AD OF THE DAY: This Cutesy Oreo Commercial Is Strangely Transfixing

AD OF THE DAY: This Cutesy Oreo Commercial Is Strangely Transfixing

Dominic Green | May 13, 2013, 8:30 PM | 563 | 

If you can stand electro-pop sensation Owl City’s auto-tuned singing, you just might love this new Oreo commercial. It features a song, the “Wonderfilled Anthem,” written by Owl City, and a cutesy animation of lovable, dancing characters. All together, the formula is oddly addicting, slightly reminiscent of last year’s Dumb Ways To Die video. An excerpt from the Martin Agency-created spot: “If I gave [Oreos] to great white sharks, would they share them with baby seals? / Would they call up a giant squid for a friendly meal?” Oreo has been all about viral marketing this year — its quick-thinking tweet during the Super Bowl power outage quickly earned the company deserved coverage.


The ‘Real Winners Of The World’ Don’t Have Work-Life Balance, They Have Work

The ‘Real Winners Of The World’ Don’t Have Work-Life Balance, They Have Work

Max Nisen | May 13, 2013, 10:00 PM | 6,284 | 20

For many, work-life balance is seen as the ultimate goal. For others, that mindset is hogwash that’s holding you back in your career. Taking time off for family or passions “can offer a nice life,” legendary GE CEO Jack Welch once told The Wall Street Journal. But he said that it lessens the chances for promotion or to reach the top of a career path. Welch is not the only one who believes this. Recently, Glencore Xstrata PC CEO Ivan Glasenberg argued that those executives who start to focus on family and hobbies will find themselves undercut and replaced by those who don’t. It’s easy to dismiss these attitudes as outdated, macho, and unreasonable. But it’s possible that people seeking work-life balance are just avoiding finding a way to work extremely hard, and be very happy about it.  Marty Nemko, a career coach, author, columnist, and radio host, argues that the most successful and contented people prefer a heavily work-centric life over work-life balance.

“The real winners of the world, the people that are the most productive, think that this notion of work-life balance is grossly overrated,” Nemko told Business Insider. “Most of the highly successful and not-burned out people I know work single-mindendly towards a goal they think is important, whether it’s developing a new piece of software, inventing something, or a cardiologist who’s seeing patients on nights and weekends instead of playing Monopoly with his kids on the weekend.””Don’t blame the hours,” Nemko says. “If somebody says they got burned out working 70 hours a week it’s because they weren’t competent enough to do the work..” These people, who are “out-of balance” in the usual sense of the word, find motivation and satisfaction in devoting themselves to something and making a difference. That comes with a caveat of course. Sleep is non-negotiable. “If you need your eight hours, you get it,” Nemko says. If you sleep eight hours a night, that still leaves you a hundred hours a week. “The pool of people that do not have work-life balance feel efficacious — are efficacious in the world — are making a difference, and are making more money,” Nemko says. He argues that many people who champion work-life balance aren’t overworked, but are using the term as a politically correct tool, as a smokescreen for the desire to not do work. So rather than focusing on work-life balance, focus on being in the moment, on giving everything at work instead of imagining relaxing at home on the weekend. And if you can’t bring yourself to work 70 hours now and then, or it feels like torture, you’re probably at the wrong job. Even startup founders, known for working incredible hours under a lot of stress, shouldn’t blame burnout on a lack of work-life balance. “Don’t blame the hours,” Nemko says. “If somebody says they got burned out working 70 hours a week it’s because they weren’t competent enough to do the work, they hired the wrong people, or the product they were working on wasn’t good enough, and they were trying to make it work when they really shouldn’t have.”

The search for work-life balance has become gospel in recent years. But depending on who you ask, sometimes it can become an excuse.

Island mentality: Joke map shows uncomfortable truths — about Taiwan

Island mentality: Joke map shows uncomfortable truths — about Taiwan

Staff Reporter  2013-05-14


A world map created as a joke by internet users in Taiwan is an accurate reflection of the prejudices of the country’s people, as highlighted by the local response to the fatal shooting of a fisherman by the Philippine coast guard on May 9, according to the chief editor of a multilingual Taiwanese magazine. The death of Hung Shih-cheng prompted a furious response across Taiwan, with hackers appearing to target government websites in the Philippines and fishermen burning the Philippine national flag. On Sunday, Taiwan’s president Ma Ying-jeou threatened to freeze the applications of Filipino laborers seeking work in Taiwan unless Manila addresses the incident to Taipei’s satisfaction within 72 hours. Chang Cheng, the editor-in-chief of 4-Way Voice, a monthly magazine catering to Vietnamese, Thai, Indonesian, Filipino and Cambodian readers, said Taiwan’s reaction has displayed a condescending attitude towards the Philippines. Taiwanese netizens and commentators are commonly saying that they are angry because “even” the Philippines is stepping all over Taiwan, Chang said, revealing a prevalent sense of superiority with regards to people from Southeast Asian countries. Read more of this post

The ASEAN bid: policy risk to the fore

Updated: Tuesday May 14, 2013 MYT 1:54:54 PM

The ASEAN bid: policy risk to the fore

SINGAPORE: Investors are becoming increasingly picky about which bonds and stocks they buy in Southeast Asia’s fast-growing economies as the risk of policy bungling makes them more discerning. The ebb and flow of cash from money managers and retail investors into Indonesia, the Philippines, Thailand and Malaysia is still on balance an inflow into these markets. The dynamics have however changed, with marked differences between countries. Unlike in 2011 or 2012 when the simple risk-on and risk-off switches could trigger flows in and out of the region, investors are a lot more discriminating.  Read more of this post

Thailand Now Has 18 Million Social Media Users

Puzzle & Dragons Maker GungHo Reaches $15 Billion Market Cap, Now Worth More Than Nintendo, or more than Mobage operator DeNA, GREE, and Zynga combined

Puzzle & Dragons Maker GungHo Reaches $15 Billion Market Cap, Now Worth More Than Nintendo

May 13, 2013 by Dr. Serkan Toto


I’ll say it again: if there is one mobile game out there right now that people in Japan will remember in 10 years, it’s Puzzle and Dragons. The game, which boasts 13 million registered users in this country (10 percent of the population), has generated US$113 million in sales in April. Since late last year, maker GungHo’s market cap at the Osaka Stock Exchange kept rising and rising – to about $10 billion – to the point that the company is worth more than Mobage operator DeNAGREE, and Zynga combined. And today, GungHo (3765.OS) shares jumped limit-up by 300,000 yen to 1,342,000 yen (up 28.8 percent) in just a few minutes of trading, until the stock was bid-only. As a consequence, the company’s market cap now reached 1.54 trillion yen, which translates to $15.1 billion. With this number, GungHo topped Nintendo’s market cap of US$1.53 trillion yen (or US$15.0 billion). The US$15.1 billion market cap is also higher than that of Nikon, Fujitsu, Isuzu, Sanyo, All Nippon Airways, Sharp, or Mitsubishi Motors. It’s a new world we live in. Other market caps (Monday, May 13 at 11:30am JST):

GREE: $2.8 billion

DeNA: $3.6 billion

Zynga at $2.6 billion

Electronic Arts: $6.7 billion

Activision Blizzard: $16.7 billion

GungHo’s new owner SoftBank can be very happy.

Unfinished Asia’s biggest amusement park in Beijing demolished after 15 years of abandonment

Unfinished Asia’s biggest amusement park demolished

2013-05-14 01:31:22 GMT2013-05-14 09:31:22(Beijing Time)  SINA English

Most of the unfinished Wonderland Amusement Park in Beijing’s Changping district has been demolished after 15 years of abandonment.

The Reignwood Group launched construction of the park, which was going to the biggest amusement park in Asia, in the mid-1990s. However, construction was stopped in 1998, leaving the park uncompleted. An Feng, the chief inspector of the investment supervision department of Reignwood Group, said that construction was suspended because most land covered by the park is forestry land, and the policy to protect such land changed after major floods in 1998, forcing the company to review its plans. Even though the park was unfinished, the fairytale castles there and other facilities still attracted many visitors every year. Demolishment operations started on April 20 and most buildings are now gone. There are only some foundations left. “In 2005, the local government of Changping district got the usage rights for part of the land covered by the park back when it was doing the planning for its new town. However, we can use only 15 hectares now,” An said. “A comprehensive luxury product supermarket will be built on the site, but we are still going through the planning permission formalities,” An added.


Investment Company Asks: Is it legal in China to short a company’s shares and then publicly question its financials with prepared research reports?

05.13.2013 16:20

Investment Company Asks: Can We Legally Short Sell?

Zhongneng Xingye’s research reports can hammer a listed companies’ share prices, but CSRC refuses to say whether it regards the activity as legal

By staff reporters Liu Ran and Wang Shenlu

(Beijing) – Is it legal in China to short a company’s shares and then publicly question its financials with prepared research reports? This is the question a domestic investment company formally asked China Securities Regulatory Commission (CSRC) in a letter in March.

The matter drew attention because of the significant weight it carries in the country’s nascent short-selling industry. The method in question is practically the same as that used by American short seller Muddy Waters Research, which has made a name for itself by attacking U.S.-listed Chinese companies in recent years and making big money out of the ensuing share collapses. Read more of this post

An odd corporate vehicle in China; The experience of carmakers reveals the challenges of joint ventures

May 13, 2013 4:21 pm

An odd corporate vehicle for doing business in China

By Andrew Hill

In 2010, seven managers from PSA Peugeot Citroën and five from Chang’an Automobile met in Shenzhen, southern China, to lay the groundwork for a new car factory. Three years later, Capsa, a 50-50 joint venture between the French and Chinese companies, is in the final stages of preparing a 1m square metre plant for the September launch of Chinese-made premium cars under the DS brand. “Because we were beginning from a blank sheet, people wanted to make it as perfect as possible,” says Gilles Boussac, Capsa’s president, between meetings with his team of mostly Chinese managers. “So often in China, if you’re trying to rework or improve something, it takes years to achieve.” But the people who built Capsa have not started from scratch. Their shared enterprise is based on three decades of global car companies’ experience working with Chinese partners. International car executives are confident such ventures will continue to be the best way to reach Chinese customers, who now buy more than 20m new vehicles annually, making it the world’s largest automobile market. But their enthusiasm for these awkward corporate vehicles, with their unique management challenges, obscures the fact that the path of co-operation has been bumpy. Read more of this post

Without constitutional rule, China will struggle to avoid turbulence

Last updated: May 13, 2013 7:07 pm

Reform can end loose talk of a Chinese revolution

By Deng Yuwen

Without constitutional rule, the country will struggle to avoid turbulence, says Deng Yuwen

There are few books as popular among Chinese intellectuals and officials these days as Alexis de Tocqueville’s L’Ancien Régime et la Révolution. The 19th-century historian postulated that the unprecedented prosperity France enjoyed under Louis XVI, its final pre-revolt king, actually hastened the 1789 French revolution.

This seems to have relevance for China. Many people say there is a possibility of revolution in China in the next 10 years. That revolution is being discussed again at all – an idea to which China’s intelligentsia bade farewell in the 1990s – shows how enormously our country has changed over the past decade.

Indeed, when we discuss revolution today, the target is the ruling Communist party – an irony given that the party long monopolised the definition of revolution. The renewed talk of revolution also shows that without constitutional rule, China will struggle to break free from the cycles of turbulence that have dominated its history. Read more of this post

France set to tax smartphones to protect culture in digital age

Last updated: May 13, 2013 6:51 pm

France set to tax smartphones to protect culture in digital age

By Hugh Carnegy in Paris

France is preparing to tax smartphones, tablets and all other internet-linked devices to help fund the production of French art, films and music.

The proposal was made in a government-commissioned report that was broadly endorsed by President François Hollande’s socialist administration.

In a trenchant defence of France’s “exception culturelle” in the digital age, the report proposed imposing a tax of up to 4 per cent on the sale of all devices, including gaming consoles and e-readers, that allow access via the internet to “cultural content”. Read more of this post

Emerging markets turn sour for global banks; Muddy Waters’ Carson Block Says He’s Shorting Standard Chartered Debt

May 13, 2013 5:54 pm

Inside Business: Emerging markets turn sour for global banks

By Patrick Jenkins

As growth has stagnated or gone into reverse across much of the western world in recent years, banks have understandably been burnishing their emerging markets credentials. Any lender with a credible plan to tap into the most dynamic markets of the world has been duly rewarded. It is no coincidence that the archetypal emerging markets bank, UK-based Standard Chartered, has seen its share price increase more than 130 per cent since its low point in early 2009 – outperforming the FTSE global banks index by 38 per cent. Rewind a few weeks, though, and that outperformance was all the more dramatic. Until the start of March, this was an unadulterated boom stock, with outperformance topping 65 per cent. The latest dip came as a result of some disappointing results last week. The bank only publishes skeletal quarterly information, but the disclosure that profits fell “slightly” in the first three months of the year has been enough to push its share price down more than 10 per cent over the four trading days since. The reason is simple enough. The bank’s core operations are no longer performing as they once did – high-risk emerging markets are delivering the same near-zero growth as lower-risk developed markets. StanChart is not alone. Other global banks with big operations in Asia and Latin America suffered a disappointing first-quarter performance, too. Read more of this post

Bank recruitment runs into red-faced factor; Only 2% of students considering career in finance; More than a quarter of students would be too embarrassed to admit to their friends that they were taking up a job in banking

May 13, 2013 8:05 pm

Bank recruitment runs into red-faced factor

By James Pickford, London and South-East Correspondent

More than a quarter of students would be too embarrassed to admit to their friends that they were taking up a job in banking, according to research that underlines the failure of banks to win over public opinion following the financial crisis. António Horta-Osório, chief executive ofLloyds Banking Group, said the result – in which only 2 per cent of students surveyed said they were considering embarking on a career in banking – was “very worrying”.  Read more of this post

Engaging with a company’s users: Ducati tapped the power of its fans; In five years revenues quadrupled to €407.8m, market share doubled and the company became more widely known

May 13, 2013 4:21 pm

Engaging with a company’s users

By Paolo Aversa

The story. Widely seen as the acme of Italian style, tradition and performance in motorcycle design and manufacturing, Ducati has nevertheless often struggled to transform fame and fans into sales. By 1996 the company was on the verge of bankruptcy and had undergone several buyouts when a new chief executive, Federico Minoli, took over.

The challenge. Ducati faced fierce competition from traditional brands such as Harley-Davidson, BMW and Triumph, and from Japanese companies Honda, Yamaha, Kawasaki and Suzuki. Ducati’s annual production in the late 1990s was about 20,000 bikes, which generated modest revenues compared with, say, the annual 5.4m Hondas sold at the time. In less than five years Mr Minoli effected a turnround. This was achieved partly by a strict reduction in production costs, but also through a strategy of extending the traditional consumer base of extreme riders to the larger group of more laid-back enthusiasts. Still, Mr Minoli felt Ducati had not made full use of the potential of its fans’ extensive community. But how could it reach such a widespread group of users with few resources to invest in the endeavour? Read more of this post

When Computer Games May Keep the Brain Nimble

Updated May 13, 2013, 7:12 p.m. ET

When Computer Games May Keep the Brain Nimble



The computer game Double Decision helped boost players’ brain function, a study found. Doing crossword puzzles had no such benefit. A new study reveals that adults who played a video game helped their mental agility more than adults who did crossword puzzles. Your Health columnist Sumathi Reddy and University of Iowa public health professor Fred Wolinsky join Lunch Break with details. Photo: Double Decision.

The computer game’s concept is relatively simple. Find the matching motor vehicle and road sign amid a series of increasing distractions. Succeed and the challenge gets quicker and harder. Cognitive-training games like this one, Double Decision, are designed to improve brain functions and are at the center of a growing body of research looking at their effectiveness as scientists strive to find ways to ward off the cognitive declines that usually come with age. A government-funded study published this month found that playing Double Decision can slow and even reverse declines in brain function associated with aging, while playing crossword puzzles cannot. The study builds on an earlier large trial which found that older people who played various cognitive games had better health-related outcomes, driving records and performed better at everyday tasks such as preparing a meal. Read more of this post

Investors bracing for slower growth in China are turning to a formerly little-used currency trade: selling Australian dollars and buying Mexican pesos

Updated May 13, 2013, 7:53 p.m. ET

Currency Investors Turn to Unlikely Pair



Investors bracing for slower growth in China are turning to a formerly little-used currency trade: selling Australian dollars and buying Mexican pesos. The bet is that Australia’s economy, and its currency, will suffer as Chinese demand cools for raw materials like iron and coal. Mexico, with closer ties to the resurgent U.S. economy, is seen as more insulated if commodities prices fall. Read more of this post

Melting Ice Cap Draws China, Japan to Seek Arctic Riches

Melting Ice Cap Draws China, Japan to Seek Arctic Riches

Japan, China and South Korea are seeking to expand their influence in the Arctic as melting ice caused by global warming offers potentially lucrative access to resources and shipping shortcuts in the region.

Asia’s biggest economies are among 14 applicants seeking observer status on the eight-nation Arctic Council, which holds its biennial ministerial meeting in Sweden on May 15. Member countries include the U.S., Russia, Canada, Denmark, Finland, Iceland and Norway.

Winning approval would mean greater sway in international discussions over a region estimated to contain 90 billion barrels of oil, according to the U.S. Geological Survey. With climate change resulting in an Arctic that will be almost ice-free in the summer by 2050, according to a U.S. government study, the organization is facing an increase in maritime traffic and environmental disruption. Read more of this post

Chinese Power Consumption Collapses: Economic Growth Slowest Since Early 2009

Chinese Power Consumption Collapses: Economic Growth Slowest Since Early 2009

Tyler Durden on 05/13/2013 11:52 -0400

Not much to add here. If there still is any confusion why China is desperately manipulating its economic data, so balatantly in fact that virtually everyone has now noticed, this chart should put all doubt to rest. According to CLSA’s Chris Wood using NEA data, China’s monthly power consumption (the most accurate proxy for underlying economic strength according to the current premier) growth slowed from 5.5% YoY in Jan-Feb 2013 to 1.9% YoY in March, the slowest growth rate since May 2009 (as discussed in-depth here). And just to make CNBC’s life easier, we will prespin this data: the lack of growth merely shows there is much pent up growth on the sidelines, even if the country is now injecting more debt to just maintain the flatline, than ever.

China power_0_0social financing volume_0

Institutional Investors Need to Stop Abdicating Their Responsibilities

Institutional Investors Need to Stop Abdicating Their Responsibilities

08 MAY 2013 – ASHBY MONK

Allow me to channel Winston Churchill by saying that capitalism is the single worst economic coordination system in the world … except for all the other models that have been tried. In short, capitalism’s got its problems but it’s still better than any of the alternatives. And that means it’s worth our while to spend some time thinking about how to improve it (rather than replacing it with something silly).

I’m clearly not alone in thinking this, as a growing army of finance and business people look to render capitalism more “inclusive” and “conscientious.” As evidence of this enlightened perspective, witness sustainable development initiatives, impact investing, community based investing, SRI, ESG, CSR, SEE, PRI, OMG, LOL, WTF, and all the other random combinations of letters that will transform icy-veined capitalists into… this guy.

I think all those initiatives are great. Expanding the number of risks that investors price in their investment decision-making can only create value in the long run, if done with rigor and routine. But it hasn’t seemed to be enough to meaningfully change the system because these strategies operate at the margin. To really transform capitalism for the better, there’s a more basic approach that could be very significant: empowering the ultimate sources of capital to be better stewards of their capital. Let me explain (and reiterate something I’ve argued for a long time now). Read more of this post

ARM: “A lot of companies talk about collaboration, but they struggle with it because it’s not really in their DNA”. The company has established a strong level of trust with partners over 22 years in business, enabling partners to share proprietary information and intellectual property with ARM without reservations

Segars won’t rock the ARM boat

Dylan McGrath

5/10/2013 3:21 PM EDT


From left: James Moore, a former Harvard Berkman Center Fellow, Simon Segars, the incoming CEO of ARM, and Paul Saffo, a veteran industry forecaster at Discern Analytics, at the Churchill Club event Thursday. 

 Simon Segars, the soon-to-be CEO of processor IP licensor ARM Holdings plc, is obviously a believer in one timeless adage: If it ain’t broke, don’t fix it. Segars, who is set to take the reins at ARM from Warren East on July 1, said Thursday (May 9) he doesn’t plan any major changes to put his stamp on the company he’s worked for since 1991. “I’m going to do exactly the same things as we’ve been doing, cause they are working very well,” Segars told an audience of about 250 people at a Churchill Club event in San Francisco Thursday. “I truly believe that what has gotten us to this point is going to be what gets us through the next set of technology challenges,” Segars said. Segars, who last month told EE Times he wouldcontinue to emphasize driving down the power consumption of electronics as ARM CEO,would be wise to stick with what works. ARM has rocketed to prominence in recent years, even though—compared to perceived peers such as Intel Corp.—it’s still a relatively small company, with 2012 revenue of about $880 million. The Churchill Club even Thursday, moderated by Paul Saffo, a veteran industry forecaster at Discern Analytics, focused mainly on ARM’s collaborative ecosystem, considered a model for the industry. Saffo quipped during the event that the idea of collaboration has become any industry buzz term that many people pay lip service to but few actually make it a focus. “A lot of companies talk about collaboration, but they struggle with it because it’s not really in their DNA,” Saffo said. ARM, however, is the exception. Segars acknowledged that maintaining a large network of partners—membership in ARM’s Connected Community is approaching 1,000 companies—can be challenging, especially since many of the community’s members compete head to head in the marketplace. “They are in business to put each other out of business,” Segars said. But ARM mostly stays above the fray, Segars said. The company has established a strong level of trust with partners over 22 years in business, enabling partners to share proprietary information and intellectual property with ARM without reservations, he said. Occasionally, he said, ARM does find itself caught in the middle of disputes between its member companies. James Moore, a former Harvard Berkman Center Fellow who also participated in the Churchill Club event Thursday, raved about ARM’s business model, saying the firm focuses on openess and the proliferation of its technology instead of relentlessly focusing on profit margin, as many organizations do.  ARM doesn’t take as much profit as it could, Moore said, and does not attempt to lock partners in using its technology.  Moore, who was contracted by ARM to do a study of the company’s ecosystem, said the ARM ecosystem may well be unique. “The disruptive technology here is this organization, where people are willing to take less in favor of growth [in the use of its IP],” Moore said.

Behavioral Outcomes of Next Generation Family Members’ Commitment to Their Firm

Behavioral Outcomes of Next Generation Family Members’ Commitment to Their Firm

Alexandra Dawson Concordia University, Quebec – John Molson School of Business

P. Gregory Irving Independent

Pramodita Sharma Wilfrid Laurier University

Francesco Chirico Jonkoping University – Jonkoping International Business School (JIBS)

Joel Markus Wilfried University

April 23, 2013 European Journal of Work and Organizational Psychology (Forthcoming)

Are there variations in behaviors and leadership styles of next generation family members or descendants who join their family business due to different forms of commitment? Evidence from a dual respondent study of 109 Canadian and Swiss family firms suggests that descendants with affective commitment to their family firms are more likely to engage in discretionary activities going beyond the job description, thereby contributing to organizational performance. Next generation members with normative commitment are more likely to engage in transformational leadership behaviors. Both affectively and normatively motivated next generation members use contingent reward forms of leadership. A surprising finding of this study is the binding force of normative commitment on positive leadership behaviors of next generation members. This study empirically tests the generalizability of the three-component model of commitment to family businesses, a context in which different forms of commitment may play a unique role.

How Much Does an Illegal Insider Trade?

How Much Does an Illegal Insider Trade?

Alex Frino University of Sydney – Discipline of Finance; Financial Research Network (FIRN)

Stephen E. Satchell University of Cambridge – Faculty of Economics and Politics

Brad Wong University of Sydney

Hui Zheng Discipline of Finance, The University of Sydney; Financial Research Network (FIRN)

June 2013 International Review of Finance, Vol. 13, Issue 2, pp. 241-263, 2013

This paper examines the choice of trade size by an illegal insider. Previous literature (i.e. Meulbroek 1992) tends to focus on the price impact of such a trader. Using a unique data set hand‐collected from the litigation reports of the Securities and Exchange Commission and court cases, we provide evidence, which suggests that the size of an illegal insider’s trade is a function of the value of his private information, the probability of detection and the expected penalty if detected. Our results have important implication for security market regulators.

Linguistic Diversity and Stock Trading Volume

Linguistic Diversity and Stock Trading Volume

Yen-Cheng Chang Shanghai Advanced Institute of Finance; China Academy of Financial Research (CAFR)

Harrison G. Hong Princeton University – Department of Economics; National Bureau of Economic Research (NBER)

Larissa Tiedens Stanford Graduate School of Business

Bin Zhao Shanghai Advanced Institute of Finance; China Academy of Financial Research (CAFR)

March 14, 2013
Rock Center for Corporate Governance at Stanford University Working Paper No. 134

We test the hypothesis that the linguistic diversity of a stock’s investor base leads to more trading. Trading might be due to beliefs differing across languages or investor exposure to multiple languages leading to more trading ideas. Using stock message boards from China, which has ten languages, we measure the linguistic diversity of a stock’s investor base using a Herfindahl index of messages posted from different languages. A firm’s diversity increases in the number of languages spoken in the province where it is headquartered. Using the latter as the instrument, trading volume in a stock rises with its linguistic diversity. We then attempt to discriminate among competing mechanisms. We also show using a sample of forty-one countries that countries with more linguistic diversity have greater stock market turnover.

The History of the Decline and Fall of the American Accounting Profession; “I don’t trust doctors, dentists or auto mechanics because I don’t know what they are doing. I don’t trust lawyers or CPAs because I do know what they are doing.”

The History of the Decline and Fall of the American Accounting Profession

William Dennis Huber Capella University

May 4, 2013
International Journal of Economics and Accounting, Forthcoming

“I don’t trust doctors, dentists or auto mechanics because I don’t know what they are doing. I don’t trust lawyers or CPAs because I do know what they are doing.”

There have been many articles and books published on the development of accounting and the accounting profession in the U.S., both historically and sociologically. Some have critically examined actions taken by the AICPA, and others that have studied the effects of legislation on the accounting profession such as the Sixteenth Amendment or the creation of the PCAOB. Still others have observed the decline in the American accounting profession‘s status and image as a result of various failures such as Enron. This is the first to combine systematically a sociological analysis of the accounting profession in the U.S. with the historical development of the profession‘s power and status, and the subsequent loss of its power and status. A sociological analysis of the American accounting profession strongly suggests that it is no longer a profession as conceived by sociologists.

Local Institutions, Audit Quality, and Financial Fraud of US-Listed Foreign Firms

Local Institutions, Audit Quality, and Financial Fraud of US-Listed Foreign Firms

Lei Chen London School of Economics & Political Science (LSE) – Department of Accounting

Jan 16, 2013

Using data on shareholder-initiated class action lawsuits in the US, I investigate financial misconducts of US-listed foreign firms. After controlling for type I errors (e.g. frivolous lawsuits), I document that firms domiciled in the countries with weak corporate governance were more likely to commit fraud, but such relation could be moderated by the presence of Big 4 auditors. Investors automatically adjusted for type II errors (e.g. undiscovered fraud) when valuating the stocks of non-sued firms. That is, non-sued firms that shared the same countries of origin with their sued peers experienced valuation declines around class periods end dates (the dates when the scandals were exposed rather than the dates when the litigation was filed). Investors relied on audit quality to form their expectations about the severity of type II errors, and thus posed less negative spillovers on firms with Big 4 auditors, especially when the firms were from countries with weak corporate governance. Taken together, my results suggest that a listing on US exchanges does not fully compensate weak local institutions; voluntarily bonding to more stringent audit process has an incremental effect on protecting shareholder interests, and enhances the confidence of investors in firms’ financial integrity.

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