Further Evidence on the Impact of SFAS 52 on Analysts' Earnings Forecasts

This study examines the impact of Statement of Financial Accounting Standards Number 52 (SFAS 52) on analysts' earnings forecasts. Value-Line forecasts of multinational firms' earnings were examined for the years 1979-1984. Forecast errors did not exhibit a significant linear trend. However, the results show a decline in signed forecast errors from the pre-SFAS 52 to the post-SFAS 52 period reflecting a change from an overstatement bias to relatively unbiased forecasts.
Overall, the results suggest that (1) overstatement errors were greater in the pre-SFAS 52 period than in the post SFAS 52 period, and (2) overstatement errors in the year that SFAS 52 was adopted were greater than surrounding years. In addition, a strong negative relation was found between 1981 signed forecast errors and both revisions in forecasts and the income effect of the accounting change.     

Trading between agents for a better match

This paper studies externalities that arise when agents can trade outcomes ex post. I show that when agents can trade outcomes ex post, principals are incentivized to contract with agents ex ante to reduce ex post transfers to outside agents with whom the principals do not directly contract. This causes principals to offer agents piece-rates that are inefficiently low and lower than the piece-rates they would offer if trading was not allowed. Although trading reduces an agent's effort and could increase the agent's outside option of rejecting a principal's ex ante contract, principals ultimately gain from allowing ex post trading because such trading results in outcomes that better match their tastes.     

Reply to Frederic Lee's Comment on “The Citation Impact of Feminist Economics”

Abstract

This essay is a response to “A Comment on the Citation Impact of Feminist Economics,” by Frederic Lee, which appears in this issue ofFeminist Economics.

Frederic Lee's comment is a valuable addition to our understanding of the intellectual interactions between feminist economics and other schools of heterodox thought, and demonstrates how much can be learned by studying citation patterns.     

Understanding South African social security through recent household surveys: New opportunities and continuing gaps

The aim of this article is to identify some of the difficult areas in researching the South African social security system, and to offer suggestions as to the kind of further research that is needed to improve our understanding over time. The article starts with a brief ‘tour’ through some of the articles dealing with the subject that have already appeared in Development South Africa, with a view to showing their relationship to each other and to the main data sets which have been used. This is followed by sections on the size of pension income relative to other sources of income; the use of the term ‘transfer income'; the relationship between policy design and socio‐economic behaviour; and some difficulties when comparing different government expenditures on welfare. It is hoped that this will contribute to a more careful analysis and interpretation of existing research, as well as the more precise formulation of social security research in future.     

Breaking the trade-off between efficiency and service

For manufacturers, customers are the open wallets at the end of the supply chain. But for most service businesses, they are key inputs to the production process. Customers introduce tremendous variability to that process, but they also complain about any lack of consistency and don't care about the company's profit agenda. Managing customer-introduced variability, the author argues, is a central challenge for service companies. The first step is to diagnose which type of variability is causing mischief: Customers may arrive at different times, request different kinds of service, possess different capabilities, make varying degrees of effort, and have different personal preferences. Should companies accommodate variability or reduce it? Accommodation often involves asking employees to compensate for the variations among customers--a potentially costly solution. Reduction often means offering a limited menu of options, which may drive customers away. Some companies have learned to deal with customer-introduced variability without damaging either their operating environments or customers' service experiences. Starbucks, for example, handles capability variability among its customers by teaching them the correct ordering protocol. Dell deals with arrival and request variability in its high-end server business by outsourcing customer service while staying in close touch with customers to discuss their needs and assess their experiences with third-party providers. The effective management of variability often requires a company to influence customers' behavior. Managers attempting that kind of intervention can follow a three-step process: diagnosing the behavioral problem, designing an operating role for customers that creates new value for both parties, and testing and refining approaches for influencing behavior.     

Cultural relativity of accounting professionalism: Evidence from New Zealand and Samoa

This study investigates the value orientations of two culturally distinct countries in the South Pacific, namely, Samoa and New Zealand, with a view to providing empirical evidence on the relationships between accounting and culture. It uses Rokeach's value survey (1973), Schwartz and Bilsky's motivational domains (1987, 1990), and Hofstede–Gray framework to establish the possible linkages between values and accounting professionalism. The results provide culture-related evidence that suggests the possibility for the existence of major differences in the levels of accounting professionalism in the two countries. This study may have implications for the application of International Financial Reporting Standards (IFRS) and the analysis of differences in judgments of professional accountants on measurement, disclosure, and ethical issues. It is the first substantial accounting study on Samoa.     

Export Performance and Destination Characteristics of Irish Manufacturing Industry

Recent research has sought to explore whether exporting enterprises have superior performance characteristics relative to non-exporters, and whether such superiority is associated with performance pre- and/or post-exporting. This paper extends existing research by examining the influence of export market destination on firm performance. It explores these issues using micro data on Irish manufacturing between 1991 and 1998, a time period during which Ireland experienced rapid export-driven growth. The study provides further evidence of the superior characteristics of exporters relative to non-exporters and supports the self-selection hypothesis that superior enterprises are more likely to export. We find export destination matters: the performance characteristics of enterprises that export globally differ from those that export locally. JEL no. F14     

Business students' and practitioners' ethical decisions over time

This paper compares the ethical decisions and attitudes of business students and practitioners. Recent unpublished data from a national study of over 1600 students are contrasted with information reported previously. Students are found consistently to make less ethical choices than practitioners, and there is some indication that students are making less ethical choices in the 1980s than in the 1960s. In addition, both students and practitioners agree that buyers should beware, view the role of business more narrowly, and find fewer incentives to behave ethically over time. Codes of ethics appear to be less influential than the individual's strong personal value system and one's superiors behaving ethically; support for codes is declining. The paper concludes with observations about the limitations and possibilities for survey research in this area drawing on other studies that used the same instrument utilized for this paper. Some implications for future research are suggested.James R. Glenn, Jr. is Professor of Management in the School of Business at San Francisco State University. His research focus is on the ethical dimensions of decisions made in business, professional and medical organizations. His writing on decision making, research and teaching business ethics has appeared in several periodicals and books. He is currently revisingEthics in Decision Making (John Wiley, 1986) for a second edition.M. Frances Van Loo is Associate Professor of Economic Analysis and Policy, and Business and Public Policy at the Haas School of Business, University of California, Berkeley where she is Director of the Public and Nonprofit Management Program. Her research uses a variety of social science disciplines to study business, public, and nonprofit policy issues.