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A firm’s ethical behavior is commonly perceived beneficial to the firm and its investors in the literature. However, activities of corporate social responsibility (CSR) are often delivered with multiple purposes, and their expenses are aggregated with other expenditures in financial statements. These two features motivate the authors to hypothesize and find that investors’ ability to predict future earnings of ethical firms may not be improved through observing the CSR activities. The study aims to suggest that CSR spending should be expressed separately from other expenses in financial reports to help investors predict the future performance of CSR firms.

The authors use future (forward) earnings response coefficients (FERC) to testing whether current stock returns reflect correct information about future earnings. The basic specification of FERC framework, initially developed by Collins et al. (1994), is a regression of current-year stock returns on past, concurrent and future reported earnings with future stock returns as a control variable. A significantly positive FERC provides evidence that investors have rich and correct information about future earnings.

The authors find less future earnings information contained in current stock returns for firms with higher intensity of CSR activities. The association is also negative between current stock returns and future earnings reported by firms with a higher degree of CSR spending aggregated with selling, general and administrative expenses (SG&A). In additional analyses, the intensity of CSR activities is positively associated the uncertainty of benefits, measured by the standard deviation of future earnings over the next five years. This future earnings variability does not exist, even though CSR spending is aggregated with SG&A, consistent with the basic principle that accounting expenses create no future economic impacts.

The authors contribute to the current debate over consequences of CSR activities and accounting for CSR spending from a different angle. A common belief is that voluntary disclosure on CSR activities would aid in reducing costs of equity capital and financial reporting errors. These studies provide corporate managers with good reasons and motivations to expect beneficial consequences of voluntary disclosure. The results show that general investors are less capable of predicting future earnings when there is a higher degree of CSR spending aggregated with SG&A. It also highlights potential problems in the disclosure of general-purpose financial reporting to accounting standard setters.

The paper aims to clarify the relationship between earnings management and the sale of long‐lived assets and investments for firms listed in Taiwan. In addition, it suggests several interesting issues for further studies by proposing that positive earnings are one of the necessary conditions for the companies to issue bonds or new shares.

The paper uses archival data and regression analysis to document empirical evidence that assets sales are one of the methods to manipulate reported earnings among 12,484 firm‐years over the period of 1984‐2006.

The paper finds that approximately 54‐57 percent of firms in Taiwan with small pre‐managed earnings losses manipulate reported earnings to show small positive earnings. This is in contrast to 30‐40 percent of firms in the USA as reported by Burgstahler and Dichev.

The paper makes a good use of the unique institutional features of Taiwan. It has not produced other unique results that differ significantly from the findings of prior studies.

The paper shows that reported earnings are viewed as a primary measure of firm performance and mechanisms behind earnings management have important implications in deriving informative summary measures of firm performance.

The paper fulfils an identified need to study how companies listed in Taiwan to beat thresholds by selling long‐lived assets and investments and provides a comparison in earnings management with US companies. Moreover, it provides several suggestions for future studies.

Rare earths are essential materials for many high-tech industries critical to both economic development and national defense. China, the world's dominant supplier of rare earths, has recently been imposing stricter controls over its production and export. The purpose of this paper is to examine the domestic roots of the changes in China's rare earth industry production and exports in its three-decade rise to the current global monopoly.

This paper adopts the historical institutionalism approach to analyze the trajectory of industry and trade development. The author analyzes data collected from government whitepapers and reputed scholarly and news sources.

This paper argues that the Chinese rare earth industry has gone through three periods of development, in which the state attempted to control the market and industry through reformulating rules and institutions to achieve state goals. Domestic state institutions, combined with macroeconomic environment and state governance strategy shaped the three-decade experience of rare earth industry and trade development in China.

This paper builds on existing findings about Chinese state regulations to provide a novel analytical framework to analyze the role of the state in industry and trade development in the rare earth industry. The focus on a single strategic industry seldom studied in the current literature also provides ample empirical value to further scholarly understanding about this industry.