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Article
Publication date: 13 February 2024

James Dean and Joshua C. Hall

The challenge of predicting changes in aggregate income and stock prices is one that has occupied the research agendas of economists. This paper aims to use the consumption–income…

100

Abstract

Purpose

The challenge of predicting changes in aggregate income and stock prices is one that has occupied the research agendas of economists. This paper aims to use the consumption–income ratio and the dividend–price ratio to predict future income and stock prices.

Design/methodology/approach

To examine the stability of the consumption–income ratio and the dividend–price ratio, the authors run a two-variable, two-lag reduced-form VAR in the vein of Cochrane (1994), using a lag of each respective ratio as exogenous to the VAR. Additionally, the authors estimate an AR(4) model for income and prices.

Findings

The consumption–income ratio and the dividend–price ratio remain key to understanding future movements in income and stock prices. The consumption–income ratio significantly predicts future income in the USA, and aggregate income is easier to predict than consumption in the VAR model. The dividend–price ratio does not significantly predict future price growth. Consumption and dividend shocks have lasting impacts on income and prices.

Originality/value

The consumption–income ratio and the dividend–price ratio are still key to understanding future movements in income and stock prices. The consumption–income ratio significantly predicts future income in the USA, and aggregate income is easier to predict than consumption in the VAR model. However, the dividend–price ratio does not significantly predict future price growth, a change from previous research from the 1990s, despite the increasing complexity of stock markets. Consumption and dividend shocks have lasting impacts on income and prices and appear to be significant drivers in both the short- and long-run variance in income and prices.

Details

Journal of Financial Economic Policy, vol. 16 no. 3
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 7 November 2016

Joshua C. Hall, Donald J. Lacombe and Shree B. Pokharel

While many studies find a positive relationship between economic freedom and entrepreneurship, very few of these studies account for possible spatial autocorrelation. Moreover…

232

Abstract

Purpose

While many studies find a positive relationship between economic freedom and entrepreneurship, very few of these studies account for possible spatial autocorrelation. Moreover, the development of an overall freedom measure has allowed researchers to test the relationship between overall freedom (personal plus economic) and entrepreneurship. The literature, however, does not account for spatial dependence in entrepreneurial activity. The purpose of this paper is to test for possible spatial dependence in entrepreneurial activity.

Design/methodology/approach

The authors employ a spatial autoregressive model to account for possible spatial dependence in entrepreneurial activity across states. The authors have data for entrepreneurial activity and overall freedom for a cross-section of data on the 48 contiguous US states for 2009.

Findings

The authors find no evidence of spatial dependence in entrepreneurial activity.

Research limitations/implications

The authors are limited to a cross-section. Combined with the spatial lag of the dependent variable, the authors might have too few observations to find statistical significance on either the spatial lag or other explanatory variables.

Practical implications

Future research should continue to account for possible spatial dependence.

Social implications

Entrepreneurship is key to economic growth. Freedom has been shown to lead to more entrepreneurship at the state level in other research.

Originality/value

This brief research note is the first paper to account for spatial dependence in the relationship between overall freedom and entrepreneurial activity.

Details

Journal of Entrepreneurship and Public Policy, vol. 5 no. 3
Type: Research Article
ISSN: 2045-2101

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Article
Publication date: 7 June 2021

Serkan Karadas, Minh Tam Tammy Schlosky and Joshua C. Hall

What information do members of Congress (politicians) use when they trade stocks? The purpose of this paper is to attempt to answer this question by investigating the relationship…

774

Abstract

Purpose

What information do members of Congress (politicians) use when they trade stocks? The purpose of this paper is to attempt to answer this question by investigating the relationship between an aggregate measure of trading by members of Congress (aggregate congressional trading) and future stock market returns.

Design/methodology/approach

The authors follow the empirical framework used in academic work on corporate insiders. In particular, they aggregate 61,998 common stock transactions by politicians over the 2004–2010 period and estimate time series regressions at a monthly frequency with heteroskedasticity and autocorrelation robust t-statistics.

Findings

The authors find that aggregate congressional trading predicts future stock market returns, suggesting that politicians use economy-wide (i.e. macroeconomic) information in their stock trades. The authors also present evidence that aggregate congressional trading is related to the growth rate of industrial production, suggesting that industrial production serves as a potential channel through which aggregate congressional trading predicts future stock market returns.

Originality/value

To the best of the authors’ knowledge, this study is the first to document a relationship between aggregate congressional trading and stock market returns. The media and scholarly attention on politicians’ trades have mostly focused on the question of whether politicians have superior information on individual firms. The results from this study suggest that politicians’ informational advantage may go beyond individual firms such that they potentially have superior information on the overall trajectory of the economy as well.

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Article
Publication date: 6 November 2017

Joshua C. Hall, Serkan Karadas and Minh Tam Tammy Schlosky

Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act of 2012, vesting the Securities and Exchange Commission with the clear legal authority to prosecute members…

290

Abstract

Purpose

Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act of 2012, vesting the Securities and Exchange Commission with the clear legal authority to prosecute members of Congress (politicians) if they engage in insider trading. This paper aims to investigate whether members of Congress are informed traders even before they get elected to Congress, and thus helps assess whether the STOCK Act was a necessary piece of legislation.

Design/methodology/approach

This study compares the performance of politicians’ portfolios before and after they are elected to Congress using data from the 2004-2010 period. The authors use an event-study method to construct transactions-based calendar-time portfolios and use standard asset pricing models including capital asset pricing model (CAPM) to determine whether these portfolios earn abnormal returns (i.e. outperform the market).

Findings

The authors find weak and inconsistent evidence of abnormal returns in politicians’ portfolios that precede their election. They also find that it takes two consecutive terms in Congress for members to start making informed trades that earn themselves abnormal returns. However, these abnormal returns only accrue to those who serve on powerful committees.

Research limitations/implications

The results in this paper provide support for the STOCK Act of 2012 by showing that members of Congress become informed traders while they serve in Congress. However, these results do not imply any wrongdoing for members of Congress, because the paper uses the pre-STOCK Act data (2004-2010 period).

Originality/value

This study is the first academic work that compares politicians’ portfolios before and after they get elected.

Details

Journal of Financial Economic Policy, vol. 9 no. 4
Type: Research Article
ISSN: 1757-6385

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Publication date: 23 June 2016

Liangjun Su and Yonghui Zhang

In this paper, we study a partially linear dynamic panel data model with fixed effects, where either exogenous or endogenous variables or both enter the linear part, and the…

Abstract

In this paper, we study a partially linear dynamic panel data model with fixed effects, where either exogenous or endogenous variables or both enter the linear part, and the lagged-dependent variable together with some other exogenous variables enter the nonparametric part. Two types of estimation methods are proposed for the first-differenced model. One is composed of a semiparametric GMM estimator for the finite-dimensional parameter θ and a local polynomial estimator for the infinite-dimensional parameter m based on the empirical solutions to Fredholm integral equations of the second kind, and the other is a sieve IV estimate of the parametric and nonparametric components jointly. We study the asymptotic properties for these two types of estimates when the number of individuals N tends to and the time period T is fixed. We also propose a specification test for the linearity of the nonparametric component based on a weighted square distance between the parametric estimate under the linear restriction and the semiparametric estimate under the alternative. Monte Carlo simulations suggest that the proposed estimators and tests perform well in finite samples. We apply the model to study the relationship between intellectual property right (IPR) protection and economic growth, and find that IPR has a non-linear positive effect on the economic growth rate.

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Article
Publication date: 1 January 1978

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act…

1509

Abstract

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:

Details

Managerial Law, vol. 21 no. 1
Type: Research Article
ISSN: 0309-0558

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Book part
Publication date: 23 August 2021

Mohammad Nurunnabi

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for…

Abstract

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research. Prior research overwhelmingly supports that the IFRS adoption or effective implementation of IFRS will enhance high-quality financial reporting, transparency, enhance the country’s investment environment, and foreign direct investment (FDI) (Dayanandan, Donker, Ivanof, & Karahan, 2016; Gláserová, 2013; Muniandy & Ali, 2012). However, some researchers provide conflicting evidence that developing countries implementing IFRS are probably not going to encounter higher FDI inflows (Gheorghe, 2009; Lasmin, 2012). It has also been argued that the IFRS adoption decreases the management earnings in countries with high levels of financial disclosure. In general, the study indicates that the adoption of IFRS has improved the financial reporting quality. The common law countries have strong rules to protect investors, strict legal enforcement, and high levels of transparency of financial information. From the extensive structured review of literature using the Scopus database tool, the study reviewed 105 articles, and in particular, the topic-related 94 articles were analysed. All 94 articles were retrieved from a range of 59 journals. Most of the articles (77 of 94) were published 2010–2018. The top five journals based on the citations are Journal of Accounting Research (187 citations), Abacus (125 citations), European Accounting Review (107 citations), Journal of Accounting and Economics (78 citations), and Accounting and Business Research (66 citations). The most-cited authors are Daske, Hail, Leuz, and Verdi (2013); Daske and Gebhardt (2006); and Brüggemann, Hitz, and Sellhorn (2013). Surprisingly, 65 of 94 articles did not utilise the theory. In particular, four theories have been used frequently: agency theory (15), economic theory (5), signalling theory (2), and accounting theory (2). The study calls for future research on the theoretical implications and policy-related research on disclosure and transparency which may inform the local and international standard setters.

Details

International Financial Reporting Standards Implementation: A Global Experience
Type: Book
ISBN: 978-1-80117-440-4

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Article
Publication date: 1 November 2016

Joshua L. Kenna and Stewart Waters

We expand on the use of monuments and memorials in the social studies classroom, while further promoting a more inclusive curriculum that better represents women in the social…

62

Abstract

We expand on the use of monuments and memorials in the social studies classroom, while further promoting a more inclusive curriculum that better represents women in the social studies. The way and frequency in which history textbooks and social studies classrooms represent women has improved over the decades; though, it still needs refining. The imbalance goes beyond the social studies classroom and includes the very resources we are advocating social studies teachers use, the United States’ historical monuments and memorials. We, therefore, offer social studies teachers a rationale, resources, and suggested activities for incorporating monuments and memorials commemorating the role of females in U.S. history. Considering less than eight percent of the United States’ cataloged, public outdoor statues honoring individuals are of women.

Details

Social Studies Research and Practice, vol. 11 no. 3
Type: Research Article
ISSN: 1933-5415

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Article
Publication date: 1 January 1977

A distinction must be drawn between a dismissal on the one hand, and on the other a repudiation of a contract of employment as a result of a breach of a fundamental term of that…

2153

Abstract

A distinction must be drawn between a dismissal on the one hand, and on the other a repudiation of a contract of employment as a result of a breach of a fundamental term of that contract. When such a repudiation has been accepted by the innocent party then a termination of employment takes place. Such termination does not constitute dismissal (see London v. James Laidlaw & Sons Ltd (1974) IRLR 136 and Gannon v. J. C. Firth (1976) IRLR 415 EAT).

Details

Managerial Law, vol. 20 no. 1
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 15 August 2016

Raymond J. March, Adam G. Martin and Audrey Redford

The purpose of this paper is to clarify the distinctions and complementary of William Baumol and Israel Kirzner’s classifications of and insights into entrepreneurship, and thus…

877

Abstract

Purpose

The purpose of this paper is to clarify the distinctions and complementary of William Baumol and Israel Kirzner’s classifications of and insights into entrepreneurship, and thus providing a more complete taxonomy of the substance of entrepreneurial activity. This paper also attempts to clarify distinctions between unproductive and destructive entrepreneurship.

Design/methodology/approach

This paper illustrates a more complete taxonomy of the substance of entrepreneurial activity by examining entrepreneurial innovation in drug markets both legal and illegal, identifying cases of productive, unproductive, superfluous, erroneous, destructive, and protective entrepreneurship.

Findings

This paper finds that the classifications of entrepreneurship (productive, superfluous, unproductive, erroneous, protective and destructive) put forth by Baumol, Kirzner, and the institutional entrepreneurship literature are complementary. While Baumol seeks to explain the disequilibrating tendencies of entrepreneurship, Kirzner seeks to explain the equilibrating tendencies of entrepreneurship within the institutional context.

Originality/value

This paper utilizes case studies from legal and illegal drug markets to uniquely and better explain the six cases of entrepreneurship. This paper also contributes to the literature by clearly articulating the complementarity of Baumolian and Kirznerian entrepreneurship.

Details

Journal of Entrepreneurship and Public Policy, vol. 5 no. 2
Type: Research Article
ISSN: 2045-2101

Keywords

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