Banking deregulation and corporate tax avoidance

We investigate whether tax avoidance substitutes for external financing. We exploit interstate banking deregulation as a quasi-external shock to examine whether...     

Credit Constraints in Manufacturing Enterprises in Africa

We investigate the question of whether firms in Africa's manufacturingsector are credit constrained. The fact that few firms obtaincredit is not sufficient to prove constraints, since certainfirms may not have a demand for credit while others may be refusedcredit as part of profit maximising behaviour by banks. To investigatethis question, we use direct evidence on whether firms had ademand of credit and whether their demand was satisfied in theformal credit market, based on panel data on firms in the manufacturingsector from six African countries. Of those firms with a demandfor credit, only a quarter obtained a formal sector loan. Ouranalysis suggests that while banks allocate credit on the basisof expected profits, micro or small firms are much less likelyto get a loan than large firms. We also find that outstandingdebt is positively related with obtaining further lending. Therole of outstanding debt is likely to be a reflection of inefficiencyin credit markets, while the fact that size matters is consistentwith a bias as well, although we cannot totally exclude thatthey reflect transactions costs on the part of banks. We presentan analysis showing how much more profitable small firms mustbe to obtain a loan than large firms.     

The changing face of HRM: in search of balance

Current models of HRM suggest that expectations about HR roles are changing as organisations are striving to make the HR function leaner and more ‘strategic’. In our article we explore the changing roles of HRM as they are perceived by different stakeholder groups within the HR profession through the medium of a study examining the diffusion of the concept of ‘the thinking performer’ launched by the Chartered Institute of Personnel and Development in 2002. We explain how the concept of business partnering dominates respondents' talk about HR policy and practice and raise questions about the impact of this in terms of HRM's relationship with employees, employee well‐being and the career paths of HR professionals. We argue that the profession needs to reflect seriously on the consequences of a dominant business/strategic partner framing of HR work, which fails to address the duality that has historically always been inherent in HR practice. We conclude that there is a need for a more balanced HR agenda addressing human and economic concerns in current and future models of HRM.     

An Adjustment Procedure for Predicting Betas When Thin Trading is Present: Canadian Evidence

We have incorporated effects of the process that generates true betas for TSE stocks, as well as thin trading effects, into the beta adjustment model. We note the Blume and Dimson and Marsh beta adjustment techniques aim at eliminating beta forecast error through regression tendency bias. Effects of other sources of forecast error have been ignored. We show the process generating security betas affects both cross-sectional correlation coefficient and order bias, while thin trading affects only cross-sectional correlation coefficient. We demonstrate that when OLS beta estimates are used to forecast their future risk levels, order bias accounts for 86% of forecast error, while thin trading effects account for 14% of forecast error. A beta regression tendency model which properly accounts for effects of cross-sectional correlation (which is a function of thin trading) and order bias completely abates forecast error. Our results have implications for the use of correlation coefficient to measure stability of betas across time, for beta adjustment models proposed in the literature, and for event study methodologies that rely on prediction errors.