Knowledge that Transforms

Frank Gigler, Thomas Hemmer, On the Frequency, Quality, and Informational Role of Mandatory Financial Reports, Journal of Accounting Research, Vol. 36, Studies on Enhancing the Financial Reporting Model (1998), pp. 117-147

This paper provides empirical evidence on the economic value of services provided by independent auditors by analyzing whether auditor association leads to reduced interest rates on revolving credit agreements. Using multivariate regressions, we analyze the relation between interest rates on revolving bank loans to small, private firms and the degree of auditor association with the financial statements provided to the lender,

Mary E. Barth, Greg Clinch, Revalued Financial, Tangible, and Intangible Assets: Associations with Share Prices and Non-Market-Based Value Estimates, Journal of Accounting Research, Vol. 36, Studies on Enhancing the Financial Reporting Model (1998), pp. 199-233

Michael W. Maher, M. Laurentius Marais, A Field Study on the Limitations of Activity-Based Costing When Resources are Provided on a Joint and Indivisible Basis, Journal of Accounting Research, Vol. 36, No. 1 (Spring, 1998), pp. 129-142

We introduce nonnested hypotheses tests using indirect, simulation-based estimation procedures. We propose different test statistics and carefully examine the corresponding implicit mi hypotheses. A notion of indirect encompassing comes up naturally, which may be compared to the usual encompassing conditions. Then we show how these methods extend standard specification and overidentification tests.

This paper develops the statistical theory for testing and estimating multiple change points in regression models. The rate of convergence and limiting distribution for the estimated parameters are obtained. Several test statistics are proposed to determine the existence as well as the number of change points. A partial structural change model is considered. The authors study both fixed and shrinking magnitudes of shifts. In addition, the models allow for serially correlated disturbances (mixingales). An estimation strategy for which the location of the breaks need not be simultaneously determined is discussed. Instead, the authors' method successively estimates each break point.

In this paper, the authors develop a discretized version of the dynamic programming algorithm and study its convergence and stability properties. They show that the computed value function converges quadratically to the true value function and that the computed value function converges linearly, as the mesh size of the discretization converges to zero; further, the algorithm is stable. The authors also discuss several aspects of the implementation of their procedures as applied to some commonly studied growth models.

anonymous referees for comments and Tel–Aviv University for its hospitality during part of the work on this paper. Dekel thanks the NSF and Lipman thanks SSHRCC for financial support for this research. Dekel and Lipman particularly thank Phil Reny for a series of discussions which led to this project. This paper was formerly titled “Possibility Correspondences Preclude Unawareness.” 2

Aaron S. Edlin, Mario Ephemerella, Walter P. Keller, Is Perfect Price Discrimination Really Efficient?: Welfare and Existence in General Equilibrium, Econometrica, Vol. 66, No. 4 (Jul., 1998), pp. 897-922