Gary Grudnitski

Golf courses and residential house prices: An empirical examination

The importance of location is well known in the literature on real estate valuation. Our study extends this body of literature by being the first to examine empirically the effect on the selling price of single-family residential properties when they abut a golf course. We determine the incremental effect on the sales price of houses on the golf course by fitting a standard hedonic pricing model to a sample of 717 sales transactions drawn from a sub-urban area of a large city. We employ a matched-pair research design to hold constant the price effects of other location factors on these golf course properties. Our results indicate that a golf course location adds 7.6 percent to a propertys sales price. We believe this finding is of interest to developers in their design of a golf course subdivision and to appraisers who wish to make location-specific value adjustments of golf course properties.

The Impact and Importance of Mandatory Adoption of International Financial Reporting Standards in Europe

In this paper we report the results of conducting a two-stage analysis on the impact and importance of mandatory adoption of international accounting reporting standards (IFRS) on European Union firms. In the first stage we determined the impact of mandatory adoption of IFRS across 13 countries and twenty industries. This was accomplished by identifying significant differences in return on assets (ROA) for firms computed under IFRS and local, generally accepted accounting principles (LG). Significant positive differences were detected for firms in Belgium, Finland, France, Italy, the Netherlands, Sweden, Switzerland and the United Kingdom: only German and Norwegian firms exhibited a negative average significant difference between ROA calculated using IFRS and LG. Repeating the analysis of differences in ROA on an industry-by-industry basis yielded additional Portuguese and Spanish firms for the second stage of the analysis in which the impact of mandatory IFRS adoption was assessed. Defining impact in terms of market and financial reporting quality, we found a statistically significant relationship between accounting information and market returns for firms in the all-countries-combined sample of 3,530 observations, and in the countries of Belgium, Finland, France, Greece, Italy, the Netherlands, Norway, Sweden and the United Kingdom. Support for the timeliness of accounting information was uncovered for firms in the all-countries-combined sample, and in the countries of Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden and Switzerland. Finally, evidence to support the proposition that accounting regimes produce quality discretionary accruals was found for firms from the all-countries-combined sample of 3,480 observations and from Finland, Greece, the Netherlands, Sweden and the United Kingdom. When comparing differential accounting information constructed under IFRS and LG, however, few differences could be found. Specifically, there was no statistical support for any of the samples that accounting information produced under IFRS was any more value relevant than the accounting information derived using LG. When our examination shifted to the timeliness of earnings, a positive differential impact between earnings constructed on the basis of IFRS and local accounting standards was detected only for the all-countries-combined sample. Finally, the quality of discretionary accruals was shown to be significantly higher under IFRS than LG for firms in Finland, Greece and Sweden.

Does Cooperative Learning Mean Equal Learning

Abstract This article compares the progress of college business students of different achievement levels after they have engaged in cooperative learning. A ratio of the average post-cooperative learning test scores to the average precooperative learning test scores for each student measured progress in a semester-long, introductory course. The ratios reflect significant variability in relative achievement among the 215 students classified as low, average, and high achievers. Additionally, the low-achieving students appeared to benefit most from cooperative learning. This result suggests that cooperative learning may be particularly valuable in helping low achievers succeed.

Country-specific institutional effects on ownership: concentration and performance of continental European firms

This paper examines the effect of country-specific institutional constructs on the relationship between ownership concentration and performance for firms in the eight Continental European countries of Austria, Belgium, Germany, Spain, France, Italy, the Netherlands and Portugal. Using data from publicly-traded firms owned by other companies (i.e., blocks), measures of the quality of investor and creditor protection and the effectiveness of legal institutions are applied. Employing a hierarchical moderated multiple regression analysis, differential validity is established for the relationship between ownership concentration and performance as measured by return on shareholders’ funds. This differential effect comes from creditor protection regimes and is consistent with a relational corporate governance model based on debt finance and concentrated ownership.

The Impact on Housing Values of Restrictions on Rights of Ownership: The Case of an Occupant's Age

With the exception of anecdotal information, little is known about the specific effects on the value of a house because its ownership is restricted to people older than a certain age. This article provides an empirically-derived assessment of the impact on the selling price of single-family residences when their ownership is age restricted. To determine the effect on the sales price of age-restricted houses, a standard hedonic pricing model is applied to a sample of 371 sales transactions drawn from a suburban area of a large city. The results indicate that an age restriction placed on houses decreases their value by 6%. This finding may be of interest to local land-use regulators, developers who are considering developing age-restricted houses and appraisers who wish to make value adjustments to these homes.

Analysts' estimates: What they could be telling us about the impact of IFRS on earnings manipulation in Europe

Purpose – The purpose of this paper is to examine whether mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union reduced earnings manipulation, as proxied by the difference between a firms reported earnings and ex post estimate of earnings by financial analysts. Design/methodology/approach – Controlling for firm and institutional factors and drawing upon a sample of 15,034 firm‐year observations from 20 European countries, the research design entailed examining the change in the earnings manipulation proxy during pre‐ and post‐IFRS adoption periods. Findings – The principal finding from this analysis was a decline in the magnitude of the proxy for earnings manipulation coincidental with IFRS adoption, which suggests that a uniform financial reporting regime may have contributed to exposing the use of temporary activities to manipulate earnings. Originality/value – The results of this study make an important contribution to the extant literature on the outcomes of IFRS adoption, and should be of value to investors and standard setters, who want honest and comparable financial reporting but are opposed to regulatory intervention. Of equal significance is the innovative model introduced to proxy for earnings manipulation.

A FORECAST OF ACHIEVEMENT FROM STUDENT PROFILE DATA

Abstract A compelling case has been made by accounting leaders for the increased use of groups to enhance learning in the classroom. If an instructor wants to form groups based on achievement or skill levels at the beginning of an accounting course, the purpose of this paper is to show that achievement levels can be forecast from profile data obtained from students on the first day of class. Specifically, results of this study indicate that the intent of a student to major in accounting and the grade he or she made in Introductory Financial Accounting provide an accurate forecast of the achievement of that student in Introductory Managerial Accounting. Additionally, the studys findings suggest there is some basis for a template that can be applied to forecast achievement levels of students in other accounting courses.

TaXpert: An expert system to determine stock ownership according to rules of the internal revenue code

Abstract The evolution of a tax expert system to determine constructive ownership of corporate stock under the rules of 60 sections of the Internal Revenue Code is described. The expert system, TaXpert, represents an example of building expert systems using alternative sources of expertise, which can be a productive methodology for developing certain expert systems. This developmental approach is applicable, in part, whenever the problem domain is narrow, complex, and highly structured, with well-defined rules. In addition to an explanation of the developmental methodology, including the techniques employed to test and validate the system, the paper also contains a sample TaXpert consultation based on the facts of an actual tax case.

Institutional Passivity and "Shadow" Corporate Governance: European Evidence

This study seeks to extend the literature on how a Continental European firms performance is impacted by the second largest investor when its dominant owner has a capacity to control but is not actually involved in its management. Using data gathered from ORBIS for publicly-traded firms from Austria, Belgium, France, Germany, the Netherlands, Spain and Portugal, and controlling for firm size, industrial sector and country-specific factors, we find statistical support for a relationship between ownership of the second largest or shadow owner and performance for firms in which an institutional investor was the dominant owner. This statistical relationship varied in direction and significance depending on whether the shadow owner was a block (another corporation), bank or family/individual. The findings in this study represent first time evidence to explain the seemingly unrelated association between CE firm performance and ownership share when an institution is the largest owner. The findings also speak to investors about the importance of identifying the type of owner filling the control vacuum left by the institutional owner, and how for each of these ownership types, the share of the shadow owner now becomes the main link with firm performance.