This study investigates the effect of changing tax accounting provisions for long-term manufacturing contracts between 1984–1985 and 1989–1990 on debt and accrual policies using a simultaneous equations approach. The results indicate that firms adjust debt ratios and discretionary accruals with relatively high book-tax conformity to achieve tax planning goals and use discretionary accruals with relatively low book-tax conformity to accomplish financial reporting objectives. Manufacturing firms directly affected by the change in tax rules for long-term contracts increase their leverage by 6.2 percentage points more than other manufacturers.

This paper illustrates how non-contractual legal rules sometimes alleviate contractual incompleteness. A serious incompleteness in debt contracts is the borrower's ability to fraudulently transfer assets to third parties, rendering the borrower insolvent. The incompleteness arises because contractual remedies are ineffective against third-party transferees who are not bound by the debt contract, while the borrower has no assets to recover. Fraudulent conveyance law is a non-contractual legal rule allowing recovery against these transferees. This increases debt capacity most dramatically for borrowers with highly liquid assets. Without non-contractual legal rules, high liquidation value implies low debt capacity. Journal of Economic Literature Classification Numbers: G32; G38.

This article analyzes an important aspect of the contemporary reorganization of work within firms: the shift from “Tayloristic” organization (characterized by specialization by tasks) to “holistic” organization (featuring job rotation, integration of tasks, and learning across tasks). We examine four driving forces behind this restructuring process: advances in production technologies promoting technological task complementarities, advances in information technologies promoting informational task complementarities, changes in worker preferences in favor of versatile work, and advances in human capital that make workers more versatile. Our analysis also helps explain the recent widening of wage differentials and disparities in job opportunities within narrowly defined groups.

The paper analyzes an important aspect of the contemporary reorganization of work within firms: the shift from “Tayloristic” organization (characterized by specialization by tasks) to “holistic” organization (featuring job rotation, integration of tasks and learning across tasks). We examine four driving forces behind this restructuring process: advances in production technologies promoting technological task complementarities, advances in information technologies promoting informational task complementarities, changes in worker preferences in favor of versatile work, and advances in human capital that make workers more versatile. Our analysis can also help explain the recent widening of wage differentials and disparities in job opportunities, not only between occupational, educational, and industry groups, but also within these groups. We are indebted to Michael Orszag for his insightful comments, and have benefited from the suggestions of Ruth Klinov, Reuben Gronau, Eric Mellander, Torsten Persson, Jorgen Weibull, and seminar participants at the Hebrew University of Jerusalem, the Industrial Institute for Economic and Social Research (Stockholm), the Institute for International Economic Studies (Stockholm), and an anonymous referee. We have profited from discussions with Solveig Wikstrom on the reorganization of firms, and are grateful to Jorgen Nilsson for drawing the figures. MULTI-TASK LEARNING AND THE REORGANIZATION OF WORK 1

This paper analyzes the market for syndicated loans, a hybrid of private and public debt, which has grown at well over a 20% rate annually over the past decade and which totaled over $1 trillion in 1997. We identify empirically the factors that influence a bank or nonbank's decision to syndicate a loan and the determinants of the proportion of the loan sold in the event of syndication. The evidence reveals a loan is more likely to be syndicated as information about the borrower becomes more transparent, as the syndicate's managing agent becomes more “reputable”, and as the loan's maturity increases. The lead manager holds larger proportions of information-problematic loans in its own portfolio. Loan syndications, like loan sales, appear to be motivated, in part, by capital regulations, and the liquidity position of the agent bank influences the likelihood of syndication, but not the extent. Our results confirm that information and agency problems affect the salability of debt claims and the extent to which a loan is “transaction oriented” rather than “relationship oriented” in the sense of A. Boot and A. Thakor (2000, J. Finance54, 679–713). Journal of Economic Literature Classification Numbers: D82, G20, G21, G24.

Research in incentives has focused on performance measures and pay-performance sensitivities but has largely ignored the “performance standard”, which generates important incentives whenever plan participants can influence the standard-setting process. “Internally determined” standards are directly affected by management actions in the current or prior year, while “externally determined” standards are less easily affected. I show that companies choose external standards when prior performance is a noisy estimate of contemporaneous performance. In addition, companies using budget based and other internally determined performance standards have less-variable bonus payouts, and are more likely to smooth earnings, than companies using externally determined standards.