We examine a firm's price-to-earnings (P/E) and price-to-book (P/B) ratios in a model of sequential capacity investments. Our analysis focuses on several key variables, including past and anticipated future investment growth, economic profitability and accounting conservatism, which jointly...

This note provides the proof of proposition 5 in our paper titled "Dynamics of Rate-of-Return Regulation."

Under Rate-of-Return regulation, a firm's product prices are constrained by the requirement that investors do not earn more an allowable return on the firm's assets. This paper examines the dynamic properties of the Rate-of-Return regulation process when the regulated firm periodically...

We formulate and analyze a model of team structure and monitoring within a LEN agency framework. We incorporate three key instruments in the internal design of an organization involving team production: team size, monitoring activities, and incentive contracts. We show that the complex...

In certain circumstances, insider trades such as private transactions between executives and their firms could be disclosed after the end of the firm's fiscal year, on a Form-5 filing. We find that insider sales disclosed in such a delayed manner for large firms are predictive of negative future...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>This paper shows that major components of modern manufacturing processes, such as inventory management and cross-training, play a significant control role. In our model, workers possess information that is critical to efficient ongoing operations. An organizational design that motivates...

Using detailed data on defect rates and quality costs from twelve plants of a Fortune 500 company, we provide the first direct tests of predictions arising from two sets of dynamic quality-based learning models. We find greater support for quality-based learning models that assume learning is a...