Price Discrimination Essay Example for Free

Price Discrimination Essay A seller charging competing buyers different prices for the same commodity or discriminating in the provision of allowances — compensation for advertising and other services — may be violating the Robinson-Patman Act. This kind of price discrimination may give favored customers an edge in the market that has nothing to do with their superior efficiency. Price discriminations are generally lawful, particularly if they reflect the different costs of dealing with different buyers or are the result of a sellers attempts to meet a competitors offering. The Supreme Court has ruled that price discrimination claims under the Robinson-Patman Act should be evaluated consistent with broader antitrust policies. In practice, Robinson-Patman claims must meet several specific legal tests: 1.The Act applies to commodities, but not to services, and to purchases, but not to leases. 2.The goods must be of like grade and quality. 3.There must be likely injury to competition (that is, a private plaintiff must also show actual harm to his or her business). 4.Normally, the sales must be in interstate commerce (that is, the sale must be across a state line). Competitive injury may occur in one of two ways. Primary line injury occurs when one manufacturer reduces its prices in a specific geographic market and causes injury to its competitors in the same market. For example, it may be illegal for a manufacturer to sell below cost in a local market over a sustained period. Businesses may also be concerned about secondary line violations, which occur when favored customers of a supplier are given a price advantage over competing customers. Here, the injury is at the buyers level. The necessary harm to competition at the buyer level can be inferred from the existence of significant price discrimination over time. Courts may be starting to limit this inference to situations in which either the buyer or the seller has m arket power, on the theory that, for example, lasting competitive harm is unlikely if alternative sources of supply are available. There are two legal defenses to these types of alleged Robinson-Patman violations: (1) the price difference is justified by different costs in manufacture, sale, or delivery (e.g., volume discounts), or (2) the price concession was given in good faith to meet a competitors price. The Robinson-Patman Act also forbids certain discriminatory allowances or services furnished or paid to customers. In  general, it requires that a seller treat all competing customers in a proportionately equal manner. Services or facilities covered include payment for or furnishing advertising or promotional allowances, handbills, catalogues, signs, demonstrations, display and storage cabinets, special packaging, warehousing facilities, credit returns, and prizes or free merchandise for promotional contests. The cost justification does not apply if the discrimination is in allowances or services furnished. The seller must inform all of its competing customers if any services or allowances are available. The seller must allow all types of competing customers to receive the services and allowances involved in a particular plan or provide some other reasonable means of participation for those who cannot use the basic plan. A more detailed discussion of these promotional issues can be found in the FTCs Fred Meyer Guides. Under certain circumstances, a buyer who benefits from the discrimination may also be found to have violated the Act, along with the seller who grants the discrimination, if the buyer forced, or induced, the seller to grant a discriminatory price. Although proof of a violation of the Robinson-Patman Act often involves complex legal questions, businesses should keep in mind some of the basic practices that may be illegal under the Act. These include: †¢below-cost sales by a firm that charges higher prices in different localities, and that has a plan of recoupment; †¢price differences in the sale of identical goods that cannot be justified on the basis of cost s avings or meeting a competitors prices; or †¢promotional allowances or services that are not practically available to all customers on proportionately equal terms. Under the Nonprofit Institutions Act, eligible nonprofit entities may purchase — and vendors may sell to them — supplies at reduced prices for the nonprofits own use, without violating the Robinson-Patman Act. The Health Care Services Products Division issued a recent advisory opinion discussing the application of this exemption to pharmaceutical purchases by a nonprofit health maintenance organization. Q: I operate two stores that sell compact discs. My business is being ruined by giant discount chains that sell their products for less than my wholesale cost. What can I do? A: Discount chains may be able to buy compact discs at a lower wholesale price because it costs the manufacturer less, on a per-unit basis, to deal with large-volume customers. If so, the manufacturer may have a cost justification defense  to the differential pricing and the policy would not violate the Robinson-Patman Act. Q: One of my suppliers is selling parts at its company-owned store at retail prices that are below the wholesale price that it charges me for the parts. Isnt this illegal? A: The transfer of parts from a parent to its subsidiary generally is not considered a sale under the Robinson-Patman Act. Thus, this situation would not have the required element of sales to two or more purchasers at different prices. †¢Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Definition of Price Discrimination A pricing strategy that charges customers different prices for the same product or service. In pure price discrimination, the seller will charge each customer the maximum price that he or she is willing to pay. In more common forms of price discrimination, the seller places customers in groups based on certain attributes and charges each group a different price. Investopedia explains Price Discrimination Price discrimination allows a company to earn higher profits than standard pricing because it allows firms to capture every last dollar of revenue available from each of its customers. While perfect price discrimination is illegal, when the optimal price is set for every customer, imperfect price discrimination exists. For example, movie theaters usually charge three different prices for a show. The prices target various age groups, including youth, adults and seniors. The prices fluctuate with the expected income of each age bracket, with the highest charge going to the adult population. Price Discrimination When you were young, did you ever order from the childrens menu in a restaurant? When a family with small children goes to a restaurant, they are often given a childrens menu in addition to the regular menu. If they order two similar items, one from each menu, they will find that the item ordered from the childrens menu will be a bit smaller, but its price will be much smaller. In fact, it would often be worthwhile for the entire family to order from the childrens menu, but they cannot. Restaurants usually only allow children to order from it.1 Why do restaurants use childrens menus?  Economists doubt that restaurant owners have a special love for children; they suspect that the owners find offering childrens menus to be profitable. It can be profitable if adults who come to restaurants with children are, on the average, more sensitive to prices on menus than adults who come to restaurants without children. Children often do not appreciate restaurant food and service, and often waste a large part of their food. Parents know this and do not want to pay a lot for their childs meal. If restaurants treat children like adults, the restaurants may lose customers as families switch to fast-food restaurants. If this explanation is correct, then restaurants price discriminate.2 A seller price discriminates when it charges different prices to different buyers. The ideal form of price discrimination, from the sellers point of view, is to charge each buyer the maximum that the buyer is willing to pay. If the seller in our monopoly example could do this, it could charge the first buyer $7.01, the second buyer $6.51, etc. In this case the marginal revenue curve becomes identical with the demand curve. The seller will sell the economically efficient amount, it would capture the entire consumers surplus, and it would substantially increase profits. The Simple Analytics of Monopoly-Repeated OutputMarginal CostMarginal Benefit Every seller would price discriminate if there were not two major obstacles standing in the way. First, the seller must be able to distinguish between those buyers who are willing to pay a high price from those who are not. Second, there must be substantial difficulty for a low-price buyer to resell to those willing to buy at a high price.3 Because price discrimination is potentially profitable, businesses have found many ways to do it. Theaters often charge younger customers less than adults. Doctors sometimes charge  the rich or insured patient more for services than they charge the poor or uninsured. Grocery stores have a lower price for people who bother to check the newspaper and clip coupons. Some companies, such as firms selling alcoholic beverages, produce similar products but try to promote one as a prestige brand with a much higher price. Electric utilities usually charge lower rates to people who use a lot of electricity (and thus probably have electric stoves and water heaters) than they do to those who use only a little electricity (and who probably have gas stoves and water heaters). Banks offer special interest rates on Certificates of Deposit (CDs) that will not be obtained when one lets a CD roll over. People who are more sensitive to interest rates will take the time and effort to personally renew each maturing CD. To the extent that businesses find ways to price discriminate, they eliminate the triangle of welfare loss and approach the economically efficient amount of production. Thus, the mere existence of monopoly does not prove there is economic inefficiency.

Influencing Factors of the Company Disclosure Level

Influencing Factors of the Company Disclosure Level Prior evidence and hypotheses Based on the theoretical framework primarily concerning information asymmetry, agency problem, signalling theory and political costs theory, many previous studies have attempted to formulate and test several hypotheses on the influencing factors of the company disclosure level.  This section will review the findings of several prior researches as well as establishing hypotheses for the current study.   (1). One of the most remarkable features of Chinese capital market is assumed to be its unique market structure, which comprises of three major segments: A shares which are only sold to domestic citizens in domestic currency; B shares which are only issued for foreign investors in foreign currency, but traded in domestic exchange markets; and H shares which are traded in SEHK in foreign currency.   Given their different characteristics, such as listing market, listing requirements, accounting standards and reporting environment, their disclosure behaviours and disclosure policies are expected to vary systematically.  Therefore, one of the basic intentions of the current study is to test whether companies, of which shares are belongs to the three different market segments, exhibit different disclosure patterns. At a glance, foreign listing status is a major feature that distinguishes H shares-issuers from the other companies issuing only A or A+B shares. For this feature alone, compliance with Chinese GAAP and IFRS is mandatory for these Chinese firms that issue both A and H-shares. Accordingly, the IFRS-based annual report must be audited by an internationally recognized auditor; while the Chinese GAAP-based annual report may be audited by local accounting firms, and any difference in net incomes between these two sets of accounting information must be reconciled and presented in the financial statement. In that case, companies with A and H shares are subject to additional listing requirements as well as disclosure rules, consequently greater information disclosure can be expected from these companies than the other firms listed only in the domestic market. Apart from regulatory requirement, H-share companies are also under greater market pressure to disclose more information. Assuming the primary objective for Chinese firms listing on international stock exchanges is to obtain capital at the lowest possible cost, they need to compete with the other SEHK-listed firms of which the westernized corporate governance systems are generally believed to be effective in terms of assuring a high quality financial report through proper internal control systems. Hard to deny that, comparing with other SEHK-listed firms, H-share PRC firms are commonly assumed to have significantly greater adverse selection and moral hazard problems due to their lack of prior trading history, the limited transparency of corporate governance and management control system, and foreign investors’ concern about the magnificent state ownership.   Given these disadvantages raised from information asymmetry and the potential economic consequence of increased discount rate, H-share firms should have greater incentives to commit to more intensive information disclosure in order to reduce their agency cost. Previous empirical study by Ferguson, et. al(2002) found that companies with both A and H-share issuing disclose substantially more financial information than purely domestically listed PRC firms as well as other SEHK listed companies. On the other hand, it is generally observed that companies only listed on the domestic exchanges (including companies with only A shares and companies with both A and B shares) tend to adopt a relatively more secret disclosure policy, which exhibit little voluntary disclosure if any information beyond the exchange requirements (Haw et al., 2000).  Ferguson, et. al (2002) offer several explanations: Firstly, the concept of public information disclosure is relatively new to both the investors and corporate managers in PRC where the basic systematic accounting standard was first promulgated since 1992. Given the less developed market-oriented accounting system and the weak disclosure culture, Tang (2000) points out that comparing to other exchange markets with mature accounting systems, accountability to outside investors is less concerned by most Chinese corporate managers; also, the majority individual investors are unfamiliar with the evaluation and use of financial statement disclosures.  Secondly, Ferguson, et. al (2002) argue that because the current capital market is experiencing the transformation from the formerly state-controlled economy to the new market model, there remains some old concerns of investors emphasizing on the state plan. That is, local investors still tend to focus on â€Å"inside† information such as anticipated actions by the controlling government entities rather than relying on public information like financial statement disclosure (DeFond et al., 1999).  Hence, corporations’ incentives and investors’ desire for information disclosure appear to be less strong for companies only listed on domestic market than firms listed on foreign exchanges; consequently, greater extent of information disclosure is expected for companies issuing both A and H shares than firms listed only on domestic market. The resulting hypothesises are as following: H1: Companies with both H shares and A shares tends to disclose more information than companies issuing only A shares; H2: Companies with both H shares and A shares tends to disclose more information than firms issuing both A and B shares. The most important difference between A share and B share is that A-shares can only be owned and traded by Chinese citizens in Chinese currency, while B-shares can only be owned and traded by foreign investors in either Hong Kong currency or US dollars. Accordingly,  the accounting regulations applicable to firms issuing only A shares is Chinese GAAP; while, for companies issuing both A and B shares are required to apply with Chinese GAAP as well as IFRS. The IFRS-based annual report must be audited by an internationally recognized auditor, while the Chinese GAAP-based annual report may be audited by local accounting firms, and the discrepancy between the two sets of audited financial reports needs to be reconciled with the IFRS and displayed in the annual report for domestic investors. Because of the different regulatory requirements, companies with both A-share and B-share issuing are expected to disclose more information than firms with only A shares. Since comparing with smaller CPA firms, which are assumed to be more sensitive to client demands due to the economic consequences associated with the loss of a client, larger and international well-known auditing firms have a greater incentive to maintain independence from clients pressure for limited disclosure because of the economic consequences associated with potential damages to their reputation (Chow and Wong-Boren, 1986). Therefore, larger CPA firms have a greater incentive to require adverse disclosures by the client, consequently increasing the level of information disclosure (Patteon and Zelenka, 1997). In contrast, accounting information audited by domestic auditing firms may be considered noisy because of sloppy information environment and inadequate regulation. (Fox, 1998; Rask, Chu, Gottschang, 1998). Prior to 1996 no auditing standards existed with the exception of a few guidelines from the sponsoring governmental agencies; and until 1998 all domestic auditors were public employees, who tend to act as government agents and bore little responsibility for any improper behaviour due to the lack of litigation against them. Thus, auditors usually were affiliated with their clients and lacked motivation to be independent from them, consequently information disclosure may be subject to management’s selective bias. Despite of the recent institutional changes such as the reformation of the accounting-information system and the introduction of new auditing standards, which aims to impose stricter disciplinary rules, more intensive monitoring and sanctions, the effective implement of regulatory is still doubt by the market (Haw, 2008). Therefore, companies with only A shares are likely to make less information disclosure than companies with both A shares and B shares of which annual reports are influenced by internationally recognised auditing firms. The resulting hypothesises is: H3: Companies with only A shares are likely to make less information disclosure than companies with both A shares and B shares. (Ferguson, Lam and Lee, 2002) 2.4 Disclosure by PRC-listed Firms PRC firms listed on the two domestic exchanges voluntarily disclose little, if any information beyond the exchange requirements (Haw et al., 2000). Explanations include (1) the lack of sophistication with respect to financial reporting on the part of both investors and corporate managers, and (2) investor reliance on â€Å"inside† rather than public information. Public financial statement disclosure is relatively new to the PRC. The first basic accounting standard was promulgated in 1992 and, of the 30 standards proposed in the intervening years, only eight have been adopted. Thus, accountability to outside investors is new to most corporate managers, and most individual investors are unfamiliar with the evaluation and use of financial statement disclosures (Tang, 2000). Institutional investment in the PRC is in a fledgling state. Local investors are also likely to place greater weight on factors such as anticipated actions by the controlling government entities than on financial statement disclosures (DeFond et al., 1999). Thus, demand for, as well as supply of additional disclosures may be limited in the PRC domestic exchanges. The disclosure practices of PRC firms listed on international exchanges, in which they face sophisticated financial statement users with diminished access to inside information, have not been examined. 2.5 Hypotheses: Disclosure by H-Share Firms on the SEHK Theory (Spence, 1973; Grossman, 1981) indicates that voluntary disclosure can be used to alleviate information asymmetry problems, including moral hazard and adverse selection. A rational strategy to avoid deep discounting of share prices is to disclose additional information to investors to signal firm value (Watts and Zimmerman, 1986). Compared to other SEHKlisted firms, H-Share firms are likely to present significantly greater adverse selection and moral hazard problems. In contrast to the westernized corporate governance systems in place in most SEHK-listed firms, many PRC SOEs still operate in a â€Å"vacuum† with respect to corporate governance and management control (World Bank, 1995). For example, audit committees and shareholder litigation are nonexistent and independent; outside directors are not required (DeFond et al., 1999). Thus, in addition to H-Share firms’ lack of prior history, important investor concerns include management quality, the potential for asset stripping or misappropriation, de-capitalization through excessive wage increases, and the role of the government as a major shareholder (Chen and Firth, 1999). Therefore, ceteris paribus, H-Share firms face significantly greater incentives to voluntarily disclose additional information. Proprietary costs, however, also affect disclosure (Verrecchia, 1983). The benefits of voluntary disclosure must be weighed against the costs of providing information that may invite or assist competition or regulation. Compared to other SEHK-listed firms, H-Share firms also face significantly lower proprietary costs. Most operate in industries deemed by the PRC government to be of strategic importance and are hence shielded from international competition (Lin et al., 1998). Thus, additional disclosure by H-Share firms is also likely to be less costly. This potential for greater incentives and lower disclosure cost leads to our first hypothesis: Hypothesis 1a: Voluntary disclosure by H-Share firms will be greater than that by other SEHK-listed firms. Further, as the primary objective for PRC firms listing on international stock exchanges is to raise capital at the lowest possible cost, we expect that H-Share firms’ incentives will mainly affect disclosure of additional strategic and financial information. Such incentives will have little impact on the disclosure of additional non-financial, social accountability information. Political costs are borne primarily in firms’ local operating environments and are driven by local norms. H-Share firms operate solely in the PRC and political costs within this environment are virtually non-existent. Thus, we expect that differences in disclosure will only be observed for financial and strategic rather than social accountability information: (Sami and Zhou, 2004) In the emerging A-share and B-share markets, however, the value relevance of accounting information has been questioned. Accounting information based on domestic standards may be considered noisy because of sloppy accounting, inadequate regulation, and crony capitalism (Fox, 1998; Rask, Chu, Gottschang, 1998). Besides, accompanying the rapid development of securities markets are some inevitable problems such as lagging legislation issues and multiple regulatory authorities (Liu Zhang, 1996). However, the institutional changes in emerging markets, including the reform of the accounting-information system, could increase market liquidity, reduce transaction cost, and improve pricing efficiency (Feldman Kumar, 1995). In this study, we directly investigate the relative value relevance of accounting information in the two segments to provide further evidence on the value-relevance issue in the emerging market. Our basic intention is to test whether the two market segments differently value the major accounting information disclosed by the same company. Under these regulations, listed companies prepare their financial statements based on the Chinese GAAP, as well as the IAS if they also issue B-shares. They should have their annual reports audited by authorized CPAs and submit copies to government agencies, such as state-owned-asset management agencies, tax authorities, securities regulatory agencies, and banks. They are also required to have copies available for investors. In addition, listed companies are required to publish their annual reports in at least one of the authorized securities’ publications before April 30th the following year.10 For companies with both A-shares and B-shares, the audited annual reports for B-share investors are published in Hong Kong on the same day as those for A-share investors in China. The reconciliation information on the two sets of accounting statements is released to only A share investors, but not to B-share investors. When there is a discrepancy between the two sets of audited financial reports, companies issuing both A shares and B-shares need to reconcile their accounting statements with the IAS for domestic investors. Because the IAS is considered to be of higher quality than local GAAP, and international auditors such as Big Five (Big Four) firms are thought to provide higher quality audits than their Chinese counterparts (Chui Kwok, 1998; DeFond et al., 2000; Lam Jing, 2000), the accounting information in the B-share market should be more relevant to the pricing process, compared with its counterpart in the A-share market. (Sami and Zhou, 2008) To shed light on the economic consequences of the implementation of new auditing standards, we investigate the Chinese emerging market where a set of auditing standards was introduced in a situation where, previously, no auditing standards existed with the exception of a few guidelines from the sponsoring governmental agencies. In addition, in the information environment of an emerging market such as China, where the accounting disclosure was criticized for its low quality and quantity, the economic consequences of increased accounting disclosures due to the implementation of a set of auditing standards should be significant. Moreover, auditors played the role of government agents and bore little responsibility for any improper behavior (Xiang, 1998). Because it was common practice to have a company audited by an auditing firm affiliated with the same level of government, auditors bent the rules under pressure from local government officials and company managers to pursue their own interests (Xiang, 1998; Graham, 1996). Additionally, there was no litigation against auditors (Graham, 1996; DeFond et al., 2000; Gul et al., 2003). Thus, auditors usually were affiliated with their clients and lacked motivation to be independent from them. Therefore, Zhou (2007) concludes that the implementation of new auditing standards helps reduce information asymmetry in an emerging market. (Peng, Tondkar, Smith and Harless, 2008) Chinese capital market development and market segmentation A-shares can only be owned and traded by Chinese citizens, while B-shares can only be owned and traded by foreign investors. The accounting regulations applicable to a Chinese listed firm depend on the type of security issued, A- or B-shares or both. Firms that issue A-shares are required to comply with Chinese GAAP, while firms that issue B-shares are required to comply with IFRS. Firms that issue both A- and B-shares are required to issue two sets of annual reports, one based on Chinese GAAP and the other based on IFRS. The IFRS-based annual report must be audited by an internationally recognized auditor, but not necessarily a Big 4 firm, while the Chinese GAAP-based annual report may be audited by local accounting firms. Reports must be released to the public simultaneously and any difference in net incomes between Chinese GAAP and IFRS must be reconciled and presented in the financial statement footnotes. Fig. 1 and Table 1 depict the Chinese capital market segmentation and the evolution of accounting regulations for Chinese listed A-share firms as of December 31, 2005. Compliance with Chinese GAAP and IFRS is mandatory for Chinese firms that issue both A and B-shares. However, Tay and Parker (1990) remark that â€Å"even where compliance with standards is legally required, companies may not comply if it is perceived that the consequences of non-compliance are not serious† (p. 75). Street and Gray (2001) and Xiao (1999) find evidence that Chinese listed firms compliance with accounting regulations is high. (Sami and Zhou, 2008) We mention the stricter disciplinary rules, monitoring, and sanctions imposed by the Chinese Institute of Certified Public Accountants (CICPA) and the Chinese Securities Regulatory Commission (CSRC) to effectively enforce the new auditing standards. The discussant points out that less effective corporate governance systems (characterized by dominant state and legal-entity ownership) and relatively low litigation risk in Chinas markets (compared to those in the West) could provide opportunities for managers of listed Chinese firms to act in the best interests of the government and its representative organizations rather than report high-quality accounting information or seek quality auditing of their financial reports (Ball, Kothari, Robin, 2000). Thus, the discussant is concerned whether auditing standards could be effectively implemented. While we agree that the Chinese markets are emerging markets, where accounting disclosure tends to be low in quality and quantity, as we mention in our introduction, (Haw, 2008) Corporate governance systems are less effective in Chinas markets than those in the West. In the government-controlled economy of China, managers of listed state-owned enterprises (SOEs) are frequently appointed by the government, who is the controlling shareholder. Recent studies show that such ownership structures adversely affect the information environment of these firms, which results in a high level of information asymmetry and a low level of informativeness of accounting earnings (Fan and Wong, 2002; Haw, Hu, Hwang, Wu, 2004). The managers of listed Chinese firms, where state and legal-entity (mostly SOEs) ownership dominate, are strongly motivated to act in the best interests of the government and its representative organizations, and have less incentive to report high-quality accounting information or seek quality auditing for their financial reports (Ball, Kathari, Robin, 2000). Until 1998, all domestic auditors were public employees, and there was little incentive for high-quality audits, while litigation for audit failure was infrequent.2 In such an environment, it is doubtful whether auditing standards could be effectively implemented. (2) The following set of hypotheses is concerned with the determinants of the extent of company disclosure. By reviewing the results of prior theoretical and empirical researches as well as considering the special feathers of the Chinese market, and data availability, the current study selects 10 relevant independent variables to be included in our model, which were further organized into three (not strictly mutually exclusive) categories, following the structure by Lang and Lundholm (1993),: Structure-related variables, Performance-related variables, Market-related variables and Other Monitoring factors. Structure-related variables The structural variables generally refer to firm characteristics that are widely known and likely to remain relatively stable over time. Size, leverage, state ownership, and board composition are included in this category. Size Apparently, among other possible influencing factors firm size has been the most commonly suggested variable in the disclosure literature, assumed to be positively associated with the level of company disclosure.  Given the existence of information asymmetry in the capital markets and the agency problem raised from the separation between ownership and control, agency theory suggest that information disclosure can be used as a mean to reduce agency costs (Chow and Wong-Boren, 1987). According to Jensen and Meckling (1976) and Leftwich, Watts and Zimmerman (1981), larger firms with more reliance on external funds potentially are more subject to complicated conflicts among their wider range of stakeholders, consequently increasing agency costs. Also, larger firms are assumed as more sensitive to political costs (Watts and Zimmerman, 1986).  Besides, it is noted by Lang and Lundholm (1993) and McKinnon and Dalimunthe (1993) that in order to enhance firm value, large firms tend to suffer from greater pressures from analysts to disclose more information than smaller firms; as reluctance to disclosure may be interpretated  by investors as unfavourable news. In that sense, larger companies have greater needs to engage in more intensive information disclosure in respect to their higher agency costs and greater disclosure demand. On the other hand, comparing to smaller companies, Singhvi and Desai (1971) argue that due to the generally better-established internal reporting systems of larger firms, the marginal cost for additional information disclosure is lower for larger companies than smaller ones.   Furthermore, larger firms are assumed to have less exposure to competitive disadvantage than smaller companies when disclosing detailed company information (Firth, 1979). Therefore, compared to small firms large firms should have additional incentives for information disclosures.  This argument has been confirmed as the influence of size on disclosure has been successfully tested by studies in various countries: the US (Singhvi and Desai, 1971 and Buzby, 1975), the UK (Firth, 1979), Canada (Kahl and Belkaoui, 1981), Mexico (Chow and Wong-Boren, 1987), Nigeria (Wallace, 1988), Sweden (Cooke, 1989), Austria (Wagenhofer, 1990), Japan (Cooke, 1991), Spain (Garcia and Monterrey, 1992, and Inchausti, 1997),  New Zealand (Hossain et al., 1995), Czech (Patton and Zalenka, 1997), and Greece (Leventis and Weetman, 2004). To summarize, based on all the rationales discussed by previous studies and their supporting evidences, the first hypotheses can be formulated as:   H1: firms with larger size disclose information to a greater extent than do those with smaller size. (Patteon and Zelenka, 1997) Several theoretical propositions from the voluntary disclosure literature support the expectation of greater financial report disclosure by larger firms: (1) lower incremental cost of producing information for larger firms (Lang and Lundholm, 1993); (2) transactions cost hypothesis (King, et a/,,1990), which suggests that incentives for private infonnation acquisition are greater for larger firms; (3) legal costs hypothesis (Skinner, 1994), which notes that damages in securities litigation are greater for larger firms; and (4) reluctance of small firms to inform competitors (Raffottmier, 1995). Although we will not be able to determine which of the above explanations is the actual cause, we expect a positive relationship between firm size and extent of disclosure. Generally, firms with more employees are more complex and create the possibility of substantial infonnation asymmetry between the firm and market panicipants. Thus, firms with a greater number of employees might be expected to have more extensive disclosures in their annual reports. (Malone, Fries and Jones, 1988) Singhvi and Desai (1971) provided several reasons why the extent of financial disclosure is different for firms of different sizes. Singhvi and Desai offered three justifications for their reasoning. First, the cost of accumulating certain infonnation is greater for small firms than for large firms. This difference is attributable to the more extensive internal reporting systems already in place in larger firms. Second, larger firms have a greater need for disclosure because their securities are typically distributed via a more diverse network of exchanges. Last, management of a smaller corporation is likely to believe more strongly than the management of a larger corporation that the full disclosure of infonnation could endanger its competitive position. Foster (1986, 111) suggested three possible proxies for firm size: total assets, net sales, and capitalized value of the firm. Among these, perhaps the one least subject to market fluctuations in the oil and gas industry is total assets. Sales and capitalized value of the firm are subject to relatively extreme fluctuations due to the volatility of oil and gas prices. Total assets, although not completely unaffected by this volatility, is less affected because of the broad capital asset base that already exists in each firm. (Meek, Roberts and Gray, 1995) -As noted by Foster [1986, p. 44], the variable most consistently reported as significant in studies examining differences across firms in their disclosure policy is firm size. Generally, large firms disclose more information than small ones. Unfortunately, it is unclear what size proxies. Larger firms may have lower information production costs, or they may have lower costs of competitive disadvantage associated with their disclosures. Larger firms are also likely to be more complex and have a wider ownership base than smaller firms. Agency theory suggests that large firms have higher agency costs [Jensen and Meckling 1976; Leftwich, Watts and Zimmerman 1981]. Finally, larger firms are more sensitive to political costs [Watts and Zimmerman 1986]. All of these reasons indicate that large firms should have additional incentives for voluntary disclosures, compared to small firms. Size is positively associated with voluntary disclosure levels in all of the country studies noted above. (Raffournier and Geneva, 1995) There is a general agreement that a positive relationship between the size of a company and its extent of disclosure is to be expected. Several reasons have been advanced in support of this influence (Singhvi and Desai, 1971; Firth, 1979). First, disclosing detailed information is relatively less costly for large firms because they are assumed to produce this information already for internal purpose. Secondly, because their annual report is the main source of information for their competitors, smaller firms may be reluctant to make a fuller disclosure of their activities which might place them at a competitive disadvantage. It can also be assumed that large firms which, according to Watts and Zimmerman (1978), are more sensitive to political costs, will disclose more in order to allay public criticism or government intervention in their affairs. The influence of size is well documented. All empirical studies on the content of annual reports found a positive relationship between the size of a company and its extent of disclosure. Salamon and Dhaliwal (1980) noted a similar association for segmental information and Cowen et al. (1987) for social responsibility disclosure. (Inchausti, 1997) It is hypothesized that the larger the firm, the more need for external funds. Therefore there will be more potential conflicts among owners, creditors and managers, and information disclosures may be used to decrease agency costs and to reduce information asymmetries between the company and the providers of funds, and potential providers of funds. Larger firms are also subject to more political costs, and disclosure may be used to reduce such costs. On the other hand proprietary costs are smaller the larger the firm, so there are less incentives to withhold information. The independent variables initially considered as measures of size are total assets and sales. However in order to avoid the problems caused by heterocedasticity natural logarithms of these variables (LASSETS and LSALES) were calculated.' The influence of size on disclosure has been successfully tested by studtes in various countries: the US (Cerf, 1961; Singhvi and Desai, 1971; Buzby, 1975; Salamon and Dhaliwal, 1980), the UK (Firth, 1979), Canada (Kahl and Belkaoui, 1981), Mexico (Chow and Wong-Boren, 1987), Nigeria (Wallace, 1988), Sweden (Cooke, 1989), Austria (Wagenhofer, 1990), and Spain (Garcfa and Monterrey, 1993; Wallace et al. 1994). (Ferguson, Lam and Lee, 2002) Research indicates that voluntary financial statement disclosure is influenced by other factors. Larger firms face higher agency costs (Leftwich et al., 1981), higher political costs (Jensen and Meckling, 1976), greater information demand from financial analysts (Lang and Lundholm, 1993), and lower information production costs (Firth, 1979; Leftwich et al., 1981). Consistent with these arguments, a positive relationship between firm size and voluntary disclosure has been found in studies of US (Firth, 1979), Swedish (Cooke, 1989), New Zealand (Hossain et al., 1995) and Japanese firms (Cooke, 1991), as well as for firms listed on multiple exchanges (Meek et al., 1995). (Hossain, perera and Rahman, 1995) A number of disclosure studies (e.g. Cooke, 1991, 1989) find that firm size is an important factor in explaining variability in the extent of corporate voluntary disclosure. In the agency theory literature. Chow and Wong-Boren (1987, p. 539) argue that potential benefits of voluntary disclosure are likely to increase with agency costs. Moreover, Jensen and Meckling (1976) contend that agency costs increase with the proportion of outside capital. The proportion of outside capital tends to be higher for the larger firms (Leftwich, Watts and Zimmerman, 1981). Thus, agency theory predicts a positive association between firm size and the extent of corporate voluntary disclosure. It is also argued, in the literature, that fiirm size is a comprehensive variable which can proxy for several corporate characteristics, such as competitive advantage and information production costs (see Buzby, 1975; Firth, 1979; Le

Examination of Macbeths Character :: essays research papers

Power can be taken, but not given: An Examination of Macbeth's Character in William Shakespeare's Macbeth. Character develops itself in the stream of life. Individuals in society each contain unique character traits that are constantly evolving. In William Shakespeare?s Macbeth, Macbeth undergoes many tremendous changes in his character. Macbeth?s character changes throughout the play because of the murders of King Duncan, Banquo and Macduff?s family. First, Macbeth?s murder of King Duncan changes him by triggering his ambition, revealing his fear and revealing his regret. For example, in his first appearance on stage, the Macbeth described as brave and noble has his ambition triggered: First Witch. All hail, Macbeth! Hail to thee, thane of Glamis! Second Witch. All hail, Macbeth! Hail to thee, thane of Cawdor! Third Witch. All hail, Macbeth! That shalt be king hereafter! Banquo. Good sir, why do you start [?] (Shakespeare I.iii.48-51) Clearly, Macbeth?s sudden movement at the news that he will be king shows how his ambition is triggered. Macbeth is so excited that he starts, and Banquo notices this. In addition, Macbeth?s soliloquy in scene seven reveals his fears about killing Duncan: Macbeth. But in these cases We still have judgement here, that we but teach Bloody instruction, which being taught, return To plague the inventor. (I.vii.7-10) Evidently, Macbeth is afraid of killing King Duncan because he believes if he performs an act of evil, then it will come back to haunt him. This is the first time in the play where Macbeth shows any sign of fear. Furthermore, the murder of King Duncan reveals a deep sense of regret within Macbeth: ?To know my deed, ?twere best not know myself. / Wake Duncan with thy knocking! I would thou could?st!? (II.ii.73-75). Already, Macbeth is regretting killing King Duncan, and this drastically changes his character (before committing the murder he was confident due to Lady Macbeth?s persuasions). Thus, Macbeth?s murder of King Duncan changes him by triggering his ambition, revealing his fear and revealing his regret. Second, the murder of Banquo changes Macbeth by causing psychological harm, creating unease within Macbeth, and making Macbeth determined to continue with his plan of evil. For example, at the feast Macbeth hosts, he sees the ghost of Banquo: Macbeth. The table?s full. Lennox. Here is a place reserv?d, sir. Macbeth. Where? Lennox. Here, my good lord. What is?t that moves your Highness? Macbeth. Which of you have done this? Lords. What, my good lord? Macbeth. Thou canst not say I did it: never shake Thy gory locks at me.

Graduation Speech -- Graduation Speech, Commencement Address

I once read that life is well represented as a pearl deep within an oyster. The pearl symbolizes each person's potential, or the things that are going well for them in life. Just as a mere grain of sand that enters an oyster can grow into something of great worth, there is a fragment of excellency within every one of you that over time can be shape you into an individual who will make a difference in the world. There will be trials and hardships to overcome along the road to making a difference, but consider what Hellen Keller once wrote, "The marvelous richness of human experience would lose something of rewarding joy if there were not limitations to overcome. The hilltop hour would not be half so wonderful if there were no dark valleys to traverse." It is true that undergoing hard work in order to achieve one's dreams makes the arrival at success even more gratifying. Our lives are books to which each of us is our own author. We are the ones who write each chapter of our life. The best chapters are yet to be written and among them are talents yet to be discovered. We all po...

Marxist Theory and Sport Essay -- essays research papers

This essay will be an attempt to bring together the ideas from our class readings about the Marxist sociological perspective as well as insight from other readings to further my understanding of Marxism and its applications to sport. I will lay the groundwork for the theory then proceed with how his theory is applied to accessibility issues in sport, distribution of power in sport and commercialization of sport. Basics of Marxist Theory The most widely used political and ideological system of thought is that of Karl Marx. Marxism is a set of ideas trying to provide an explanation for human society. Although a little over a hundred years old his theories and thoughts have led to coups, revolutions and new waves theories and academics. As well, it is this systemic theory that has led many academics to look at the way they teach, discuss, write and even look at the way the world acts and thinks, even within their own small worlds. Within the world of sport the ideological views have no real place however it is possible to equate the views of Marx to the idea of sport. Marxism is known as the interpretation of the thoughts of Karl Marx (1813 - 1883), a German social theorist and political revolutionary. Karl Marx wanted to understand the politics, culture and economics of the newly emerging nations within Europe. He emphasized the leading role of the economy in society as a whole as well as in societal parts, known as superstructures. These superstructures are non-economic aspects of society, i.e. culture, religion, social life, education, religion, politics and social institutions. Marx identified society as consisting of two classes: The so-called Bourgeoisie and the so-called Proletariat. The Bourgeoisie is a capitalistic, wealthy and powerful minority consisting of aristocracy and upper class members meanwhile the Proletariat, also known as working-class, holds the majority of societal members who are poor, semi- or unskilled workers. The Bourgeoisie owns the entire means of production and wealth, therefore they are powerful and hegemonic. Thei r hegemony is maintained because only they have access to the financial and productive means. Their ideologies, i.e. their thoughts and beliefs, are hegemonic and influencing as they have the power to establish them in society (Rigauer, 2000). In contrast, the Proletariat is alienated from and by the Bourgeoisie. Th... ... of sport in our society still cannot be ignored. Thus, giving his theory partial credibility in my opinion. While I struggled to understand how this information could be used directly in the field of sport administration, in the end, I have learned that simply being aware of different sociological theories can help to understand why society behaves the way it does in the sport context. This application is very indirect; however, it will allow me to approach future situations with a deeper understanding of sports in society. References Rigauer, B. (2000). Marxist Theories. In J, Coakley and E. Dunning (Eds.), Handbook of Sport Studies (pp. 28-47). Thousand Oaks, CA: Sage Giddens, A. (2001) Sociology 4th ed. Cambridge. Polity Press. Haralambos, M. and Holborn, M. (2000) Sociology Themes and Perspectives 5th ed. London. HarperCollins Publishers Limited. Abercrombie, N. et al (2000) The Penguin Dictionary of Sociology 4th ed. London. Penguin Books. Manthorp, N. (2003) Guardian Unlimited Network. Feature Article. Accessed Online. Available : http://sport.guardian.co.uk/cricket/story/0,10069,870038,00.html Safai, P. (2005). Lecture Notes - APA 5304. January 18, 2005.

Problem Solving. Younger Sibling Problems Essay

Younger siblings can be a problem that will lead to a bigger problem, your parents being angry at you for never being home. My younger brothers, CJ and Colin, are obnoxious and very annoying. CJ is six years younger than me and Colin is eight years younger than me. You wouldn’t think that they would be a problem to me since there is such an age difference between us, but they are. Since my brothers annoy me I am rarely home; my parents get angry with me for it, but there is not much I can do when both of my brothers get on my nerves; most of the time they do it at the same time. A big problem for me is that my brothers annoy me so much that I have to leave and go somewhere that does not involve my brothers, which causes my parents to be mad at me. CJ, the older brother, is so mouthy. He always has something to say to me when I try talk to him; most of the time it is not nice, it is usually something rude. It seems like he was raised not to be respectful, but he wasn’t r aised that way. For example, one day I asked him nicely to grab my cellphone and his reply was â€Å"why don’t you get up and get it yourself, both of your legs work, right?† I do not know why he acts the way he does, but it gets on my nerves. CJ and I always argue about everything. For instance, when I am in the living room watching TV he will try to play the Xbox, but I tell him that he can wait after the show is over, so he decides to tell our mother then has a fit about it. If he doesn’t get what he wants he gets furious and starts to have little fits; sometimes the fits are out of control. Also, he always talks back to our mother; that is the most annoying thing to me. When he talks back to our mother it makes me irate. I usually want to leave whenever he gets that way, but sometimes I do not have anywhere to go. When I leave I go to my friend’s house or I will go to the store such as Wal-Mart, the Dollar Store, or just somewhere that I can get away from him when he acts that way. Colin, the younger brother, is too hyper active for me. He is always jumping off the walls. It is like he cannot sit still. When he acts like that I just want to leave and go somewhere peaceful. I cannot go in my room because I can hear him in there too. The only time it is quiet at my house is when he is at his friends, watching TV, playing the Xbox, playing on the computer, or sleeping. When I ask him to stop nicely he does it again just to get on my nerves. I know he  does it on purpose because when he does it he laughs about it; nothing makes me angrier than that. If he has a friend over I cannot be home because when he and his friends are together they act like they are insane. For example, around Fourth of July his friend Preston was at our house and he lit fireworks off inside our house when my mother was sleeping; she was upstairs sleeping and they were downstairs in our living room, so she could not hear them. I was not home at the time and neither was my father. She found out the next morning and was furious with them. You would think that my brother Colin would have told him not to do it, but he was right along with Preston. There was burn marks in our white carpet. There was no reason for him to act like that with his friends. He should be more responsible whenever situations like that happen. Colin is too hyper active for me to handle, so when he acts up I cannot stand being around him; I usually leave whenever he acts like that. Solving a problem that involves emotions is difficult. I could solve the problem by trying to avoid the situations and ignoring my younger brothers. When CJ begins to say rude comments to me I could leave the room instead of leaving the house so my parents do not get angry at me for never being home. I could remove myself from the situation; maybe whenever Colin starts to act up I could go outside or do something I enjoy such as reading or listening to music. When I listen to music it calms my nerves down. If I do that then I would not leave my house as much as I usually do. If I remove myself from the situation by doing something that relaxes me could solve the problem an efficient and effective way my parents would not be as frustrated with me. I would be home a lot more than I usually am and that would cause my parents to be very happy with me, especially if I am home more to help my mother clean the house or help her with whatever she needs help with. In brief, younger siblings can be a problem that can lead to another problem that involves your parents. My brothers, CJ and Colin are both very annoying to me and that causes me to leave my house; when I leave my house my parents get angry at me because I am never home. CJ always talks back to everyone in my house and that irri tates me. When he does that I get annoyed and I go somewhere that doesn’t involve him. I try to leave the house and go wherever I can get away from the annoyance of my brothers. Colin is an extremely hyper child; he is always jumping up and down. When he does that it really gets on my nerves  and I leave the house whenever he acts like that; I cannot handle it sometimes. I like to go to a place where I can have peace. To solve these problems I can calm myself down by doing something I enjoy like reading or listening to music. It would be effective if I removed myself from the situations my brothers cause. If I remove myself from the situations instead of leaving all the time my parents would not be as frustrated with me. It would be a win-win situation; I would not be as annoyed with my brothers and my parents would not be as frustrated with me for leaving the house. I would be home more often and could help my mother more around the house. In conclusion, to avoid my parents being angry with me I could do something that calms me down instead of leaving the house beca use my brothers annoy me.

Woman Education in India

Pre-IndependenceThe history of female education in India has its roots in the British Regime. Women's employment and education was acknowledged in 1854 by the East India Company's Programme: Wood's Dispatch. Slowly, after that, there was progress in female education, but it initially tended to be focused on the primary school level and was related to the richer sections of society. The overall literacy rate for women increased from 0.2% in 1882 to 6% in 1947.[56]In 1878, the University of Calcutta became one of the first universities to admit female graduates to its degree programmes, before any of the British universities had later done the same. This point was raised during the Ilbert Bill controversy in 1883, when it was being considered whether Indian judges should be given the right to judge British offenders. The role of women featured prominently in the controversy, where English women who opposed the bill argued that Bengali women, whom they stereotyped as â€Å"ignorantâ₠¬  and neglected by their men and that Indian men should therefore not be given the right to judge cases involving English women.Bengali women who supported the bill responded by claiming that they were more educated than the English women opposed to the bill and pointed out that more Indian women had degrees than British women did at the time.[57]Post-IndependenceAfter India attained independence in 1947, the University Education Commission was created to recommend suggestions to improve the quality of education. However, their report spoke against female education, referring to it as: â€Å"Women's present education is entirely irrelevant to the life they have to lead. It is not only a waste but often a definite disability.†[58]However, the fact that the female literacy rate was at 8.9% post-Independence could not be ignored. Thus, in 1958, a national committee on women's education was appointed by the government, and most of its recommendations were accepted. The crux of its recommendations were to bring female education on the same footing as offered for boys.[59]Soon afterward, committees were created that talked about equality between men and women in the field of education. For example, one committee on differentiation of curricula for boys and girls (1959) recommended equality and a common curricula at various stages of their learning. Further efforts were made to expand the education system, and the Education Commission was set up in 1964, which largely talked about female education, which recommended a national policy to be developed by the government. This occurred in 1968, providing increased emphasis on female education.