Dividend and Share Changes: Is There a Financing Hierarchy?

The most widely accepted empirical dividend model is that proposed by Lintner, who argued that firms smooth dividends over time. Many theoretical dividend models, however, either predict that dividends should be highly variable, or at least offer no support for the smoothing hypothesis. We use a switching regression model to test the Lintner model against an alternative which allows dividend behavior to differ depending upon whether or not firms are issuing shares. We reject the Lintner model, finding no evidence of dividend smoothing when firms are not issuing shares, and a high negative dividend growth rate when firms are issuing shares. This description of dividend behavior suggests the existence of a financing hierarchy in that the marginal source of finance differs over time. To further explore the financing hierarchy, we estimate logit models which explain the decisions by firms to change dividends, and to issue or repurchase shares. The results are consistent with the existence of a financing hierarchy.

Career Concerns, Contract Choice, and “Unpaid” Executives

We examine a unique setting of publicly listed Chinese state-owned enterprises (SOEs), where some top executives are paid by government-controlled parent firms rather than by the firms where these executives work. Because their reported compensation is zero, these executives have been ignored in the literature. We find that the CEOs’ own personal characteristics, the nature of the CEO’s job responsibilities, and the environment in which the firm operates are significantly related to the CEO’s contract type. We also document that parent-paid CEOs have a significantly higher probability of future promotion than other CEOs. Compared to peer firms that directly pay their CEOs, firms with parent-paid CEOs have higher asset turnover. Contrary to concerns that parent-paid executives might extract resources from minority shareholders to the benefit of the parent SOE or local government, we document less use of tunneling or tax strategies under parent-paid contracts

Reporting Bias and Monitoring in Clean Development Mechanism Projects*

The Clean Development Mechanism (CDM) is a flexible carbon market mechanism managed by the United Nations. The program grants tradable carbon emissions credits (Certified Emission Reductions) for carbon‐reducing projects in developing countries. A project can only be admitted to the program if it is not financially profitable, and thus would not take place without the emission credits granted through the CDM. In this paper, we examine how monitoring reduces incentives of companies to bias the reported expected financial viability of potential CDM projects to gain admission to the program. We find that reported rates of return, which are a key factor for admission to the program, tend to be downwardly biased and are negatively associated with the expected benefits stemming from forecasted greenhouse gas reductions. However, monitoring from various sources mitigates some of the distorted incentives and related reporting bias. Furthermore, the monitoring effect becomes much stronger after 2008, when the CDM Executive Board implemented a series of measures to strengthen the additionality testing that provides guidance for program applications

Air pollution and analyst information production

Abstract(#br)Recent studies investigate the impact of air pollution on labor productivity. We extend this literature by showing that air pollution negatively affects equity analyst information production. Analysts exposed to air pollution are less likely to issue timely forecasts or improve their forecast accuracy. Investigating the underlying mechanism, we find that analysts exposed to air pollution are less likely to provide bold (especially, negatively bold) forecasts. We also find evidence that market pricing is less sensitive to forecast revisions issued by analysts exposed to air pollution. Our results are robust to controlling for firm/analyst and time fixed effects, as well as additional specifications employing difference-in-differences designs and placebo tests

Quantifying Sources of Variability in Infancy Research Using the Infant-Directed-Speech Preference

Psychological scientists have become increasingly concerned with issues related to methodology and replicability, and infancy researchers in particular face specific challenges related to replicability: For example, high-powered studies are difficult to conduct, testing conditions vary across labs, and different labs have access to different infant populations. Addressing these concerns, we report on a large-scale, multisite study aimed at (a) assessing the overall replicability of a single theoretically important phenomenon and (b) examining methodological, cultural, and developmental moderators. We focus on infants’ preference for infant-directed speech (IDS) over adult-directed speech (ADS). Stimuli of mothers speaking to their infants and to an adult in North American English were created using seminaturalistic laboratory-based audio recordings. Infants’ relative preference for IDS and ADS was assessed across 67 laboratories in North America, Europe, Australia, and Asia using the three common methods for measuring infants’ discrimination (head-turn preference, central fixation, and eye tracking). The overall meta-analytic effect size (Cohen’s d) was 0.35, 95% confidence interval = [0.29, 0.42], which was reliably above zero but smaller than the meta-analytic mean computed from previous literature (0.67). The IDS preference was significantly stronger in older children, in those children for whom the stimuli matched their native language and dialect, and in data from labs using the head-turn preference procedure. Together, these findings replicate the IDS preference but suggest that its magnitude is modulated by development, native-language experience, and testing procedure

A multilab study of bilingual infants: Exploring the preference for infant-directed speech

From the earliest months of life, infants prefer listening to and learn better from infant-directed speech (IDS) compared with adult-directed speech (ADS). Yet IDS differs within communities, across languages, and across cultures, both in form and in prevalence. This large-scale, multisite study used the diversity of bilingual infant experiences to explore the impact of different types of linguistic experience on infants’ IDS preference. As part of the multilab ManyBabies 1 project, we compared preference for North American English (NAE) IDS in lab-matched samples of 333 bilingual and 384 monolingual infants tested in 17 labs in seven countries. The tested infants were in two age groups: 6 to 9 months and 12 to 15 months. We found that bilingual and monolingual infants both preferred IDS to ADS, and the two groups did not differ in terms of the overall magnitude of this preference. However, among bilingual infants who were acquiring NAE as a native language, greater exposure to NAE was associated with a stronger IDS preference. These findings extend the previous finding from ManyBabies 1 that monolinguals learning NAE as a native language showed a stronger IDS preference than infants unexposed to NAE. Together, our findings indicate that IDS preference likely makes similar contributions to monolingual and bilingual development, and that infants are exquisitely sensitive to the nature and frequency of different types of language input in their early environments

Testing the relationship between preferences for infant-directed speech and vocabulary development: A multi-lab study.

From early on, infants show a preference for infant-directed speech (IDS) over adult-directed speech (ADS), and exposure to IDS has been correlated with language outcome measures such as vocabulary. The present multi-laboratory study explores this issue by investigating whether there is a link between early preference for IDS and later vocabulary size. Infants' preference for IDS was tested as part of the ManyBabies 1 project, and follow-up CDI data were collected from a subsample of this dataset at 18 and 24 months. A total of 341 (18 months) and 327 (24 months) infants were tested across 21 laboratories. In neither preregistered analyses with North American and UK English, nor exploratory analyses with a larger sample did we find evidence for a relation between IDS preference and later vocabulary. We discuss implications of this finding in light of recent work suggesting that IDS preference measured in the laboratory has low test-retest reliability

Putting some “sense” into our research

Purpose This paper aims to propose using human senses as a means of thinking about the contributions of this research. Design/methodology/approach Based upon the metaphor of human senses, the model describes different aspects of research, such as topic selection, theory and method, providing suggestions for enhancing relevance and expanding the audience for the research. The model is applied to a current working paper on cyber security and then more broadly to provide suggestions for researchers who are interested in conducting research on risk. Findings The model can be used to frame different types of research projects in a way that helps to increase the interest in and impact of this research. Research limitations/implications The model in the paper is ad hoc but provides a fresh way to view this research. Social implications Increasing interest in accounting research can result in a broader audience for this work. Originality/value The paper provides a means for researchers to step back from their research and think about what makes their research original and interesting. </jats:sec