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on Accounting |
| By: | FIOL, Michel |
| Abstract: | Information on the activity of Mary P. Follet, her theory on business management and her contribution to the understanding of control concept. |
| Keywords: | management; control |
| JEL: | B31 M40 |
| Date: | 2004–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0796&r=acc |
| By: | DING, Yuan; JEANJEAN, Thomas; STOLOWY, Hervé |
| Abstract: | Historically, the format of financial statements has varied from one country to another. Recently, due to the attractiveness of their capital markets, the strength of their accounting professions and the influence of their institutional investors, Anglo-American countries have seen the impact of their accounting practices on other nations increase steadily, even influencing the actual format of financial statements. Given that French accounting regulations allow a certain degree of choice in consolidated balance sheet format (‘by nature’ or ‘by term’) and income statement format (‘by nature’ or ‘by function’), this study examines a sample of 199 large French listed firms in an attempt to understand why some of these firms do not use the traditional French formats (‘by nature’ for the balance sheet and ‘by nature” for the income statement), instead preferring Anglo-American practices (‘by term’ format for the balance sheet and ‘by function’ format for the income statement). We first analyze the balance sheet and income statement formats separately using a logit model, then combine the two and enrich the research design with a generalized ordered logit model and a multinomial logit regression. Our results confirm that the major driving factor behind the adoption of one or two alternative formats is the firm’s degree of internationalization, not only financial (auditor type, foreign listing and the decision to apply alternative accounting standards) but also commercial (company size and the internationalization of sales). |
| Keywords: | Disclosure; Determinants; Financial Statements; Alternative format; France; Logit; Generalized ordered logit; Multinomial logit |
| JEL: | M41 |
| Date: | 2005–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0808&r=acc |
| By: | DEGEORGE, François (University of Lugano); DING, Yuan; JEANJEAN, Thomas; STOLOWY, Hervé |
| Abstract: | We investigate the role of analyst following as a monitoring device reducing earnings management. We find strong evidence that analysts are more effective monitors in transparent environments than in opaque environments. In a sample of 51,401 observations for 10,866 non-financial firms in 26 countries from 1994 to 2002, we find that the more transparent the country, the stronger the reduction in earnings management activity associated with analyst following. We also find that firms in transparent countries use short-term earnings management techniques to reach the consensus analyst forecast. Taken together, our findings suggest that while analyst following acts as a curb on the most visible forms of earnings management in transparent countries, it also encourages more subtle, short-term forms of earnings management to reach the analyst consensus. In transparent countries monitoring effectiveness more than offsets consensus fixation. In opaque countries, analyst following does not act as a curb on total earnings management, but neither does it create any short-term pressure to manage earnings. Our results are robust to (1) our measure of transparency, (2) reverse causality checks and (3) our choice of measure of earnings management. |
| Keywords: | analyst following; earnings management; international comparison |
| JEL: | G31 |
| Date: | 2005–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0810&r=acc |
| By: | Genevieve Boyreau-Debray; Shang-Jin Wei |
| Abstract: | State-owned financial institutions have been proposed as a way to address market failure, but the recent literature has also highlighted their pathological problems. This paper studies the case of China for pitfalls of a state-dominated financial system, including possible segmentation of the internal capital market due to local government interference and mis-allocation of capital. Even without formal legal prohibition to capital movement across regions, we find that capital mobility within China is low. Furthermore, to the extent some capital moves around the country, the government (as opposed to the private sector) tends to allocate capital systematically away from more productive regions toward less productive ones. In this context, a smaller role of the government in the financial sector might increase economic efficiency and the rate of economic growth. |
| JEL: | G1 F3 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11214&r=acc |
| By: | Isabelle Sin; Suzi Kerr; Joanna Hendy (New Zealand Treasury) |
| Abstract: | This paper provides an overview of key issues involved in the choice among market-based instruments for climate change policy. Specifically, it examines the potential net benefits from shifting to a permit system for emission reduction, and the preconditions necessary for this change. It also draws out the implications of New Zealand’s specific circumstances and current climate policies for future policy development. |
| Keywords: | climate change; emissions trading; permits; taxation; New Zealand |
| JEL: | Q28 Q48 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:05/02&r=acc |
| By: | Kenichiro Suzuki; David Cobham |
| Keywords: | financial systems, corporate finance, bank-industry relationships, main bank, firm size, Japan. |
| JEL: | G1 G3 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:0501&r=acc |
| By: | Zhang, Ge |
| Abstract: | This paper investigates a market-valuation-based hypothesis for employee stock options (ESOs). It examines how market valuation has affected the decision to grant ESOs, the amount of options granted, and the distribution of options among executives and rankand- file employees. I find strong empirical evidence that firms with high market valuation and high probability of future overvaluation are more likely to adopt ESOs and grant more options to their employees. Furthermore, when top executives perceive that the current market valuation is high, they grant a smaller portion of options to themselves relative to rank-and-file employees. All these results are consistent with the market-valuation rationale for ESOs, which argues that firms use ESOs as a method to sell overvalued equity. |
| Keywords: | Market valuation, Stock options |
| Date: | 2004–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:uno:wpaper:2003-13&r=acc |
| By: | Baker, H. Kent; Mukherjee, Tarun K.; Powell, Gary E. |
| Abstract: | This study explores why firms distribute excess cash as specially designated dividends (SDDs) instead of using regular dividends or repurchasing shares. We survey top managers of NASDAQ, AMEX, and NYSE firms issuing at least one SDD between 1994 and 2001. The results show that firms tend to pay SDDs when they experience strong earnings and cash flows and want to increase at least temporarily the yield to shareholders. Having strong earnings and cash flows also provide an impetus for regular dividend increases, but paying regular dividends is part of a firm’s standard dividend policy. The primary motives for repurchasing shares are to take advantage of perceived market undervaluation of the firm’s shares and to improve performance measures, especially. Overall, the results lend support to the signaling explanation for the disbursement of excess funds, but not the free cash flow or wealth transfer explanations. |
| Keywords: | Dividends, Payout policy, Specially designated dividends, Share repurchases |
| JEL: | G35 |
| Date: | 2004–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:uno:wpaper:2004-07&r=acc |
| By: | Samuel Hanson; M. Hashem Pesaran; Til Schuermann |
| Abstract: | This paper considers a simple model of credit risk and derives the limit distribution of losses under different assumptions regarding the structure of systematic risk and the nature of exposure or firm heterogeneity. We derive fat-tailed correlated loss distributions arising from Gaussian (i.e. non-fat-tailed) risk factors and explore the potential for (and limit of) risk diversification. Where possible the results are generalized to non-Gaussian distributions. The theoretical results indicate that if the firm parameters are heterogeneous but come from a common distribution, for suffciently large portfolios there is no scope for further risk reduction through active portfolio management. However, if the firm parameters come from different distributions, say for different sectors or countries, then further risk reduction is possible, even asymptotically, by changing the portfolio weights. In either case, neglecting parameter heterogeneity can lead to underestimation of expected losses. But, once expected losses are controlled for, neglecting parameter heterogeneity can lead to overestimation of risk, whether measured by unexpected loss or value-at-risk. We examine the impact of sectoral and geographic diversification on credit losses empirically using returns for firms in the U.S. and Japan across seven sectors and find that ignoring this heterogeneity results in far riskier credit portfolios. Risk, is reduced significantly when parameter heterogeneity is properly taken into account. |
| Keywords: | Risk management, correlated defaults, credit loss distributions, heterogeneity, diversification |
| JEL: | C33 G13 G21 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:scp:wpaper:05-18&r=acc |