Earnings Preannouncement Strategies

We examine the disclosure strategies managers follow when theyd preannounce quarterly earnings shortly before formal earnings announcements. We document that managers with bad news release essentially all of their news at the preannouncement date, while managers with good news only release about half of their news. Controlling for the combined news released at the preannouncement and earnings announcement dates, firms with negative earnings announcement surprises have significantly lower excess returns for the period from just before the preannouncement to just after the earnings announcement. This finding is consistent with the observed disclosure strategies whereby managers attempt to avoid negative earnings announcement surprises, and suggests that how information is presented can affect the market's reaction to that information.     

Covariance complexity and rates of return on assets

This paper considers the estimation of the expected rate of return on a set of risky assets. The approach to estimation focuses on the covariance matrix for the returns. The structure in the covariance matrix determines shared information which is useful in estimating the mean return for each asset. An empirical Bayes estimator is developed using the covariance structure of the returns distribution. The estimator is an improvement on the maximum likelihood and Bayes–Stein estimators in terms of mean squared error. The effect of reduced estimation error on accumulated wealth is analyzed for the portfolio choice model with constant relative risk aversion utility.     

Factors that influence the length of industrial channels

This article is concerned with the length of channels utilized to market industrial products. Several marketing scholars have proposed that the appropriate channel structure is a function of conditions associated with the market for the product, the nature of the product itself, and characteristics of the producer and middlemen. By means of a survey of industrial product manufacturers, this study identified six characteristics of middlemen, industrial markets, and industrial customers that appear to be significant influences on the length of channels used to distribute industrial products.     

The Impact of Public Policies on Innovation and Imitation: The Role of R&D Technology in Growth Models

It has been shown under the assumption of linear R&D technology that a government subsidy to imitative (innovative) R&D decreases (increases) imitative effort but increases (decreases) innovative effort, and that strengthening the enforcement of patent laws leads to a decrease in innovative R&D but to an increase in imitative R&D. By replacing the linear R&D technology with a sufficiently convex R&D technology, we have shown that the counter-intuitive results are reversed. In the case of linear R&D technology, the socially optimal R&D policies and activities are indeterminate, but with convex R&D technology, optimal innovation and imitation subsidies would induce the market to generate socially 'balanced' innovative and imitative activities.     

Environmental taxes in a differentiated mixed duopoly

Beladi and Chao (2006) and Bárcena-Ruiz and Garzón (2006) considered the role of environmental policy on the decision whether to privatize a public firm in different market structures. This paper re-examines whether privatization improves (or deteriorates) the environment in a mixed duopolistic framework with differentiated product and pollution abatement. It is shown that, due to privatization, less attention is paid to pollution abatement by all the firms coupled with less environment taxes levied by the government in a differentiated duopoly, and the environment is more (less) damaged when the product is less (more) substitutable. When the product is highly substitutable, industry profits increase because this softens the intensity of the product market, but social welfare deteriorates accompanied with the path of privatization because the loss of consumer surplus and tax revenue exceeds the increases in profits, even if the environment is less damaged.     

Competition and Competition Policy: Implications of Hong Kong's Reversion to China

The paper explores how Hong Kong's new status as China's Special Administrative Region (SAR) may affect the competitiveness of the industries and the relative position of companies owned by non-Hong Kong investors. The conclusion is that mainland Chinese firms will play an increasingly more important role in Hong Kong's economy and British firms will lose their dominance further. This does not, however, indicate a return to unequal competition in favor of firms from the sovereign country, but the beginning of a period of greater competition by all firms in Hong Kong, whether they be local or non-local. There is a risk that governmental and semi‐governmental corporations of the SAR and other Chinese governments may use their official and semi-official status to tilt the playing field in their favor, but appropriate competition law can address this concern.     

Moving from the lab to the field: Exploring scrutiny and duration effects in lab experiments

The most important issue facing experimental economists is the generalizability of lab results. This letter examines more than 1200 doctor/patient consultations, in which scrutiny and duration of treatment were varied. We show that scrutiny has an important but short-lived effect.     

Who's in charge here? Co‐CEOs,power gaps,and firm performance

At the pinnacles of organizations, comparative tests of unity of command and shared command are nearly impossible because only one individual sits atop most organizations. In organizations led by co‐CEOs, however, such a test is possible because co‐CEOs can truly share power. But do they? Our research pits the unity‐of‐command principle against the shared‐command principle and finds overall support for the former, even within the co‐CEO context. Our sample of 71 co‐CEO pairs at publicly traded U.S. firms shows that increasing power gaps between co‐CEOs are positively associated with firm performance. This positive association wanes and turns negative, however, as power gaps become very large. We conclude that whatever benefits the co‐CEO structure might offer likely lie outside the shared command paradigm. Copyright © 2014 John Wiley & Sons, Ltd.     

The Theory of Planned Behavior in the Context of a Food and Drink Event: A Case Study

The present case study seeks to contribute to the culinary event management literature, investigating key motivators among participants to the Derbyshire Food and Drink Fair, United Kingdom. A questionnaire, which was partly based on predictors related to the theory of planned behavior was designed and distributed; 308 usable responses were collected. The validity and impact of attitude toward the behavior, perceived behavioral control, and subjective norms on behavioral intention was confirmed. Additionally, several motivators, such as “commitment and perceived importance,” “consumption and entertainment,” “attendance and discovery,” and “joining others” were identified as key factors. Finally, statistically significant differences were noticed among various participating groups, namely, in terms of age, gender, or distance traveled to the event. The findings have important implications for event managers and organizers, in terms of promotion, and addressing the needs and wants of various segments of food festival attendees.     

Instructional Manipulation Checks: A longitudinal analysis with implications for MTurk

Instructional Manipulation Checks (IMCs) assess respondent behavior by, for example, asking participants not to answer a trick question. We find IMCs can be used to detect problematic response behavior in longitudinal surveys. This is important because a Latent Class Analysis based on IMC-failure in the two reported studies reveals that between 9% and 12% of respondents can be labelled Inattentive Stayers at the first survey-wave and between 13% and 17% at the third wave. The tendency of Inattentive Stayers to remain in the panel is particularly relevant for online panel services such as MTurk, with workers participating in many surveys over longer time-periods. We find IMC-failure to be mitigated by a warning to respondents that their attention will be checked early in the survey, but not by repeated exposure to IMCs, or a timer leaving questions on the screen longer. Respondent personality also plays a role in IMC-failure, which implies persistency of undesirable respondent behavior.