How Do Investors Interpret Announcements of Earnings Delays?

Unlike in the case of delays of 10‐K or 10‐Q filings, the SEC does not require managers to disclose delays of earnings announcements to the public. Thus, for companies that are unable to report earnings by their expected date, managers face a decision: remain silent or announce the delay. Prior research has investigated all earnings delays, whether or not they are accompanied by announcements of the delay announcement, and found that the market reaction is slightly negative, on average, for companies that allow their expected earnings dates to pass without disclosing results. It's not clear, however, whether this negative reaction was due to the absence of news or to the information contained in the announcements of the earnings delays. The authors' recent study documents that earnings delay announcements are associated with an average one‐day abnormal stock return of a negative 6%. This statistically as well as economically significant reduction in value is consistent with anecdotal evidence in the popular business press as well as predictions of disclosure theories, in particular the explanation that concerns about legal liability and managerial reputation motivate managers to disclose bad news. The study also shows that almost all managers who announce earnings delays attempt to influence the market reaction by disclosing the underlying cause. Finally, the study shows that the market reaction to earnings delay announcements is positively related to future earnings changes, consistent with the role of these disclosures in providing a signal of deteriorating financial performance.     

Scale-independent North-South trade effects on the technological-knowledge bias and on wage inequality

This paper develops a general equilibrium endogenous growth model that highlights the scale-independent mechanisms through which trade-induced North-South technological-knowledge diffusion affects the technological-knowledge bias and, thus, the paths of intra-country wage inequality. In contrast with the market-size effect, stressed in the previous literature on skill-biased technological change, the operation of the emphasized price channel following openness predicts, in line with the recent trends in developed and developing countries, an increasing skilled technological-knowledge bias, which, in turn, rises wage inequality in favor of skilled labor.     

Intangible capital,relative asset shortages and bubbles

Purely technological factors can be a fundamental force behind the emergence of asset price bubbles in developed economies. We analyze an economy in which the production technology utilizes both physical and intangible capital, where the latter cannot be used as collateral for borrowing. Technological change, in the form of increased importance of intangible capital in production, sharpens the borrowing constraints of entrepreneurs, leading to a scarcity of high-yield assets relative to low-yield ones. This can create the conditions for asset bubbles. Additionally, due to the financial frictions, standard dynamic efficiency tests are not valid, and bubbles are not Pareto improving.     

The Non‐Observed Economy in Portugal: The monetary model and the MIMIC model

This paper offers estimations for the Portuguese path of the Non‐Observed Economy (NOE), in the period 1970–2015, through two seminal approaches: monetary method and the Multiple Indicators Multiple Causes (MIMIC) model. It is observed that the tax burden and social benefits are its main causes. Then, to get a more in‐depth understanding of the phenomenon, it provides a study of the Granger causality between the NOE and the official Gross Domestic Product (GDP), emphasizing the implications of the NOE on the Portuguese economy. Evidence has been found for the existence of bidirectional causality between the NOE and the GDP, suggesting that the formal economy affects the NOE, and conversely that the NOE affects the economic growth.     

Systemic Cooperative Actions among Competitors: the Case of a Furniture Cluster in Brazil

The purpose of this article is to describe cooperation practices observed in competitors companies in a furniture cluster in Brazil. The literature refers to it as coopetition. The research method was the multiple case study. The main research technique was the semi-structured interviews with practitioners of the cluster. The study created a theoretical framework for cooperative practices in industrial clusters formed by four types of practices: logistics, marketing and sales, formation of the workforce, and innovation and technology. The study investigates these four types of cooperation in five large companies that compete in the same market, the anchor companies of the cluster. The only entirely complied type of collaboration is the formation of the workforce of the cluster. In the other practices, cooperation involving competitors is lower than reported in the literature. The main reason for this low cooperation is excessive rivalry and mutual distrust in the cluster, and competition by differentiation, which partially prevent the gain of scale provided by cooperative actions.     

Could immigration explain wage inequality in a skill-biased technological model?

The aim of this paper is to evaluate how immigration of high-skilled workers affects the technological-knowledge bias and, in turn, the skill premium in the host countries, in particular bearing in mind the recent experience in a number of European countries. We study a skill-biased dynamic general equilibrium R&D growth model in which the standard R&D technology is modified so wage inequality results from the direction of the technological knowledge, which in turn is induced by the price channel. By solving the transitional dynamics numerically, we show that the rise of the skill premium arises from the price-channel effect, complemented with a mechanism that reflects the impact of immigration on R&D. According to our quantitative results, our model is able to account for a significant proportion of the dynamics of the skill premium in the data for a number of European countries, thus, suggesting that differences in labour skills between immigrants and natives are, in practice, an important source of skill premium variation over time.     

The impact of health sector on R&D,economic growth and wages

We extend the existing R&D growth literature by focusing on the short-, medium-, long-run effects of the health sector on R&D intensity, economic growth and wages, and by considering 21 OECD countries between 1991 and 2008. We show that: (i) there is a unique and stable steady state; (ii) an increase in health-labour share in skilled population has no effect on growth, but affects negatively (positively) the R&D intensity (the skill premium); (iii) Anglo–Saxons countries have the lowest health-labour share in skilled-labour population, and Nordic countries have the lowest skill premium and the highest consumption/production of healthcare per capita.     

Understanding the strategies of late-movers in International Manufacturing

This paper analyzes the internationalization of new multinationals from emerging countries. It also focuses on Production's role in firm internationalization, a subject seldom addressed because the discipline of International Manufacturing is still embryonic, while International Business tends to overlook production. The authors integrate International Business and International Manufacturing concepts and frameworks in order to analyze new multinationals from emerging countries, using the empirical evidence of a survey plus case studies of Brazilian multinationals for understanding late-movers’ strategies and competences, with emphasis on production.     

The impact of European firms＇ economic conditions and financial performance on accounting quality

In this study the authors analyse the possible effect of firms＇ economic conditions and financial performance on accounting quality. Bradshaw, et al. （2004）, Gelos ＆ WEI （2005） stated that financial reporting quality is fundamental for investors and it affects international capital movements. Following Schipper ＆ Vicent （2003）, the authors estimated accounting quality by abnormal accruals and earnings persistence. The authors＇ contribution consists of investigating a huge number of firms from 17 European countries using unbalanced panel data. The authors found evidence that economic conditions affect accounting quality： big firms and those with high current earnings exhibit better financial information. These results are robust because they do not depend on the accounting quality proxy, even when the authors estimated regression with economical and financial factors alone or together. Financial performance does not seem to affect accounting quality. However, this relation is not linear because in high leveraged firms, the capital structure becomes determinant.