Our paper simulates the likely effects of a comparable-worth wage-adjustment policy in the state and local sector on female employment in the sector. The simulation is based on estimates of within-occupation male/female substitution and across-occupation occupational employment substitution that we obtain using data from the 1980 Census of Population.

We examine the impact of auditing on public school operations with two objectives: to investigate whether audits provide economic benefits to stakeholders and how complex compliance rules impact auditing effectiveness. Utilizing auditing time data and a unique opportunity presented by the Quality Basic Education Act in Georgia, we estimate the relative performance of school district operations employing a stochastic frontier estimation technique. We find that auditing produces real economic benefits for stakeholders by mitigating inefficiency in the use of school resources. We also find that stringent compliance rules reduce an audit’s effectiveness but auditors’ experience can help to overcome the problems. The lack of disclosure of auditing costs hinders the ability to conduct a cost–benefit analysis of new requirements. Our analysis supports the notion that auditing is vital to establish governance mechanisms and disclosure of auditing costs is important to adequately evaluate a new policy. Data are available from the public sources identified in the text.

We examine the impact of auditing on public school operations with two objectives: to investigate whether audits provide economic benefits to stakeholders, and how complex compliance rules impact auditing effectiveness. Utilizing auditing time data and a unique opportunity presented by the Quality Basic Education Act in Georgia, we estimate the relative performance of school district operations employing a stochastic frontier estimation technique. We find that auditing produces real economic benefits for stakeholders by mitigating inefficiency in the use of school resources. We also find that stringent compliance rules reduce an audit’s effectiveness but auditors’ experience can help to overcome the problems. The lack of disclosure of auditing costs hinders the ability to conduct a cost-benefit analysis of new requirements. Our analysis supports the notion that auditing is vital to establish governance mechanisms and disclosure of auditing costs is important to adequately evaluate a new policy.

Les auteurs examinent l’incidence de l’audit sur le fonctionnement de l’école publique en poursuivant deux objectifs : déterminer si les audits procurent des avantages économiques aux parties prenantes et définir l’incidence de la complexité des règles à observer sur l’efficacité de l’audit. Utilisant des données relatives au temps consacréà l’audit et profitant de l’occasion unique offerte par la Quality Basic Education Act en Georgie, les auteurs estiment le rendement relatif des activités des arrondissements scolaires au moyen d’une méthode stochastique d’estimation des frontières. Ils constatent que l’audit produit de véritables avantages économiques pour les parties prenantes en atténuant le manque d’efficience de l’utilisation des ressources scolaires. Ils constatent également que la rigueur des règles à observer réduit l’efficacité de l’audit mais que l’expérience des auditeurs peut contribuer à surmonter ce problème. Le fait que les coûts d’audit ne soient pas communiqués entrave la réalisation d’une analyse coûts‐avantages des nouvelles exigences. L’analyse des auteurs vient confirmer la thèse selon laquelle l’audit est indispensable à l’établissement de mécanismes de gouvernance et la communication des coûts d’audit est importante dans l’évaluation adéquate d’une nouvelle politique. Les données pertinentes peuvent être obtenues auprès des sources publiques indiquées dans le texte.

This paper examines the information content of revenue recognition rules in a series of environments, ranging from an abstract disclosure setting to one of disclosure in the presence of moral hazard and self‐reporting by an informed agent. The emphasis is on conceptualization of recognition issues, ranging across financial and labor markets, and the simplification required to force the analysis into a workable and familiar model. In this way, the limitations of both our thinking about recognition issues and our modeling techniques are highlighted. Résumé. Les auteurs examinent le contenu informationnel des règies de constatation des produits dans un éventail de cas, parmi lesquels un cas abstrait de publication d'information, un cas de présentation d'information en situation de risque moral, en passant par la présentation autonome d'information par un mandataire averti. Les auteurs s'intéressent particulièrement à la conceptualisation de questions relatives à la constatation des produits couvrant le marché financier et le marché du travail, et à la simplification qu'il faut opérer pour ramener l'analyse à la dimension d'un modèle maniable et d'utilisation courante. Ainsi les limites que component tant l'opinion au sujet des questions de constatation des produits que les techniques de modélisation sont‐elles mises en relief.

The analysis in this paper considers the effects of relaxing regulations that ensure that the proportions of ownership retained by entrepreneurs in new issues are observable to investors. Entrepreneurs, endowed with full ownership of their firms and private information concerning future prospects, seek to share risks with investors able to diversify those risks away. There is a trade‐off for entrepreneurs receiving good news between shedding risk and having their shares undervalued by uninformed investors. In equilibrium, an entrepreneur with good news either retains full ownership or sells a portion of his shares at the same price offered by an entrepreneur with bad news. The price in the latter case reflects rational expectations by investors as to the proportion of ownership retained by the entrepreneur conditional on his news. Only in certain cases are Pareto orderings possible across regimes in which ownership retention is either observable or unobservable. Implications for securities regulation are discussed. Résumé. Les auteurs s'intéressent dans leur analyse aux conséquences de l'assouplissement de la réglementation voulant que la proportion de titres retenue par les entrepreneurs dans les nouvelles émissions soit observable pour les investisseurs. Les entrepreneurs qui ont la propriété exclusive de leur entreprise et qui disposent d'une information privilégiée au sujet des ses perspectives d'avenir cherchent à partager leurs risques avec des investisseurs capables de diversifier ces risques de manière à les minimiser. Lorsque l'information est positive, l'entrepreneur fait face à un compromis entre le partage du risque et la sous‐évaluation de ses titres par les investisseurs non informés. En situation d'équilibre, l'entrepreneur qui détient une information positive conserve la totalité des titres ou en vend une fraction au prix qu'offrirait un entrepreneur détenant de l'information négative. Le prix, dans ce dernier cas, reflète les attentes rationnelles des investisseurs quant à la proportion des titres conservée par l'entrepreneur, en fonction de l'information dont il dispose. L'application des classements de Pareto n'est possible que dans certains cas seulement dans des situations où la proportion de titres conservée est soit observable soit non observable. Les auteurs traitent des conséquences des résultats de leurs recherches sur la réglementation relative aux valeurs mobilières.

This article investigates the impact of political uncertainty on contractual lending terms using a large sample of syndicated loans and a within-firm estimation approach to achieve identification. Firms pay 7 basis points (bps) more on loans originated when their lenders are undergoing an election relative to when their lenders are not undergoing an election. Lenders from less financially developed countries are more likely to pass political uncertainty costs to borrowers. Consistent with electoral uncertainty driving this premium, the most contested elections have the largest impact (17 bps). Overall, political uncertainty leads to a tangible increase in firms’ financing costs.

Recently, agency theory has become popular as a means of explaining the structure of contracts between various classes of economic agents. Oftentimes the contracts of interest represent sharing rules for the payoffs that result from some production activity. In the usual two-party model of the contracting problem, one party designated the principal delegates authority for decisions affecting production to another party designated the agent. Typically, the assumptions made about the consequences of the agent's actions are that they are associated with effort on the part of the agent for which the agent (but not the principal) has disutility, and that greater effort will result in higher payoffs from production in every state of nature. Moral hazard is then introduced by assuming that the principal is unable to observe the agent's effort, or to infer what effort the agent applied through an ex post observation of the payoff that results.

Samuel S. Stewart, Jr., Discussion: The Impossibility of Efficient Decision Rules for Firms in Competitive Stock Market Economies, The Journal of Financial and Quantitative Analysis, Vol. 17, No. 4, Proceedings of the 17th Annual Conference of the Western Finance Association, June 16-19, 1982, Portland, Oregon (Nov., 1982), pp. 575-577

The recent experience of increased volatility of exchange rates among major currencies coupled with highly unstable price levels necessitates a more fundamental understanding of exchange risk. This necessity is further enhanced by the increased internationalization of consumption, investment, and other aspects of economic activity.