Nonlinear dynamics in discretionary accruals: An analysis of bank loan-loss provisions

Several studies have analyzed discretionary accruals to address earnings-smoothing behaviors in the banking industry. We argue that the characteristic link between accruals and earnings may be nonlinear, since both the incentives to manipulate income and the practical way to do so depend partially on the relative size of earnings. Given a sample of 15,268 US banks over the period 1996–2011, the main results in this paper suggest that, depending on the size of earnings, bank managers tend to engage in earnings-decreasing strategies when earnings are negative (“big-bath”), use earnings-increasing strategies when earnings are positive, and use provisions as a smoothing device when earnings are positive and substantial (“cookie-jar” accounting). This evidence, which cannot be explained by the earnings-smoothing hypothesis, is consistent with the compensation theory. Neglecting nonlinear patterns in the econometric modeling of these accruals may lead to misleading conclusions regarding the characteristic strategies used in earnings management.

The incorporation of construction and demolition wastes as recycled mixed aggregates in non-structural concrete precast pieces

Concern for the environment has lately heightened awareness about the need for recycling in the construction industry. However, some standards, such as the Spanish standard, only accept the recycling of aggregates derived from concrete, which limits the extensive use of construction and demolition waste, which are produced in much bigger volumes. The aim of this work was to explore the possibility of using recycled mixed aggregates (RMA) in the preparation of precast non-structural concretes. To that end different percentages of natural aggregate were replaced by RMA in non-structural elements (25, 50, 75 and 100%). Contents of cement, water, and the dosages commonly used by companies were unchanged by the introduction of RMA. The characterization of the prepared elements has been done using the specific tests for each type of non-structural element (terrazzo for indoor use, hollow tiles, kerbstones and paving blocks): compression and flexural strength, water absorption, dimensional tolerances, abrasion and slipping resistance. The paving blocks, kerbstones, and hollow tiles prepared were tested for 360 days. The stability of the tested properties confirmed the possibility of using these wastes on an industrial scale satisfying the standard requirements. However, the surface of terrazzo with RMA is not as good as that prepared with natural aggregate.