Mentoring: A Path to Prosocial Behavior

Public accounting firms can build integrity within their organizations through early detection of fraud. One way to reduce and detect fraud is to encourage whistleblowing as a prosocial behavior. We explore the impact of mentoring on intention to report fraud. A survey with 120 responses from the US public accountants suggests that quality mentoring relationships, a common feature in the profession, and caring ethical climate positively relate to internal reporting of fraud. Two intermediate variables, trust and affective commitment, mediate these effects. Mentor-relationship quality also increases perceptions of caring ethical climate. The study contributes to two bodies of research by (1) finding extended benefits from mentoring, beyond those typically discussed in academic literature; and (2) identifying a previously unexplored firm intervention capable of positively influencing prosocial behavior and combating fraud.     

Exchange Rules and the Incentive Compatibility of Choice Experiments

The incentive properties of stated-preference surveys continue to be a central debate in the valuation of public goods. The majority of empirical studies have focused on incentive properties of contingent valuation questions in relation to situations where answers have monetary consequences. This research explores the incentive properties of repeated, attribute-based choice questions when subjects are provided with an explicit connection between choices and outcomes. Two market/provision-rules are investigated: a posted-price market and a plurality-rule vote. These two provision rules are contrasted to treatments in which no provision rule is discussed—subjects are simply asked to choose their preferred alternative. These three hypothetical choice treatments are compared with a binding choice treatment. While none of the public good treatments are theoretically incentive compatible, we include a comparison of hypothetical and binding choices for a private-good that is incentive compatible. The private good experiments indicate that marginal willingness to pay (WTP) estimates from the hypothetical treatment are larger, but not statistically different than corresponding estimates in the binding choice treatment. Results for the public good experiments indicate that marginal WTP estimates from the hypothetical treatments are much larger, and statistically different than corresponding estimates in the binding choice treatment. The bias is largest when no provision rule is discussed. The bias is reduced with the inclusion of a provision rule, but surprisingly, there was no difference across provision rule treatments. Overall, our results indicate that choice experiments involving a public good should include a provision rule to reduce bias, but the resulting marginal WTP estimates may still be more biased, on average, than those arising from contingent valuation survey formats.     

THE EFFICIENCY OF THE INTERNATIONAL MONEY MARKETS: A COMMENT

McInish and Puglisi reccntly claimed that weak form efficiency should be tested by runs tests and not autocorrelation tests, when returns are not Normal. It is the opinion of this author however, that autocorrelation tests are not invalidated by a non-Normal distribution. Furthermore, it can be shown that the runs test has lower power than autocorrelation tests and ihat the runs test is not preferable.     

The Impact of a Business School on Regional Economic Development: a Case Study

This paper investigates the impact of a major extension to Lancaster University's Management School on the North West regional economy. It differs from earlier university impact studies since the estimated impact is not confined to backward linkage effects but focuses specifically on the forward linkage effects that will occur as a result of greater engagement with firms in the region's SME sector. The paper demonstrates that the expansion of the university sector can have far greater beneficial effects on their regional economies than is indicated by conventional impact studies. Specifically, the provision of business advice to SMEs can be a significant factor in increasing their sales volume.     

Executive Share Options: An Economic Framework

This paper provides an overview of the executive compensation debate with special emphasis on the role of executive share options. Widespread criticism of executive pay typically concentrates on pay levels, rather than the composition of executive pay and its determinants. The paper points out that gains from exercising executive share options are not simply rewards for the period in which they are realised and reported. The economic rationale for rewarding executives through share options is reviewed, leading to the conclusion that options are more likely to form a relatively important part of executive remuneration in organisations which face valuable, but relatively risky, investment opportunities. However, because options can aggravate conflicts of interest such as those that arise between shareholders and lenders, they are not a universally efficient form of executive compensation.     

Abolish the Mortgage Subsidy

Ian Gow, Minister of Housing, is faced with a market massively distorted by subsidies and controls imposed at the whim of earlier politicians. Mortgage subsidies, coupled with rent controls, have virtually abolished the rented sector, and have encouraged (at the taxpayer's expense) owner-occupancy among groups which would probably have preferred to rent. Tom Taylor, of the University of Wales Institute of Science and Technology, argues that the current system reduces choice in housing and that the mortgage subsidy should be abolished, replaced for the less well-off by a housing voucher.     

Indirect Damages from Price Fixing: The Alabama Lysine Case

Indirect damages to broiler and pork producers fromsupra-competitive pricing of synthetic lysine, whichis an important feed additive, are discussed in thisarticle. Indirect damages occur in fundamentallydifferent ways in the two industries because thebroiler industry is vertically integrated while thepork industry was dominated by independent producersduring the 1992–1995 time period. Pass-through ofhigher lysine prices to hog feed purchasers isdemonstrated with regression analysis of purchasesof a feed premix containing synthetic lysine and aregression analysis of purchases of synthetic lysinefrom feed dealers.     

Risk,efficiency and speculation in the 1920s foreign exchange market: An overlapping data analysis

Zusammenfassung Risiko, Effizienz und Spekulation auf dem Devisenmarkt der 20er Jahre: Eine Analyse mit überlappenden Daten. — Die Autoren überprüfen die Hypothese der effizienten M?rkte für die Zwischenkriegszeit mit ihren floatenden Wechselkursen und benutzen dabei w?chentliche Daten für Kassakurse sowie Terminkurse der Ein-Monats- und Drei-Monats-Frist. Im Gegensatz zu einer Anzahl anderer Forscher zeigen sie unter Verwendung sowohl von Standard-Orthogonalit?ts-Tests als auch einer Vektor-Autoregressionstechnik, da\ die Hypothese effizienter M?rkte für die betrachtete Periode strikt zurückzuweisen ist. Da diese Hypothese auf die Hypothese der Risiko-Neutralit?t und der Rationalit?t zurückgeht, versuchen die Autoren zu ermitteln, ob die Hypothese deshalb zurückgewiesen werden mu\te, weil die Akteure auf den Devisenm?rkten eine Risikoscheu zeigten. Dabei verwenden sie ein spezielles Risikopr?mien-Modell.

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Résumé Risque, efficience et spéculation au marché des changes dans les années {dy1920}: Une analyse avec des données croisées. — Les auteurs examinent la validité de l’hypothèse des marchés efficients concernant l’expérience avec les cours de change flottants entre les guerres en utilisant des données hebdomadaires du marché au comptant et des marchés à terme (un mois et trois mois). Contrairement à d’autres chercheurs, les auteurs démontrent, en utilisant des tests standardisés d’orthogonalité et une technique d’autoregression de vecteur que l’hypothèse des marchés efficients doit être rejetée pour cette période. Comme cette hypothèse reste sur les hypothèses combinées de la neutralité de risque et de la rationalité, les auteurs essaient de trouver, en utilisant un modèle spécifique pour la prime de risque, si la rejection est due aux transacteurs qui reculent devant le risque au marché des changes.

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Resumen Riesgo, eficiencia y especulación en el mercado de cambios de los anos 20: un análisis de datos sobrepuestos. — En este trabajo se reexamina la validez de la hipótesis de mercados eficientes para la experiencia con tasas de cambio flotantes en el periodo de entreguerra, utilizando datos semanales del mercado spot y de las tasas a término para uno y tres meses. A diferencia de una serie de otros investigadores, se demuestra que la hipótesis de mercados eficientes es rechazada para el periodo estudiado, utilizando tests estándar de ortogonalidad y una técnica de autoregresión vectorial. Como esta hipótesis es una hipótesis conjunta de neutralidad frente al riesgo y de racionalidad, utilizando un modelo especial de sobretasa por riesgo, se intenta determinar si el rechazo se debe a la actitud adversa al riesgo por parte de los participantes en el mercado de cambios.

     

Police management, office automation and organizational change

Police forces, in common with much of the UK system of public administration, continue to come under pressure to engage in managerial and administrative modernisation. This article looks at the role office automation systems play in these processes and at the case for organizational change to accompany the adoption of these systems.