Value or volume strategy?

This article reports a study that analyzes financial data for US firms listed during 1996–2005 to examine the asymmetric effects of the informative variables on stock returns between the boom and bust conditions in stock price. The study includes analysis of changing distribution of stock returns across stocks and over time by using a quantile regression (QR hereafter) model and comparison of the results with OLS and LAD estimates. The present empirical results indicate that market investors are more influenced by the fundamental variable, such as P/E ratios, derived from the value strategy when the stock they invest is in experience of a large fall in price. Conversely, when the stock price is hugely rising, market participants increase the loading of the effect of trading volume. Last, although the market returns have a significantly positive impact on the individual stock returns, we further indicate that the systematic effects involved in the market returns are much more notable when this specific stock is experiencing a recession condition in price.     

Coca Substitution and Free Trade in Bolivia: The Pending Crisis

This paper uses the factors proportion model of production and trade with ten inputs to analyze the potential impact of the Free Trade Agreement of the Americas (FTAA) on the coca substitution program in Bolivia. With six crops including coca, the model produces comparative statics elasticities of changing prices on factor prices and output. Results show that the coca substitution program with free trade will result in large income redistribution in the coca‐producing region as a result of increased competition from larger and more efficient economies. Increased subsidies and institutional changes will be needed to sustain the coca substitution program in the long run.     

Loosely Coupled Results Control in Dutch Municipalities

This paper analyses the implementation of the ‘dual system’ in Dutch municipalities which was part of a package of New Public Management‐reforms. This system was stimulated by Dutch central government and called for more accountability for performance of municipal managers and the board of mayor and aldermen, as well as for the use of more output and outcome information. Interviews of participants on four different hierarchical levels in 12 municipalities show that the practices of output management at different hierarchical levels are only loosely coupled to each other (‘vertical loose coupling’). We also found some degree of ‘horizontal loose coupling’ at each hierarchical level between result orientation, the development of output indicators and the use of output information for performance evaluation. The paper analyses the reasons why municipalities encounter difficulties in designing a comprehensive and coherent performance management system.     

Robust anomalies? A close look at accrual‐based trading strategy returns

The last 40 years have seen an extensive literature documenting so‐called anomalies in major capital markets. Evidence of ‘abnormal’ returns associated with trading strategies based on readily observable phenomena such as accounting‐based data involves experimental design choices that can be expected to influence the results. We show how evidence of an accrual anomaly in Australia is sensitive to research design specifications such as the choice of proxy for total accruals; the definition of abnormal returns (i.e. the return generating model); the impact of data trimming as a response to exceptionally large returns; and the choice between value and equal weighting of returns. We show that research design choices do matter and help reconcile conflicting prior evidence of any accrual anomaly in Australia. More broadly, our results suggest the need for caution in drawing inferences from trading strategy tests which claim to identify anomalies.