2023 - Reprints: Finance, Accounting and Insurance

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The role of political belief in COVID-19 vaccine resistance, virus transmission, and closure policy responseVaccines, 11, 1046, 2023
D. Ben-Shahar, S. Gabriel and R. Golan
(Reprint No. 411)
Research No.: 02222100

https://doi.org/10.3390/vaccines11061046

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We employ unique panel data on the universe of COVID-19 vaccination and infection cases in Israel to examine the role of political belief in COVID-19 vaccine uptake, virus transmission, and closure policy response. The paper identifies political beliefs based on statistical area votes in national elections held in Israel on the eve of the COVID-19 outbreak in March 2020. Unlike the U.S. and elsewhere, pandemic policy intervention in Israel was broadly supported by politicians across the belief spectrum. As such, household response to virus risk was not biased by contemporaneous partisan disagreement and debate among political leaders. Findings show, all things equal, that in the wake of emergent and localized virus risk, voters in politically right-of-center and religious areas displayed substantially higher odds of both vaccine resistance and virus transmission as compared to their left-center counterparts. Moreover, political belief is highly salient to aggregate pandemic outcomes. Model simulation shows that had all areas responded to virus risk with the more riskaverse behaviors of left-of-center areas, the number of vaccinations nationwide would have increased by 15 percent. That same scenario results in a full 30 percent reduction in total infection cases. Results also show that coercive policy measures such as economic closure were more effective in reducing virus transmission among less risk-averse right-wing and religious areas. Findings provide new evidence of the role of political belief in household response to health risks. Results further underscore the importance of timely, targeted messaging and intervention among divergent political belief groups to reduce vaccine hesitancy and enhance disease control. Future studies should explore the external validity of findings, including the use of individual voter data, if available, to evaluate political belief effects

Audit quality and investment efficiency with endogenous analyst informationThe Accounting Review, 98(4), 247-272, 2023
N. Langberg and N. Rothenberg
(Reprint No.: 420)
Research Nos.:  03721100; 03722100

https://doi.org/10.2308/TAR-2020-0191

 

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We study audit quality and investment efficiency when an analyst’s information can curb overvaluation and auditors are subject to legal liability following audit failure. With the auditor’s damage payment based on price inflation after audit failure, the analyst’s information brings prices closer to fundamentals and provides a hedge to the auditor against legal liability risk. This weakens incentives for audit quality, and the analyst responds with more information production due to the penalty for mispricing. Consequently, in equilibrium, stricter legal liability leads to higher audit quality that reduces overinvestment but also less information production that increases underinvestment. Thus, stricter liability has a nonmonotonic effect on firm value; it increases the value of firms with a high valued growth option but reduces the value of firms with a low valued growth option. The results have implications for the optimal level of legal liability that maximizes the expected value of the firm.

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