Valuation under imperfect information: Bayesian learning from the performance of the firm and the market

This paper develops a valuation model for a project or firm in the presence of uncertainty about the mean of the probability distribution of the cash flows generated by the project. Its major point is that in the presence of parameter uncertainty the value of the project is smaller than in the case where the mean cash flows is perfectly known. The second point is that when there is a known covariance between project cash flows and aggregate market cash flows investors can learn about the unknown mean cash flows by observing the market. This is referred to as ‘learning from the market’.     

The innovative bureaucrat: evidence from the correctional authorities in Washington State

Bureaucracies are usually regarded as inefficient, wasteful mechanisms. Contrary to this deeply rooted perception of bureaucracy, this paper documents the case of the correctional authorities in Washington State, a bureaucracy that acted with a considerable degree of innovation and professionalism. Their task was to administer a risk assessment instrument that measured the level of risk posed by offenders by way of a numerical score. They used that score to identify the level of supervision offenders were to receive once released into the community. In analyzing the data, I discovered an unusual application of the instrument that resulted in many offenders being bumped to a higher supervision level. Using a regression discontinuity design, I uncover the mechanics of the bumping-up process and I generate an instrument that is cleansed of the manipulation. I find that the manipulated instrument predicts serious recidivism events better than the cleansed instrument, especially when these events involve high-risk offenders, thus providing evidence that the authorities had good reason to undertake the manipulation.     

Perceived value of corporate donations: an empirical investigation

• There is current recognition that value is the fundamental basis for all marketing activities. The present research provides an empirical examination of perceptions of value within the voluntary sector and specifically donations made by organisations towards the funding of charitable projects. The impact of a number of charity and project‐related variables on the formation of value and the corresponding effect of value on satisfaction and behavioural variables are examined.
• The results support claims that past experience with and information about a charity as well as information about a specific project are significant determinants of value. However, the impact of these constructs is differential between the two components of value (i.e. get/benefits and give/sacrifices). We confirm the significant effect of value on satisfaction and indicate that satisfaction and benefits derived from a donation have a direct impact on behavioural intention.

Copyright © 2008 John Wiley & Sons, Ltd.     

Investments and uncertainty revisited: the case of the US economy

This article examines the relationship between investments and uncertainty for the US economy, as the latter is approximated by consumer sentiment, purchasing managers’ prospects and economic policy uncertainty. Contrary to the existing literature, we provide evidence that this relationship is time varying. The time variation is attributed to the observed temporal replacement effect between private and public investments. Furthermore, we show that there are two distinct correlation regimes in this relationship and unless we concentrate on them, we cannot fully unravel the real link between uncertainty and investments. Finally, we examine whether the use of the two correlation regimes provides better forecasts for investments compared to the use of the uncertainty indices alone. The forecasting exercise reveals that the use of correlation regimes provides statistically superior out-of-sample forecasts.     

Innovation and upheaval: early growth in Greek capital market listings and IPOs from 1880 to the Second World War in the Athens Stock Exchange†

The establishment and growth of the Greek stock market were coincident with development episodes, financial upheavals, and geographic expansions of the country's economy over the period 1880–1940. This article explores the growth of the Athens Stock Exchange through new listings and initial public offerings (IPOs) in the late nineteenth and early twentieth centuries. We examine changes in exchange governance and listing requirements. On a theme not addressed before , we find that simple listings were far more numerous than actual IPOs. IPOs in Greece remained unregulated throughout the period. Their under‐pricing became pronounced in the later parts of the period, especially the 1920s. The study presents data on ‘quasi‐IPOs’ (that is, capital increases shortly after listing) and shows that they offer a more accurate assessment of the demand for the financing of listing firms in an emerging market. Robust evidence is presented to show that as the Exchange developed it also underwent a change in character, becoming more oriented to the domestic market and catering to smaller firms in domestic manufacturing in the post‐First World War era that marked the end of early globalization.     

High-performance work practices and nurses’ intention to leave: the mediating role of organizational cynicism and the moderating role of human resource management-related educational background

Recently, an increasing stream of research has examined high-performance work practices in the health care context. In this vein, high-performance work practices have been shown to be related to various employees’ attitudes and behaviors including intention to leave. This study attempted to improve our understanding of the relationship between high-performance work practices and intention to leave by jointly examining mediating and moderating mechanisms. Results from a sample of 299 private nurses supported our moderated mediation model thus demonstrating that organizational cynicism mediated the relationship between high-performance work practices and intention to leave and further that this indirect effect is dependent on nurses’ human resource management-related educational background.     

Corporate non-participation in the ASB standard-setting process

The standard-setting process of the UK's Accounting Standards Board (ASB) can be examined from different theoretical frameworks. One considers it a political process where interested parties choose to lobby on the basis of lobbying costs and benefits accrued from successful lobbying. The examination of the motives of various parties to lobby or not is considered important for understanding the process. Another framework assumes a non-pluralistic process, dominated by a few powerful groups to the detriment of the interests of other groups which are effectively excluded from the process. Drawing from the first framework, this study examines the factors which influenced the choice of a sample of UK listed companies not to make a submission on the ASB's discussion paper proposals on deferred tax. A perception that their participation would not make a difference to the outcome of the process and reliance on their external auditors to represent their position were found to be the most important factors for not making a submission. In contrast, no support was found for the suggestion that agreement with the proposals is more likely to prompt a non-response than disagreement with the proposals.