CEO marital status and corporate cash holdings

We examine the effect of CEO marital status on corporate cash holdings. Consistent with the classical agency framework, we find that firms with single CEOs hold more cash compared to otherwise similar firms with married CEOs and that the excess cash held by single CEOs is significantly discounted by shareholders. Our findings survive a battery of tests to ease endogeneity and selection bias, confirming that results are not simply reflecting innate heterogeneity in preferences. Overall, our findings indicate that a variable outside the common firm- and macro-level determinants, CEO marital status, can significantly influence corporate policies.     

TESTING THE THEORY OF MULTITASKING: EVIDENCE FROM A NATURAL FIELD EXPERIMENT IN CHINESE FACTORIES

Using a natural field experiment, we quantify the impact of one‐dimensional performance‐based incentives on incentivized (quantity) and nonincentivized (quality) dimensions of output for factory workers with a flat‐rate or a piece‐rate base salary. In particular, we observe output quality by hiring quality inspectors unbeknownst to the workers. We find that workers trade off quality for quantity, but the effect is statistically significant only for workers under a flat‐rate base salary. This variation in treatment effects is consistent with a simple theoretical model that predicts that when agents are already incented at the margin, the quantity–quality trade‐off resulting from performance pay is less prominent.     

The investment opportunity set and the voluntary use of outside directors: New Zealand evidence

This study examines whether the composition of boards of directors differs between high and low growth firms. Based on prior research, we hypothesise that firms with greater investment opportunities require more monitoring because managers in these firms have more discretion both in selecting investments and allocating resources between investments. Because outside directors can be more effective monitors than inside directors, we predict that outsiders will make up a larger proportion of the board in high growth firms than in low growth firms. Using a cross-sectional sample of 77 New Zealand firms, our results suggest that the percentage of outside directors is related to growth for two of the four measures of investment opportunities which we employ. As expected, the percentage of outside directors is also related to a composite measure of investment opportunities.     

The investment opportunity set and disclosure policy choice: Some Malaysian evidence

Recently researchers have shown that certain corporate and accounting policy decisions are related to the firm's portfolio of growth opportunities or its investment opportunity set (ios). This paper augments the research by examining whether the firm's ios is also predictably related to disclosure policy decisions made by the firm. We hypothesize that because agency costs between managers and shareholders are an increasing function of the firm's growth opportunities, managers in high growth firms will be motivated to disclose information about the firm's future prospects in order to commit themselves to particular courses of action and thereby limit their future managerial discretion. Our empirical results indicate that for a sample of 67 Malaysian firms, this is supported only amongst a sample of lower growth firms.The authors are Associate Professor and lecturer, respectively, at the Department of Accountancy, Massey University, Palmerston North, New Zealand. Correspondence should be addressed to S F Cahan at the above address, e-mail: S.F.Cahan@massey.ac.nz.     

The Canadian tax-free savings account: a programme to help the rich get richer?

This article examines participation in the Canadian tax-free savings account (TFSA), implemented in 2009, and its potential impact on wealth inequality in Canada. Data from the 2012 Survey of Financial Security is used to estimate probit, tobit and Heckman probit selection models to test the hypothesis that high-income earners and wealth holders are the most likely recipients of the benefits associated with the TFSA. Empirical results highlight the significance of net worth as a key determinant of both participation in and contribution levels of the TFSA. The results are expected to be relevant to public policy-makers concerned with reducing inequality and those endeavouring to encourage savings for all socio-economic groups.     

Effects of country-level legal,extra-legal and political institutions on auditing: A cross-country analysis of the auditor specialization premium

In this cross-country study of the specialist auditor premium, which spans the US and 12 other countries, we provide evidence that country-level institutional strength increases average audit fees, but reduces the incremental demand for specialist auditors. This finding supports the hypothesis that strong institutions and the demand for specialist knowledge act as substitutes in providing the requisite assurance of financial statements.     

Consumption of foods and foodstuffs processed with hazardous chemicals: a case study of Bangladesh

Determining the best way to persuade consumers to consume more healthy foods is challenging. In Bangladesh, however, daily newspapers consistently show that various hazardous chemicals (e.g. calcium carbide, sodium cyclamate, cyanide and formalin, etc.) are mixed with or added to foods and foodstuffs. These chemicals are very dangerous to humans. This present study examines the reasons behind the use of hazardous chemicals in foods as well as the extent to which food producers/sellers use such chemicals. In addition, this study assesses consumer perceptions of and attitudes towards these contaminated food items and explores how adulterated foods and foodstuffs affect consumer health. The empirical data were collected from 110 consumers, 25 sellers or producers, seven doctors and seven pharmacists in Dhaka, the capital of Bangladesh. This study shows that nearly every consumer (93.7%) is aware that various foods and foodstuffs contain hazardous chemicals, and that 95.5% of consumers are aware that these adulterated foods and foodstuffs are harmful to their health. This paper explores the myriad reasons why consumers nevertheless feel compelled to consume such chemically treated foods.