[Econmaster2012] Research Seminar in Economics and Colloquium-Announcement

[Johannes Pfeifer]

Dear All,

 

we are happy to announce the following two presentations this week. 

 

1.       The Research Seminar in Economics takes place on Tuesday, January
22nd  at  18:00 - 19:30 in room E03, ground floor, Mohlstraße 36.

Presenter:  Jean-Marie Viaene – Tinbergen Institute, Rotterdam

Title:  "Public Funding of Higher Education" 

(joint work with Itzhak Zilcha)

 

Abstract:

Recent criticism from different sides has expressed the view that, with
scarce resources, there is little justification for massive public funding
of higher education. Central to the debate is the conjecture that colleges
and universities use their resources inefficiently and focus insufficiently
on their mission to expand students’ human potential. Our aim in this paper
is to examine the theoretical premises of this conjecture in a small open
economy and uncover the conditions under which public investment in higher
education is efficient and desirable. We analyze non-stationary equilibria
of an OLG economy, characterized by perfect capital mobility,
intergenerational transfers and a hierarchical education system. The
government uses income tax revenues to finance basic education and support
higher education that generates skilled labor. Given this, the following
issues are considered: (a) the impact of education and international markets
on the equilibrium number of low-skilled and skilled workers in each
generation; (b) the economic efficiency of public subsidies to higher
education in generating skilled human capital; (c) the endogenous support
for a government’s educational policies found in a political equilibrium.

 

2.       The Colloqium takes place on Wednesday, January 23rd at 18:00 -
19:30 in room E04, ground floor, Mohlstraße 36.

 

Presenter:  Alfred Wagenhofer  – University of Graz 

 

Title:  "Accounting Conservatism and Board Efficiency" 

(joint work with Yanmin Gao)

 

Abstract:

Accounting plays a major part in corporate governance in that it provides
information, and thus transparency, which supports other corporate
governance mechanisms. The paper focuses on the board of directors, which
plays a crucial role in the corporate governance of firms and depends to a
large extent on accounting information. In a two-period model, the board of
directors decides to monitor the manager and to retain or replace the
incumbent manager after the first period. The characteristics of the
accounting system influence both decisions. We solve for the optimal board
monitoring strategy and the bias of the accounting system that complements
this strategy. Our main result is that if board monitoring is more
effective, the optimal accounting system generally is conservative. The
reason is that conservatism makes the favorable signal a very precise
indicator that the manager is actually a good fit. In contrast, monitoring
after observing a favorable signal does not reveal much additional
information, but nevertheless incurs the monitoring cost. If the board is
less effective or incurs a high monitoring cost, the optimal accounting
system generally is liberal. We consider several extensions, including
earnings management, moral hazard, and board incentives. In sum, the paper
establishes that conservative accounting complements (rather than
substitutes) effective board monitoring and provides a theoretical
underpinning for empirical findings that find a positive association between
strong corporate governance and conservatism.

 

 

Regards,

 

Prof. Dr. Johannes Pfeifer

 

--

Johannes Pfeifer

Department of Economics

University of Tuebingen

Mohlstrasse 36

72074 Tuebingen

Germany

Phone: +49 7071 2974137

 

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