Earnings Predictability,Bond Ratings,and Bond Yields

We examine the role that earnings predictability plays in establishing a firm’s cost of debt capital by measuring its influence on establishing a new issue’s bond rating. In addition, we also examine the effects of earnings predictability on the initial pricing of the firm’s debt. Using new corporate bond issues from the period 1990–2000, our results indicate that the degree of predictability of a firm’s earnings is positively associated with a firm’s bond rating. Moreover, earnings predictability is also documented to be negatively associated with the offering yield. Importantly, bond rating classification accuracy is improved when specific measures of a firm’s earnings predictability are added to a robust model.JEL Classification:     

The Perfect Little Bump: Does the Media Portrayal of Pregnant Celebrities Influence Prenatal Attachment?

This study proposes and tests a theoretical model that analyzes celebrity pregnancy attraction and its ultimate influence over prenatal attachment within pregnant women. In particular, interest in pregnant celebrities and a high concern for physical appearance are examined for their relationship to weight concern and body image, and then leading on to prenatal attachment. The conceptual model presented was tested using structural equation modeling in a sample of 478 pregnant women. All hypotheses proposed were found to be significant. Results suggest that a high pregnant celebrity attraction, in combination with other factors, can lead to a reduced level of prenatal attachment. The study contributes further to knowledge of the influence of celebrities over consumer body image and healthy psychological adaptation in the important context of pregnancy.     

Differentiated Standards and Patent Pools

We consider patent pool formation by owners of essential patents for differentiated standards that may be complements or substitutes in use. Pooling improves coordination in terms of royalty setting within a standard but provokes a strategic response from licensors in the competing standard. We characterise the incentives to form and defect from pools within standards and show how pool formation and stability depend on competition between standards. We also examine strategic patent pool formation by consortium standards and show that policies promoting compatibility of standards may increase or decrease welfare depending on the effects on the incentives to form pools.     

Effects of Milk Marketing Order Regulation on the Share of Fluid-Grade Milk in the United States

The share of raw milk meeting fluid quality (Grade A) standards in the United States rose steadily through the latter half of the twentieth century, but a shrinking portion of that was used in fluid products. Grade A milk exceeds the quality standards for the manufactured products for which it has been increasingly used. We present an econometric model that exploits regional and temporal variation in policy implementation to identify the effect of marketing orders on the Grade A share of milk. Results support the hypothesis that marketing orders significantly encouraged the growth in the Grade A share of milk.     

Comparing China’s GDP statistics with coincident indicators

We use factor analysis to summarize information from various macroeconomic indicators, effectively producing coincident indicators for the Chinese economy. We compare the dynamics of the estimated factors with GDP, and compare our factors with other published indicators for the Chinese economy. The estimated factors and the published coincident indicators match the GDP dynamics well and discrepancies are very short. The largest discrepancies may correspond to shocks affecting the growth process.     

An Examination of Frontline Cross-functional Integration during Retail Transactions

This research investigates cross-functional integration in contexts where customers interact with multiple frontline functions during a retail transaction. Specifically, this study: (1) proposes and empirically tests a framework for frontline cross-functional integration, (2) shows that joint reward valence alters the effects of other integration mechanisms in ways that can sometimes be detrimental, and (3) demonstrates the effects of cross-functional integration on individual sales performance and job satisfaction. The proposed framework is empirically tested in the automobile sales context with sales and finance as the frontline functions. Results indicate that cross-functional training and cohesion influence quality of communication, which in turns leads to more effective relationships. As joint reward valence increases, the positive impact of cross-functional training on communication quality is enhanced; however, the positive impact of cohesion on communication quality is reduced. Similarly, as joint reward valence increases, relationship effectiveness leads to higher individual sales performance but the positive benefits of relationship effectiveness on job satisfaction diminish. Thus, this study improves the understanding of frontline cross-functional integration and the process by which integration mechanisms influence employee outcomes.     

Results of a cross-national structured cognitive interviewing protocol to test measures of disability

This paper describes the Washington Group project to test a short battery of disability questions developed for national censuses. The study used an unusually structured cognitive test protocol and was administered to a total of 1,290 respondents selected from convenience samples in fifteen countries in Central and South America, Asia and Africa. The test protocol consisted of the six core disability questions followed by questions designed to illustrate: (1) whether core questions were administered with relative ease; (2) how core questions were interpreted by respondents; (3) the factors considered by respondents when forming answers to core questions; and (4) the degree of consistency between responses to core questions and a set of more detailed functioning questions. Additionally, demographic and general health sections allowed for an examination of comparability, specifically, whether test questions performed consistently across all respondents, or if nationality, education, gender or socio-economic status impacted the ways in which respondents interpreted or considered each core question.     

The rise of the machines: Capital imports and real manufacturing wages in 57 nations

Outward-oriented policy reform has attracted a large number of academics to the study of the trade-labour market nexus. One of these fields has focused on capital intensive (machinery) imports and its effect on manufacturing wages. The skill-enhancing-trade (SET) hypothesis was put forth to explain a potential relationship where an inflow of capital imports results in increased demand for skilled labour and decreased that of unskilled labour, and thus resulted in a rise in skilled wages and a decrease in their unskilled counterparts. This study revisits this hypothesis with a panel from the manufacturing sector of 57 nations. We improve upon previous studies in a number of ways. We add developed nations to the sample and examine capital imports from rich countries as well as the rest of the world. This takes into account the prominence of vertical production networks in international trade. We adhere closely to the neo-classical trade model and employ definitions of skilled and unskilled workers that capture the production process of particular items. Finally, we fit a robust dynamic panel data model that accounts for the endogeneity of the determinants of trade and wages. In this way we test whether the SET hypothesis is generally applicable as opposed to previous studies which use an ad hoc selection of countries and variables. We find that the SET hypothesis is not driving changes in manufacturing wages. Instead, worker productivity and GDP per capita explain these labour market outcomes.     

Capital building through gym work

This research employed Pierre Bourdieu’s model of capital accumulation to frame the benefits conferred by gym use. Thirteen participants from four gyms in Melbourne, Australia, were purposefully selected for in-depth interviews, where detailed case histories were solicited, and data were analysed using a narrative coding model. Results indicated that the two most highly valued forms of capital were bodily capital and psychological capital. All 13 participants cited gym work as the means by which they built a better looking and better functioning body. They also advised that gym work had strengthened their self-esteem and psychological resilience, which, in turn, enabled them to present themselves more confidently in their various social roles outside the gym. In contrast, these 13 gym users accrued low levels of cultural and symbolic capital through their activities, and contrary to previous studies, also secured little social capital from gym work.     

Demand elasticity estimates for New Zealand tourism

Demand elasticities for New Zealand tourism are estimated for 16 different international visitor segments. Segments are differentiated by origin, purpose of visit, and travel style. Elasticities for both international visitor arrivals and on-the-ground expenditure per arrival are estimated for each segment using time-series data. In general, on-the-ground consumption per arrival is more price sensitive than number of arrivals, and Asian market segments are found to be more price sensitive, both in terms of arrivals and on-the-ground expenditure, compared to international visitors from other regions. An application of the results is presented giving the total effect of exchange rate changes on expenditure by international visitors in New Zealand, and management implications are discussed.