Does financial reporting misconduct pay off even when discovered?

Review of Accounting Studies - Experts and popular belief contend that it pays to engage in financial misconduct. We hand-collect data on three subsamples of severe misconduct cases, between 2003...     

Determinants of consumer demand for circular economy products. A case for reuse and remanufacturing for sustainable development

We investigate determinants of consumer demand for circular (reused and remanufactured) products. Based on exploratory choice-based conjoint experiments with a sample of 800 adults in the United Kingdom, we examine two types of premium segment electronic appliances: a mobile phone and a robot vacuum cleaner. We find that consumers prefer partly circulated products over fully or not at all circulated products and that circular products can likely successfully enter the existing market at the retail price of a new product. Interestingly, circular products compete for market share primarily with new products, leaving the market share of second-hand options less affected. The results show a promising path for firms considering a transition to circular business models.     

The Incidence of Public Spending on Healthcare: Comparative Evidence from Asia

The article compares the incidence of public healthcare across11 Asian countries and provinces, testing the dominance of healthcareconcentration curves against an equal distribution and Lorenzcurves and across countries. The analysis reveals that the distributionof public healthcare is prorich in most developing countries.That distribution is avoidable, but a propoor incidence is easierto realize at higher national incomes. The experiences of Malaysia,Sri Lanka, and Thailand suggest that increasing the incidenceof propoor healthcare requires limiting the use of user fees,or protecting the poor effectively from them, and building awide network of health facilities. Economic growth may not onlyrelax the government budget constraint on propoor policies butalso increase propoor incidence indirectly by raising richerindividuals' demand for private sector alternatives.     

THE VALUE OF EXPERIENTIAL LEARNING BY ORGANIZATIONS: EVIDENCE FROM INTERNATIONAL JOINT VENTURES

We use a sample of international joint venture announcements to test the hypothesis that organizations learn from experience, such that prior learning enhances the value of later ventures. We find that experience with ventures in the same foreign location, as well as experience with international joint ventures in general, is valued by the market. In contrast, experience in the same type of joint venture activity does not add any incremental value. These findings suggest the market recognizes and values some, although not all, forms of organizational learning.     

Saving–investment correlations, capital mobility and crowding out: some further results

This study attempts to reassess the evidence on the degree of capital mobility and crowding out by applying a varying coefficients model to data on 19 OECD countries over the 1971–1999 period. Our period-specific results strongly support the crowding-out effect as well as the low capital mobility argument for this group of countries as a whole. However, the strength of the crowding-out effect appears to weaken and the degree of capital mobility to increase in the 1990s as compared to the 1970s and 1980s. We also classify countries into five groups according to the relative size of the government sector. Our group-specific results indicate that the degree of capital mobility is generally lower and the crowding-out effect generally stronger, in country groups with smaller governments. The differences are especially evident when we compare the group with largest government size with all other groups, those differences between the latter being much more modest. However, significant differences in the country-specific results suggest that it is prudent to be cautious when we draw conclusions about crowding-out and capital mobility for specific countries from the period-wise or group-wise results. This is particularly important in drawing policy implications for specific countries.     

Is silence golden? An empirical analysis of firms that stop giving quarterly earnings guidance

We investigate firms that stop providing earnings guidance (“stoppers”) either by publicly announcing their decision (“announcers”) or doing so quietly (“quiet stoppers”). Relative to firms that continue guiding, stoppers have poorer prior performance, more uncertain operating environments, and fewer informed investors. Announcers commit to non-disclosure because they (i) do not expect to report future good news or (ii) have lower incentives to guide due to the presence of long-term investors. The three-day return around the announcement is negative. Stoppers subsequently experience increases in analyst forecast dispersion and decreases in forecast accuracy but no change in return volatility or analyst following.     

Do the SEC's enforcement preferences affect corporate misconduct?

Recent frauds have questioned the efficacy of the SEC's enforcement program. We hypothesize that differences in firms' information sets about SEC enforcement and constraints facing the SEC affect firms' proclivity to adopt aggressive accounting practices. We find that firms located closer to the SEC and in areas with greater past SEC enforcement activity, both proxies for firms' information about SEC enforcement, are less likely to restate their financial statements. Consistent with the resource-constrained SEC view, the SEC is more likely to investigate firms located closer to its offices. Our results suggest that regulation is most effective when it is local.     

Relationship marketing in consumer markets: Antecedents and consequences

Understanding the motivations of consumers to engage in relationships with marketers is important for both practitioners and marketing scholars. To develop an effective theory of relationship marketing, it is necessary to understand what motivates consumers to reduce their available market choices and engage in a relational market behavior by patronizing the same marketer in subsequent choice situations. This article draws on established consumer behavior literature to suggest that consumers engage in relational market behavior due to personal influences, social influences, and institutional influences. Consumers reduce their available choice and engage in relational market behavior because they want to simplify their buying and consuming tasks, simplify information processing, reduce perceived risks, and maintain cognitive consistency and a state of psychological comfort. They also engage in relational market behavior because of family and social norms, peer group pressures, government mandates, religious tenets, employer influences, and marketer policies. The willingness and ability of both consumers and marketers to engage in relational marketing will lead to greater marketing productivity, unless either consumers or marketers abuse the mutual interdependence and cooperation. He has published more than 200 books and research papers in different areas of marketing. His bookThe Theory of Buyer Behavior (1969) with John A. Howard is a classic in the field. He has recently published two scholarly books:Marketing Theory: Evolution and Evaluation (1988) andConsumption Values and Market Choices (1991). He is on the editorial boards of at least a dozen scholarly journals in marketing, international business, and quantitative methods; he is also series editor ofResearch in Marketing (JAI Press). Prior to joining Emory, he was an associate professor of marketing at XLRI Jamshedpur in India. He received his M.B.A. and Ph.D. from Banaras Hindu University, India. He has authored a number of articles in the area of international marketing, business alliances, and environmental marketing. He is coeditor ofResearch in Marketing (Annual Series, JAI Press) and serves on the editorial review board ofInternational Marketing Review.     

DO SCANDALS TRIGGER GOVERNANCE CHANGES? EVIDENCE FROM OPTION BACKDATING

We examine whether firms charged with backdating option grants make discernible changes to board structure and activity and whether such changes help recoup value losses from the revelation of option backdating. We find that these firms increased board size, reduced duality, and increased board independence. In addition, the boards and the compensation committees of these firms experienced significant increases in meeting frequency. We also find that firms in the same sectors that had not been identified as backdating option grants experienced similar changes in board activity and some elements of board structure. Additional analysis reveals that increases in board size, chief excutive officer turnover, and the meeting frequency of the audit committee are related to buy‐and‐hold abnormal returns in the postscandal period.