are household production decisions cooperative evidence on pastoral migration and milk sales from northern kenya market based development efforts frequently create opportunities to generate income from goods previously produced and consumed within the household production within the household is often characterized by a gender and age division of labor market development efforts to improve wellbeing may lead to unanticipated outcomes if household production decisions are noncooperative we develop and test models of household decision making to investigate intrahousehold decision making in a nomadic pastoral setting from kenya our results suggest that household decisions are contested with husbands using migration decisions to resist wives ability to market milk

empirical evidence on the relation between stock option compensation and risk taking abstract we examine whether executive stock options esos provide managers with incentives to invest in risky projects for a sample of oil and gas producers we examine whether the coefficient of variation of future cash flows from exploration activity our proxy for exploration risk increases with the sensitivity of the value of the ceo s options to stock return volatility eso risk incentives both eso risk incentives and exploration risk are treated as endogenous variables by adopting a simultaneous equations approach we find evidence that eso risk incentives has a positive relation with future exploration risk taking additional tests indicate that eso risk incentives exhibits a negative relation with oil price hedging in a system of equations where eso risk incentives and hedging are allowed to be endogenously determined overall our results are consistent with esos providing managers with incentives to mitigate risk related incentive problems

value relevance of tobin s q and corporate governance for the taiwanese tourism industry for knowledge and invention based industries scholars have introduced the firm value which is composed of traditional financial capital and intangible intellectual capital and tobin s q which is the commonly used approach for intellectual capital valuation scholars have thus evaluated firm valuation appropriately by considering corporate governance this study applies the multi regression model to present a discussion on the value relevance of intellectual capital and corporate governance concerning the tourism industry in taiwan the results show that intellectual capital is positively related to firm valuation and that corporate governance influences the positive relationship between intellectual capital and firm valuation the tourism industry must focus on intellectual capital and corporate governance

nuclear decommissioning costs the impact of recoverability risk on valuation abstract mounting nuclear plant decommissioning costs and utility deregulation focused attention on accounting for decommissioning liabilities fasb s exposure draft 158 b proposes balance sheet recognition of the projected future decommissioning cost liability at initial plant commission we expect market valuation of each dollar of decommissioning cost apportioned to utilities to vary with utility specific factors related to the probability of cost recovery via rates we find a more negative decommissioning cost firm value association for utilities with higher business or financial risk also equity value is significantly associated with total decommissioning cost across all nuclear units in which a utility has ownership interest

are disclosures about bank derivatives and employee stock options value relevant abstract the papers by venkatachalam 1996 and aboody 1996 provide some interesting evidence on issues that are important to accounting regulators as well as accounting academics however for econometric as well as economic reasons there are limits to what we can learn from this type of research cross sectional levels studies careful attention to methodological issues in this type of research design can reduce but likely will not eliminate these interpretational difficulties

paper millionaires how valuable is stock to a stockholder who is restricted from selling it abstract many firms have stockholders who face severe restrictions on their ability to sell their shares and diversify the risk of their personal wealth we study the costs of these liquidity restrictions on stockholders using a continuous time portfolio choice framework these restrictions have major effects on the optimal investment and consumption strategies because of the need to hedge the illiquid stock position and smooth consumption in anticipation of the eventual lapse of the restrictions these results provide a number of important insights about the effects of illiquidity in financial markets

valuing executive stock options with endogenous departure abstract executive stock options differ from exchange traded options because of vesting and portability restrictions executive departure from the firm forces early exercise reducing the value of executive options current methodology calculates the option value by multiplying the black scholes option price by the departure probability this ignores the possibility that executive departure is less likely when stock price is high and thus is correlated with the stock price we show that this correlation implies a substantial increase in option values a similar situation occurs in performance based option packages where the actual number of options granted depends on stock performance

real investment implications of employee stock option exercises this paper examines a real cost of awarding employee stock options based on the observation that managers are extremely concerned about earnings per share dilution in equity related compensation we predict and find that firms experiencing significant employee stock option eso exercises shift resources away from real investments towards the repurchase of their own stocks we further find weak evidence of a decline in subsequent firm performance as measured by return on assets for several years following the cut in discretionary investments as a result of stock option exercises though this result is sensitive to the metric used to measure performance collectively our findings indicate that eso exercises potentially impose a real cost on the firm in terms of foregone investment opportunities

on the use of instrumental variables in accounting research abstract instrumental variable iv methods are commonly used in accounting research e g earnings management corporate governance executive compensation and disclosure research when the regressor variables are endogenous while iv estimation is the standard textbook solution to mitigating endogeneity problems the appropriateness of iv methods in typical accounting research settings is not obvious drawing on recent advances in statistics and econometrics we identify conditions under which iv methods are preferred to ols estimates and propose a series of tests for research studies employing iv methods we illustrate these ideas by examining the relation between corporate disclosure and the cost of capital

market valuation of employee stock options this study investigates whether investors incorporate the value of a firm s outstanding employee stock options into its stock price i estimate the outstanding options value for a sample of firms for which outstanding fixed options exceed 5 of outstanding common shares in 1988 i find a negative correlation between the value of outstanding options and a firm s share price the correlation is stronger i for the option s intrinsic value than for the option s time value ii for options that are later in their vesting stage than earlier in their vesting stage and iii for large firms than for small firms in addition the fasb s method for calculating compensation expense has no explanatory power in the presence of this paper s calculation of the options value

whose fast and whose feast intrahousehold asymmetries in dietary diversity response among east african pastoralists thisarticleexploresintrahouseholddietarydiversityallocationwithinpastoralisthouseholdsineastern africa we estimate income elasticities of dietary diversity for demographic cohorts allowing asymmetric behavior depending on household circumstances we find that household heads disproportionately bear the nutritional burden when household income is below mean while other cohorts disproportionately enjoy the nutritional gains when it is above mean the commonly assumed symmetric framework masks this intrahousehold behavior and produces biased elasticity estimates stochastic dominance tests show adult daughters as better off than other household members in their dietary diversity sons as worse off and little difference between male heads and their wives nutritional welfare is an individual not household characteristic while the average nutrient intake and dietary quality of the household can be one of the largest determinants of the well being of its members nutritional well being is individually experienced therefore development policies targeting nutrition are typically more concerned with their possible implications for individual welfare than for household community or national level aggregates the household though may be one of the most important institutions influencing individual nutritional welfare consequently in order to evaluate income generation and pricing policies it is essential to understand both how households allocate resources to individual members as well as how allocations

an evaluation of the swedish system of active labour market programmes in the 1990s we investigate the presence of short and long term effects from joining a swedish labor market program vis a vis more intense job search in open unemployment overall the impact of the program system is found to have been mixed joining a program has increased employment rates among participants a result robust to a misclassification problem in the data on the other hand it has also allowed participants to remain significantly longer on unemployment benefits and more generally in the unemployment system this being particularly the case for those entitled individuals entering a program around the time of their unemployment benefits exhaustion

milk sales and dietary diversity among the maasai in maasai culture responsibilities are traditionally divided between genders men are in charge of grazing and managing the livestock herds women take care of the family administer food supplies and are responsible for milking for them balancing home consumption of milk for the family and for the calves milk sale and food purchase is a major task in this article we first investigate how different milk sales groups vary regarding the use of different food items and the respective quantities consumed by the enkaji i e a maasai subhousehold then we address the commercialization decision and assess the effect of milk sales on the enkaji s food item use and food consumption using the data of maasai enkajijik in the milk catchment area of a milk collection center in ngerengere tanzania we estimate the effects by employing propensity score matching procedures our findings suggest that milk sellers especially those selling to the milk collection center have a more diverse diet in terms of per person consumption the groups are markedly similar therefore we conclude that income generated by milk sales is invested in diet diversification rather than in increasing the quantity of food consumed hence the enkajijik appear not to make use of caloric terms of trade

the exercise and valuation of executive stock options abstract in theory hedging restrictions faced by managers make executive stock options more difficult to value than ordinary options because they imply that exercise policies of managers depend on their preferences and endowments using data on option exercises from 40 firms this paper shows that a simple extension of the ordinary american option model which introduces random exogenous exercise and forfeiture predicts actual exercise times and payoffs just as well as an elaborate utility maximizing model that explicitly accounts for the nontransferability of options the simpler model could therefore be more useful than the preference based model for valuing executive options in practice

employee stock options as warrants abstract previous studies ignore the fact that employee stock options are warrants because these options have been an insignificant component of firms capital structures i show that this assumption is no longer correct for example for more than 36 of my sample firms employee stock options represent a more significant claim on firm value than the firm s debt and preferred stock combined moreover in contrast to the suggestions of previous research i show that employee stock options are a significant claim on firms throughout the economy including larger firms older firms and firms in old economy industries finally i show that the presumption in prior studies that employee stock options are not warrants causes a potential misunderstanding of the risk shifting interests of securityholders and biases the analysis of capital structure issues

why do firms use incentives that have no incentive effects this paper illustrates why firms might choose to implement stock option plans or other pay instruments that reward luck i consider a model where adjusting compensation contracts is costly and where employees outside opportunities are correlated with their firms performance the model may help to explain the use and recent rise of broad based stock option plans as well as other financial instruments even when these pay plans have no effect on employees on the job behavior the model suggests that agency theory s often overlooked participation constraint may be an important determinant of some common compensation schemes particularly for employees below the highest executive ranks many compensation plans reward or punish employees for factors they cannot control an often discussed example of this phenomenon is executive compensation where stock options are not generally indexed to the overall market however many firms also offer firm wide stock options and profit sharing plans that provide even weaker incentives than executive plans after all most workers can expect to reap trivial personal gain from their contribution to firm value or profits i consider an explanation for this phenomenon in which firms contract with employees as a means of indexing wages to market rates rather than to provide incentives while much of the agency literature has concentrated on inducing optimal effort i consider the importance of the generally overlooked participation constraint i study a model in which employees outside opportunities are correlated with firm profits or stock price and in which both turnover and adjusting the pay scheme parameters are costly given these assumptions the firm may find it most profitable to pay the employee in a way that is correlated with the outside options presented by the outside labor market despite the requisite risk premium rather than pay a fixed wage that insures participation in all states the model derived below starts from the assumption that wage adjustments are costly but that workers are willing to make part of their pay contingent

internet downturn finding valuation factors in spring 2000 abstract during spring 2000 the internet stock index declined 45 using a sample of internet firms this paper investigates whether this decline was associated with new disclosures such as earnings analyst forecast revisions and web traffic measures or to a reassessment by investors of pre existing information we find only modest evidence that the decline was associated with new disclosures however returns and post decline stock prices are significantly explained by 1999 annual report data when earnings are decomposed into gross profit and various expenses traditional financial information contributes significantly more in explaining the cross sectional returns and price levels than non financial information

capital labor and the firm a study of german codetermination under the german corporate governance system of codetermination employees are legally allocated control rights over corporate assets through seats on the supervisory board that is the board of nonexecutive directors the supervisory board oversees the management board the board of executive directors approves or rejects its decisions and appoints its members and sets their salaries we empirically investigate the implications of this sort of labor participation in corporate decision making we find that companies with equal representation of employees and shareholders on the supervisory board trade at a 31 stock market discount as compared with companies where employee representatives fill only one third of the supervisory board seats we show that under equal representation management board compensation provides incentives that are not conducive to furthering shareholders interests possibly because labor maximizes a different objective function than shareholders we document that under equal representation companies have longer payrolls than their one third representation peers have finally we provide evidence that shareholders respond to the allocation of control rights to labor by linking supervisory board compensation to firm performance and by leveraging up the firm jel g32 g34

health and hunger nutrient response to income depending on caloric availability in nepal using data from nlss iii we estimate nutrient income elasticities for macronutrients vitamins and minerals we further allow for differential nutrient demand response to income depending on where a household is in the caloric availability distribution we find that some nutrients are income inelastic indicating that they are necessity goods while others are relatively income elastic we further test and reject equivalent nutrient income elasticities across the caloric availability distribution households in the lowest calorie quintile have highly income elastic nutrient demand leaving them vulnerable to income fluctuations moreover as households meet their first order caloric needs they substitute away from cheap calorie dense staples toward more expensive nutrient dense foods finally for most nutrients households in the highest calorie quintile exhibit more elastic nutrient demand similar to households in the lowest quintile our results suggest that policies aimed at improving income will likely also improve household nutrient availability particularly for the most calorie poor households they further suggest that policies aimed at protecting poor households from negative income shocks will also likely yield nutritional benefits

trade standards and poverty evidence from senegal summary in the debate on trade and poverty it is argued that standards act as trade barriers and cause marginalization of the poor this paper quantifies income and poverty effects of high standards trade and integrates labor market effects by using company and household survey data from the vegetable export chain in senegal we find that exports grew sharply despite increasing standards contributing importantly to rural incomes and poverty reduction tightening standards induced a shift from smallholder contract farming to integrated estate production altering the mechanism through which poor households benefit through labor markets instead of product markets

ceo stock option awards and the timing of corporate voluntary disclosures abstract we investigate whether ceos manage the timing of their voluntary disclosures around stock option awards we conjecture that ceos manage investors expectations around award dates by delaying good news and rushing forward bad news for a sample of 2 039 ceo option awards by 572 firms with fixed award schedules we document changes in share prices and analyst earnings forecasts around option awards that are consistent with our conjecture we also provide more direct evidence based on management earnings forecasts issued prior to award dates our findings suggest that ceos make opportunistic voluntary disclosure decisions that maximize their stock option compensation

employee stock options equity valuation and the valuation of option grants using a warrant pricing model we investigate the use of a warrant pricing approach to incorporate employee stock options esos into equity valuation and to account for the dilutive effect of esos in the valuation of option grants for financial reporting purposes our valuation approach accounts for the jointly determined nature of eso and shareholder values the empirical results show that our stock price estimate exhibits lower prediction errors and higher explanatory powers for actual share price than does the traditional stock price estimate we use our valuation approach to assess the implications of dilution on the fair value estimates of eso grants we find that the fair value is overstated by 6 if we ignore the dilutive feature of esos furthermore this bias is larger for firms that are heavy users of esos small and r d intensive and for firms that have a broad based eso compensation plan

employee stock option exercises an empirical analysis this paper describes the exercise behavior of over 50 000 employees who hold longterm options on employer stock at eight corporations employees typically exercise options years before expiration commonly sacrificing half of the black scholes value exercise is strongly associated with recent stock price movements the market to strike ratio proximity to vesting dates time to maturity volatility and the employee s level within the company these findings have implications for compensation planners the fasb as it develops a new accounting standard for options and financial statement users and preparers who apply and interpret the new fasb standard

corporate performance and managerial remuneration an empirical analysis abstract economic theories of efficient compensation predict a positive relationship between executive pay and corporate performance and yet efforts to document this relationship have been largely unsuccessful in this paper we argue that previous cross sectional studies have omitted important variables which seriously bias their results using data that focus on individual executives over time we find that executive compensation is strongly positively related to corporate performance as measured by shareholder return and growth in firm sales the results are robust to the stock market performance measure utilized

risk aversion and block exercise of executive stock options abstract it is well documented that executives granted stock options tend to exercise early and in a few large transactions or blocks standard risk neutral valuation models cannot explain these patterns and attempts to capture the exercise behavior of risk averse executives have been limited to the special case of one option this paper solves for the optimal exercise behavior for a risk averse executive who is granted multiple stock options we show that utility based models do not predict block exercise behavior rather the risk averse executive exercises stock options individually at a sequence of increasing price thresholds when in addition the executive faces frictions such as costly exercise he faces a trade off between exercising little and often to maximize return and exercising larger quantities on fewer occasions to minimize effort this generates realistic block exercise behavior and yields new predictions in particular executives should begin by exercising large blocks of options but the block sizes should become smaller over time our framework also allows us to study the impact of multiple exercise dates on estimates of the cost of options to the company we find that assuming the executive can only exercise on a single occasion underestimates the cost of the options compared with allowing for optimal exercise behavior

co2 emissions embodied in china us trade input output analysis based on the emergy dollar ratio to gain insight into changes in co2 emissions embodied in china us trade an input output analysis based on the emergy dollar ratio edr is used to estimate embodied co2 emissions a structural decomposition analysis sda is employed to analyze the driving factors for changes in co2 emissions embodied in china s exports to the us during 2002 2007 the results of the input output analysis show that net export of co2 emissions increased quickly from 2002 to 2005 but decreased from 2005 to 2007 these trends are due to a reduction in total co2 emission intensity a decrease in the exchange rate and small imports of embodied co2 emissions the results of the sda demonstrate that total export volume was the largest driving factor for the increase in embodied co2 emissions during 2002 2007 followed by intermediate input structure direct co2 emissions intensity had a negative effect on changes in embodied co2 emissions the results suggest that china should establish a framework for allocating emission responsibilities enhance energy efficiency and improve intermediate input structure

energy perspective of sino us trade imbalance in global supply chains abstract the unprecedented global supply chain fragmentation brings an ever increasing trade imbalance in terms of monetary flows between china and the united states associated with the bilateral trade imbalance is the reallocation of resources utilization and environmental stress in this regard this study presents an embodied energy model to investigate impacts of sino us trade imbalance on global energy use during 2000 2014 distinguished from previous studies that only evaluate the sino us trade based on specific bilateral perspective this study probes into overall impacts of the sino us trade on global primary energy use pattern from the perspective of global supply chains for the first time a boost to eastbound trade and distinct export industrial structures fuel the unprecedented growth of sino us embodied energy trade imbalance accounting for more than half of the total energy transfers embodied in sino us trade such imbalance firstly increases sharply from 1956 0 pj in 2000 to 5265 3 pj in 2006 followed by a short term decrease to hit a low point at 3267 7 pj in 2009 because of financial crisis and then a gradual resuscitation with a slower pace in the following years the exported energy embodied in manufacturing products dominates eastbound flows whereas energy embodied in agricultural products technology intensive products and primary energy commodities constitute majority of westbound flows due to the dispersed production process in global value chains more than half of primary energy use embodied in the bilateral trade is geographically exploited in other economies along the supply chain i e europe the middle east and south asia furthermore security of energy supply is evaluated for the two economies the results can help predict potential influences of trade conflicts on global energy extraction illustrating policy implications to make sino us trade in line with global energy conservation goals considering sino us trade s impacts along complex supply chains distinctive domestic energy conservation measures should give way to global collective and inclusive governance

accounting for employee stock options employee stock options eso s are a ubiquitous form of compensation in corporate america by the late 1990 s eso s outstanding at large corporations averaged 7 percent of total outstanding shares with top executives holding approximately one third of total eso s john core and guay 2001 empirical evidence suggests that firms use eso s to align employees and shareholders interests attract and retain employees and compensate employees for their labor while simultaneously raising capital from employees core and guay 1999 2001 kevin j murphy 1999 there is currently an intense debate nationally and internationally among standard setters politicians investors corporate executives and academics about whether to require corporations to deduct the estimated value of eso grants as a business expense in reported income existing accounting standards require firms to expense most forms of pay such as salaries cash bonuses and the value of stock grants but allow firms to choose whether to expense the value of eso grants until very recently nearly all firms chose not to expense eso s however firms that do not expense eso s must publicly disclose in the financial statement footnotes what reported income would have been if the eso s were expensed in a recent sample of large growth firms christine botosan and marlene plumlee 2001 find that mandatory expensing of eso s would have resulted in a 14 percent median reduction in firms earnings per share firms are also required to disclose details of top executive eso compensation in the annual proxy statement underlying the eso debate is the concern that the choice among alternative financialaccounting treatments have real economic consequences a large literature beginning with ross watts and jerold zimmerman 1978 provides evidence that accounting choice can impose economic costs on firms when contracts e g debt and executive compensation contracts or influential external parties e g tax authorities rely on reported accounting numbers see thomas fields et al 2001 for a survey of this literature accounting choice can also have economic consequences if investors fixate on particular numbers such as reported earnings resulting in security mispricing and misallocation of capital proponents of mandatory expensing argue that eso s reflect a cost of acquiring employee labor and that expensing eso s conveys this information to outsiders consistently with other labor costs some argue that the absence of eso expense results in stock mispricings because investors fixate on reported earnings and fail to understand or utilize supplemental footnote disclosures about the true economic cost of eso grants others argue that when investors and boards of directors fixate on accounting earnings the absence of eso expense exacerbates ineffective corporate governance and allows management to use eso s to extract excessive compensation proponents of this view argue that expensing eso s will reign in management compensation by putting it under a brighter light opponents of expensing eso s argue that deducting the cost of eso s from earnings conveys an impression of weaker financial results to investors and under the assumption that investors fixate on reported earnings could raise the firms cost of financing and stifle corporate investment and innovation there is also a concern that external parties such as taxing authorities might use changes in financial accounting treatment as a cue to alter regulatory and tax policy