CAPITAL CONTROL AND DOMESTIC INTEREST RATES: A GENERALIZED MODEL

This article addresses the question of capital control (inflow) and its varied effect on interest rates and real-side economy. The moral hazard problem causes interest rates to increase as a function of external debt. Decreased capital inflow (external debt) can reduce moral hazard and outweigh the effect of costly capital transactions, with capital control decreasing interest rates and increasing output. This result runs counter to other theoretical works on capital control. The policy implication is that a government can generate national gains from capital inflow control by prohibiting new external debt (borrowing from abroad). With old debt retired and no new borrowing from abroad, external debt is reduced. This will reduce the moral hazard problem and lead to a drop in interest rates and an increase in output. (JEL F32 , F41 , E43 )     

Politically Connected Private Equity and Employment

We investigate the employment consequences of private equity buyouts. We find evidence of higher job creation, on average, at the establishments operated by targets of politically connected private equity firms than at those operated by targets of nonconnected private equity firms. Consistent with an exchange of favors story, establishments operated by targets of politically connected private equity firms increase employment more during election years and in states with high levels of corruption. In additional analyses, we provide evidence of specific benefits experienced by target firms from their political connections. Our results are robust to tests designed to mitigate selection concerns.     

The New Game in Town: Competitive Effects of IPOs

We analyze the effect of initial public offerings (IPOs) on industry competitors and provide evidence that companies experience negative stock price reactions to completed IPOs in their industry and positive stock price reactions to their withdrawal. Following a successful IPO in their industry, they show significant deterioration in their operating performance. These results are consistent with the existence of IPO‐related competitive advantages through the loosening of financial constraints, financial intermediary certification, and the presence of knowledge capital. These aspects of competitiveness are significant in explaining the cross‐section of underperformance as well as survival probabilities for competing firms.     

Analyst Forecast Consistency

We show empirically that analysts who display more consistent forecast errors have greater ability to affect prices, and that this effect is larger than that of stated accuracy. These results lead to three implications. First, consistent analysts are less likely to be demoted and are more likely to be nominated All Star analysts. Second, analysts strategically deliver downward‐biased forecasts to increase their consistency (if at the expense of stated accuracy). Finally, the benefits of consistency and of “lowballing” (accuracy) are increasing (decreasing) in institutional investors’ presence.     

ORDER PROCESSING COST REDUCTION IN A JOINT VENDOR-BUYER INVENTORY SYSTEM VIA THE APPLICATION OF INFORMATION TECHNOLOGY

Modem information technologies have become important means for manufacturing and retailing firms to gain such competitive advantages as lower logistics costs and securer customers' loyalty. In this paper, we investigate a joint inventory system where the vendor produces a single item for its sole buyer and the buyer sells the item to consumers with backorders allowed. Each production lot is delivered to the buyer in a number of shipments and consecutive shipments will be increased by a fixed factor. Both vendor and buyer are willing to participate in order processing time reduction by applying information technologies in order to decrease their joint total cost. The order processing time can be reduced by certain expenditures and will affect the lot-size decisions. An analytical model is developed for determining the optimal expenditure in order processing time reduction and lot sizes for both vendor and buyer. The numerical experiment along with sensitivity analysis is also performed to obtain some insights of our model.     

Financial Distress and the Earnings‐Sensitivity‐Difference Measure of Conservatism

Following Basu (1997 ), the difference between the sensitivity of accounting earnings to negative equity return (proxy for bad news) and its sensitivity to positive equity return (proxy for good news) is interpreted as an indicator of conditional accounting conservatism. However, there is concern that the earnings‐sensitivity difference (ESD) may be affected by factors other than conditional conservatism, and that this may impair its reliability as an indicator of conditional conservatism. Motivated by such concerns and by recognition that financial distress could contribute to an ESD through a conditional‐conservatism route and/or through a non‐conditional‐conservatism route, we examine the association between financial distress and the ESD for U.S. non‐financial firms. By decomposing the association into an element arising from accruals, which can reflect conditional conservatism, and an element arising from cash flow from operating activities (CFO), which cannot directly reflect conditional conservatism, we seek evidence as to whether such association arises through a conditional‐conservatism route or through a non‐conditional‐conservatism route. We find that positive association between financial distress and the ESD arises predominantly through the accruals component of earnings rather than the CFO component, consistent with it arising primarily because of a higher degree of conditional conservatism in relatively financially distressed firms. The inference that there is a positive association between financial distress and conditional conservatism is supported by other non‐equity‐return‐based measures of conditional conservatism. The evidence in this paper suggests that the effect of financial distress does not significantly impair the reliability of the ESD as an indicator of conditional conservatism.     

Management Forecast Consistency

We posit that management forecasts, which are predictable transformations of realized earnings without random errors, are more informative than unbiased forecasts, which manifest small but unpredictable errors, even if biased forecasts are less accurate. Consistent with this intuition, we find that managers who make consistent forecasting errors have a greater ability to influence investor reactions and analyst revisions, even after controlling for the effect of accuracy. This effect is more economically significant and statistically robust than that of forecast accuracy. More sophisticated investors and experienced analysts are found to have a better understanding of the benefits of consistent management forecasts.     

The viable measure for hospitals？ --Healthcare expenditure forecasting under the global budget system

After the implementation of the global budget system, hospitals need to negotiate individual＇s healthcare budget in order to face the uncertainty of income and cost control. The major contribution of this study is to predict the increase of the inpatient healthcare expenditure using ARIMA model under the global budgets system to establish a better allocation rule for healthcare expenditure budget during the negotiation with the Bureau of National Health Insurance. The healthcare expenditure prediction model proposed in this paper will serve as a justification for hospitals＇ negotiation. Although Taiwan has abundant experiences implementing national health insurance, there are still a limited number of literatures concerning economic significance of the budget allocation rule. This paper intends to fulfill this gap. We find that as the individual healthcare expenditure increases, the number of physicians does not function as a bargaining chip. However, there are significant differences in the increase rate and quality of healthcare within the scope of insurance coverage and the increase rate of healthcare for healthy insured. The findings in this paper can serve as policy references in hospital management.     

交易纪律和私有信息对机构投资者超额报酬的影响

依据台湾股指期权成交档、委托档和持仓档等日内数据,参考Fishe and Smith (2012)方法识别出获得超额报酬的外资和本土机构投资者,对应的比例分别为50.6％和44.9％.考量获得超额报酬的来源,结果发现:外资和本土投资者确实拥有私有信息;交易纪律对机构投资者的绩效有显著的影响,外资和本土机构投资者中分别有78.3％和69.6％的超额报酬得益于交易纪律;交易纪律和投资者的信息优势存在交叉效应的影响.