In December 1982, the Financial Accounting Standard Board (FASB) issued SFAS No. 71 which became effective in fiscal years beginning after December 15, 1983. This statement regulates the accounting practices of regulated enterprises. The major controversial aspects of SFAS No. 71 are: (1) requiring special accounting for regulated industry, (2) capitalization of future revenues, (3) treatment of refund, and (4) impacts of SFAS No. 71 on financial reporting and rate cases. Given these controversies and new developments in the electric utility industry, the FASB has issued an exposure draft to revise some of the provisions of SFAS No. 71. The revisions as stipulated in December 19, 1985 exposure draft amend the accounting treatment of phase-in-plan, abandonments, and disallowances of costs of newly completed plants. Questions such as, whether Generally Acceptable Accounting Principle (GAAP) should be formulated for each industry (e.g. regulated/nonregulated), impact of SFAS No. 71 on financial reporting and rate cases, and accounting treatments of refund are not forcefully addressed in the exposure draft.As an input to current deliberations on SFAS No. 71 this study explores investor owned utility companys opinions concerning the controversial aspect of the statement specified above. In addition, the study reviews major issues addressed in the exposure draft amending SFAS No. 71.

Although there have been many studies dealing with psychological aspects of investor behaviour and scholarly research being pursued to support the day-of-the-week effect, January effect, small-firm effect, etc., and to explain these effects with vigorous economic theory and statistical models, there is scant attention paid to analyzing the effects of lunar cycles (full moon or new moon) on the stock market. The authors have gathered evidence from the literature on psychology which indicates the possibility of the existence of abnormal human behaviour during such periods of lunar cycles and have statistically analyzed the full moon effect separately from the new moon effect on the stock market and have come out with the conclusion that the stock market indices examined showed no evidence of a full moon or a new moon effect. However, there is scope for further research in this most important yet little explored subject.

IntroductionOf late, there have been many studies dealing with psychological aspects of investor behavior. Some authors find abnormal returns on days such as Friday the Thirteenth\u0027 and opine that the market may be affected by superstition. While others2 discount the presence of such anomaly: they found that the mean returns on Friday the Thirteenth are lower than those of other Fridays. Other researchers have found evidence to support day-of-the-week effect, January effect, small firm effect, etc,. Scholarly research is attempting to explain these effects with vigorous economic theory and statistical models. Jacobs abd Levy3 indicate that psychology offers the most promising explanation for such behavior. The purpose of this paper is to add to this body of literature by analyzing the effect of lunar cycles (specifically, full moon and new moon) on the stock market. Unlike previous research into psychological aspects of investor behavior, we have gathered evidence from the psychology literature which indicates the possibility of existence of abnormal human behavior during such periods.Slovic points out that most research in human judgement and decision-making has been done without explicit consideration of problems in business and finance. There is a need to replicate and extend various types of studies on human judgement in specific financial settings4. This research is an addition to the field of human judgement in an unusual environment.Analysis of Human Behavior During Full and New MoonIn the field of psychology and psychiatry, several researchers have attempted to analyze human behavior during full moon and new moon. Tasso and Miller5 gathered data for one year as to nine categories of 34,318 criminal offenses committed during phases of full moon and non-full moon in a major metropolitan area. They found that eight categories of offenses occurred (statistically) significantly more frequently then at other times of the year. They conclude that criminal offenses are more apt to occur during the full moon phase of the moon than at other times. Other Studies6-9 confirm support these results/conclusions.Rotton and Kelly10 however, suggest that lunar phase is not related to human behavior. Rotton and Rosenberg11 studied the effect of lunar cycles on the stock market by relating Dow Jones closing averages to different phases of the moon over the period 1975 to 1979. Their preliminary evidence indicates abnormal values for the Dow Jones industrial average around time periods when the moon is near the earth and when it is far from the earth.*Behavioral theories of financial decision-making have been addressed by a number of researchers. Slovic4 argues that individuals suffer from a variety of cognitive biases in security decision-making. Kahneman and Tversky16 demonstrate that decisionmakers cannot easily separate issues of form and substance. Shefrin and Statman, by relying on behavioral theories to explain the tendencies of investors to sell winners and ride losers, explain why individuals appear to prefer cash dividends to equivalent capital gains,17 \u002618 Shiller19 Summers20 and DeBondt and Thaler21 hold the view that investors systematically overreact to new information, so that market prices fluctuate far more than they would if they were simply functions of the rational expectations of objective, wealth maximizing investors.The central theme of these studies is that investor\u0027s perceptions of situations, rather than rational economic factors, motivate behavior. The above evidence establishes the legitimacy of behavioral explanations for financial market phenomena.Sources of Data* This study uses stock return indices from two sources. The NYSE/AMEX indices are from the CRSP tape, while the NASDAQ indices are from the CRSP NASDAQ tape. We examine four market indices: NYSE/ AMEX value weighted returns with dividend (VWRETD), NYSE/AMEX equal weighted returns with dividend (EWRETD), returns on the S\u0026P 500 (SPRTRN) and returns on the NASDAQ composite index (NCRTRN) VWRETD and SPRTRN are weighted toward large firms, while EWRETD and NCRTRN are weighted toward small firms. …

This study analyzes empirical evidence related to changes in market value and liquidity characteristics of stocks, which are delisted from the National Market System (NMS) due to an elevation of NMS listing standards. Our results are thus relatively independent of the financial conditions of the firms prior to delisting. We document significant increase in bid-ask spreads and decrease in trading volume after delisting. A significant negative stock price reaction around the delisting announcement period is also observed. Both sets of findings suggest that delisting from NMS increases a firm’s cost of capital by adversely affecting the liquidity of its stock. (JEL: G14)

This study extends prior studies on auditor changes by testing (1) whether investors react to 8-K disclosures, and (2) the probability of investors anticipating a potential switch. The study includes 136 firms that both switched and did not switch auditors. It is hypothesized that investors would find it difficult to ascertain the true motives behind auditor changes. Event methodology and logit analysis are used. The results indicate a negative drift in abnormal returns prior to the switch, followed by significant positive abnormal returns on the day of the switch, and a positive drift after the switch.

In this paper we use citational analysis to examine the influence of individuals and disciplines on international business research. We collected citational data over the ten-year period 1984 to 1993 from every issue of the Journal of International Business Studies. We found that management, economics, marketing, and finance disciplines have had significant influence on international business research and identified researchers such as Dunning, Porter, Vernon, Casson, Rugman, and Hofstede as having made significant contributions to international business research.

Each week Value Line highlights one or two timeliness rank 1 stocks. We find a significant 2.65 percent three-day return around this event. However, this effect is temporary and largely reverses over the next several weeks. We also find that the market response to a highlighted stock is stronger when the stock has a lower price/earnings ratio, is smaller, and has fewer institutional owners. We cannot find evidence against the semistrong form of the efficient market hypothesis. Finally, we present a hypothesis examining whether a favorable Value Line report permanently or temporarily affects stock price.

AbstractThis study examines the price reactions of common stocks to changes in preferred stock ratings, with focuses on firms with less information available in the market as well as on firms with a relatively larger proportion of preferred stock financing. Emphasis on differential information and the relative size of preferred stocks across firms provide a more powerful test of the effect of rating changes on stock prices. Contrary to previous studies that report no price effect on common stocks due to preferred stock re‐ratings, these results show that for low‐information firms and for firms with a larger proportion of preferred stocks in their capital structure, a preferred stock rating downgrade exerts significant negative price effect on common stocks during the two‐day announcement period. Our findings also have implications for future studies of other firm‐specific events such as security offerings, stock repurchases, and convertible calls.

P.R. Chandy, Professor of Finance and Toulouse Scholar, University of North Texas, Denton, TX, U.S.A. Pradeep Gopalakrishna, Assistant Professor of Marketing, Hofstra University, Hempstead, NY, U.S.A. Introduction Publishing represents the scholarly contributions of individuals and plays a significant part in faculty and institutional evaluations. Because of the importance of publishing, there is considerable interest among scholars in getting a better understanding of the relative quantity of published researched contributed by individuals and institutions. This is evidenced by the publications of Carpenter et al. (1974); Andrews and McKenzie (1978); Ricks and Czinkota (1979); Bazley and Nikolai (1975); Brown and Gardner (1985); Erwin and Toyne (1987); Nehrt (1987, 1989); Ball and McCulloch (1988); Morrison and Inkpen (1991). These studies were well received by the academic community for documenting the contributions of individuals and institutions to the business disciplines. Heck and Cooley (1988) state that documenting the contributions of scholars to the literature provides an objective measure of research productivity. In other words, a historical analysis of research contributions can serve as a benchmark to evaluate and set the standards of scholarly output. Such benchmarks are likely to be useful for self-evaluation purposes, in providing valuable input in promotion, tenure and salary decisions and in the formation of expectation of the research productivity of faculty. This paper documents the contributions to one journal, Management International Review (MIR) by analyzing the sources of articles, authors and institutions. The period covered in this study is from 1976 to the end of year 1990 (fifteen years). Literature Review Among business disciplines, studies that evaluated the contributions of authors, institutions, and journals can be divided into two main groups: Those that used subjective measurement criteria such as faculty and educators' perceptions of journal quality and those that used objective measurement criteria such as number of articles published (productivity), number of pages published, or average cites received. Among studies that used subjective measurement criteria, the notable ones include studies by Estes (1970); Benjamin and Brenner (1974); Bazley and Nikolai (1975); Brooker and Shinoda (1976); Andrews and McKenzie (1978); Weber and Sevenson (1981); Coe and Weinstock (1983); Ebrahimi, Ganesh, and Chandy (1992). The second group of studies that used more objective evaluation criteria and focused on the contributions of individuals and institutions includes studies by Ricks and Czinkota (1979); Windal (1981); Koch, Merino, and Berman (1984); Brown and Gardner (1985); Heck and Gremser (1986); Thanapoulos and Vernon (1987); Ervin and Toyne (1987); Nehrt (1987, 1989); Heck and Cooley (1988); Ball and McCulloch (1988); and Morrison and Inkpen (1991). The few studies that used citation analysis include studies by McRae (1974); Zeff and Rhode (1975); Dyckman and Zeff (1984); Brown and Gardner (1985); and Smith and Krogstad (1988). Data Data for the present study was gathered from each issue of MIR. Only main articles and notes were included in the analysis for assessing individual and institutional authorship. Publications such as book reviews were not included in the study. A fifteen year period since 1976 was chosen, and this is expected to provide a good history of publication percentage by academic and non-academic institutions, as well as by faculty in different universities. Results Table 1 displays the number of articles published, number of authors appearing in each journal and number of academic institutions represented over the entire period of the study. A total of 481 articles an notes were published by 558 authors during the years 1976-1990 in MIR, an average of 32.06 articles per year. The average number of appearances per author for the journal was 0. …

■ In this paper we do a historical analysis of research contributions of scholars and contributions from various universities over the period 1976 to 1990.

Major events in the private lives of CEOs have been a source of fascination for decades. However, despite gaining traction, studies on the relevant phenomena (e.g., marriage, divorce, parenthood, illness) remain scattered in parallel across disciplines. We thematically review the interdisciplinary evidence on the fast-emerging literature on CEO private life events (72 unique studies) to consolidate our understanding of how private life events can become reflected in the professional domains of CEO influence. Through this approach, we comprehensively intersect empirical progress on CEO life events with key strategic leadership outcomes (i.e., performance, strategy, socio-ethical issues, innovation, governance), allowing us to identify key gaps and highlight inconsistencies. We then propose several research opportunities and challenges to move the field from phenomenon-driven standalone studies to a more coherent research program on the blurred boundaries between the private and professional lives of CEOs.

ABSTRACT Many researchers have dealt with and contributed to the literature on bond risk and risk premium. This paper analyzes components of bond risk premium using market valuation theory. We introduce a concept of “yield risk.” The “yield risk” of a bond is shown to be the sum of systematic risk and default risk. We successfully bridge the theoretical gap between what is commonly known (and contained in most investment textbooks) that yield to maturity of a bond may be an upward biased measure of cost of debt, and the theory of valuing risky debt in capital market equilibrium.

We surveyed publishing business scholars to assess their familiarity with journals in the various fields taught in a college of business. Our results suggest that even well-read scholars are less knowledgeable about journals outside their fields. They know the top two or three journals in other fields and perceive them to be of good quality, but for journals below that they indicate that they have “no knowledge.” There are identifiable cohort groups in some cases that are more aware of each others' journals. There are also fields whose journals were less well known than others—business law, insurance, real estate, and, most notably, management information systems.