Management’s personal ideology and financial reporting quality

Review of Quantitative Finance and Accounting - We investigate the relation between managers’ personal ideologies and financial reporting quality. We use Federal Elections Commission data to...     

Stadiums and Scheduling: Measuring Deadweight Losses in the Victorian Football League, 1920–70

Over a 50 year period, Australian Rules football's major league, the Victorian Football League, did not always use its largest and best-equipped stadium for regular season games between its most popular teams or schedule those teams to play twice in a regular season. We calculate deadweight losses from the use of capital goods (stadiums) and effects of match scheduling in this professional sports league. Such analysis has not been attempted previously because of the absence of a counterfactual. The welfare losses were significant but not sufficient to threaten the survival of a distance-protected cartel.     

An efficiency wage approach to reconciling the wage curve and the Phillips curve

This study develops an efficiency wage model that generates a wage curve at the regional level and a Phillips curve at the national level, under the assumption that workers' efficiency depends on both regional and aggregate labor market conditions. An equation relating wages to unemployment and lagged wages is derived from the profit-maximizing behavior of firms, and it is demonstrated that the coefficient on lagged wages is less than 1 with regional data but equals 1 with aggregate data. In addition, there is an equilibrium relationship between unemployment and wages at the regional level, but not at the aggregate level.     

Social learning with differentiated products

Learning from friends is a key process by which consumers acquire information about available products. This article embeds social learning in a model of firms producing differentiated products. I consider how the structure of social relationships between consumers influences pricing and welfare. In particular, how a variety of characteristics of social networks ‐ distribution of friendships, homophily, clustering, and correlations between an individual's preferences and number of friends ‐ influence these outcomes. I also find conditions under which consumer awareness and the sensitivity of demand to prices are useful measures of the informational efficiency of markets.     

Multi-country event-study methods

We provide the first simulation evidence of event-study test performance in multi-country non-US samples. The nonparametric rank and generalized sign tests are more powerful than two common parametric tests, especially in multi-day windows. The two nonparametric tests are mostly well specified, but neither is perfectly specified in all situations. The parametric standardized cross-sectional test can provide a useful robustness check but is less powerful than the nonparametric tests and rejects too often in single-market samples and when firm-specific events affect the market index. Local-currency market-model abnormal returns using national market indexes are sufficient.     

An exploratory study into brand alignment in B2B relationships

B2B relationships are characterized by strategic partnerships between firms and the suppliers of goods and services integral to their offerings. Failure to choose the right partner could jeopardize the survival of both partners. While a number of studies suggest that partnering firms need to be aligned operationally, few studies look at whether there should be alignment between the brands of firms and their suppliers. Therefore, we build on existing studies on sexual selection to develop a theory of whether similarity in brand attributes affects the success of B2B relationships. We propose that firms wishing to portray particular brand images to their customers choose suppliers whose images mirror their own. To develop our proposition, we investigate the brand personality alignment between well-known firms and their suppliers in four industries. The findings of our analysis have significant implications for scholars and managers interested in the nature and success of B2B partnerships.     

Venture capitalist monitoring: Evidence from governance structures

We examine the impact of venture capitalist (VC) involvement, quality and exit on corporate governance structures at the time of and subsequent to an initial public offering (IPO). Venture capital backed firms utilize governance structures with greater levels of monitoring at the time of an IPO compared to non-backed firms, but this difference begins to dissipate over time. While short-lived, IPOs backed by high quality VCs have greater overall monitoring levels than those IPOs backed by low quality VCs. IPOs backed by high quality VCs use significantly more equity-based compensation than their low quality counterparts. Finally, the exit of a VC materially alters the governance structure of firms. Measures of governance decline following the departure of a venture capital firm. Overall, the presence of a venture capitalist affects governance structures of firms both at the IPO and through the early years as public firms.     

On optimal regulation of price and R&D with asymmetric information

This paper deals with the optimal regulation for cost-reducing R&D and pricing in natural monopoly that is privately informed on its efficiency. We extend the work of Cantner and Kuhn (Rev Econ Des 4:191–204, 1999) and then we are able to analyse the entire effects of the interplay between agent’s efficiency and investment in R&D particularly considering the substitutability case.     

Weak dependence, models and some applications

The paper is devoted to recall weak dependence conditions from Dedecker et al. (Weak dependence, examples and applications. Lecture Notes in Statistics, vol 190, 2007)’s monograph; the main basic results are recalled here and we go further in some new applications. We develop here several models of weakly dependent processes and random fields. Among them an ARCH(∞) model is considered with statistical applications to ordinary least squares. A last part aims at proving new asymptotic results for weakly dependent random fields. Such applications are indeed the main proof of the interest of this theoretical notion which measures the asymptotic decorrelation of a process.