This paper presents a statistical procedure to identify effects of three potential structural changes on accounting earnings – temporary, short-run, and long-run. The procedure is applied to quarterly accounting earnings of 39 utility companies. Structural changes are found to be commonplace. Statistical forecasting models that explicitly incorporate structural change effects are found to generate more accurate forecasts than other statistical models in the literature. Although no statistical model significantly dominates Value Line, a firm-specific model with structural change adjustment forecasts as well as Value Line. Moreover, all statistical models examined have significant marginal forecasting power to complement Value Line forecasts.

Using a large sample of hand-collected directors' foreign experience data for Chinese listed companies from 2001 to 2016, we examine the impact of directors with foreign experience on corporate tax avoidance. We find a significantly negative association between directors with foreign experience and tax avoidance, suggesting that these directors can help constrain their firms' tax aggressiveness. The result is robust to Heckman two-stage analysis, instrumental variable approach, inclusion of potential omitted variables, change analysis, and alternative tax avoidance measures. Further analyses reveal that reputation concerns and CSR awareness are potential channels through which returnee directors affect corporate tax avoidance. The negative relation between directors with foreign experience and tax avoidance only holds when directors' foreign experiences are derived from countries or regions with higher investor protections. Non-independent directors with foreign experience have larger impacts on corporate tax avoidance than independent directors, and the effect is more pronounced when directors with foreign experience sit on audit committees. Directors' working and studying experiences both have important impacts on corporate tax avoidance. The result also suggests that the negative relation between directors with foreign experience and tax avoidance is more pronounced in non-state-owned firms. Overall, the findings suggest that directors' foreign experience matters for corporate tax behavior in emerging markets.

This paper examines the determinants and economic efficiency of corporate voluntary disclosure. The focus is on the trade-off for an individual firm when the costs and benefits of voluntary disclosure stem from the consequences of its investment decisions and the impact on its share price. Investment and voluntary disclosure decisions are intertwined. First, voluntary disclosure leads to more accurate pricing, which induces more efficient investment decisions. Second, the firm may affect the market pricing in its favor by strategically disclosing or withholding its private information. This opportunistic use of disclosure may cause the real investment to be distorted at the margin. My analysis shows that the efficiency of voluntary disclosure is influenced by both effects. Further, this paper investigates how the investment efficiency and the propensity for providing voluntary disclosure respond to various environmental variables. Two such key variables are the general economic outlook of the investment opportunity and the quality of firm private information.

Rubinstein's alternating-offers bargaining model is enriched by assuming that players' payoffs in disagreement periods are determined by a normal form game. It is shown that such a model can have multiple perfect equilibria, including inefficient ones, provided that players are sufficiently patient. Delay is possible even though there is perfect information and the players are fully rational. The length of delay depends only on the payoff structure of the disagreement game and not on the discount factor. Not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs. Indeed, some negotiation games have a unique perfect equilibrium with immediate agreement.

Guided by the Gervais and Odean (2001) overconfident trading hypothesis, we comprehensively investigate the trading behavior of individual vs. institutional investors in Taiwan in an attempt to identify who is the more overconfident trader. Conditional on the various states of the market, on market volatility, and on the risk level of the securities they trade, we find that both individual and institutional investors trade more aggressively following market gains in bull markets, in up-market states, in up-momentum market states, and in low-volatility market states and that only individual investors trade more in riskier securities following market gains. More importantly, we find that individual investors trade more aggressively following market gains in the three conditional states of the market and in high-volatility market states than institutional investors. Also, individual investors trade more in relatively riskier securities following gains than institutional investors. These findings provide evidence that individual investors are more overconfident traders than institutional investors.

The purpose of this article is to present the mathematical logic underlying variance computations. Variance analysis is often regarded by beginning students in cost accounting as one of the most difficult topics. They are confused by the intricate maze of alternative procedures and amounts used in variance computations and resort to memorizing the mechanics involved. Since in accounting a variance is always calculated as the difference between two related quantities, an understanding of the mathematical operations involved facilitates the understanding of the significance of the variance. A variance horn standard is defined as the difference between the standard cost and the actual cost incurred. The use of standard costs thus gives rise to variances between projected amounts and actual amounts for direct material and direct labor. Since price and quantity are the only variables present, the discussion that follows applies equally to either the analysis of direct material cost or of direct labor cost.

Inventory accounting method, Uncertainty, Inventory accounting method changes, FIFO

This paper examines the impact of geographic technological diversification on firm innovativeness. Our empirical study conducted on a panel of U.S. manufacturing companies shows that firms with geographic technological diversification are more innovative (as measured by both patents and citations) than firms without. Furthermore, we find that the positive relation between geographic technological diversification and firm innovation is driven by domestic technological diversification, while international technological diversification is negatively related to firm innovation. Our valuation tests further confirm the detrimental effect of international technological diversification on shareholder wealth.