Ending Food Subsidies: Nutritional, Welfare, and Budgetary Effects

Governments faced with growing budget deficits are cutting manysocial expenditures, including costly food subsidy programsthat have provided benefits to the rich and poor alike. Becausethe poor spend a larger share of their income on food than dothe rich, however, such cuts usually have negative distributional,welfare and nutritional effects. This article discusses themethodological issues in estimating the effects of price andtax reforms in developing countries. I apply a model that Deaton(1988) developed to estimate price elasticities from cross-sectiondata, the only reliable and detailed data available in mostdeveloping countries. I use measures of both real income andnutrition to evaluate the effects of changes in the Moroccanfood subsidy program. The analysis suggests that subsidies oninferior foods not consumed by the wealthy would reduce thewelfare costs to the poor and limit the budgetary expendituresrequired.     

An Empirical Examination of the Pricing of Seasoned Equity Offerings: A Test of the Signaling Hypothesis

This paper tests the predictions made by Signaling Theory against the competing Price–Irrelevance Hypothesis (Eckbo and Masulis, 1992). Signaling Theory suggests that the issue price of a security provides a signal of quality of the issuing firm. In contrast, the Price–Irrelevance Hypothesis suggests that equity pricing does not possess information content. This paper investigates the pricing of seasoned equity offerings by examining the role of firm quality and relative firm valuation on issue price discounts. Additionally, this paper investigates the relationship between the issue price discount and the market reaction at the issuance of seasoned equity offerings. The results indicate that firm quality does not have a significant impact on the degree of price discounting by the issuing firm. Relative firm market valuation does appear to be a determinant of the magnitude of discounting in setting the issue price. This paper also provides evidence that seasoned equity offerings firms that provide a lower issue-price discount experience a lower stock-price decline following the issuance as compared to firms offering a higher price discount.     

Tests of Market Reaction and Analysts' Forecast Revisions to the Disclosure of Improved Management Earnings Expectations: A Case of Concurrent Bad News Management Earnings Forecasts

This paper tests whether a negative stock market reaction, associated with a management forecast of near term bad earnings, is lessened by a concurrent management forecast of improved longer term earnings expectations. Stock market reactions depend on the creditability of management forecasts of improved earnings expectations. In this analysis, the authors examined market reactions around the time of management forecasts of bad earnings, with and without longer-term management forecasts of improved earnings expectations. The results show that the stock market reaction is significantly less negative when management forecasts of bad earnings are followed by management forecasts of improved long run earnings expectations than when management forecasts of bad earnings are not accompanied by management forecasts of improved earnings expectations. In addition, this paper examines financial analysts' reactions to management bad earnings forecasts and management forecasts of improved earnings expectations. The findings show that analysts react less negatively to management forecasts of improved earnings expectations than to management forecasts of bad earnings. An analysis of a sub-sample of observations shows that analysts consider management forecasts of improved earnings expectations to imply improved expected future performance, thus conveying that analysts give credence to management forecasts of improved earnings expectations. However, results show that the stock market and analysts are unable to distinguish management forecasts of improved earnings expectations that come true from management forecasts of improved earning expectations that do not come true.     

Forum: Teaching Professional Judgement in Accounting

In May 2005, the University of Lethbridge and the Institute of Chartered Accountants of Alberta sponsored the Banff Education Conference entitled Professional Judgement: Can It Be Taught? The opening forum at the conference was a panel discussion on the topic presented by academics and practitioners. The session included an overview of the research literature on expertise as a basis for considering the nature of professional judgement and the implications of various attributes of expertise for accounting education. Past practices and current pressures facing practitioners in exercising good judgement were addressed, including increased complexity of transactions and decreased time to assess problems. The forum also included a discussion of the need for educators to help guide students to develop an understanding of a problem rather than simply seek the answer. There was a discussion of particularly challenging topics for students to grasp in a principlesbased environment. The forum culminated in a question‐and‐answer session involving the panelists and the attendees at the conference. This paper summarizes the presentations and the discussion that took place during the forum. En mai 2005, l'Université de Lethbridge et l'Institut des comptables agréés de l'Alberta commanditaient le congrès de Banff sur l'éducation ayant pour thème la question suivante: le jugement professionnel s'enseigne‐t‐il? Le forum d'ouverture a consisté en une table ronde sur cette question au cours de laquelle enseignants et praticiens ont effectué un survol des publications de recherche sur la compétence qui a servi de point de départ à l'étude de la nature du jugement professionnel et des répercussions de diverses caractéristiques de la compétence sur la formation comptable. Les panélistes se sont penchés sur les méthodes passées et sur les pressions auxquelles sont actuellement soumis les praticiens dans l'exercice d'un jugement éclairé, notamment les difficultés occasionnées par la complexité accrue des transactions et la réduction du temps dévolu à l'évaluation des problèmes. Les panélistes ont également discuté de la nécessité pour les enseignants d'amener les étudiants à mieux comprendre les tenants et les aboutissants d'un problème plutôt que de simplement en chercher la solution. Ils ont également discuté d'enjeux particulièrement importants pour les étudiants dans un environnement axé sur les principes. Le forum s'est terminé par une période d'échange entre panélistes et participants au congrès. Le texte qui suit est un résumé des exposés présentés dans le cadre de ce forum et des discussions qui s'y sont déroulées.     

Special focus: The Bangladesh sorghum experiment

In 1978, an experiment was undertaken in Bangladesh to test the possibility of targeting part of the country's public food system toward the poorer and more malnourished population groups through the introduction of a lower-status, but nutritionally valuable food. Sorghum, as a representative inexpensive coarse grain, was selected and introduced into a set of ration shops in both urban and rural areas. Given the low, or negative, income elasticity of demand for sorghum among the middle class, offtakes in the urban test were low. However, in the rural areas, offtakes were substantial, particularly among the lower-income groups, reaching almost 70% in one of the two districts studied. Although this would suggest that the programme has considerable potential in affecting malnutrition and, to a lesser extent, the distribution of income, other information collected on the rural ration system as a whole indicates that, unless the larger system is reoriented, this potential has little chance of being realized.     

The Impact of Foreign Agricultural Aid and Total Foreign Aid on Agricultural Output in African Countries: New Evidence from Panel Data Analysis

Official Development Assistance may play an important role in increasing the resources to finance the agriculture sector and improve agricultural outcomes in African countries. Although this is a relevant issue, very few studies have investigated the link between foreign agricultural aid and national agricultural output. Using advanced econometrics techniques, this paper examines the impact of foreign agricultural aid and foreign aid on agriculture output in the panel data set of 29 African countries over the period of 1975–2013. In particular, we employed two estimation methods: Augmented Mean Group and Common Correlated Effects‐2SLS. The first method accounts for heterogeneous slope coefficients across group members and cross‐sectional dependency among variables, whereas the second method accounts for endogenous regressors. Our main findings indicate a small and positive impact of foreign agricultural aid and total foreign aid on agricultural output for low‐ and middle‐income countries. Furthermore, the Pairwise Dumitrescu‐Hurlin Panel Causality test shows evidence of a bidirectional causal relationship between agricultural aid and agricultural output for the full sample, noting that the result changes at the different group income level. Based on the empirical results, recommendations for future policy are given.     

Navigating Ambivalence: Perceived Organizational Prestige–Support Discrepancy and Its Relation to Employee Cynicism and Silence

Drawing on the social identity literature, this study offers theoretical arguments and empirical evidence to understand reactions to divergent perceptions of organizational external prestige (PEP) and organizational support (POS) – two crucial bases of employees’ social worth. Across three studies, using both experimental and field data, we find that PEP‐POS discrepancy contributes to employees’ perceptions of organizational cynicism and silence behaviour, especially when PEP is high and POS is low (rather than the reverse). Consistent with our social identity perspective, we find that ambivalent identification, that is, the simultaneous identification and disidentification of an individual with an organization, is a key mediating mechanism that transfers the interactive relationship of PEP and POS to cynicism and silence. These findings contribute to a more comprehensive understanding of the dynamics of individuals’ social worth at work.     

Managing integration and coordination in cross‐functional teams: an international study of Concurrent Engineering product development

This study is about the influence of integration and coordination of organisational mechanisms on the effectiveness of the process of product development by cross-functional teams. The sample consists of 50 cross-national Concurrent Engineering (CE) project teams, from companies in Australia, Canada, Denmark, Finland, UK, and USA, in the technology intensive industries of aerospace, automobile, chemical, computer, electronics, shipbuilding, and telecommunications. The study offers a diagnostic tool which measures the effectiveness of the Concurrent Engineering team's process in terms of the behaviours and attitudes of the engineering/R&D and manufacturing representatives on the product development team: (a) two-way communication, (b) overlapping problems-solving, (c) readiness to use uncertain and ambiguous information released by team counterparts for decision-making, and (d) readiness to release uncertain and ambiguous information to team counterparts. The findings of the study are that integration mechanisms, such as team-based rewards and job rotation, and coordination mechanisms, such as project structure and information technology, and project leader's management style, support an effective team process, and overcome the negative effect of geographic distance and time-difference in cross-national teams. In addition, there are interesting implications for organisational learning in the practice of Concurrent Engineering for product development, and of the implications of these findings for practice and future research.     

Blockchain technology in the smart city: a bibliometric review

Quality & Quantity - Blockchain can function as a foundational technology with numerous applications in smart cities. The objective of this paper is twofold. First, it provides a detailed...     

The inoperability extended multisectoral model and the Role of Income Distribution: A U.K. Case Study

In this paper, an effort is made to enrich the current input–output (I–O) methodologies employed for studying disruptive events, by extending the I–O framework and including all the phases of the circular flow of income into the overall disaster impact. In this respect, the Inoperability Extended Multisectoral Model is created and implemented in order to estimate the higher‐order effects in terms of value added and disposable income. The social accounting matrix, referred to the United Kingdom, is constructed and proposed as a starting point for assessing the effects of a system perturbation related to the eruption of the Volcano Eyjafjallajökull, in mid‐April 2010, which affected air transport services due to the full closure of the U.K.'s airspace for several days. Finally, the ranking of those commodities and institutional sectors which are badly affected can provide guidance to policymakers in order to minimize the overall impact on the economy.