Start-up and hiring practices of immigrant entrepreneurs: An empirical study from an evolutionary psychological perspective

Strong social ties embedded in ethnic communities of immigrant populations have been considered key assets for immigrant entrepreneurs. However, little research has been done on how biological kinship and the biological theories of altruism influence the behavior of ethnic entrepreneurs. In this study, we have applied a neo-Darwinian evolutionary theory of kinship to examine adaptive functions of kin and ethnic altruism in business start-up and hiring practices of Korean immigrant entrepreneurs in the United States. We confirmed that the patterns of help received by Korean entrepreneurs for business start-ups were congruent with an evolutionary perspective on altruism. However, the results for hiring patterns suggested that customer ethnicity trumped kin and co-ethic interests. We close by offering suggestions for future research.     

The inflation and inflation uncertainty relationship for Turkey: a dynamic framework

This article assesses the interaction between inflation and inflation uncertainty in a dynamic framework for Turkey by using monthly data for the time period 1984–2009. The bulk of previous studies investigating the link between inflation and inflation uncertainty employ Autoregressive Conditional Heteroskedasticity (ARCH)-type models, which consider inflation uncertainty as a predetermined function of innovations to inflation specification. The stochastic volatility in mean (SVM) models that we use allow for gathering innovations to inflation uncertainty and assess the effect of inflation volatility shocks on inflation over time. When we assess the interaction between inflation and its volatility, the empirical findings indicate that response of inflation to inflation volatility is positive and statistically significant. However, the response of inflation volatility to inflation is negative but not statistically significant.     

Strategic Incentives for Keeping One Set of Books in International Transfer Pricing

We study the equilibrium accounting and transfer pricing policies in a multinational duopoly with price competition in the final product market. We find that the firms in a duopoly can benefit from strategically using the same transfer price for tax and managerial purposes instead of using separate transfer prices for both objectives. According to our results, the practice of one set of books should be the prevalent accounting method in markets with a small number of competitors and similar products.     

The Unreliability of Online Review Mechanisms

Journal of Consumer Policy - Online reviews have an undeniable impact on the market and are an important source of consumer information. From a legal perspective, online reviews actively influence...     

A Qualitative Analysis to Determine the Domains and Skills Necessary to Lead in Public Health

Leadership programs in public health have been declining in numbers since 2012. The decline in training programs could be due to the lack of outcome‐based results and the lack of a manageable set of standardized skills needed for public health leadership. A comprehensive study was completed in two phases to determine if the current model of public health leadership institutes is effective at generating outcome‐based results. The following paper will focus on the first phase of the study. The first phase included a qualitative analysis to determine the domains, definitions, and skills needed to lead. An analysis of the skills, domains, definitions, and traits included in five established and commonly used leadership models/theories in public health leadership development (Transformational, Servant, Appreciative, Collaborative, and Emotional Intelligence leadership) plus the National Public Health Leadership Development Network (NLN) Leadership for Community Health, Safety & Resilience Competency Framework was completed. Of the 161 different skills, definitions, traits, and/or competencies from the five leadership models and the NLN competency framework, 123 were determined to be related to one of six domains needed for leadership and were defined into 21 skills. The findings could lead to more uniformity in public health leadership development and evaluation.     

Facebook posting activity and the selective amplification of earnings disclosures

This study examines the determinants of Facebook activity levels with a particular focus on Facebook activity around earnings announcements. Facebook activity is generally higher for firms with higher levels of analyst following, individual ownership, and trading volume, indicating that it is responsive to investor demand effects. Facebook activity also increases around earnings announcements, with the increase being largely attributable to posts containing earnings news. In general, therefore, firms use Facebook posts to amplify earnings news. Such activity is selective, however; it is lower for firms with high levels of information asymmetry, for firms reporting earnings that exactly meet the consensus analyst forecast amount, and when the earnings news is negative but the accompanying price movement is positive. Hence, firms appear to use Facebook to manage the level of attention paid to earnings news.     

Impact of Auditor Report Changes on Financial Reporting Quality and Audit Costs: Evidence from the United Kingdom

While substantial revisions to auditor reporting requirements are being implemented internationally, the impact of these reforms on financial reporting quality is unknown. We exploit the United Kingdom's recent auditor reporting changes and find that the United Kingdom's new reporting regime is associated with an improvement in financial reporting quality as proxied by significant decreases in absolute abnormal accruals and the propensity to just meet or beat analyst forecasts, and a significant increase in earnings response coefficients. As for audit costs, we do not find a significant change in audit fees or audit delay surrounding the implementation of the new reporting regime. Taken together, the results of this study suggest that new auditor reporting requirements are associated with a significant improvement in financial reporting quality without detecting a significant increase in audit costs.     

Investor Overreaction to Earnings Surprises and Post‐Earnings‐Announcement Reversals

Prior literature suggests that the market underreacts to the positive correlation in a typical firm's seasonal earnings changes, which leads to a post‐earnings‐announcement drift (PEAD) in prices. We examine the market reaction for a distinct set of firms whose seasonal earnings changes are uncorrelated and show that the market incorrectly assumes that the earnings changes of these firms are positively correlated. We also document that positive (negative) seasonal earnings changes in the current quarter are associated with negative (positive) abnormal returns in the next quarter. Thus, we observe a reversal of abnormal returns, consistent with a systematic overreaction to earnings, rather than the previously documented PEAD. Additional analysis indicates that financial analysts similarly overestimate the autocorrelation of these firms, although to a lesser extent. We also find that the magnitude of overestimation and the subsequent price reversal are inversely related to the richness of the information environment. Our results challenge the notion that investors recognize but consistently underestimate earnings correlation and provide a new perspective on the inability of prices to fully reflect the implications of current earnings for future earnings. That is, we show that investors predictably overestimate correlation when it is lacking, but underestimate it when it is present.     

Maintaining a Reputation for Consistently Beating Earnings Expectations and the Slippery Slope to Earnings Manipulation

This paper investigates whether maintaining a reputation for consistently beating analysts' earnings expectations can motivate executives to move from “within GAAP” earnings management to “outside of GAAP” earnings manipulation. We analyze firms subject to SEC enforcement actions and find that these firms consistently beat analysts' quarterly earnings forecasts in the three years prior to the manipulation period and continue to do so by smaller “beats” during the manipulation period. We find that manipulating firms beat expectations around 86 percent of the time in the 12 quarters prior to the manipulation period (versus 75 percent for control firms) and that manipulation often ends with a miss in expectations. We document that executives of manipulating firms face strong stock market and CEO pressure to perform. Prior to the manipulation period, these firms have high analyst optimism, growing institutional interest, and high market valuations, along with powerful CEOs. Further, we find that maintaining a reputation for beating expectations is more important than CEO overconfidence and is incremental to CEO equity incentives for explaining manipulation. Our results suggest that pressure to maintain a reputation for beating analysts' expectations can encourage aggressive accounting and, ultimately, earnings manipulation.