Financial Sector Risk and the Stock Returns: Evidence from Tokyo Stock Exchange Firms

We investigate whether the activity of financial firms creates value and/or risk to the economy within the asset pricing framework. We use stock return data from nonfinancial firms listed in the first section of the Tokyo Stock Exchange. The value-weighted index that is solely composed of nonfinancial firms is augmented with the index of the firms from the financial sector, and we estimate multivariate asset pricing model with these two indices. We note that our procedure can simultaneously take into account the cross-holding phenomena among Japanese firms, especially between the financial sector and the nonfinancial sector. Our augmented index model performs well both with cross-sectional Fama and MacBeth regression test and GMM test. Our two index model with additional Fama and French's HML factor can capture cross-sectional variations of the returns of sample portfolios better than the original Fama and French model can, when measured by Hansen and Jagannathan distance measure. We find that this additional new sector variable can be a substitute for Fama and French's size factor, but not related to the bond index return. This variable has similar factor characteristic as money supply growth or the term structure, but the latter variables contain more information than the former. Morever, our financial sector model helps explain the return and risk structure of Japanese firms during the so-called bubble period.     

Mining History of Gamification Towards Finding Expertise in Question and Answering Communities: Experience and Practice with Stack Exchange

Recently, an online Q&A tool has become an essential part of individual communities and organizations of experts on specific topics. Using the answers to questions about specific topics will help such communities work more efficiently in their fields. Currently, Q&A online communities are adopting gamification to engage users by granting awards to successful users. In this paper, we investigate how to mine award achievement histories to find expertise. We propose the use of sequence analysis and clustering techniques. Specifically, we study the history of Stack Exchange, a large Q&A community that employs gamification. To the best of our knowledge, this is the first study of using award achievement history to find expertise in Q&A communities.     

Empowering leadership and meaningful work: the mediating role of learning goal orientation

Drawing on positive psychology and self‐determination theories, this study investigates the direct and indirect effects of empowering leadership on meaningful work of employees, particularly through the mediation of learning goal orientation. Longitudinal survey data of 388 employees in medical institutions were used to test the hypotheses. The results support the direct positive relationship between empowering leadership and meaningful work, but also emphasize the mediating effect of learning goal orientation within this relationship. This study is among the first to examine the effect of mediation by learning goal orientation upon the relationship between empowering leadership and meaningful work.     

Dissemination of Accruals Information,Role of Semi‐Annual Reporting,and Analysts' Earnings Forecasts: Evidence from Japan

Our study investigates the effects of dissemination of accounting accruals information on stock prices using Japanese annual reports as our sample. We conduct month‐by‐month detailed analyses of price adjustment behavior with a particular focus on revisions of analysts' earnings forecasts and changes in trading volume around the period of upcoming semi‐annual reports. We find that analysts' forecasts are often revised around this time, and analysts use this as auxiliary information. In addition, an accompanying re‐adjustment of abnormal returns and an increase in trading volume are observed. Our findings demonstrate that informational uncertainty initially triggered by the announcement of annual reports decreases as semi‐annual reports are disclosed and analysts change their earnings forecasts, and confirms the importance of semi‐annual reporting.     

Social Network Rebuilder: A Tool to Estimate a Social Network of Financial Crisis Propagation

The objective of this paper is to find a new method to estimate real social networks based on observed data collected by questionnaire surveys. Studies on social networks have been increasing in order to analyze social phenomena from a micro viewpoint. Most social phenomena can be explained by micro-level interactions among people. Spread of rumor and pandemics are typical example of micro interaction? However, there has not been much work on an analysis of real social networks based on observed data. This study tries to establish a methodology that exploits a genetic algorithm to rebuild a social network based on the data observed indirectly from real social networks. This paper introduces our proposed method, which allows us to rebuild a social network to some extent from degree distributions of a target real social network.     

Does an extrinsic reward for R&D employees enhance innovation outcomes? Evidence from a Japanese innovation survey

This paper examines the effects of extrinsic rewards for R&D employees on innovation outcomes based on evidence from a Japanese innovation survey. Theoretical and empirical studies present conflicting findings regarding the relationship between extrinsic rewards and innovation outcomes. This article seeks to shed light on the relationship between rewards and outcomes, as represented by the development of new products and services and their technological superiority and profitability. The analysis produced the following findings. First, companies that have introduced an evaluation system based on R&D performance are more likely to develop new products and services. The introduction of the evaluation system brings about success in product innovation with greater technological superiority. Second, monetary compensation has a negative impact on the development of new products and services and technological superiority. Third, these effects vary with the company size. Small- and medium-sized companies achieve higher technological superiority with performance-based evaluations. Large companies tend to adversely impact the development of new products and services and their technological superiority with monetary compensation.     

Does citizen participation affect municipal performance? Electoral competition and fiscal performance in Japan

Subnational fiscal performance has been receiving a lot of attention from researchers in various disciplines. However, there is very little published on the impact of citizen involvement on fiscal performance. This paper shows that a lack of citizen involvement in the electoral process was associated with fiscal performance in all 807 city-level Japanese municipalities from 2006 to 2012.     

FISCAL CONSTRAINTS, COLLECTION COSTS, AND TRADE POLICIES

The last two decades witnessed trade liberalization in many developing countries. What caused this trend, and why have trade barriers been so ubiquitous when economic theory overwhelmingly supports free trade? This paper proposes that governments' revenue needs are the driving force. Governments may rely disproportionately on trade taxes because they are inexpensive to collect. Trade liberalization is an integral part of a tax reform: a tax base expansion is necessary to allow governments to reduce tariff rates. This hypothesis is supported by a panel data analysis of 27 developing countries.     

Team Incentives and Reference‐Dependent Preferences

We investigate a multi‐agent moral‐hazard model where agents have expectation‐based reference‐dependent preferences à la K?szegi and Rabin (2006, 2007). We show that even when each agent's probability of success in a project is independent, a principal may employ team incentives. Because the agents are loss averse, they have first‐order risk aversion to wage uncertainty. This causes the agents to work harder when their own failure is stochastically compensated through other agents' performance. In the optimal contract, agents with high performance are always rewarded, whereas agents with low performance are rewarded if and only if other agents' performance is high.     

Spillovers of Equal Treatment in Wage Offers

We analyse a labour‐matching model with wage posting, where – reflecting institutional constraints – firms cannot differentiate their wage offers within certain subsets of workers. Inter alia, we find that the presence of impersonal wage offers leads to wage compression, which propagates to the wages for high productivity workers who receive personalized offers.