information to study this role. In our model, there is both a verifiable signal (a publicly observed output) and an unverifiable signal (a productivity parameter privately observed by the agent). In a one-period setting, the optimal contract does not make use of the agents report on the private signal. However, when the output is tracked over two periods, the agents communication can be valuable. This reversal of results suggests uncovering the disciplining role of accounting may require a long-term perspective.JEL Classification: D82, M41     

多种多样的新船建造融资方式

船厂建造资金的主要来源是买方提前支付合同价款,其目的是使船厂在建造项目开始时(和在船舶建造的重要阶段)获得充足的流动资金,从而能按合同约定的期限完成船舶建造,交付买方.典型的付款方式是在合同签订后,船舶买主即按合同价支付分期付款的第一笔预付款(例如合同价的10%),其余款项则应在不同的建造阶段予以支付.这些都是船舶交付前的分期付款.合同价的余额(通常为合同价的60%～80%)将在船舶交付时支付,被称为"交船时支付的尾款".     

The five minds of a manager

Managers are told: Be global and be local. Collaborate and compete. Change, perpetually, and maintain order. Make the numbers while nurturing your people. To be effective, managers need to consider the juxtapositions in order to arrive at a deep integration of these seemingly contradictory concerns. That means they must focus not only on what they have to accomplish but also on how they have to think. When the authors, respectively the director of the Centre for Leadership Studies at the University of Exeter in the U.K. and the Cleghorn Professor of Management Studies at McGill University in Montreal, set out to develop a masters program for practicing managers, they saw that they could not rely on the usual MBA educational structure, which divides the management world into discrete business functions such as marketing and accounting. They needed an educational structure that would encourage synthesis rather than separation. Managing, they determined, involves five tasks, each with its own mind-set: managing the self (the reflective mind-set); managing organizations (the analytic mind-set); managing context (the worldly mind-set); managing relationships (the collaborative mind-set); and managing change (the action mind-set). The program is built on the exploration and integration of those five aspects of the managerial mind. The authors say it has proved powerful in the classroom and insightful in practice. Imagine the mind-sets as threads and the manager as weaver. Effective performance means weaving each mind-set over and under the others to create a fine, sturdy cloth.     

Getting a handle on health fund finances: a comprehensive but practical approach

Multiemployer health funds are being hammered from several directions. While it is difficult to find a silver lining in the situation, plan sponsors are far from helpless. They should immediately begin to take concrete steps to help stabilize plan costs in order to be able to continue to offer their members meaningful health coverage.     

Having trouble with your strategy? Then map it

If you were a military general on the march, you'd want your troops to have plenty of maps--detailed information about the mission they were on, the roads they would travel, the campaigns they would undertake, and the weapons at their disposal. The same holds true in business: a workforce needs clear and detailed information to execute a business strategy successfully. Until now, there haven't been many tools that can communicate both an organization's strategy and the processes and systems needed to implement that strategy. But authors Robert Kaplan and David Norton, cocreators of the balanced scorecard, have adapted that seminal tool to create strategy maps. Strategy maps let an organization describe and illustrate--in clear and general language--its objectives, initiatives, targets markets, performance measures, and the links between all the pieces of its strategy. Employees get a visual representation of how their jobs are tied to the company's overall goals, while managers get a clearer understanding of their strategies and a means to detect and correct any flaws in those plans. Using Mobil North American Marketing and Refining Company as an example, Kaplan and Norton walk through the creation of a strategy map and its four distinct regions--financial, customer, internal process, and learning and growth--which correspond to the four perspectives of the balanced scorecard. The authors show step by step how the Mobil division used the map to transform itself from a centrally controlled manufacturer of commodity products to a decentralized, customer-driven organization.     

The impact of all-star analyst job changes on their coverage choices and investment banking deal flow

Using a sample of all-star analysts who switch investment banks, we examine (1) whether analyst behavior is influenced by banking relationships and (2) whether analyst behavior affects investment banking deal flow. Although the stock coverage decision depends on the relationship with the client firms, we find no evidence that analysts change their optimism or recommendation levels when joining a new firm. Investment banking deal flow is related to analyst reputation only for equity transactions. For debt and M&A transactions, analyst reputation does not matter. There is no evidence that issuing optimistic earnings forecasts or recommendations affects investment banking deal flow.     

THE LEGALITY OF THE SHAREHOLDER RIGHTS BY-LAW IN DELAWARE: PRESERVING THE MARKET FOR CORPORATE CONTROL

Just as some lawyers almost killed the takeover market with the invention of the poison pill in the 1980s, others are now about to reinvigorate it with another legal invention. The “shareholder rights bylaw,” which promises to be the next major legal battleground in the market for corporate control, aims to eliminate the current ability of target company boards of directors to block changes of control by keeping their poison pill defenses in place. The new bylaws require the poison pill (and other defensive measures) to expire automatically whenever the firm receives an allcash offer for 100% of the firm's stock at a price at least 25% above the prebid market price. The firm can keep its poison pill, but only if shareholders vote to keep it after receiving the offer. Although the legality of the share-holder rights bylaw has been challenged as an undue infringement on boards of directors' power to run companies, this article argues that their legality will be upheld for three reasons:

• ? First, shareholder rights bylaws merely reinforce the corporate manager's responsibility to manage the firm to maximize shareholder value.
• ? Second, Delaware and most other jurisdictions give shareholders the specific right to amend the bylaws of a corporation; and the shareholder rights by-law is a straightforward exercise of this explicit right granted to shareholders.
• ? Third, the adoption of shareholders rights by-law does not prevent the board of directors from advising share-holders to vote to reject a takeover bid, nor does it prevent shareholders from giving management the authority to use defensive mechanisms such as the poison pill.

As the article concludes, upholding this right of shareholders to choose whether a poison pill is used to block a takeover is critical to the vitality of the takeover market and, hence, to the preservation of the agency relationship between directors and shareholders. Upholding this right may also prove critical to Delaware's ability to maintain its predominance in the market for corporate chartering.     

Returns to Regionalism: An Analysis of Nontraditional Gains from Regional Trade Agreements

The past decade has witnessed a renewed interest in regionaltrade agreements, with many policymakers and academics seemingto believe that these provide more than the traditional gainsfrom trade. This article examines several possible benefitsthat regional trade agreements may confer on their partners,including credibility, signaling, bargaining power, insurance,and coordination. It assesses the necessary conditions for eachpossible channel to work, gives stylized examples of specifictypes of policy where the benefit might be applicable, examinescases where the explanation might be relevant, and discussestheir overall plausibility. It concludes by examining the NorthAmerican Free Trade Agreement and the Europe Agreements.     

An econometric model for ex ante prediction of wildfire suppression costs

This paper develops an econometric model that can provide predictions of fire suppression costs (per acre and in total) for a given large fire before final fire acreage is known. The model jointly estimates cost per acre and acreage equations via Maximum Likelihood, accounting for sample truncation based on final fire size. Formulas and results are shown for predictions of costs and fire size for wildfires in general, and for large fires in particular. Marginal effects of explanatory variables on cost and acreage are discussed. The distribution of these model predictions illustrates the importance of accounting for sample truncation when generating predicted outcomes based on ex ante information.