cssi/SciSciGPT-SciSciNet huggingface dataset:
Large shareholders and the pressure to manage earnings

Abstract We present empirical evidence that firms inflate earnings around seasoned equity offerings in the presence of large outsider blockholdings, but not in their absence. The finding is robust to several alternative explanations, including differences in firm characteristics, growth, performance, CEO incentives, and capital usage. While we do not dispute that CEOs behave opportunistically, we challenge that earnings management is solely a symptom of weak governance. We conclude that strengthening shareholder power to alleviate the conflict between shareholders and management can also have the unintended consequence of intensifying the conflict between current and future shareholders.
The Impact of Self-Esteem, Machiavellianism, and Social Capital on Attorneys' Traditional Gender Outlook

Utilizing a national sample of 106 attorneys and hierarchical regression analysis, this study identified several individual tendencies that could adversely affect women attorneys' career experiences. The findings indicated that self-esteem was negatively associated with a traditional gender outlook, and that Machiavellianism was positively associated with conservative beliefs about gender. Tolerance for diversity was negatively related to a traditional gender outlook, while work-based social agency was positively related to the preference for established gender roles. The results imply that confidence brings about greater acceptance of women's organizational roles, and that self-serving tendencies lower individuals' tolerance of women's employment. Diversity tolerance appears to prompt a nontraditional gender outlook, while social agency seems to prompt a traditional gender outlook. The organizational implications of the results are discussed along with the research limitations and recommendations for future inquiry.
Prepare for takeoff: improving asset measurement and audit quality with drone-enabled inventory audit procedures

Auditors increasingly employ technologies to improve audit quality. Using a design science approach, we examine whether using drones and automated counting software can improve audit quality and thus financial reporting. We assess three dimensions of audit quality—efficiency, effectiveness, and quality of documentation. We show that auditors can perform inventory counts with these technologies much more efficiently than they can with manual techniques, decreasing count time in our study from 681 h to 19 h. Similarly, auditors can maintain or improve audit effectiveness, decreasing error rates in our study from 0.15% to 0.03% while providing higher-quality audit documentation. Interviews with national-level partners and audit standard setters highlight impediments to adopting these technologies, including firm concerns about being first movers combined with inability of standard setters to provide guidance at a pace that matches the pace of technological development. Collectively, our results suggest that technology-enabled inventory audits can improve audit quality and further regulatory guidance on using such technologies would enhance adoption.
AFFILIATION, INTEGRATION, AND INFORMATION: OWNERSHIP INCENTIVES AND INDUSTRY STRUCTURE

This paper presents theory and evidence on horizontal industry structure. At issue is the question: what makes industries necessarily fragmented? The theoretical model examines trade-offs associated with affiliation and integration, and how they are affected by the contracting environment. I show how contractual incompleteness can lead industries to be necessarily fragmented. I also show that contractual improvements will tend to lead to a greater concentration of brands, but whether they lead industries to be more or less concentrated depends on what becomes contractible. I then discuss the propositions generated by the model through a series of case study examples. I. INTRODUCTION TWO CORE THEORETICAL LITERATURES underlie much of the field of industrial organization: theories of industry structure and theories of the firm. Although the issues these literatures emphasize are very different, they actually seek to explain the same thing. Theories of industry structure are, in a way, also theories of firms’ boundaries. Likewise, theories of firms’ boundaries can also be read as theories of industry structure. These literatures have different strengths and weaknesses. The industry structure literature provides several good explanations for why industries might be necessarily concentrated. The traditional literature (Bain [1956], Scherer [1980]) emphasizes factors such as scale economies, market size, and entry barriers; the newer literature adds concepts such as heterogeneity in tastes, the strength of price competition, and consumers’ sensitivity to sunk expenditures such as advertising (Spence [1976], Dixit and Stiglitz [1977], Salop [1979], Sutton [1991]). But most industries are fragmentedFmost of their output is produced by small, independently-owned firmsFparticularly those in the service and retail sectors. 1 As I describe in more detail
Marketing in Computer-Mediated Environments: Research Synthesis and New Directions

Although an extensive body of research has emerged on marketing in computer-mediated environments, the literature remains fragmented. As a result, insights and findings have accumulated without an overarching framework to provide structure and guidance to the rapidly increasing research stream, which is detrimental to long-term knowledge development in this area. To address this issue, the authors organize and synthesize findings from the literature using a framework structured around four key interactions in computer-mediated environments: consumer–firm interactions, firm–consumer interactions, consumer–consumer interactions, and firm–firm interactions. The proposed framework serves a valuable organizational function and helps identify a broad spectrum of gaps in the literature to advance the next generation of knowledge development.
Taxation of Mobile Factors as Insurance under Uncertainty

This paper considers the effects of the taxation of mobile factors, i.e., capital, under uncertainty. The wages earned by residents of a jurisdiction are uncertain due to random shocks. Since the uncertain wages in a jurisdiction depend on the amount of mobile capital employed in the jurisdiction, and since taxation alters the quantity of capital employed, taxation affects the riskiness of uncertain wages. In particular, the taxation of capital moderates the fluctuation of uncertain wages, thereby providing insurance. For this reason, jurisdictions use distortionary capital taxation even if lump-sum taxation is available. In addition, this insurance effect counteracts the tendency toward too low tax rates on capital arising from tax competition, and possibly improves the efficiency of tax competition.
High-Yield Preparation of Outer Membrane Protein Efflux Pumps by in Vitro Refolding is Concentration Dependent

Overexpression of tripartite efflux pump systems in gram-negative bacteria is a principal component of antibiotic resistance. High-yield purification of the outer membrane component of these systems will enable biochemical and structural interrogation of their mechanisms of action and allow testing of compounds that target them. However, preparation of these proteins is typically hampered by low yields, requiring laborious large-scale efforts. If refolding conditions can be found, refolding these proteins from inclusion bodies can lead to increased yields as compared to membrane isolations. A classical method for refolding outer membrane proteins involves unfolding inclusion bodies in urea followed by refolding in lipid or detergent micelles. However, that method has not yet been successful in refolding tripartite efflux pump TolC. Here, we find that refolding TolC from inclusion bodies requires an additional oligomerization enhancing step of sample concentration. We show that by our method of refolding, homotrimeric TolC remains folded in SDS-PAGE, retains binding to an endogenous ligand, and recapitulates the known crystal structure by single particle cryoEM analysis. We find that TolC refolding is concentration dependent. We then extended our method to refolding CmeC, a homologous protein from Campylobacter jejuni, and find that concentration-dependent oligomerization is a general feature of these systems. Because outer membrane efflux pump components are ubiquitous across gram-negative species, we anticipate that incorporating a concentration step in refolding protocols will promote correct refolding allowing for reliable, high-yield preparation of this family of proteins.
Negative reciprocity: The coevolution of memes and genes

Abstract A preference for negative reciprocity is an important part of the human emotional repertoire. We model its role in sustaining cooperative behavior but highlight an intrinsic free-rider problem: the fitness benefits of negative reciprocity are dispersed throughout the entire group, while the fitness costs are borne personally. Evolutionary forces tend to unravel people's willingness to bear the personal cost of punishing culprits. In our model, the countervailing force that sustains negative reciprocity is a meme consisting of a group norm together with low-powered (and low-cost) group enforcement of the norm. The main result is that such memes coevolve with personal tastes and capacities so as to produce the optimal level of negative reciprocity.
The Dual Lives of “The Emerging Right to Democratic Governance”

Thomas M. Franck's The Emerging Right to Democratic Governance has lived a dual existence. On the one hand, it is almost universally cited as having brought international lawyers into the freewheeling debate of the early 1990s among scholars of international relations, comparative politics, and political theory about the so-called “ Third Wave ” of democratization. On the other hand, the article is not infrequently described as a legal avatar of post-Cold War Western triumphalism, often sharing a sentence or a footnote with Francis Fukuyama's The End of History and the Last Man . From the standpoint of the two authors of this essay— one a long-time defender of Franck's thesis and the other a long-time critic —both of these broad-brush characterizations of the article contain elements of truth, but both are also woefully incomplete.
Politics Close to Home: The Impact of Meso-level Institutions on Women in Politics

Scholars recognize a worldwide increase in decentralization as well as the prevalence of multilevel governance in Europe. This article examines the advantages and disadvantages that meso-level institutions present for women’s political representation in three European Union member-states that are decentralized, unitary states. Using the framework of the triangle of women’s empowerment, we ask whether women are represented in meso-level legislatures, women’s policy agencies, and women’s movements in Italy, Spain, and Poland. We find that gains in meso-level legislatures are slow, but meso-level women’s policy agencies and movements provide important access for women to politics. Like scholars studying women and federalism, we conclude that decentralized institutions in unitary states offer both opportunities for and impediments to feminist policy and activism.
The Formation, Institutionalization and Consolidation of the LTTE: Religious Practices, Intra-Tamil Divisions and a Violent Nationalist Ideology

Utilizing the case of the Liberation Tigers of Tamil Eelam (LTTE) in Sri Lanka, I make a three-part explanation for the critical role the religious organization, ideological fitness, and state capacity played in the formation, institutionalization and consolidation of the LTTE in the Tamil ethnic mobilization process. Firstly, I show how the Tamil religious re-awakening during the British colonial period led to religious practices which consolidated the social dominance of the Vellalar caste and blocked the upward economic, social and political mobility of the other Tamil castes, thus enabling the emergence of lower-caste groups such as the LTTE in the 1970s. Secondly, I demonstrate that the LTTE's ideology privileged its nationalist goals over Marxist doctrinal purity because of the LTTE's commitment to improved intra-Tamil caste equality; an ideological approach which only increased the LTTE's legitimacy within the Tamil community and solidified its institutionalization as a viable Tamil group. Finally,...
In Answer to a Quasi-Ontological Argument: On Sheridan's “Toward an Eclectic Ontology of Presence” and Mantovani and Riva's “Building a Bridge between Different Scientific Communities”

Sheridan, in his “Toward an Eclectic Ontology of Presence” (Sheridan, 1999), approaches the semblance of an ontological argument with discussion of “divine presence” in relation to virtual reality communications media and the consequent effect of virtuality upon the mind/matter ensemble. Although he doesn’t offer proof for God, Sheridan (and subsequently Mantovani and Riva, who accept Sheridan’s initial ground of discussion) suggest a connection between the ontology of presence and the divine. This suggestion of a connection between the two frames of reference establishes a route that opens to argument fundamentally for existence of and proof of the existence of God. Indeed, Sheridan offers an “eclectic ontology” and states that his argument could provide “a framework for a rational discussion of God” (p. 558). In so doing, he reaches to say something very specific about the nature of being, making a claim that we can come to a rational understanding of divine presence. He describes coming to such an understanding as the “ultimate challenge of understanding perception of (estimation) of reality.” In defining the ultimate challenge in terms of an “estimation paradigm,” however, he seeks to answer this challenge through a rational formality. Granted, the reductionist, formalist tradition founded on the rational underlies formal logic, mathematics, and science. But pure rationality with regards to “divine presence” flies in the face of the work of some of the most renowned thinkers in the history of thought. One of these thinkers, whose Critique of Pure Reason sought to discover the very workings of rational thought, was Immanuel Kant. Another was one of the founding fathers of quantum theory, Wolfgang Pauli.
Strategic decision-making in Hollywood release gaps

Abstract Hollywood blockbusters are usually released in the U.S. before other foreign markets. The release gaps have declined significantly over time and varied greatly across countries. While movie piracy has been suggested as an important determinant for the release gap decision of distributors, theory and evidence suggest that there are other important determinants. In this paper, we use a discrete choice release gap decision game model to disentangle the impacts of the i) release gap effect, which includes factors that provide incentives for a distributor to shorten the release gap; ii) word-of-mouth effect, which provides incentives for a distributor to lengthen the release gap; and iii) competition effect, which accounts for the incentives blockbusters have to avoid each other. We obtain box office and release gap data from the private industry source Boxofficemojo.com . We provide results on the economically significant impact of these three factors on distributors' release gap decisions and box office revenue.
Visions of Social Transformation and the Invocation of Human Rights in Mumbai: The Struggle for the Right to Housing

The struggle for access to and control over a space in which to live has made housing a central issue for the city of Mumbai. The city’s history is one in which human rights and, in particular, the right to housing have played an important role. This article examines the Indian Supreme Court’s development of the right to housing as an aspect of the right to life, placing this unique jurisprudence within the complex reality of life for Mumbai’s inhabitants. The article traces the growth of this expansive human right through the Indian jurisprudence and then contrasts the housing rights case law with more recent litigation on the environment, urban growth, and rural development, in which the housing rights of marginalized communities have been radically refigured. The analysis reveals competing visions of how human rights should be interpreted and whose interests these norms should protect. In fact, as the article exposes, the contested interpretation of the right to housing is caught up in competing visions of India’s social transformation into a new, “modern” state and the place of its marginalized citizens within that state. In this context, the right to housing emerges as a site of struggle through which the meaning of urban citizenship, participation, and the future of the city itself are contested. The article closes by offering some conclusions on the factors underlying the shift in popular and judicial human rights discourse, showing that competing visions of social transformation have had concrete impacts on the human rights of India’s most marginalized citizens.
Size and Value in China

Abstract We construct size and value factors in China. The size factor excludes the smallest 30% of firms, which are companies valued significantly as potential shells in reverse mergers that circumvent tight IPO constraints. The value factor is based on the earnings-price ratio, which subsumes the book-to-market ratio in capturing all Chinese value effects. Our three-factor model strongly dominates a model formed by just replicating the Fama and French (1993) procedure in China. Unlike that model, which leaves a 17% annual alpha on the earnings-price factor, our model explains most reported Chinese anomalies, including profitability and volatility anomalies.
Pass-through rates and the price effects of mergers

Abstract We investigate the relationship in Bertrand oligopoly between the price effects of mergers absent synergies and the rates at which merger synergies are passed through to consumers in the form of lower prices. We find that the demand conditions that cause a merger to result in large price increases absent synergies also cause the pass-through rate to be high. The low estimated pass-through rate and the relatively large predicted merger effect, thus likely, were inconsistent in an important U.S. merger case.
Indirect Incentives of Hedge Fund Managers

Indirect incentives exist in the money management industry when good current performance increases future inflows of capital, leading to higher future fees. For the average hedge fund, indirect incentives are at least 1.4 times as large as direct incentives from incentive fees and managers’ personal stakes in the fund. Combining direct and indirect incentives, manager wealth increases by at least $0.39 for a $1 increase in investor wealth. Younger and more scalable hedge funds have stronger flow-performance relations, leading to stronger indirect incentives. These results have a number of implications for our understanding of incentives in the asset management industry.
A Case Discussion on Market-Based Extended Producer Responsibility: The Minnesota Electronics Recycling Act

In this article, we analyze the Minnesota Electronics Recycling Act to explore the benefits and potential drawbacks of a market‐based extended producer responsibility (EPR) legislation implementation with operational flexibility for manufacturers. Based on publicly available reports and stakeholder interviews, we find that the Minnesota Act attains two key goals of market‐based EPR (i.e., higher cost efficiencies and substantial landfill diversion); however, this may come at the expense of selective collection and recycling, an increased burden on local governments, and a loss of balance in contractual power between stakeholders. We observe that these concerns arise because of specific flexibility provisions afforded to manufacturers that allow them to operationalize their EPR compliance with a cost‐efficiency focus. Thus, we conclude that EPR goals must be carefully translated into operating rules in order to achieve goals while avoiding unintended consequences.
The merits of dual pricing of Russian natural gas

Our analysis reveals that, from Russia's perspective, there is no economic rationale to unify the price of natural gas it sells domestically and in Europe. We argue that pipelines allow Gazprom to segment the Russian market from the European (including Turkey) market and that Russia has market power in the European market. If Russia were to fail to exploit this market power in its European market, by selling its natural gas to Europe at only full long-run marginal cost plus transportation costs, Russia would lose between $5 billion and $7.5 billion per year (almost two per cent of its GDP). If, instead, Russia were to raise its domestic prices to the prices it charges in Europe, Russian industry would incur very large investment adjustment and unemployment costs in the short run – adjustment costs that cannot be justified on the basis of comparative advantage. We estimate that the efficient world price would be achieved if Gazprom were to employ its optimal ‘two-part tariff’. The optimal two-part tariff would double Gazprom's annual profits in Europe, but it involves significant long-term risks for Gazprom of lost market share.
The enduring impact of transient emotions on decision making

People often do not realize they are being influenced by an incidental emotional state. As a result, decisions based on a fleeting incidental emotion can become the basis for future decisions and hence outlive the original cause for the behavior (i.e., the emotion itself). Using a sequence of ultimatum and dictator games, we provide empirical evidence for the enduring impact of transient emotions on economic decision making. Behavioral consistency and false consensus are presented as potential underlying processes.
The Rise and Fall of the New Jersey Stock Exchange

The Tea Party that emerged in the wake of what is now called the Great Recession is not the first such group to co-opt the symbolism of the Boston Tea Party for political purposes. Rather, the first “Tea Partiers” were also an unlikely group of activists protesting the infringement of “freedom” by government. This Tea Party was comprised of Wall Street brokers, stock-traders and other businessmen who, in 1933, decided to move the New York Stock Exchange to Newark in protest against the city’s new stock taxes. In this paper, I discuss this important history in order to show that, in many ways, we have returned to the past and have experienced similar contradictions. Now, as then, we are poorer and richer; more interconnected and more isolated; cognizant of our interdependence and simultaneously unaware of the cascading effects of our individual decisions. In this paper, I also discuss the important differences, though, such as a Tea Party in favor of Wall Street, culture wars, and a consolidation of power on Wall Street. A close discussion of this history can help us understand the future while looking to the past.
Reexamining Growth Effects: Are All Types of Asset Growth the Same?

Asset growth has been shown to be negatively associated with future returns. Cooper, Gulen, and Schill (2008) argue that an aggregation of all asset growth components as total asset (TA) growth leads to the strongest association with future negative returns. Based on their study, the literature now employs TA growth as an umbrella proxy for “the growth effect.” I hypothesize that not all types of growth imply negative future returns. Specifically, I show that growth financed by suppliers is positively associated with future performance and returns. Removing this growth component from TA growth makes it evident that the TA growth anomaly is simply a noisy manifestation of the net operating asset growth anomaly. Consequently, I suggest caution when using TA growth to control for the growth effect.
Regulatory oversight and auditor market share

Abstract We examine whether auditor regulatory oversight affects the value of financial statement audits. Using the PCAOB international inspection program as a setting to generate within country variation in regulatory oversight, we find that non-U.S. auditors inspected by the PCAOB gain 4% to 6% market share from competing auditors after PCAOB inspection reports are made public. When inspection findings reveal that an auditor has many engagement-level deficiencies, market share gains following inspection reports are significantly smaller. Our evidence suggests that regulatory scrutiny increases the assurance value of an audit and highlights the role of public regulatory oversight in the audit market.
Modeling customer value perceptions in cross-cultural business markets

Abstract Even as customer value research in business-to-business markets burgeons, scholars still circumscribe its progress to studies performed in domestic, Western markets and call attention to the ongoing lack of consensus for how to model customer value. To advance the validity and usefulness of this emerging core construct in marketing, this study investigates the measurement equivalence and modeling of customer value perceptions with business managers across five culturally-diverse countries. Analyses draw clarity to the divergent modeling of customer value in the literature by exploring alternative measures and model specifications within structural equations modeling (SEM) and partial least squares (PLS). Comparisons of eight models reveal several valid and invalid conceptualizations reported previously in the literature and generate guidance for managers and scholars modeling customer value in various research contexts.
Local government type and municipal bond ratings: what’s the relationship?

ABSTRACTThere is an extensive literature analysing the executive branch within local U.S. government jurisdictions. This has largely revolved around the differences between elected mayors and appointed city managers. Much of the academic work has considered the potential efficiency gains that may be associated with either form of government and comparative analyses between the two. However, the empirical literature has been divided regarding the relative efficiency of either form. This article attempts to add to that literature by considering how bond markets may perceive potential efficiencies that emerge from one executive type over the other by evaluating bond ratings for a sample of large municipal governments in the United States. Overall, the results suggest that municipalities headed by a city manager are associated with increased bond ratings (and thus lower borrowing costs), which may lend support that this form of administration is, on some margin, relatively more efficient than others. These re...
Treatment and Spillover Effects under Network Interference

We study nonparametric and regression estimators of treatment and spillover effects when interference is mediated by a network. Inference is nonstandard due to dependence induced by treatment spill...
Rules, Rights, Options, and Time

Do we have constitutional rights that certain states of affairs exist (for example, that I burn an American flag and am not punished); or do we instead have constitutional rights that certain rules not exist (for example, that there be no rule forbidding the burning of American flags on pain of punishment)? I believe that as a positive account of at least most of our constitutional law, our constitutional rights are best conceived as rights against rules. However, the question remains, why should the Constitution concern itself with rules rather than with states of affairs, with rule-differentiated act types rather than rule-independent act tokens? Must not its concern for the former be based on its concern for the latter? The most plausible explanation for the constitutional concern with rules is that most states of affairs are constitutionally optional - neither forbidden nor mandated. By itself, however, that would not justify a concern with rules. The concern with rules must be based additionally on the fact that rules are temporally extended - that although today's application of a rule produces a state of affairs that is constitutionally permissible, over time the rule will likely produce states of affairs that, in conjunction with other rules, are constitutionally forbidden. That then raises two final questions: (1) What makes the temporal extension of a rule constitutionally problematic if the same states of affairs could be brought about by the legitimate changing of rules? (2) Why should we assume that a rule will be temporally extended and not repealed at the point that its applications become constitutionally problematic?
Women Do Not Report the Violence They Suffer: Violence against Women and the State Action Doctrine

Section 13981 of the Violence Against Women Act gave victims of criminal violence motivated by gender animus the opportunity to lodge civil complaints against their attackers in federal court. In United States v. Morrison the United States Supreme Court struck down Section 13981 as unconstitutional because, inter alia, Congress lacked the authority to enact it under Section Five of the Fourteenth Amendment. In its decision, Professor Anderson argues, the Court failed to consider the full scope of state action regarding violence against women that violates Section One of the Fourteenth Amendment. States deter women from turning to their authority because of the unequal protection they offer against crimes motivated by gender animus. For example, the traditional legal rules for rape complaints - the marital rape exemption and the requirements of utmost resistance, corroboration, and prompt complaint - were grounded in gender bias. Although these rules have been formally ameliorated in the past twenty-five years, the biased imperatives behind them continue to direct the discretionary decisions of police and prosecutors today. When a woman fails to resist her attacker forcefully enough, succumbing without a fight that would create corroborative evidence, or fails to complain promptly enough, or is unlucky enough to be assaulted by her husband or boyfriend, she has little chance of obtaining a conviction. Police often discourage women from proceeding with these complaints. For those who do wish to proceed, police disproportionately code these rapes as "unfounded" or place them in non-criminal codes where they receive little to no investigation. For those complaints that are investigated seriously, prosecutors disproportionately dismiss these cases. Through these discretionary decisions, state actors deny women who are raped the equal protection of the criminal law. In response to such state action, Anderson argues, women have little to no faith in the formal structures of police power to remedy gender-motivated violence. When states' violations of Section One of the Fourteenth Amendment deter women from turning to the public system of criminal justice for relief, Congress must have the authority under Section Five to provide women a legal remedy in the form of civil claims against private actors. Only if Section Five authorizes this remedial help will the Fourteenth Amendment redress the true scope of state malfeasance regarding violence against women.
Measuring the Impacts of Labor in the Platform Economy: New Work Created, Old Work Reorganized, and Value Creation Reconfigured

Though economists have examined labor displacement due to digitization, few have considered the new work and value created. Studies of platforms invariably focus on specific organizational forms such as sharing or gigs. They build taxonomies based on the platform’s organization – few consider the scope and scale of platform-enabled value creation. We consider all of the platform-enabled value creation activities including old work displaced or reorganized to new work created. We apply our framework to the work generated by Etsy and Amazon publishing.
Does it pay to pay teachers more? Evidence from Texas

Abstract This study presents robust evidence on the relationship between teacher pay and turnover using detailed panel data from Texas. While controlling for changes in district and local labor market characteristics, I estimate an overall turnover elasticity of − 1.4 and show that the effect is largest for inexperienced teachers, declines with experience, and disappears around 19 years of experience. Combining these results with what we know about the relationship between teacher value-added and experience, I show that paying teachers more improves student achievement through higher retention rates. The results also suggest that adopting a flat salary schedule may be a cheap way to improve student performance. I find no evidence that pay effects vary by the teacher's gender or subject taught.
Privatization and efficiency: Industry effects of the sale of British Airways☆

Abstract We analyze the effect of privatization on the performance of British Airways by examining the privatization's impact on airfares and competitors' stock prices. We find that stock prices of U.S. competitors fell a significant 7% upon British Airways' privatization, implying expectation of a more competitive British Airways. Closer rivals of British Airways experienced a greater drop in stock price than more distant rivals. Further, airfares in markets served by British Airways fell significantly upon privatization. The results suggest that a change from government to private ownership improves economic efficiency.
Evenly rotating economy: A new modeling technique for an old equilibrium construct

In the middle of the twentieth century, just five years before Arrow and Debreu proved the existence of an equilibrium for a competitive economy in the Walrasian system, Ludwig von Mises introduced the English-speaking world to his alternative equilibrium construct: the evenly rotating economy. In contrast to Arrow and Debreu, which characterizes equilibrium as a unique vector of prices and quantities, Mises depicts equilibrium as a pattern of behavior. After reviewing the Misesian conception of equilibrium and its failure to take hold in the profession, I turn to the modern literature. I contend that the evenly rotating economy is a special case of the now-prevalent class of search-theoretic exchange models. As such, I argue that this class of models is particularly well suited for applications considered by economists working in the Austrian tradition.
How Do Reductions in Foreign Country Corporate Tax Rates Affect U.S. Domestic Manufacturing Firms

We examine whether reductions in foreign country statutory corporate tax rates affect the competitive environment of U.S. domestic manufacturing firms and how U.S. firms respond. We develop a measure of U.S. domestic firms’ exposure to changes in foreign country corporate tax rates and find U.S. domestic firms’ profitability is adversely affected by decreases in foreign country corporate tax rates, consistent with intensified competition. We find U.S. domestic firms respond by increasing investment in research and development and capital expenditures and by improving total factor productivity. In cross-sectional analyses, we find the impact of foreign tax cuts is concentrated among U.S. domestic firms with low product differentiation. Taken together, these findings suggest that reductions in foreign country statutory corporate tax rates escalate competition faced by U.S. domestic firms, and in response U.S. domestic firms increase investment and become more productive.
Further Evidence on Nontrading‐Period Information Release*

. Using a sample of 856 management earnings forecasts, we provide evidence that managers release larger shock-earnings forecasts in nontrading periods. Our results do not depend on whether the magnitude of the shock is measured exogenously (unexpected accounting earnings) or endogenously (security market reaction). The timing effects are more pronounced for less-precise (i.e., open-interval and closed-interval) forecasts. Also, we provide evidence of an overnight reaction to closed-period management forecast releases. Our results are consistent with explanations for voluntary disclosure that rely on a precommitted policy of information asymmetry reduction (see Diamond 1985; King, Pownall, and Waymire 1990). These explanations lead to predictions of strategic timing of greater shocks in the nontrading period in order to provide the less-informed with a period for information evaluation. Resume. A partir d'un echantillon de 856 previsions de benefices publiees par la direction de diverses entreprises, les auteurs demontrent que les previsions publiees par les gestionnaires en periode ou les titres ne sont pas negocies ont davantage d'impact. Les resultats qu'ils obtiennent ne dependent pas du caractere exogene (benefices comptables inattendus) ou endogene (reaction du marche des valeurs mobilieres) de la mesure de l'impact. L'effet du choix du moment est plus prononce pour les previsions moins precises (c'est-a-dire a intervalle ouvert et a intervalle ferme). Les auteurs demontrent aussi qu'il se produit une reaction a la publication de previsions par la direction en periode de fermeture, dans les vingt-quatre heures qui suivent la publication. Les resultats de l'etude sont conformes au principe de la presentation facultative d'information dont l'explication repose sur une politique, prealablement adoptee, de reduction de l'asymetrie de l'information (voir Diamond, 1985; King, Pownall et Waymire, 1990). Cette explication mene a des predictions voulant que l'on choisisse, a des fins strategiques, les periodes de non-negociation des titres pour publier les previsions de benefices dont l'impact est plus grand, de maniere a laisser aux investisseurs moins bien informes un certain laps de temps pour evaluer l'information.
Negotiability, Property, and Identity

In this Article, Professor Rogers challenges the assumption that securities transfer law has always been based on negotiable certificates and suggests that the reign of negotiability is a relatively recent, and brief, phase in the long history of investment securities trading. Professor Rogers posits that the difficulties currently facing the law of securities transfers are in large part due to the transition from paper to electronic representations of investments. To place these challenges into perspective, Professor Rogers first surveys the history of securities trading and then examines the theoretical underpinnings of the law of securities transfers.
Under New Management: Equity Issues and the Attribution of Past Returns

There is a strong link between measures of stock market performance and subsequent equity issues. We find that management turnover weakens the link between equity issues and the returns that preceded the new chief executive officer (CEO). Moreover, there is a discontinuity in the distribution of equity issues around the specific share price that the CEO inherited, while there is no discontinuity around salient share prices prior to turnover. The evidence suggests that capital allocation involves an attribution of past returns not only to the firm but also to its CEO. A corollary is that a firm with poor stock market performance may be better able to raise new capital if its current CEO is replaced.
Self-Selection and Pareto Efficient Taxation

Abstract This paper analyses the set of Pareto efficient tax structures. The formulation of the problem as one of self-selection not only shows more clearly the similarity between this problem and a number of other problems (such as the optimal pricing of a monopolist) which have recently been the subject of extensive research, but also allows the derivation of a number of new results. We establish (i) under fairly weak conditions, randomization of tax structures is desirable; (ii) if different individuals are not perfect substitutes for one another in production, then the general equilibrium effects—until now largely ignored in the literature—of changes in the tax structure may be dominant in determining the optimal tax structure; in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor, the optimal tax structure entails a negative marginal tax rate on the high ability individuals, and a positive marginal tax rate on the low ability individuals (the marnitude of which depends on the elasticity of substitution); (iii) if individuals differ in their preferences, Pareto efficient taxation may entail negative marginal tax rates for high incomes; while (iv) if wage income is stochastic, the marginal tax rate at the upper end may be 100%. Our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic.
Uncertainty as Commitment

Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate endogenous crises when the government cannot commit. However, at the outbreak of nancial problems, usually the government is uncertain about their nature, and hence it may delay intervention to learn more about them. We show that intervention delay leads to strategic restraint: banks endogenously restrict the riskiness of their portfolio relative to their peers in order to avoid being the worst performers and bearing the cost of such delay. These novel forces help to avoid endogenous crises even when the government cannot commit. We analyze the eect of government policies from the perspective of this new result.
FINANCIAL LIBERALIZATION AND THE SENSITIVITY OF HOUSE PRICES TO MONETARY POLICY: THEORY AND EVIDENCE*

We analyse the impact of financial liberalization on the link between monetary policy and house prices. We present a simple model of a small open economy subject to credit constraints. The model shows that the higher the degree of financial liberalization is, the stronger is the impact of interest rate shocks on house prices. We then use vector autoregressions to study the role of monetary policy shocks in house price fluctuations in Finland, Sweden and the UK, characterized by financial liberalization episodes over the last 20 years. We find that the response of house prices to interest rate surprises is bigger and more persistent in periods characterized by more liberalized financial markets. 1I  In the last three decades or so, many industrialized countries have experienced wide changes in house prices. It is generally felt that monetary policy conditions have been an important factor behind house price inflation and deflation. It is also agreed that the process of financial liberalization can have played a direct role in these fluctuations (International Monetary Fund, 2000) but little is known, instead, on the possible indirect role that financial liberalization could have had modifying the sensitivity of house prices to monetary policy actions. This paper takes a preliminary step in investigating this issue. In the first part of the paper we present a simple theoretical model of a small open economy subject to credit constraints. With the help of numerical calibrations of the model, we analyse the impact of interest rate shocks on house prices in regimes characterized by different levels of financial liberalization. The results show that the higher the degree of financial liberalization of the economy is, the higher is the impact of monetary policy shocks on house prices.
Volatility activity: Specification and estimation ✩

Abstract The paper examines volatility activity and its asymmetry and undertakes further specification analysis of volatility models based on it. We develop new nonparametric statistics using high-frequency option-based VIX data to test for asymmetry in volatility jumps. We also develop methods for estimating and evaluating, using price data alone, a general encompassing model for volatility dynamics where volatility activity is unrestricted. The nonparametric application to VIX data, along with model estimation for S&P index returns, suggests that volatility moves are best captured by an infinite variation pure-jump martingale with a symmetric jump compensator around zero. The latter provides a parsimonious generalization of the jump-diffusions commonly used for volatility modeling.
A New Approach to Estimating the Relation between Audit Fees and Financial Misconduct

Research on the association between abnormal audit fees (measuring audit effort) and financial misconduct has produced mixed results. The use of actual misstatements in this research creates small-...
The Financial and Competitive Value of NCAA Basketball Recruits

In this article, we examine the value of high school basketball prospects, and results indicate that each five-star (four-star) recruit generates US$625,000 (US$178,000) in marginal revenue for his university. Additionally, university academic donations are strongly related to basketball performance and five-star recruits bring in an additional US$5,800,000 in funding on average as a result of their contribution to team success. Calculations indicate that if five-star players were to be fairly compensated, their earnings would be approximately US$613,000. Four-star prospects would be paid roughly US$166,000, three-star recruits US$91,000, and two- and one-star players US$50,000.
E‐commerce adoption in the retail sector: empirical insights

– To investigate the determinants of e‐commerce adoption in the retail sector using duration analysis., – The study proposes a conceptual model based on technology adoption and population ecology models. It identifies specific determinant factors organized under three areas: perceived benefits, organizational readiness, and external influences. Duration analysis is applied to data on 392 retailers., – Organizational readiness and external influences were the main driving factors of the adoption decision. There is no strong support for the perceived benefits construct. This suggests that e‐commerce adoption was to a great extent responsive to external pressures., – Major limitations include insufficient data. Future research can collect other types of data. Other extensions include the investigation of the effect of e‐commerce adoption, the construction of a formal theoretical model, and the collection of data from other countries., – The study provides guidelines to entry anticipation. It appears that many retailers mimetically responded to the online entry of other retailers. Managers should be also aware of the suitability of e‐commerce adoption to their organization. In order to be proactive, firms can put more emphasis on internal factors and rely less on outside signals in their strategies., – The paper investigates the e‐commerce adoption decision among retailers using a unique database collected from public sources, avoiding potential subjectivity bias. It traces the timing of e‐commerce adoption incorporating both fixed and time‐varying covariates.
Why There is No Duty to Pay Damages: Powers, Duties, and Private Law

This Article was part of a symposium on the rise of civil recourse theory. It contributes to this debate by defending a simple but counterintuitive claim: There is no duty to pay damages in either tort or contract law. The absence of such a duty provides a reason for believing that civil recourse provides a better account of private law than does corrective justice. Corrective justice is committed to interpreting private law as creating duties for wrongdoers to compensate their victims. In contrast, civil recourse sees the law as empowering plaintiffs against defendants. My argument is that a careful analysis of the doctrines surrounding pleading, payment of damages, accord and satisfaction, and judgments reveals that our law gives plaintiffs the power to extract wealth from defendants but does not impose duties on defendants to compensate those that they have wronged. The structure of my argument is borrowed from a much older exchange between Oliver Wendell Holmes, Jr., who thought that contract law imposed a duty to perform or pay damages, and Frederick Pollock, who denied that the payment of damages was part of the duty to keep a contract. I side with Pollock against Holmes and think that the Englishman’s argument provides a useful model in the debate between corrective justice and civil recourse.