CEO internal experience and voluntary disclosure quality: Evidence from management forecasts

Internally‐promoted CEOs should have a deep understanding of their firm's products, supply chain, operations, business climate, corporate culture, and how to navigate among employees to get the information they need. Thus, we argue that internally‐promoted CEOs are likely to produce higher quality disclosure than outsider CEOs. Using a sample of US firms from the S&P1500 index from 2001 to 2011, we hand‐collect whether a CEO is hired from inside the firm and, if so, the number of years they worked at the firm before becoming CEO. We then examine whether managers with more internal experience issue higher quality disclosures and offer three main findings. First, CEOs with more internal experience are more likely to issue voluntary earnings forecasts than those managers with less internal experience as well as those managers hired from outside the firm. Second, CEOs with more internal experience issue more accurate earnings forecasts than those managers with less internal experience as well as those managers hired from outside the firm. Finally, investors react more strongly to forecasts issued by insider CEOs than to those issued by outsider CEOs. In additional analysis, we find no evidence that these results extend to mandatory reporting quality (i.e., accruals quality, restatements, or internal control weaknesses), perhaps because mandatory disclosure is subjected to heavy oversight by the board of directors, auditors, and regulators. Overall, our findings suggest that when managers have work experience with the firm prior to becoming the CEO, the firm's voluntary disclosure is of higher quality.     

Marx‐biased technical change and income distribution: A panel data analysis

This paper provides a further empirical evaluation of the Neoclassical theory of distribution as opposed to Marx‐biased technical change (MBTC) using a series of panel estimators. We argue that a panel data analysis is instrumental in increasing the efficiency and validity of the test. Our results generalize previous findings in providing support for MBTC and against the Neoclassical theory of income distribution.     

Lend me your wallets: the effect of charismatic leadership on external support for an organization

We argue that charismatic leadership can influence external support for the organization, particularly in making the company more attractive to outside investors. Two studies were conducted to test this general hypothesis. First, an archival study demonstrated that the stock of companies headed by charismatic leaders appreciated more than the stock of comparable companies, even after differences in corporate performance were controlled. It was also found that the effect of charismatic leadership was heightened under more difficult economic conditions. Second, an experiment was conducted in which the salience of charismatic leadership was manipulated, along with information about the prospects for an organization's turnaround. Results showed that appeals from a charismatic leader led to increased investment in the firm, and the leader's influence was greater when the prospects for an organizational turnaround were more difficult. It was also found that an endowment of stock enhanced the influence of charismatic appeals and that charismatic leadership may have affected the general risk propensities of followers. These findings were interpreted in terms of an external perspective on leadership, illustrating how leaders can manage the firm's economic and social environment. Copyright © 2004 John Wiley & Sons, Ltd.     

Regional and National Perspectives of China's Integration into the WTO: A CGE Inquiry with Emphasis on the Agricultural Sector

China's integration in the World Trade Organization (WTO) is already on its fast track. Understanding the complexity of China's dynamic adjustment resulting from its membership in the WTO and the differential regional impacts within China is very important and poses crucial challenge in evaluating its impacts. In this study, we make an attempt to incorporate seven regional commodity-detailed models into a dis-aggregated multi-sector and multi-region China Computable General Equilibrium (CGE) framework. This framework has allowed us to evaluate the impacts of China's integration into the WTO at both national and regional levels and analyze the inter-linkages between China's provincial agricultural markets. Using the framework and assumptions about factor mobility, we assess the impacts on China's agricultural and non-agricultural sectors (regionally and nationally) by reduction of its trade policy distortions, such as tariffs rate changes and quantitative restrictions. We also evaluate the structural changes on China's national and regional production and trade as China implements its commitments and moves into the WTO.     

THE EFFECTS OF COMPANY TRAINING,FURTHER EDUCATION AND THE YOUTH TRAINING SCHEME ON THE EARNINGS OF YOUNG EMPLOYEES*

Abstract This paper provides evidence on the impact of company training, of post-compulsory education and of the UK Youth Training Scheme in the late 1980's on the earnings of 21-year-old employees in England and Wales. Earnings equations are estimated for each of seven groups of employees who have followed alternative routes from compulsory education into employment, allowing for selectivity into these routes. There are several findings, including: both high parental social class and better school qualifications help to channel people into higher status routes, while high local unemployment has the opposite effect; participation in company training in long spells substantially raises wages but short spells do not; YTS participation fails to raise, and possibly substantially lowers, wages even three years after graduation compared to those who left school at 16 and went to work and received no training; there is weak evidence that, even for those that do not enter higher education, it is better to stay on at school after 16 than go into YTS.     

Equity Volatility and Corporate Bond Yields

This paper explores the effect of equity volatility on corporate bond yields. Panel data for the late 1990s show that idiosyncratic firm‐level volatility can explain as much cross‐sectional variation in yields as can credit ratings. This finding, together with the upward trend in idiosyncratic equity volatility documented by Campbell, Lettau, Malkiel, and Xu (2001), helps to explain recent increases in corporate bond yields.     

Using technology to improve the management of development impacts on biodiversity

The mitigation hierarchy (MH) is a prominent tool to help businesses achieve no net loss or net gain outcomes for biodiversity. Technological innovations offer benefits for business biodiversity management, yet the range and continued evolution of technologies creates a complex landscape that can be difficult to navigate. Using literature review, online surveys, and semi-structured interviews, we assess technologies that can improve application of the MH. We identify six categories (mobile survey, fixed survey, remote sensing, blockchain, data analysis, and enabling technologies) with high feasibility and/or relevance to (i) aid direct implementation of mitigation measures and (ii) enhance biodiversity surveys and monitoring, which feed into the design of interventions including avoidance and minimization measures. At the interface between development and biodiversity impacts, opportunities lie in businesses investing in technologies, capitalizing on synergies between technology groups, collaborating with conservation organizations to enhance institutional capacity, and developing practical solutions suited for widespread use.     

Money disillusion and stagflation

In the conventional income-expenditure model with rigid wages, the aggregate supply curve is upward sloping. Increases in demand therefore imply increases in real output and employment. We demonstrate here that this conclusion depends on the form of money illusion implied by the rigid wage assumption. If we assume instead that labor supply is more sensitive to price increases than to wage increases, the aggregate supply curve is negatively sloped, and the conventional policy multipliers are thereby reversed. In the second section, we show that this result also follows if labor supply depends on the expected real wage.     

Are serial Condorcet rules strategy-proof?

Abstract. This paper explores the extent to which majority rule is invulnerable to manipulation by individuals and coalitions, even when majority rule is used to select more than one alternative. The resulting rule may or may not be strategy-proof, depending on the size of the coalitions that can form, and on the nature of the individual preferences over sets of alternatives. No individual can manipulate with respect to a wide family of preferences over sets. The only restriction on the domain of true and revealed individual preferences is that the selection rule is always well defined. Received: 1 November 1999 / Accepted: 7 May 2001 We thank two anonymous referees for suggestions that have significantly improved the paper. We are also grateful to l'Université de Caen for sponsoring a Workshop on Social Choice Theory, where a first draft of this paper was presented in May, 1999, and to the workshop participants for helpful observations. Work on the final version of the paper was done while one of the authors was a guest of the Project on Intergenerational Equity supported by the Ministry of Education, Science, and Technology of Japan. We are grateful to the Ministry and to the project leader, Professor Kotaro Suzumura, for their support.