Academics and practitioners have long recognized the importance of a firm’s industry membership in explaining its financial performance. Yet, contrary to conventional wisdom, recent research shows that industry-specific profitability forecasting models are not better than economy-wide models. This paper re-examines the incremental advantage of industry-specific models. We find considerable indu...

This paper investigates the value-relevance of earnings and book value over 20 years of institutional transition in China, from 1991 to 2010, and explores the suitability of Fair Value Accounting (FVA) in the emerging capital market. In contrast to findings in the mature market, we find that the combined value-relevance of earnings and book value of listed firms in China has significantly incre...

Using a sample of 43 countries, we examine the association between societal trust and firms‟ voluntary and regulated financial reporting and disclosure quality. We explore two competing predictions. On one hand, societal trust and voluntary reporting quality are predicted to have a negative association if greater trust lowers stakeholders‟ demand for information. Similarly, a predicted negative...

In the model there are two types of financial auditors with identical technology, one of which is endowed with a prior reputation for honesty. We characterize conditions under which there exists a “two-tier equilibrium” in which “reputable” auditors refuse bribes offered by clients for fear of losing reputation, while “disreputable” auditors accept bribes because even persistent refusal does no...

We examine the selection and performance of stocks recommended by analysts at a large investment firm relative to those of sell-side analysts during the period mid-1997 and 2004. The buy-side firm’s analysts issued less optimistic recommendations for stocks with larger market capitalizations and lower return volatility than their sell-side peers, consistent with their facing fewer conflicts of ...

Given a simple, simply laced, complex Lie algebra g corresponding to the Lie group G, let n+ be the subalgebra generated by the positive roots. In this paper we construct a BV-algebra BV[g] whose underlying graded commutative algebra is given by the cohomology, with respect to n+, of the algebra of regular functions on G with values in ∧ (n+\g). We conjecture that BV[g] describes the algebra of...

We provide an analytical and flexible framework to evaluate executive stock options. Our model takes into account the vesting period, American style, resetting and reloading provisions that are features of many options programs, and also considers the trading and hedging restrictions on executives. We identify a recursive structure in the stream of options that are granted to the executive over...

As a contribution to the hypothesis of mixing of three active neutrinos with, at least, one sterile neutrino, we report on a simple 4× 4 texture whose 3× 3 part arises from the popular bimaximal texture for three active neutrinos νe , νμ , ντ , where c12 = 1/ √ 2 = s12, c23 = 1/ √ 2 = s23 and s13 = 0. Such a 3 × 3 bimaximal texture is perturbed through a rotation in the 14 plane, where ν4 is th...

This paper conducts an empirical study on output, costs and incomes in organic farming with a sample of Spanish firms. Financial accounting data reveals that organic and partly or transitional to organic farming do not get significantly different output than intensive farming. Farms in transition to organic farming bear significantly higher costs and obtain significantly lower income than inten...

The aim of this paper is to examine what has been the role of information provision to the market throughout the crisis. We consider two main sources of information to the market, financial statements and information provided by credit rating agencies. We examine how these sources of information work and the effectiveness of their disclosure process during the crisis. Contrary to the commonly h...