evidence on the choice of inventory accounting methods lifo versus fifo in this paper we describe various systematic properties of lifo and fifo firms accounting numbers included are assessments of these properties for firms reported annual numbers and for their as if counterparts obtained by estimating what lifo fifo firms would have reported had they used the fifo lifo inventory method instead our purpose in conducting these assessments is to provide additional evidence on tax and nontax explanations of firms choices of inventory accounting methods in the next subsection we elaborate on these two classes and suggest that the nontax explanations may have attracted adherents partly because existing empirical evidence is not entirely consistent with the tax explanation of lifo fifo choices of inventory accounting methods although data limitations prevent us from performing direct tests of these alternative explanations our empirical results

where is the plus in credit plus the case of chiapas mexico abstractit has become common to try and increase the effectiveness of microfinance programmes by adding supplementary services to the financial product however the added value accruing from this credit plus approach has been little analysed we hypothesise that the extent of added value from credit plus depends on the ability of the credit supplier to cultivate trust or social capital amongst clients applying difference in difference estimation we exploit a natural experiment of two credit plus programmes in mexico the findings suggest that credit plus is not universally effective but that it is at its most effective especially with low income groups where bonding within group social capital exists

microfinance literature a sustainability level perspective survey abstract since the early microcredit programs up to the present microfinance has grown exponentially as it has the academic interest on it as a research subject considering that this sector has impact in terms of sustainability any research in the field requires an analysis with wide criteria which should include the economic environmental social and governance dimensions eesg as well as their interrelationships the objectives of this survey are to investigate the contributions of microfinance sectoral scholarly research to sustainability through a systematic literature review using content analysis method contextualizing the scientific production and studying its terminology according to the eesg criteria and under global reporting initiative framework and finally to identify research gaps and to propose future research paths

an empirical examination of the relation between debt contracts and management incentives abstract prior research on the factors influencing the use of debt covenants restricting dividends and additional borrowing is extended by considering management incentives when alternative incentive variables are considered separately we find covenants have a significant negative relation to ceo cash compensation an insignificant relation to the value of ceo equity held and significant positive relations to both the ratio of the value of ceo equity holdings to cash compensation and the fraction of equity held by the ceo in two stage simultaneous equations models only the latter is significant when jointly considered with each of the other incentive variables

who benefits the interactional determinants of microfinance s varied effects abstractsince its emergence as a development tool scholars and practitioners have questioned microfinance s short and long term impacts but have had insufficient empirical evidence to assess them to address this gap this paper draws on mixed method research to assess the effects of microfinance loan and educational services over time it explores why even within the same microfinance institution mfi some borrowers benefit from microfinance services more than others in the short term and examines how this translates into long term impacts the article identifies understudied sources of intra group variation the diversity and choices of borrowers and mfi employees interacting with each other and their broader contexts

microfinance and poverty a macro perspective we test the hypothesis that microfinance reduces poverty at the macro level using cross country and panel data which are constructed by the microfinance information exchange data on microfinance institutions mfis and the world bank data taking account of the endogeneity associated with mfis loans we show that a country with higher mfis gross loan portfolio per capita tends to have lower levels of poverty indices contrary to recent micro evidence our results suggest that microfinance significantly reduces poverty at macro level and thus reinforce the case for channeling funds from development finance institutions and governments of developing countries into mfis

microfinance and poverty in bolivia both in its institutional range and in its penetration of financial markets the microfinance sector in bolivia rivals any in the world and has played a major part in extracting the macro economy from meltdown since the mid 1980s we seek specifically to assess its impact on poverty and do this through small sample surveys on four microfinance institutions two urban and two rural using a range of poverty concepts income generated both through the borrower s enterprise and through the labour market asset holdings and diversity and various measures of vulnerability all the institutions studied had on balance positive impacts on income and asset levels with income impacts correlating negatively with income on account of poor households choosing to invest in low risk low return assets microfinance may however augment vulnerability average debt service ratios of microfinance clients are disturbingly high and if the coping mechanisms used by borrowers fail borrowers may be forced out of the

analysts use of managerial bonus incentives in forecasting earnings abstract this study presents evidence on whether analysts earnings forecasts anticipate management s discretionary accruals choices if analysts anticipate discretionary accruals earnings forecast errors are composed of at least two parts cash flow and discretionary accruals forecast errors management s bonus maximizing incentives allow for identification of circumstances in which discretionary accruals forecast errors are expected to offset cash flow forecast errors and circumstances in which they are expected to exacerbate cash flow errors controlling for the unexpected cash flow variability the empirical results are consistent with these predictions

impact of financial inclusion in low and middle income countries a systematic review of reviews financial inclusion programmes seek to increase access to financial services such as credit savings insurance and money transfers despite a wealth of systematic review evidence the impacts of financial inclusion are inconclusive hence the first systematic review of systematic reviews was undertaken to synthesize the impacts of financial inclusion interventions on economic social gender and behavioural outcomes thirty two systematic reviews were identified the headline finding is that impacts are more likely to be positive than negative but the effects vary and appear not to be transformative in scope or scale as they largely occur in the early stages of the causal chain the effects of financial services on core economic and social poverty indicators are small and inconsistent there is no evidence for meaningful behaviour change outcomes the effects on women s empowerment appear generally positive but they depend upon programme features that are often peripheral to the financial service and cultural and geographical context accessing savings opportunities has small but more consistently positive effects for poor people and bears fewer downside risks for clients than credit the inconsistent quality of the primary evidence base that formed the basis of their syntheses raises concerns about the reliability of the overall findings

the economic consequences of accounting choice implications of costly contracting and monitoring abstract in this paper we review research into the economic consequences of voluntary and mandatory choices of accounting techniques and standards we discuss how the predictions of extant economic consequence theories are driven by contracting and monitoring costs associated with management compensation contracts bond covenants regulation and or political visibility we review empirical tests of economic consequence theories categorize those tests and discuss their strengths and weaknesses the empirical tests reveal two systematic associations with accounting choice size a proxy for political visibility and leverage a proxy for contracting and monitoring costs of lending agreements interpretation of the results is difficult due to general limitations of the tests we conclude by suggesting some directions for future research based on our analysis of the potential payoffs associated with different types of empirical tests

microfinance its impact outreach and sustainability summary this symposium brings together recent empirical contributions with respect to a number of related and highly relevant issues on the economics of microfinance in particular the contributions provide answers to the following two main questions 1 does microfinance have an impact on the social and economic situation of the poor in developing nations and 2 are microfinance institutions sustainable in the long term and is there a trade off between sustainability and outreach

a study of existing solar power policy framework in india for viability of the solar projects perspective a decade before conversion of solar energy into electricity was quite expensive compare with other renewable energy or conventional fossil fired generated power for making solar energy as a main stream source of power generation indian government has taken several initiatives in last 5 6 years presently the deployment of the solar power project in india is governed by both central and state government under the various schemes these schemes are mainly includes feed in tariff fit renewable purchase obligation rpo long term power purchase agreements ppas renewable energy certificates rec accelerated depreciation ad benefit and reverse bidding auctions etc as an effect of this competitive market environment the tariff of solar power has come down from inr 17 or us 0 271 year 2010 to less than inr 6 or us 0 0922 year 2015 this decremented solar tariff may achieve grid parity soon but also has raised the question of sustainability of the solar power project as well additionally this multi policy environment of both central and state government has created lots of confusion among the solar power project developers to select scheme and make their investment viable as per other power generation business this paper summarizes various schemes under the current policy framework in terms of viability of the solar power projects in india it also includes issues related with the sustainability of the solar power project taken under the competitive bidding process with remarkable lowered tariff than benchmarked tariff ceiling price in india i e inr 7 or us 0 107 this study will help project developers and other stakeholders to understand the issues related with viability of the project in current multi policy environment for better planning before investing in the field of solar power business

evidence on the effect of bond covenants and management compensation contracts on the choice of accounting techniques the case of the depreciation switch back abstract provisions of bond indenture agreements and management compensation contracts are examined to derive testable implications concerning management s incentives to choose among alternative accounting techniques the hypotheses are subjected to empirical examination by investigating the voluntary change from accelerated to straight line depreciation for financial reporting purposes only the methodology utilized incorporates an expectations model of accounting earnings in an attempt to separate out of the effects of earnings announcements from accounting change announcements which are often concurrent the evidence from both price and non price data is not consistent with the general hypothesis that bond covenants and management compensation contracts are important determinants of the decision to change depreciation techniques five potential explanations for the results are offered

accounting earnings and future economic rents an empirical analysis abstract this study reexamines competition cost structure and growth opportunities effects on earnings response coefficients and extends this literature in several ways first it presents a more refined theoretical motivation for investigating competition and cost structure effects second it introduces new economic factor proxies that confirm prior findings with respect to competition but differ from prior findings with respect to cost structure and growth opportunities overall the evidence suggests that accounting earnings reflect information about future economic rents generated by firms assets in place the evidence also suggests contrary to prior studies that accounting earnings are not very informative about firms growth opportunities

renewable deployment in india financing costs and implications for policy india s ambitious goals for renewable energy raise many questions regarding the nature of investment required we conduct financial modeling of actual renewable projects in india and derive the following insights first the high cost of debt is the most pressing problem higher cost and inferior terms of debt in india may raise the cost of renewable energy by 24 32 compared to the u s second even if cost of debt goes down loan terms including short tenors and variable interest rates will become significant impediments given that they add 13 14 to the cost of renewable energy in india compared to the u s finally due to the high cost of debt policy lessons from the u s and europe which focus on finer instruments such as duration of revenue support revenue certainty investor risk perception and completion cost certainty are not likely to be as effective with potential impacts on the cost of renewable energy in the 3 11 range in fact we find that an interest rate subsidy which reduces the cost of debt reduces the overall subsidy burden by 13 16 this suggests that indian policymakers need to prioritize the provision of low cost long term debt and take a closer look at the successful efforts by china and brazil 2013 elsevier ltd

the investment opportunity set and accounting procedure choice abstract this paper provides evidence on the cross sectional relation between firms investment opportunities their debt and compensation contracts their size and financial leverage and their accounting procedure choices this evidence is important because previous studies hypothesize that the link between firms investment opportunities and their accounting choices helps explain extant results on the size debt equity and bonus plan hypotheses however while i find that firms investment opportunities do affect the nature of their contracts i also find that the traditional explanations for accounting choice are important after controlling for the effects of the investment opportunity set

empirical research on accounting choice abstract we review research from the 1990s that examines the determinants and consequences of accounting choice structuring our analysis around the three types of market imperfections that influence managers choices agency costs information asymmetries and externalities affecting non contracting parties we conclude that research in the 1990s made limited progress in expanding our understanding of accounting choice because of limitations in research design and a focus on replication rather than extension of current knowledge we discuss opportunities for future research recommending the exploration of the economic implications of accounting choice by addressing the three different reasons why accounting matters

microfinance and household poverty reduction new evidence from india the objective of the present study is to examine whether household access to microfinance reduces poverty using national household data from india treatment effects model is employed to estimate the poverty reducing effects of micro finance institutions mfis loans for productive purposes such as investment in agriculture or non farm businesses on household poverty levels these models take into account the endogenous binary treatment effects and sample selection bias associated with access to mfis despite some limitations such as those arising from potential unobservable important determinants of access to mfis significant positive effect of mfi productive loans on multidimensional welfare indicator has been confirmed the significance of treatment effects coefficients has been verified by both tobit and propensity score matching psm models in addition we found that loans for productive purposes were more important for poverty reduction in rural than in urban areas however in urban areas simple access to mfis has larger average poverty reducing effects than the access to loans from mfis for productive purposes this leads to exploring service delivery opportunities that provide an additional avenue to monitor the usage of loans to enhance the outreach

microfinance and child mortality microfinance institutions mfis offer targeted opportunities for the poor to generate additional income with a range of financial services including credit insurance savings accounts and money t

on cross sectional analysis in accounting research abstract this paper examines cross sectional analysis procedures common to many market based accounting research papers both the economic and econometric properties of levels and returns studies are discussed topics covered include the relations between the accounting studies and cash flow valuation models the role of expectations of accounting variables deflators spurious inference risk adjustment and its relation to growth size and leverage residual dependence dependence among explanatory variables and the effect of scale differences across firms major conclusions are that market value is the correct deflator in returns studies and that levels and returns studies are economically but not econometrically equivalent

a comprehensive study of solar power in india and world energy is considered a prime agent in the generation of wealth and a significant factor in economic development energy is also essential for improving the quality of life development of conventional forms of energy for meeting the growing energy needs of society at a reasonable cost is the responsibility of the government limited fossil resources and environmental problems associated with them have emphasized the need for new sustainable energy supply options that use renewable energies development and promotion of non conventional alternate new and renewable sources of energy such as solar wind and bio energy etc are also getting sustained attention alternative energy news source has long asserted that there are fortunes to be made from smart investments in renewable energy solar power is one of the hottest areas in energy investment right now but there is much debate about the future of solar technology and solar energy markets this report examines various ways in which solar power is precisely such an opportunity

boosting solar investment with limited subsidies rent management and policy learning in india in order to avoid irreversible damage to global ecosystems new green technologies are needed some of which are nowhere near commercial maturity in these cases governments may create temporary rents to make investments artificially attractive but the creation of such rents involves risks of faulty allocation and political capture this article first highlights the importance of managing rents effectively in promoting green technologies it then shows how india s national solar mission has been remarkably effective in triggering solar investments and managing the necessary subsidies e g through a process of competitive reverse bidding for tariffs policy design and implementation also reflect considerable experimentation and learning some risks remain especially regarding the enforceability of renewable energy quotas at the level of indian states

financial inclusion gender dimension and economic impact on poor households summary we examine the question in the context of gender dimension what is the evidence of the impact of the financial inclusion programs on poor households represented by women relative to that represented by men by constructing a good counterfactual and comparison group we employ the difference in difference estimator approach with panel least squares and generalized methods of moments using standard errors for a robust analysis we notice that income growth cagr net of inflation effect was 8 40 for women as against 3 97 for men indicating that the gender of participating poor undoubtedly affects the outcomes of these programs

choice of inventory accounting methods comparative analyses of alternative hypotheses in the past decade hundreds of firms switched to the lifo accounting method for their inventories in response to high rates of inflation nevertheless many others continue to use the fifo method biddle 1980 estimated that each of the 105 fifo firms in his study paid an average of nearly 26 million in additional federal income tax what makes these fifo firms so reluctant to switch accounting methods a review of the literature provides three possible explanations for inventory accounting choices political costs agency costs and divergent production and investment characteristics because the required economic variables to test these three alternative explanations are not observable the empirical tests are based on examination of proxy variables many of the proxy variables of the first and third explanations are the same so it is difficult to discriminate one from the other using univariate statistical methods for example there is consistent evidence of an association between size and inventory accounting choices but size can serve as a proxy for either political costs or divergent production and investment opportunities or both similarly there is also strong evidence that the type of industry is associated with inventory choice which could also be consistent with both explanations the major purpose of this paper is to test the three explanations cited above in a simultaneous manner using multivariate probit methods

income and employment effects of micro credit programmes village level evidence from bangladesh micro credit programmes having made their mark in providing credit and other development services to the poor in a non traditional way are able to make significant changes in a rural economy this article attempts to quantify the village level impacts of the three most important micro credit programmes of bangladesh namely grameen bank bangladesh rural advancement committee brac and bangladesh rural development board s brdb rd 12 project descriptive and econometric analyses show that these programmes have positive impacts on income production and employment particularly in the rural non farm sector also growth in self employment has been achieved at the expense of wage employment which implies an increase in rural wages the article emphasises that an upward shift in the labour demand curve is required for both improved productivity and wage gains on a sustainable basis which can only be supported through a structural transformation of the rural economy

the price of policy risk empirical insights from choice experiments with european photovoltaic project developers managing the transition to a renewable energy future is an important policy priority in many countries solar photovoltaic pv technology is expected to make an important contribution but due to relatively higher cost its growth to date has been largely driven by public policy notably feed in tariffs feed in tariffs have been implemented in various countries however with widely differing outcomes in terms of installed pv capacity previous research indicates that the level of policy risk may be an important driver for differences in renewable energy policy effectiveness more specifically we suggest that investors who take a decision between pv investment opportunities in different countries carefully weigh feed in tariff induced returns against a set of policy risks and choose the country with the most favorable risk return profile we empirically test this model based on a stated preference survey among european pv project developers consisting of 1575 choice decisions by 63 investors the findings of our study demonstrate that risk matters in pv policy design and that a price tag can be attached to specific policy risks such as the duration of administrative processes or uncertainty induced by an approaching capacity cap governments can build on our empirical results to design policies that will be effective in attracting private pv investment while at the same time maintaining efficiency by providing an adequate compensation for policy risk

debt covenants and accounting choice abstract in this issue duke and hunt and press and weintrop show that leverage is significantly related to the existence of and closeness to accounting based debt covenants alternative rationales for this relation are presented the theory requires more rigorous specification to define closeness to covenants and determine which measure of leverage produces a more appropriate proxy for closeness to covenants then healy and palepu investigate a sample of firms close to their dividend restriction and find in general they are no more likely than other firms to change accounting methods their sample selection criteria reduces the generalizability of their results

the limitations of industry concentration measures constructed with compustat data implications for finance research industry concentration measures calculated with compustat data which cover only the public firms in an industry are poor proxies for actual industry concentration these measures have correlations of only 13 with the corresponding u s census measures which are based on all public and private firms in an industry also only when u s census measures are used is there evidence consistent with theoretical predictions that moreconcentrated industries which should be more oligopolistic are populated by larger and fewer firms with higher price cost margins further the significant relations of compustatbased industry concentration measures with the dependent variables of several important prior studies are not obtained when u s census measures are used one of the reasons for this occurrence is that compustat based measures proxy for industry decline overall our results indicate that product markets research that uses compustat based industry concentration measures may lead to incorrect conclusions jel g10 g30 l10 a growing number of studies that consider the effects of product markets on financial economics related phenomena use industry concentration measures calculated with compustat data which cover only the public firms in an industry these studies examine issues related to asset pricing hou and robinson 2006 informed trading tookes 2008 idiosyncratic stock return volatility gaspar and massa 2006 mergers and acquisitions song and walkling 2000 fee and thomas 2004 shahrur 2005 corporate governance defond and park 1999 engel hayes andwang2003 rennie2006 karuna2007 capitalstructure lang and stulz 1992 kaleand shahrur 2007 corporate disclosurepolicy

taxes and firm size abstract firm size has been used as a proxy for the firm s political costs and hence managers proclivity to choose income reducing accounting procedures this study provides additional evidence on this topic by examining the association between firm size and effective corporate tax rates the latter are one component of a firm s political costs the roughly fifty largest u s exchange listed firms in particular oil and gas companies and manufacturing firms have significantly higher worldwide tax rates than other firms these higher tax rates are observed primarily after the implementation of the u s 1969 tax reform act and after the opec countries raised their tax rates on u s oil producers the findings which are insensitive to alternative sources of data alternative measures of firm size and alternative measures of effective tax rates are consistent with the use in previous studies of firm size as a proxy for the firm s political costs

do microfinance institutions benefit from integrating financial and nonfinancial services this article examines the impact of microfinance plus i e coordinated combination of financial and nonfinancial services on the performance of microfinance institutions mfis using a global data set of mfis in 77 countries we find that the provision of nonfinancial services does not harm nor improve mfis financial sustainability and efficiency the results however suggest that the provision of social services is associated with improved loan quality and greater depth of outreach

an income strategy approach to the positive theory of accounting standard setting choice abstract this paper is designed to provide additional evidence on the positive theory of accounting policy choice by combining individual accounting principles into firm income strategies these strategies were the dependent variable in a probit analysis where the independent variables were size management compensation industry concentration ratio systematic risk capital intensity and the total debt to total asset ratio the results indicate that four of these factors size management compensation concentration ratio and the total debt to total asset ratio have a significant association with the choice of a firm s income strategy this test provides strong evidence consistent with the positive theory of accounting standard setting choice we also present evidence that smaller firms and or firms in less concentrated industries do not appear to make accounting policy choice decisions that are consistent with this theory

the economic determinants of the market reaction to proposed mandatory accounting changes in the oil and gas industry a cross sectional analysis abstract this paper examines the economic reasons for the observed negative abnormal common stock performance of firms whose reported earnings and stockholders equity were negatively affected by the proposed elimination of full cost accounting in the oil and gas industry four explanations of the market effects of this mandatory accounting change are examined 1 naive investor theory 2 modified naive investor theory 3 contracting cost theory and 4 estimation risk theory these hypotheses are developed in detail and used to generate variables for a cross sectional model which explains observed return behavior the effect of the accounting change on total stockholder s equity the existence of financial contracts denominated in terms of accounting numbers and to a lesser extent firm size are shown to be important explanatory variables the importance of these variables is consistent with both the contracting cost and estimation risk theories

the renewable energy market in brazil current status and potential abstract renewable energy offers a range of options with which to meet the growing demand for energy particularly in the context of the pursuit especially in developing countries of economic development which takes into account social and environmental issues brazil has abundant natural sources of renewable energy such as wind and solar power hydraulic energy small hydroelectric plants ethanol and bio diesel these sources form part of the brazilian strategy aimed at satisfying the demand for 6300 mw of fresh capacity per year arising out of projected economic growth of 5 1 per year over the next 10 years renewable energy sources currently provide 47 2 of the internal supply of primary energy in brazil brazil has been pursuing a strategy of maintaining its renewable energy matrix and developing and providing incentives for further low carbon initiatives in this study we set out an overview of the renewable energy options available in brazil their current status the main positive results obtained to date and future potential we describe the market for renewable energy in brazil and examine specific public policies aimed at overcoming barriers to this market thereby promoting its consolidation and expansion

the impact of short term credit on microenterprises evidence from the fincomun bimbo program in mexico abstract the lack of credit is often mentioned as one of the major constraints facing small businesses we use differences in the phasing in of a new lending program designed to serve clients of the largest snack food company in mexico to identify the impact of credit on outcomes of small retail enterprise in mexico city we find that the loans have positive impacts on the smallest firms but negative impacts on larger firms these results are consistent with hypotheses that smaller firms have higher returns to capital and face greater credit constraints given that the program involved loans given for 4 month terms we find surprisingly large effects on investment in fixed assets