Political connection and cost of debt: Some Malaysian evidence

This paper investigates the association between Malaysian politically connected (PCON) firms and the cost of debt. We extend previous research that finds Malaysian PCON firms are perceived as being of higher risk by the market, and by audit firms, by providing evidence that lenders also perceive these firms as being of higher risk. We also find that PCON firms have a significantly (1) higher extent of leverage, (2) higher likelihood of reporting a loss, (3) higher likelihood of having negative equity, and (4) higher likelihood of being audited by a big audit firm. We suggest that PCON firms are charged higher interest rates by lenders as a result of efficient contracting given their higher inherent risks. Additionally, we find that CEO duality present in PCON firms is perceived by lenders as being more risky, and that a higher proportion of independent directors on the audit committee mitigate this perceived risk. © 2012.

Auditor industry specialization, political economy and earnings quality: some cross-country evidence

Using cross-country data, we evaluate the impact of investor protection on the association between earnings quality and audits by industry specialists. Our findings show that the positive association between industry specialist auditors and earnings quality as documented in the literature is affected by the political electoral system, which reflects investor protection rights in a country. We document that audits by industry specialists are associated with higher earnings quality in countries with the proportional electoral system, reflecting weak investor protection. Our results also confirm Kwon et al.'s findings that overall there is a positive association between earnings quality and audits by industry specialists in countries with weak legal enforcement. Our findings, however, indicate that Kwon et al.'s results are valid only for countries with weak investor protection reflected by the proportional electoral system and not for countries with strong investor protection reflected by the majoritarian electoral system. These findings thus suggest that higher earnings quality of firms audited by industry specialists across countries can especially be expected when investor protection is low and legal enforcement is also weak. In addition, our research suggests that future cross-country studies could explicitly consider the role of the political electoral system of a country in evaluating corporate governance, management and accounting issues.

Do political connections affect the role of independent audit committees and CEO Duality? Some evidence from Malaysian audit pricing

This study examines whether political connection to firms affects the association between audit committee independence and demand for higher quality audits. In line with Carcello et al. (2002), our findings show that there is a positive association between audit committee independence and audit fees thus supporting the hypothesis that more independent audit committees demand higher audit quality. However, we find that this relationship is weaker for politically connected (PCON) firms suggesting that the independence of audit committees in Malaysian PCON firms may be compromised. Additionally, we provide evidence that PCON firms that have CEO duality are perceived by audit firms as being of higher risk than CEO duality firms without political connection.

Perks and the informativeness of stock prices in the Chinese market

While the literature shows that perks can affect firm values positively or negatively, we argue that firms with higher perks are more likely to be associated with a lower quality of financial reporting, which, in turn, can affect the informativeness of stock prices. Based on hand-collected data on perks from Chinese listed firms, we find that firms with lower perks are associated with higher informativeness of stock prices (or lower R-square). Moreover, the positive association between perks and R-square is shown to be weaker for firms with higher financial reporting quality through audit and earnings quality measures.

Does board gender diversity improve the informativeness of stock prices?

We show that stock prices of firms with gender-diverse boards reflect more firm-specific information after controlling for corporate governance, earnings quality, institutional ownership and acquisition activity. Further, we show that the relationship is stronger for firms with weak corporate governance suggesting that gender-diverse boards could act as a substitute mechanism for corporate governance that would be otherwise weak. The results are robust to alternative specifications of informativeness and gender diversity and to sensitivity tests controlling for time-invariant firm characteristics and alternative measures of stock price informativeness. We also find that gender diversity improves stock price informativeness through the mechanism of increased public disclosure in large firms and by encouraging private information collection in small firms. © 2011 Elsevier B.V.

Does political economy reduce agency costs? Some evidence from dividend policies around the world

This study shows that firms in proportional-electoral countries pay out lower dividends and that the correlation between a firm's growth potential and dividend payout ratio is weaker in proportional-electoral countries. However, firms in proportional-electoral countries that cross-list in majoritarian system countries, tend to pay out higher dividends and the negative relation between growth potential and dividend payout tend to be stronger than their peers that do not cross-list. For a few countries that changed their electoral system towards a more proportional system, we observe a decrease in dividend payout ratio and a weaker relation between growth and dividends after the change. Overall these results indicate that a country's political system affects the severity of agency problems. Further, the effect of legal origin on dividend policy reverses once we include the political economy variables in the regressions. We also document that the electoral system not only affects the amount of dividends paid by a firm but also the form of payment.

Truths and half truths: China's socio-economic reforms (1978-2010)

Truths and Half Truths is aimed at economic and social science academics and students who are interested in the dynamics of China's institutional development and societal transformation. Covering the complexity of the social, economic, and governance reforms behind the economic miracles achieved by China since its reform in 1978, and particularly in the past twenty years, this book provides much needed insight and critical thinking on major aspects of China's reform. Topics include employment, environment, anti-poverty; urbanization and rural development; education, corruption, political regime and media. Readers will be able to re-evaluate the costs and benefits of China's modernization from a point-of-view of sustainability. © 2011 Woodhead Publishing Limited. All rights reserved.

Executive equity risk-taking incentives and audit pricing

Using a large sample of U.S. firms spanning the period 2000-2010, we document a strong positive association between the sensitivity of CEO compensation portfolio to stock return volatility (vega) and audit fees. We also show that the positive association between vega and audit fees is weaker in the post-Sarbanes-Oxley Act (SOX) period. In supplementary tests, we show that the relation between vega and audit fees is stronger for firms with older CEOs and in firms where the CEO is also chairman of the board. Collectively, our results suggest that audit firms incorporate executive risktaking incentives in the fees they charge for their services.

Por um "nó" espistemológico da linguística e da psicanálise : um estudo sobre Saussure, Jakobson, Benveniste e Lacan

O objetivo do presente trabalho é construir recursos operatórios de leitura que permitam articular, desde um ponto de vista epistemológico, lingüística e psicanálise. Esta temática surge de uma problemática de pesquisa atual, relativa à crescente demanda, endereçada a lingüística, por diferentes práticas clínicas nas quais a linguagem está implicada. Neste sentido, procura-se relacionar um paradigma de linguagem com uma teoria da subjetividade apropriada tanto à reflexão clínica quanto à reflexão epistemológica. Desta forma, esta dissertação opta por um estudo teórico, visando a construção de operadores conceituais que possibilitem a articulação entre a psicanálise lacaniana e as teorias da linguagem de Saussure, Jakobson e Benveniste, utilizando como corpus de análise essas próprias teorias lingüísticas e psicanalíticas. Portanto, seu procedimento analítico pode ser qualificado como metateórico. Quatro critérios são utilizados para a seleção dos autores: 1°) as três teorias são, cada uma a seu modo, estruturalistas – isso significa que a estrutura é o conceito operador que permite pensar as proposições que estão na base de cada teoria (seus axiomas); 2°) as três teorias estabelecem proposições sobre o objeto língua – isso requer perguntar quais axiomas sobre a língua cada teoria teve que construir para dar conta da estrutura. Desses dois critérios deriva-se um terceiro; 3°) as três teorias conformam três “sistemas de linguagem” que não dissolvem o “objeto língua” para se constituírem em sua especificidade (diluindo-a em objetos de outros domínios teóricos, exteriores ao campo da linguagem – ou da lingüística – propriamente dito, tais como, por exemplo, a biologia, a psicologia, a sociologia). Cada sistema é representado por um nome próprio : I – Sistema de Linguagem elaborado por Saussure; II – Sistema de Linguagem tratado por Jakobson; III – Sistema de Linguagem concebido por Benveniste. Como critério de fechamento, temos que : 4°) as três teorias interessam de perto ao Sistema de Linguagem da psicanálise lacaniana. A relação entre tais teorias deverá servir de suporte de leitura à interlocução estabelecida no campo interdisciplinar sobre a presença da linguagem nas diferentes clínicas, assim como revitalizar os campos conceituais tanto da lingüística quanto da psicanálise.

Consumption smoothing in Latin America: an empirical assessment of present value models

The study aims to assess the empirical adherence of the permanent income theory and the consumption smoothing view in Latin America. Two present value models are considered, one describing household behavior and the other open economy macroeconomics. Following the methodology developed in Campbell and Schiller (1987), Bivariate Vector Autoregressions are estimated for the saving ratio and the real growth rate of income concerning the household behavior model and for the current account and the change in national cash ‡ow regarding the open economy model. The countries in the sample are considered separately in the estimation process (individual system estimation) as well as jointly (joint system estimation). Ordinary Least Squares (OLS) and Seemingly Unrelated Regressions (SURE) estimates of the coe¢cients are generated. Wald Tests are then conducted to verify if the VAR coe¢cient estimates are in conformity with those predicted by the theory. While the empirical results are sensitive to the estimation method and discount factors used, there is only weak evidence in favor of the permanent income theory and consumption smoothing view in the group of countries analyzed.

Previsibilidade de retorno das ações no mercado brasileiro, através da aplicação de modelo de valor presente com retornos esperados constantes num contexto de expectativas racionais

Através de dados financeiros de ações negociadas na Bolsa de Valores de São Paulo, testa-se a validade do modelo de valor presente (MVP) com retornos esperados constantes ao longo do tempo (Campbell & Schiller, 1987). Esse modelo relaciona o preço de uma ação ao seu esperado fluxo de dividendos trazido a valor presente a uma taxa de desconto constante ao longo do tempo. Por trás desse modelo está a hipótese de expectativas racionais, bem como a hipótese de previsibilidade de preço futuro do ativo, através da inserção dos dividendos esperados no período seguinte. Nesse trabalho é realizada uma análise multivariada num arcabouço de séries temporais, utilizando a técnica de Auto-Regressões Vetoriais. Os resultados empíricos apresentados, embora inconclusivos, permitem apenas admitir que não é possível rejeitar completamente a hipótese de expectativas racionais para os ativos brasileiros.

A sustentabilidade da agricultura familiar no Vale do Gurguéia-PI : construção de novas identidades socioprofissionais

Este estudo analisa o desenvolvimento sustentável dos agricultores familiares do Vale do Gurguéia no Estado do Piauí, ameaçados pela expansão da agricultura empresarial no cerrado piauiense. Nesse contexto de modernização agropecuária, pela ocupação capitalista — reconcentração de terra e avanço tecnológico — e pela (re)colonização da região, os tradicionais produtores familiares enfrentam os impactos e os riscos decorrentes dessa dinâmica de transformações socioeconômicas e institucionais, a partir da construção de novas identidades socioprofissionais no desenvolvimento de formas organizativas sustentáveis enquanto estratégias alternativas de sobrevivência e de reprodução social. Para tanto, esses agricultores desenvolvem relações socioculturais que se orientam tanto pela recriação de novos contextos interacionais e institucionais de sociabilidade quanto pela especialização de produtos e profissionalização. Nesse sentido, associações e cooperativas emergem como apoio à produção e à conquista de cidadania, espaço político de luta e inclusão social. A sustentabilidade da agricultura familiar é fundamental para o desenvolvimento rural dessa região, porque a sua inserção econômica e social na produção capitalista depende de políticas públicas agrícolas e agrárias conseqüentes. A conclusão do estudo mostra que a forma social de produção familiar na região constitui o setor com maior potencial inclusivo dos seus diferentes segmentos, ressignificados segundo os valores culturais locais no uso social da terra e na organização social, para além da reprodução mercantil simples.Enfim, as relações sociais com a terra, o trabalho e o mercado confirmam a existência de novas dinâmicas características da produção familiar em curso na região, quanto à apropriação e ao uso dos recursos disponíveis, instituindo novos e/ou recriando estratégias produtivas e padrões de interação social.