The predictive ability paradox in behavioral accounting research

The purpose of this brief paper is to illustrate a problem with certain “types” of behavioral experiments predicated on a test of predictive ability. Such studies possess the following common characteristics: (1) They employ the implicit prediction models of individual human subjects; (2) They utilize as criteria for assessing predictive usefulness events whose outcomes cannot be independent of expectations about them (e.g. bankruptcy); (3) They use historical values for both criterion events and treatment factors. The difficulty with such experimental designs lies in the necessity to assume unalterable prior behavior in order to utilize a known value for the criterion event. Such an assumption makes it difficult to demonstrate the predictive usefulness of any information treatment factors.     

Inflation,Taxation, and Interest Rates

This paper demonstrates that the response of nominal interest rates to changes in inflationary expectations should lie between that predicted by the “Fisher” and “Darby” effects. The exact nature of the response will depend on the relative size of the income and capital gains tax rates, and the relative size of the derivatives of investment and savings to their respective after-tax real rates. The other major conclusion of this paper is that capital gains taxation offsets the negative effect on investment produced by treating depreciation on a historic rather than a replacement cost basis.     

Impact of telephone and satellite earth station installations on GDP : A model for rural areas of LDCs

Presents a method for estimating the impact on national development of installation of telecommunication facilities in rural areas of developing countries. A methodology developed by Hardy is applied to three groups of developing countries and a hypothetical rural region to estimate the impact on GDP per thin route satellite earth station installed over a ten year period. A logarithmic relationship between telephone density and impact on GDP per earth station is found, so that the impact per earth station increases with lower telephone densities. The model can be used to estimate the impact on national GDP of telephone installations and/or thin route earth stations in regions of low telephone density.     

Geography,demography, and economic growth in Africa

This paper presents the effects of climate, topography, and natural ecology on public health, nutrition, demographics, technological diffusion, international trade and other determinants of economic development in Africa. The goal of this paper is to emphasize the need for intensified research on the issues at the intersection of ecology and human society. Geography was given emphasis because of three reasons: the minimal gain from another recitation of the damage caused by statism, protectionism and corruption to African economic performance; negligence of the role of natural forces in shaping economic performance; and tailoring of policies to geographical realities. The paper also discusses the general problems of tropical development and the focus of Africa's problems in worldwide tropical perspectives; demographic trends in Africa; use of standard cross-country growth equations with demographic and geographic variables, to account for the relative roles of geography; and the future growth strategies and the need for urban-based export growth in manufacturing and services. Lastly, the authors provide a summary of conclusions and discuss the agenda for future research.     

Migration of the population

Two factors influence foreign migration balance of the Russian Federation. The first factor involves the migration process between Russia and former union republics. The influx of population to the Russian Federation from other republics of the former Soviet Union is considered as one of the largest in the world. The average annual migratory growth of Russia during the years 1991-94 as a result of this migration exchange has tripled as compared with 1986-90, with a total of 2.7 million Russians who migrated into Russia. However, from 1996 up to the present time, the number of persons arriving in Russia declined dramatically. Meanwhile, the second factor that determines the country's migration balance is emigration to the far abroad. The most significant trend in determining the development of internal migration in Russia is the outflow of population from northern and eastern regions. The directions of internal and external migratory flows have a large influence on the migration balance in Russia's rural areas. The reduction of migratory flows in rural areas is the direct result of processes in the economic sphere. It confirms the reconstruction of rural-urban migratory exchange.     

Manager-Employee Relationships: Guided by Kant's Categorical Imperative or by Dilbert's Business Principle

The relationship between Employer and Employees is a central one in the world of business. While an important relationship, it is one that is often a source of tension for the workplace. Employers are seemingly in constant mistrust of workers, while workers often look upon their bosses as "less than competent". In the American world of business today, should this "adversarial" relationship continue or should the Employer–Employee Relationship be governed by different rules. Immanuel Kant's Categorical Imperative offers some insights into the way this relationship should be viewed. Also, the philosopher Alfred North Whitehead has some important points to add to the discussion of this crucial business relationship. A look at the case involving Malden Mills Textile Plant and its CEO Aaron Feuerstein will be used to launch this discussion.     

Block Share Purchases and Corporate Performance

This paper investigates the causes and consequences of activist block share purchases in the 1980s. We find that activist investors were most likely to purchase large blocks of shares in highly diversified firms with poor profitability. Activists were not less likely to purchase blocks in firms with shark repellents and employee stock ownership plans. Activist block purchases were followed by increases in asset divestitures, decreases in mergers and acquisitions, and abnormal share price appreciation. Industry-adjusted operating profitability also rose. This evidence supports the view that the market for partial corporate control plays an important role in limiting agency costs in U.S. corporations.