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Publication History View all

  • Management Accounting Research. 12/2012; 23(4):225–228.
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    ABSTRACT: Tax fraud is an issue of increasing importance in China. One particularly significant fraud involves excessive claims for the rebate of VAT on exported goods. This fraud has two interesting features. First, it requires the collusion of an intermediary to supply the false documentation that supports a rebate application. Second, the punishment schedule is convex—with capital punishment used in major fraud cases. These features ensure that the payoff function of a firm engaging in fraud is strictly concave in the level of fraud. This gives a well-defined optimization without the need to appeal to risk aversion. We show that the existence of fraud does not affect the real output decision of the firm nor the tax policy of the government. Audit resources can be used to detect firms engaged in fraud as well as the intermediaries who supply false documents. Under reasonable assumptions it is shown that resources should be focused on detecting firms and not intermediaries. Finally, if the government must take action on fraud a convex punishment scheme is shown to be optimal.
    International Review of Law and Economics. 03/2010;
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    ABSTRACT: Tests for cointegration with allowance for structural breaks using the extrema of residual-based tests over subsamples of the data are considered. One motivation for the approach is to formalize the practice of data snooping by practitioners, who may examine subsamples after failing to find a predicted cointegrating relationship. Valid critical values for such multiple testing situations may be useful. The methods also have the advantage of not imposing a form for the alternative hypothesis–in particular slope vs. intercept shifts and single versus multiple breaks–and being comparatively easy to compute. A range of alternative subsampling procedures, including sample splits, incremental and rolling samples are tabulated and compared experimentally. Shiller’s annual stock prices and dividends series provide an illustration.
    Computational Statistics & Data Analysis. 01/2010;
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    ABSTRACT: Two outcome-based defence contracts are studied in the attempt to better understand the provision of services in maintenance, repair and overhaul (MRO) environment that is contracted on the outcome of the equipment, rather than the provision of equipment. The nature of the contract changes the dynamics of the delivery, bringing complex issues such as customer behaviours and involvement to the forefront, with both customer and firm focused on value co-creation and co-production, rather than each party’s contractual obligation. We uncover four areas that are crucial in the understanding of value co-production in service delivery and analysed them through a systems approach combined with the application of the service-dominant logic, both considered as the theoretical underpinnings of service science.
    European Management Journal. 12/2009;
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    ABSTRACT: Contest theory has been used in Industrial Organization to describe phenomena like R&D races, or efforts to defend a monopoly position. When pricing behavior is constrained by regulators, competition can also take the form of a contest. This paper reports on an experimental test of the effects of asymmetry in the Tullock contest success function. Both the simultaneous-move and sequential-move frameworks are considered. Despite high levels of overbidding across the different conditions, the introduction of asymmetries in the contest function generates experimental behavior on aggregate qualitatively consistent with the theoretical predictions. At the individual level, behavior seems divided into those subjects who bid very high amounts and those who bid very low amounts.
    International Journal of Industrial Organization 09/2009; 27(5):582-591.
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    ABSTRACT: This paper presents a discourse for embedding the new discipline of service science. It argues for service science to be free of the paradigmatic research influences of existing disciplines and propose service science as an integrative discipline of engineering, technological and social sciences (including business and law) for the purpose of value co-creation with customers. The paper proposes a research agenda for service science and considers five salient issues for knowledge production. It locates the argument for service science knowledge production alongside disciplinary knowledge of service and in so doing, suggests that service science is not a logical development within any discipline and proposes that the time is right for it to emerge into a discipline of its own.
    Service Operations, Logistics and Informatics, 2009. SOLI '09. IEEE/INFORMS International Conference on; 08/2009
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    ABSTRACT: This paper proposes simple Hausman-type tests to check for bias in the log-periodogram regression of a time series believed to be long memory. The statistics are asymptotically standard normal on the null hypothesis that no bias is present, and the tests are consistent.
    Economics Letters 02/2009; 102(2):83-86.
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    ABSTRACT: This paper evaluates the accuracy, bias and efficiency of analysts’ long run earnings growth forecasts for US companies. It is shown that forecast accuracy is extremely low. Analysts’ long run earnings growth forecasts are less accurate than the forecasts of a naive model in which earnings growth is forecast to be zero. Consistent with their short run and interim forecasts, analysts’ long run forecasts are shown to be both biased and inefficient. Furthermore, there is evidence that analysts do not fully incorporate information about future earnings that is contained in current share prices. However, the bias and inefficiency of analysts’ forecasts contributes very little to their inaccuracy, which is shown to be primarily the result of random error. It is also shown that the performance of analysts’ long run earnings growth forecasts varies substantially both with the characteristics of the company whose earnings are being forecast and of the forecast itself. The most reliable earnings growth forecasts are low forecasts issued for large companies with low price-earnings ratios and high market-to-book ratios.
    Journal of Business Finance & Accounting 10/2008; 26(5‐6):725 - 755.
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    ABSTRACT: The expectations hypothesis of the term structure has been decisively rejected in a large empirical literature that spans several decades. In this paper, using a newly constructed dataset of synthetic zero-coupon bond yields, we show that evidence against the expectations hypothesis is substantially weaker in data generated after the widespread publicity of its failure. These results are consistent with the idea that asset pricing anomalies tend to disappear once they are widely recognized.
    Journal of Banking & Finance. 05/2008;
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    ABSTRACT: White (1996), Poyago-Theotoky (2001) and Myles (2002) prove that in the mixed oligopoly the optimal subsidy, equilibrium output level, all firms' profits and social welfare are identical irrespective of whether the public firm maximizes welfare or profit and moves simultaneously with private firms, or maximizes welfare and acts as a Stackelberg leader. They name this observation the `irrelevance result''. Previous results have assumed all firms produce a homogeneous product with quantity as the strategic variable. We show that the irrelevance result extends to product differentiation and to Bertrand competition with price as the strategic variable.
    Economics Bulletin. 03/2007; 8(2):1-7.
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