Regional convergence of growth,inequality and poverty in India—An empirical study

The paper attempts to examine whether there is regional convergence of per capita consumption, inequality and poverty across various states in India. Using panel unit root tests that are robust to cross-sectional dependence, we find that inequality and poverty indicators converge at both rural and urban levels. Further, per capita consumption converges at urban level but not at rural level. Based on factor analysis, we find two groups of states for rural sectors, viz., low-growth and high-growth states, for each of which per capita consumption converges. We also attempt at identifying the responsible entities — central or state governments or both in cases where convergence is not achieved.     

Earnings management and firm valuation under asymmetric information

This paper seeks to provide an explanation for why corporate officers manage the disclosure of accounting information. We show that earnings management affects firm value when value-maximizing managers and investors are asymmetrically informed. In equilibrium, the strategic management of reported earnings influences investors' assessments of the market values of companies' shares.     

Regulation and investment behaviour in the telecommunications sector: policies and patterns in US and Europe

This paper reports the results of the quantitative analysis of international experience of the relationship between infrastructure investment in the deployment of capacity that can carry large volumes of voice and data traffic and regulatory policy changes in the telecommunications sectors. It looks at the relationship between infrastructure investment for these infrastructure assets and the access pricing régimes for local exchange carriers in the United States and Europe. It then looks at the relationship between various aspects of regulatory and institutional policy changes in Europe and how they affect access prices.The paper finds that a lower access price promotes greater deployment of digital technology among US incumbent local exchange carriers (ILECs). Based on this finding, it suggests that it is in the ILECs interest to have access to their networks encouraged.The European data for interconnection are recent and far reaching conclusions are not feasible, but the findings, however, suggest that competition has worked by facilitating new entry through decreasing interconnection prices, although path dependencies, of existing and traditional concepts, in the mindsets of operators as well as regulators, may account for these findings.     

An Investigation of the Informational Role of Short Interest in the Nasdaq Market

This paper examines the relationship between the level of short interest and stock returns in the Nasdaq market from June 1988 through December 1994. We find that heavily shorted firms experience significant negative abnormal returns ranging from −0.76 to −1.13 percent per month after controlling for the market, size, book–to–market, and momentum factors. These negative returns increase with the level of short interest, indicating that a higher level of short interest is a stronger bearish signal. We find that heavily shorted firms are more likely to be delisted compared to their size, book–to–market, and momentum matched control firms.     

Agency problems in tracking stock and minority carve-out decisions: Explaining the discrepancy in short- and long-term performances

Several studies have evaluated short- and long-term performances of parent firms who resort to restructuring via tracking stock or minority carve-out. Results show that short-term positive performance of restructuring parents turns negative in the long haul. Although researchers have attempted to resolve this inconsistency, a satisfactory explanation is yet to emerge. In this paper, we offer the self-serving behavior of restructuring parents’ managers as a potential explanation for the observed discrepancy in the short- and long-term performances. We argue that managers of parent firms create new units to receive additional compensation packages. We present evidence that the long-term negative performance can be attributed, at least partially, to self-awarded raise. Since managers of tracking stock parents enjoy a greater degree of managerial discretion and controls, we hypothesize that they would pay themselves a bigger compensation package than their carve-out counterparts and their long-term performance would be inferior to that of the latter group. Our results largely support these hypotheses.

Well‐Being,Deprivation, and the Great Recession in the U.S.: A Study in A Multidimensional Framework

We study changes in social well‐being and deprivation in the U.S. during the Great Recession and the subsequent recovery. We outline an analytical framework for measuring well‐being and deprivation in a multidimensional fashion when data on achievement in each dimension is assumed to be ordinal and binary in nature. We use data from the American Community Survey between 2008 and 2015 and find that there was a decline in social well‐being and a rise in social deprivation in the U.S. during the recession followed by a reversal of trends during the recovery. Despite low deprivation levels among the White population, this population experienced the largest increase in deprivation during the recession and the least decline in deprivation in the recovery period. These results underscore the fact that the impact of recession and the subsequent recovery varied significantly across population groups.     

Measuring relative volatility in high-frequency data under the directional change approach

We introduce a new approach in measuring relative volatility between two markets based on the directional change (DC) method. DC is a data-driven approach for sampling financial market data such that the data are recorded when the price changes have reached a significant amplitude rather than recording data under a predetermined timescale. Under the DC framework, we propose a new concept of DC micro-market relative volatility to evaluate relative volatility between two markets. Unlike the time-series method, micro-market relative volatility redefines the timescale based on the frequency of the observed DC data between the two markets. We show that it is useful for measuring the relative volatility in micro-market activities (high-frequency data).     

Quality-efficiency trade-off when the state is the sole provider of hospital services: Evidence from New Zealand

The purpose of this study is to explore the trade-off between technical efficiency and the quality of hospital services when the state is the sole provider. Data from 20 New Zealand District Health Boards from 2011 to 2017 is used to estimate technical efficiency using the data envelopment analysis technique, which employs an additive inverse formulation for undesirable outcomes. The estimated average quality-adjusted technical efficiency score is 0.69. In comparison, when the quality variable was removed, the efficiency declined to 0.66. More importantly, the ranking of district health boards stays consistent across both models, indicating that there is very little trade-off between quality and efficiency. A sensitivity analysis also confirms the lack of a trade-off between quality and efficiency.     

The roles of insurance and well-specified standards in dealing with environmental risks

The present liability system for managing environmental risks has had huge transaction costs through the courts with limited funds actually utilized for compensation (except to the lawyers) and cleanup of wastes. This paper discusses the use of insurance coupled with well-specified standards as an alternative to the current system. It illustrates the potential for the use of these policy tools in the context of two environmental risk management problems: providing liability protection to contractors involved in asbestos removal and protecting commercial property lenders and owners from liabilities associated with environmental contamination.