Late for a very important date: financial reporting and audit implications of late 10-K filings

Delays in financial reports often reflect issues related to period-end accounting and audit processes. We investigate the impact of filing delays in connection with auditor characteristics on the quality of financial statements in a sample of firms that filed Form 10-K after the statutory due date. We find that late filing firms are associated with lower financial reporting quality compared to timely filing firms matched by propensity scores, where financial reporting quality is measured by the absolute value of performance-matched discretionary accruals and the probability of a late filing being restated in subsequent periods. Furthermore, we demonstrate that the adverse consequences of late filings can be largely mitigated by having a Big 4 auditor. The differential audit quality stems primarily from Big 4 auditors in large offices and is more pronounced when an auditor may need to draw on additional resources in a limited period.     

The World Is Not Enough! Small Open Economies and Regional Dependence

In this paper, we explicitly introduce regional factors into a global dynamic factor model. We combine new open economy factor models (emphasizing global shocks) with the recent findings of regional importance in the business cycle synchronization literature. The analysis is applied to a large panel of domestic data for four small open economies. We find that global and regional shocks explain roughly 30 and 20 percent, respectively, of the business cycle variation in all countries. While global shocks have most impact on trade variables, regional shocks explain a relatively large share of the variation in cost variables.     

Behavioral theories and the pricing of IPOs’ discretionary current accruals

The main purpose of this paper is to provide additional evidence about the effect of discretionary current accruals on the pricing of IPOs. This paper seeks to discriminate between two alternative explanations for the prior findings: (1) behavioral biases coupled with limited arbitrage; and (2) the sample- and period-specific nature of the results in the prior literature. The IPOs from 1962 to 1998 were used to obtain the following results. First, there was not a negative association observed between discretionary current accruals and subsequent price performance for the 1926–1971 period. Second, analysis reveals that the pattern of cross-sectional evidence is inconsistent with the predictions made by behavioral theories. Third, in the 1972–1998 period, evidence of predictable negative performance attributable to IPO discretionary current accruals is limited to NASDAQ firms. These findings are difficult to reconcile with the explanation of behavioral biases coupled with limited arbitrage.     

Monte Carlo theoretical trials of methods for assessing statistical significance for differences between adjusted odds ratios

Odds are generally defined as the number of successes divided by the number of failures in a given number of trials. An odds ratio is the ratio of one odds divided by another. Odds ratios can be adjusted to reflect associations with the outcome independently of the influence of associations with other variables. These are adjusted odds ratios. There are several well known methods for comparing odds ratios and testing for statistically significant differences between them. Analogous methods for adjusted odds ratios are not well known or well documented. One method for comparing adjusted odds ratios is explained by Hosmer and Lemeshow (Applied logistic regression, 2000). This method is used for the odds ratios for two variables from the same data set. The purpose of this analysis was to apply this method to a different situation: comparing odds ratios for the same variable from two different data sets. Monte Carlo trials were used to assess the performance of the method and these indicated the method performed well.     

Intergroup contact and reduction of explicit and implicit prejudice toward immigrants: a study with Italian businessmen owning small and medium enterprises

A field study was conducted to test the effectiveness of intergroup contact (Allport, The nature of prejudice, 1954) as a predictor of explicit and implicit attitudes toward immigrants and to examine the processes driving its effects. Participants were Italian businessmen owning small and medium enterprises in Northern Italy who had daily contact with their immigrant workers. We tested a model in which contact ameliorated explicit attitudes, measured as support for social policies toward immigration, through reduced negative outgroup stereotypes. Furthermore, we predicted that contact would have a direct, unmediated effect on improved implicit attitudes toward immigrants, assessed with an Implicit Association Test (Greenwald et al., J Personal Soc Psychol 74:1464–1480, 1998). The results were fully consistent with predictions, thus providing strong support for the contact hypothesis at both an explicit and at an implicit level. The lack of correlation between explicit and implicit attitudes supports dual-process models, suggesting that the two types of attitudes are formed through different processes. The theoretical and practical implications of the findings are discussed.     

Organizational climate for innovation and creative teaching in urban and rural schools

Due to the impact of knowledge-based economies, all countries strive to foster creative education. Research has demonstrated that creativity is influenced both by individual characteristics and by the environment. Previous research examining creative teaching by teachers in Taiwan has typically focused on the relationships between creative teaching and innovative personal characteristics, school leaders’ behaviors, and internal motivation. The purpose of this study was to move beyond prior research to investigate the relationship between creative teaching behaviors and innovation-fostering elements of the organizational climate in schools. In addition, we examined the impact on teacher creativity of urban versus rural school location.     

Time-varying persistence in US inflation

The persistence property of inflation is an important issue not only for economists, but especially for central banks, given that the degree of inflation persistence determines the extent to which central banks can control inflation. Further, not only is it the level of inflation persistence that is important in economic analyses, but also the question of whether the persistence varies over time, for instance, across business cycle phases, is equally pertinent, since assuming constant persistence across states of the economy is sure to lead to misguided policy decisions. Against this backdrop, we extend the literature on long-memory models of inflation persistence for the US economy over the monthly period of 1920:1–2014:5, by developing an autoregressive fractionally integrated moving-average-generalized autoregressive conditional heteroskedastic model with a time-varying memory coefficient which varies across expansions and recessions. In sum, we find that inflation persistence does vary across recessions and expansions, with it being significantly higher in the former than in the latter. As an aside, we also show that persistence of inflation volatility is higher during expansions than in recessions. Understandably, our results have important policy implications.     

Steuerpolitik und Wirtschaftswachstum

The design of the tax system matters for economic growth. During times of economic crisis, tax instruments such as temporary tax cuts can be used to soften adverse effects on the economy by stimulating private and corporate spending. However, empirical evidence suggests that the overall impact of short term tax policies is limited. In the long run, the structure of the tax system is essential to building up an investment friendly and innovation-stimulating environment, which will promote sustainable economic growth.