Business Commons^™

Changing And/Or Funding Opeb Promises: A Typology Of Local Government Responses To Gasb 45 And The Realization Of Opeb Liabilities, Juita-Elena Yusuf, Thomas Musumeci

School of Public Service Faculty Publications

GASB Statement No. 45 addresses how governmental units account for employees' other post-employment benefits (OPEB), requiring government employers to replace OPEB reporting on a pay-as-you-go basis with an accounting of the cost of current and future benefits. This requirement and the resulting OPEB liability may prompt government employers to reconsider key questions regarding their OPEB provision. The size of the OPEB liability depends on both the benefit promises made to employees and the assets to fund these promises. We propose a typology that defines four approaches for governments to respond to GASB 45 and their OPEB liabilities. These approaches represent …

Effective Popular Financial Reports: The Citizen Perspective, Juita-Elena (Wie) Yusuf, Meagan M. Jordan

School of Public Service Faculty Publications

The article presents a study that investigates the views of citizens on the efficiency of financial reports in the U.S. Researchers did a survey to discern the perspectives of respondents about the effectiveness of the said reports in informing other individuals about government finances. Moreover, results reveal that 80% of respondents believed that the reports are effective. [Associates Programs Source, EbscoHost database]

How Effective Is The International Fuel Tax Agreement As A Multistate Tax Administration Model? A View From The States, Juita-Elena Yusuf, Lenahan O'Connell

School of Public Service Faculty Publications

The International Fuel Tax Agreement (IFTA) was established to reduce the complexities of reporting, allocating, and collecting diesel fuel taxes from interstate commercial carriers operating in multiple jurisdictions. This paper examines IFTA's effectiveness as a multistate tax administration model from the perspective of the states. We identify three criteria of effectiveness and use a survey of IFTA officials in the member states and provinces as well as additional data provided by IFTA, Inc to assess IFTA's effectiveness. We conclude that (1) IFTA promotes inter-jurisdictional cooperation and revenue transfers; (2) carriers do not locate disproportionately in low tax jurisdictions; and (3) …

Club Good Influence On Residential Transaction Prices, J. Andrew Hansz, Darren K. Hayunga

Finance Faculty Publications

We examine residential real estate transactions in a market where an additional property right to a club good may have an influence on prices. We find that for single-family property, the market capitalizes approximately 50% of the full value of the extra property right. For condominiums, the amount reduces to approximately 25%. While these amounts are positive, they clearly are significantly lower than full value.

Risk Allocation Across The Enterprise: Evidence From The Insurance Industry, Michael K. Mcshane, Tao Zhang, Larry A. Cox

Finance Faculty Publications

Financial researchers initially regarded hedging activities as a means to reduce total firm risk, which often is defined in terms of cash flow volatility. More recently, researchers have focused on the strategic allocation of risk. Direct tests of risk allocation have been problematic, however, because hedging data are rarely available and, when available, are specific only to a single operation of the firm, such as bank lending. In this study, we exploit unique data from the insurance industry that allows us to observe hedging proxies for both investment and insurance underwriting risks and test the risk allocation hypothesis developed in …

Trading Volume And Overconfidence With Differential Information And Heterogeneous Investors, Kenneth Yung, Qian Sun, Hamid Rahman

Finance Faculty Publications

This paper adds to the overconfidence literature by specifically considering the differential nature of information and its use by different classes of investors. The literature suggests that overconfidence is a major determinant of stock trading volume. We postulate that private investors are more prone to overconfidence bias as compared to institutional investors. This implies that turnover in firms with low institutional ownership will be driven more by private information while turnover in firms with high institutional ownership will be driven more by public information. This is the essence of the two hypotheses we explore. We find strong evidence in support …

Creditor Rights And R&D Expenditures, Bruce Seifert, Halit Gonenc

Finance Faculty Publications

Manuscript Type: Empirical

Research Question?Issue: This study examines the impact of creditor rights on R&D intensity (R&D/total assets). We argue that managers in countries with strong creditor rights have more incentives to reduce cash flow risk and therefore limit expenditures on R&D more than managers located in countries with weak creditor rights.

Research Findings/Insights: Using a sample of over 21,000 firms from 41 countries, our research is one of the first to document that strong creditor rights are indeed associated with reduced R&D intensity. This negative relationship is observed in market‐based countries, but not in bank‐based countries. Moreover, the results …

Risk Allocation Across The Enterprise: Evidence From The Insurance Industry, Michael K. Mcshane, Tao Zhang, Larry A. Cox

Finance Faculty Publications

Financial researchers initially regarded hedging activities as a means to reduce total firm risk, which often is defined in terms of cash flow volatility. More recently, researchers have focused on the strategic allocation of risk. Direct tests of risk allocation have been problematic, however, because hedging data are rarely available and, when available, are specific only to a single operation of the firm, such as bank lending. In this study, we exploit unique data from the insurance industry that allows us to observe hedging proxies for both investment and insurance underwriting risks and test the risk allocation hypothesis developed in …