The Declining Value Relevance of Accounting Information and Non Information-Based Trading: An Empirical Analysis

Recently, a growing body of literature has suggested that financial statements have lost their value relevance because of a shift from a traditional capital-intensive economy to a hightechnology, service-oriented economy. These conclusions are based on studies that find a temporal decline in the association between stock prices and accounting information (earnings and book values). This paper empirically tests a theoretical prediction arising from the Noisy Rational Expectations Equilibrium model that suggests that the decline could be driven by noninformation- based (NIB) trading activity, because such trading reduces the ability of stock prices to reflect accounting information. Specifically, Dontoh et al. (2004) show that when NIB trading increases, the R-squares of a regression of stock price on accounting information declines. Our empirical tests confirm this prediction; i.e., the decline in the association between stock prices and accounting information as measured by R-squares is driven by an increase in NIB trading

The Stock Market Valuation of R&D Leaders

We examine future excess returns, earnings variability and stock volatility of R&D Leaders and Followers. Drawing on the business strategy literature, which makes a clear distinction between R&D Leaders and Followers, we show that R&D Leaders do earn significant future excess returns, while R&D Followers just earn average returns. We further document that R&D Leaders generate higher future sales growth, and return-on-assets than Followers. We also tackle the perennial question of whether the excess returns subsequent to R&D are due to mispricing or risk, and show that only a small part of the returns can be attributed to risk compensation. Finally, it has been documented that R&D expenditures are strongly associated with future earnings volatility, suggesting that R&D is less reliable (verifiable) an asset than physical capital. We show that the association between R&D intensity and future earnings volatility of R&D Leaders is not lower than that of R&D Followers. Thus, penetrating the population of R&D firms to distinguish between R&D Leaders and Followers, we bridge the chasm between the major findings of the economics/finance strand and the accounting body of R&D research

Is Doing Good Good for You? Yes, Charitable Contributions Enhance Revenue Growth

A key question concerning socially responsible corporate activities is whether such actions achieve traditional goals, such as profit maximization and shareholder value creation, or whether such activities represent a drain on resources by opportunistic managers. Much of the debate about the legitimacy of and justification for socially responsible activities would be settled if it is convincingly shown that they further traditional business goals. In this study we provide such evidence. Using a large sample of charitable contributions made by public companies from 1989 through 2000, and a statistical methodology that distinguishes causation from association, we document that charitable contributions enhance the future revenue growth of the donors. In particular, we find evidence that, for firms in industries that are highly sensitive to consumer perception, corporate giving is associated with subsequent sales growth. On the other hand, our results do not provide strong evidence that revenue growth drives future charitable giving

Is Doing Good Good for You? Yes, Charitable Contributions Enhance Revenue Growth

A key question concerning socially responsible corporate activities is whether such actions achieve traditional goals, such as profit maximization and shareholder value creation, or whether such activities represent a drain on resources by opportunistic managers. Much of the debate about the legitimacy of and justification for socially responsible activities would be settled if it is convincingly shown that they further traditional business goals. In this study we provide such evidence. Using a large sample of charitable contributions made by public companies from 1989 through 2000, and a statistical methodology that distinguishes causation from association, we document that charitable contributions enhance the future revenue growth of the donors. In particular, we find evidence that, for firms in industries that are highly sensitive to consumer perception, corporate giving is associated with subsequent sales growth. On the other hand, our results do not provide strong evidence that revenue growth drives future charitable giving

Real Options and Software Upgrades: An Economic Analysis

This work extends earlier work on software upgrades as well as research on real options and IT investment. We consider a two-period model with one software provider who develops and releases a software product to the market. The result shows that the profit from the upgrade policy increases when the market size uncertainty increases. The option value of upgrade is higher when there is more market uncertainty. Also, the value of investing in design effort is more when the development cost is low

Corporate Social Responsibility Report Narratives and Analyst Forecast Accuracy

Standalone corporate social responsibility (CSR) reports vary considerably in the content of information released due to their voluntary nature. In this study, we develop a disclosure score based on the tone, readability, length, and the numerical and horizon content of CSR report narratives, and examine the relationship between the CSR disclosure scores and analyst forecasts. We find that CSR reporters with high disclosure scores are associated with more accurate forecasts, whereas low score CSR reporters are not associated with more accurate forecasts than firms who do not issue CSR reports. The findings are robust to controlling for firm characteristics including CSR activity ratings and financial narratives. The findings are driven by experienced CSR reporters rather than first-time CSR reporters. Together, our findings suggest that the content of CSR reports helps to improve analyst forecast accuracy, and this relationship is more pronounced for CSR reports with more substantial content

Diversity of mantids in tea plantation

Abstrac

The Effect of Third Party Investigation on Pay-Per-Click Advertising

Click fraud is a critical problem in pay-per-click advertising. While both service providers (SPs) and advertisers employ technologies to identify fraudulent clicks, prior work shows that they cannot be induced to make further improvements to their respective technologies. We consider the use of third-party investigation to address this problem and examine whether the responsibility of investigation payments helps induce both parties to work towards improving their technologies unilaterally. Using a principal-agent setting, we show that the advertiser always has incentives to improve his verification technology and the SP will improve his detection technology only when the detection cost is not too large. Given that the cost of detection technology is likely to be small due to the use of inexpensive online filters, our result suggests that third-party investigation helps induce further enhancements to the technologies and is a good mechanism to address the incentive problems in the click fraud setting

Synthesis, characterization and thermal decomposition of 2’-amino-6’-(1H-indol-3-yl)-1-methyl-2-oxospiro-[indoline-3,4’-pyran]-3’,5’-dicarbonitrile under non-isothermal condition in nitrogen atmosphere

The kinetics and decomposition of a new spirooxindole compound, 2’-amino-6’-(1H-indol-3-yl)-1-methyl-2-oxospiro[indoline-3,4’-pyran]-3’,5’-dicarbonitrile was studied by thermo gravimetric technique under non-isothermal conditions. The kinetic parameters were calculated using model-free (Friedman, Kissinger-Akahira-Sunose and Flynn-Wall-Ozawa methods) and model-fitting (Coats-Redfern) methods. The results of the Friedman isoconversional analysis of the thermo gravimetric data suggested that the investigated decomposition process follows a single-step