The potential impact of abolishing company tax in Ciskei

The purpose of this paper is to examine the likely effect of the abolition of company tax on the Ciskeian economy. After considering the case for and against a corporate tax exemption, the issues involved are analysed on two levels. Using aggregate data, drawn from available census data, we find that most firms seem likely either to prefer the existing package of industrial concessions to the tax holiday, or to be indifferent to either option. Similarly, a recent survey of manufacturing enterprises in Ciskei indicated that the majority would prefer the incentive package. Firms that might be attracted by the tax‐free option are likely to be relatively profitable, subsidiaries of multinational companies, and enjoying a higher turnover per worker than firms opting for the incentive package.     

Measuring Residential Real Estate Liquidity

There are many factors, other than price alone, that may affect the liquidity of real estate. This study develops a liquidity measure based on the Cox proportional hazard technique, a statistical model widely used in the epidemiologic and social sciences. The odds ratio, along with an estimate of market value for a home, are used to construct a liquidity measure. This measure can extract from the data a rich statistical profile of the variables that affect liquidity.     

Were internal capital markets affected by the ‘perfect’ pension storm?

We examine capital expenditures in multi-segment firms before and after the “perfect storm” that affected pension plans between 2000 and 2002, when bond yields and stock prices both fell precipitously. Our sample of firms went from having overfunded to underfunded pension plans as a result of the storm. We examine the segment-level relation between investment, Tobin's q, and cash flow both before and after the event. We find mixed evidence on the change in the relation between investment and q, which may be a result of measurement error in q. We find stronger evidence for the conclusion that after the pension storm, firms with underfunded pension plans directed more investment towards segments that produce higher cash flow.     

Do borrowers know their mortgage terms?

We assess whether borrowers know their mortgage terms by comparing the distributions of these variables in the household-reported Survey of Consumer Finances (SCF) to the distributions in lender-reported data. We also examine the characteristics of SCF respondents who report not knowing these contract terms. Although most borrowers seem to know basic mortgage terms, borrowers with adjustable-rate mortgages appear likely to underestimate or to not know how much their interest rates could change. Borrowers who could experience large payment changes if interest rates rose are more likely to report not knowing these contract terms. Difficulties with gathering and processing information appear to be a factor in borrowers' lack of knowledge.     

Comparative assessment of tourist generating markets for New Zealand

Portfolio analysis has become a widely used strategic planning tool in many industries during the past decade. Strategic decisions in the tourism industry include issues such as which markets are most attractive (e.g. have greatest visitor expenditure potential); in which markets are a specific country's “products” most competitive; how promotional budgets should be allocated for greatest effectiveness; and what the promotional message should convey. Industry Attractiveness Analysis—a flexible variety of portfolio analysis—has been applied to the generating countries which supply tourists to New Zealand in an illustrative case study. Both national level and individual company applications are described and illustrated in 3 × 3 matrix form. These diagrams are, in themselves, a good communication mechanism which encourages rational, strategic thinking about managerial decisions and resources allocations. Past, present, and future situations can be portrayed in a graphically useful manner.     

Repeated games and the ‘reciprocal dumping’ model of trade

A repeated game version of the basic Brander and Krugman (1983) model is analyzed. In the Brander-Krugman model, rivalry among oligopolistic firms gives rise to international trade. It is now shown that no trade, which is welfare-reducing when transportation costs are negligible, is a strong Nash equilibrium of the supergame. The threat strategies that support ‘no trade’, the discount rate, and the crucial role of transportation costs are discussed, extending the BranderKrugman analysis in a natural way.     

Rethinking Hecs: Its Definition and Fiscal Role in Compensating for Non-deductibility of Tuition Fees

This paper develops a two period model of the higher education decision to determine the required return from higher education. It uses the model to calculate the proportion of full tuition costs which should be charged 'up front' under the Australian Higher Education Scheme (HECS), in order to compensate for the fact that such fees are not deductible against income for tax purposes. Because full tuition costs represent less than 11 per cent of the total costs of higher education, the ideal HECS ratio is relatively high, in the region of 0.7. The low relative importance of tuition costs means that fee subsidy schemes cannot possibly compensate for other distortions such as income tax progression which persist over the working life of graduates.     

Posing larger questions: the British miners’ strike of 1984–85

The miners’ strike was the longest and most significant dispute in modern British industrial history. The conflict provided a vivid case study of the rationales and processes of capitalism and liberal democracy in the closing decades of this century. This article is an assessment of the important issues raised by the dispute.     

Corporate loyalty,does it have a future?

A promotion of concepts of corporate family and employee participation as well as euphemisms which stress employee-employer long-term continuity makes the loss of loyalty flowing from downsizings and mass firings as well as corporate restructurings more difficult both for the employer and employee. The promotion of reciprocal obligations between employer and employee misleads both into a belief system which is to their mutual disadvantage.Corporate semanatics that soften employment realities and the implications of dislocation with positive rhetoric increases the sense of failure and guilt on the part of both employer and employee. Unrealistic expectations create hostility. If employment dislocation is seen as part of a continual economic evolution, not shrouded in semantic double-speak, loss of employment no longer becomes an outrageous afront to the dignity of those involved but rather a normal process of economic change and renewal. Brian A. Grosman, LL.B., LL.M., Q.C., is one of Canada's leading employment lawyers. He has taught law at McGill University and at the College of Law at the University of Saskatchewan and is the past founding Chairman of the Law Reform Commission of Saskatchewan. He is the author of numerous legal articles and six books. His last three books deal with employment relationships. His most recent book is entitled Corporate Loyalty: A Trust Betrayed and was published by Viking-Penguin Books Canada in 1988. Mr. Grosman practices law in Toronto where he advises corporate employers and executive employees on management and individual rights.