The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting

We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multiperiod contracts among managers, directors, shareholders, and creditors

Structural Simplicity and Mechanistic Complexity in the Hammerhead Ribozyme.

Natural or full-length hammerhead ribozymes are up to 1000-fold more active than their minimal counterparts that lack a complex tertiary interaction that pre-organizes and stabilizes the ribozyme active site, positioning RNA functional groups to facilitate acid-base catalysis. The recent discovery that a single tertiary contact (an AU Hoogsteen pair) between Stems I and II confers essentially all of the enhanced activity greatly simplifies our understanding of the structural requirements for hammerhead ribozyme activity. In contrast, the simplest mechanistic interpretations are challenged with the presentation of more complex alternatives. These alternatives are elucidated and critically analyzed in the context of several of the active hammerhead ribozyme structures now available

Tone Concavity around Expected Earnings

We examine whether the relationship between managerial tone and earnings performance depends on the performance of the firm relative to earnings expectations. Using both annual changes in earnings and the difference between realized earnings and analyst consensus forecasts, we find evidence of ‘‘tone concavity’’ around earnings expectations. Specifically, the covariance between managerial tone and earnings performance is positive when earnings are below expectations, but negative when earnings meet or exceed expectations. We interpret our results to suggest that managers downplay positive changes in earnings to attenuate future growth expectations. We also find that tone concavity is significantly attenuated by managers’ career concerns and accounting conservatism, but unrelated to litigation risk. Our results indicate that the effect of earnings performance on disclosure tone is complex and reflects managers’ incentives to manage expectations

The Political Economy of India's Economic Reforms

10.1111/j.1748-3131.2008.00118.xAsian Economic Policy Review32315-33