Showing 1 - 10 of 20
Persistent link: https://www.econbiz.de/10005546340
This study endogenously generates the asymmetric verification concept of conservatism, using evolutionary biology as a foundation. A producer produces (or hunts) a consumable with a stochastic production technology, and possibly faces a stealer thereafter, who seeks to expropriate the...
Persistent link: https://www.econbiz.de/10011183918
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...
Persistent link: https://www.econbiz.de/10011183973
Under rate-of-return regulation, a firm's product prices are constrained by the requirement that investors not earn more than 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...
Persistent link: https://www.econbiz.de/10010990429
We decompose the market-to-book ratio into two additive components: a conservatism correction factor and a future-to-book ratio. The conservatism correction factor exceeds the benchmark value of one whenever the accounting for past transactions has been subject to an (unconditional) conservatism...
Persistent link: https://www.econbiz.de/10010741314
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...
Persistent link: https://www.econbiz.de/10004999369
<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...
Persistent link: https://www.econbiz.de/10005023839
<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>The reported cost of a product frequently contains historical cost components that reflect past investments in productive capacity. We examine a setting wherein a firm makes a sequence of overlapping capacity investments. Earlier research has identified particular accrual accounting...
Persistent link: https://www.econbiz.de/10005658732
<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>There is growing interest in the use of markets within firms. Proponents have noted that markets are a simple and efficient mechanism for allocating resources in economies in which information is dispersed. In contrast to the use of markets in the broader economy, the efficiency of an...
Persistent link: https://www.econbiz.de/10005658737
We analyze optimal correlation levels in information technologies when multiple signals are available as contracting mechanisms within the principal-agent paradigm. We identify sufficient conditions ensuring that uniformly lower-correlation functions (in action levels) are preferred, as well as...
Persistent link: https://www.econbiz.de/10005551335