Market Discipline and Deposit Guarantee: Evidence from Australian Banks

This study examines depositor market discipline of Australian banks and its interaction with the 2008 deposit and wholesale funding guarantee. Prior to 2008 market discipline is found for Australian‐incorporated banks. Depositors did not distinguish between major and small banks, but some differences in the degree of market discipline were found for foreign bank subsidiaries. Following the introduction of the 2008 guarantees, market discipline was reduced except for nonhousehold depositors at banks that did not access the wholesale guarantee. Market discipline is also evidenced at foreign bank branches, but weaker for those accessing the wholesale guarantee.     

Optimal surveillance against foot‐and‐mouth disease: the case of bulk milk testing in Australia

Previous foot‐and‐mouth disease (FMD) outbreaks and simulation‐based analyses suggest substantial payoffs from detecting an incursion early. However, no economic measures for early detection have been analysed in an optimising framework. We investigate the use of bulk milk testing (BMT) for active surveillance against an FMD incursion in Australia. We find that BMT can be justified, but only when the FMD entry probability is sufficiently high or the cost of BMT is low. However, BMT is well suited for post‐outbreak surveillance, to shorten the length of time and size of an epidemic and to facilitate an earlier return to market.     

Information and Communication Technology (ICT) and Singapore’s economic growth

Singapore’s remarkable success in economic development has been strongly associated with the country’s vigorous efforts to embrace the Information and Communication Technology (ICT) revolution to promote economic growth. This study provides a comprehensive investigation of the contributions of ICT to Singapore’s economic growth during the 1990–2008 period. It documents three key findings. First, there is a strong positive association between the intensity of ICT use and value-added and labor productivity growth at the sector level. Second, ICT investment contributed approximately 1 percentage point to Singapore’s GDP during 1990–2008, and its role in driving economic growth has become increasingly important over time. Third, the contribution of the ICT manufacturing sector to Singapore’s growth was notable, but it was on the decline and faced difficult restructuring challenges. This paper also provides valuable policy lessons and strategic insights for governments in both developed and developing countries that aspire to embrace ICT to promote economic growth.     

AN EMPIRICAL ANALYSIS OF BEN GRAHAM'S NET CURRENT ASSET VALUE RULE

This paper presents evidence that the net current asset value rule developed by Ben Graham in 1930 is still profitable in the 1970s and early 1980s. The abnormal gain is not due to future mergers because both the merged and nonmerged subsamples have positive and statistically significant returns in the post-event period.     

The Effect of Junk Bond Defaults on Common Stock Returns

This paper examines the effect of junk bond defaults on common stock returns. The evidence indicates that stockholders uncover the signs of financial distress long before the default date. Stock prices fall sharply at the time of the default announcement. Although stocks of fallen angel sample recover slowly and steadily after the default announcement, stocks of the original-issue junk bond sample continue to decline. On average, bankrupt firms suffer larger negative stock returns than defaulted firms not only at the time of announcement, but also in both pre- and post-event periods.     

Physical capital accumulation in Asia 12: Past trends and future projections

The pace of capital accumulation in East Asia has simply been stunning. In this paper, we investigate sources of this fast accumulation and make projections for the future. We estimate a “convergence” equation for physical capital per capita, which is derived from an open economy growth model, using a pooled cross-country, across-decade sample of the entire world. We also conduct projections for the next two decades. We find that an economy with a low level of capital stock per capita tends to experience faster accumulation subsequently. Asian economies have certainly benefited from this “convergence effect”. But on the other hand, other factors such as a low rule of law score and high investment goods prices have worked against them. Our projection shows that, if those economies wish to maintain their current pace of fast capital accumulation, the keys would be to reduce distortions in the domestic market and to improve the quality of institutions.     

Intraday Volatility in Interest‐Rate and Foreign‐Exchange Markets: ARCH,Announcement, and Seasonality Effects

We explore the determinants of intraday volatility in interest‐rate and foreign‐exchange markets, focusing on the importance and interaction of three types of information in predicting intraday volatility: (a) knowledge of recent past volatilities (i.e., ARCH or Autoregressive Conditional Heteroskedasticity effects); (b) prior knowledge of when major scheduled macroeconomic announcements, such as the employment report or Producer Price Index, will be released; and (c) knowledge of seasonality patterns. We find that all three information sets have significant incremental predictive power, but macroeconomic announcements are the most important determinants of periods of very high intraday volatility (particularly in the interest‐rate markets). We show that because the three information sets are not independent, it is necessary to simultaneously consider all three to accurately measure intraday volatility patterns. For instance, we find that most of the previously documented time‐of‐day and day‐of‐the‐week volatility patterns in these markets are due to the tendency for macroeconomic announcements to occur on particular days and at particular times. Indeed, the familiar U‐shape completely disappears in the foreign‐exchange market. We also find that estimates of ARCH effects are considerably altered when we account for announcement effects and return periodicity; specifically, estimates of volatility persistence are sharply reduced. Separately, our results show that high volatility persists longer after shocks due to unscheduled announcements than after equivalent shocks due to scheduled announcements, indicating that market participants digest information much more quickly if they are prepared to receive it. However, contrary to results from equity markets, we find no evidence of a meaningful difference in volatility persistence after positive or negative price shocks. © 2001 John Wiley & Sons, Inc. Jrl Fut Mark 21: 517–552, 2001     

Hospital Numerical Flexibility and Nurse Economic Security in China and India

This article contrasts the flexibility of Chinese and Indian urban hospitals and the security of nurses. The study draws on a survey of 55 urban hospitals, and finds that national context generates different flexibility–security outcomes even when workers with similar skills are considered. Our findings support claims that China is constructing a flexibility–security regime that aims to promote both security and flexibility, and that India remains attached to employer‐based social protection, but challenges the claim that economic growth is higher in China because India's employers have relatively less capacity to utilize labour‐time as they wish.     

Daily outfit satisfaction: the effects of self and others' evaluation on satisfaction with what I wear today

This study investigated the satisfaction of the outfit which an individual chose to wear for the day by examining how self and others' evaluations influenced the outfit satisfaction and the intention to re‐wear. In addition, moderator variables (body satisfaction and body surveillance) that affected the effect of the evaluative factors upon satisfaction and behavioural intention were also examined. An online‐survey was conducted and the sample size used in the analysis was 349 in total. Using SPSS 18.0 and AMOS 18.0, structural equation modeling analysis and one‐way analysis of variance were implemented for hypothesis testing. The results showed that self‐evaluation as a perception of appropriateness of the outfit for that day and others' positive feedback increases outfit satisfaction. Appropriateness perception also had a significant impact on the intention to re‐wear. However, feedback from others on one's outfit did not have a significant direct effect on behavioural intention. Three‐way ANOVA was performed to verify the impact the feedback from others, body satisfaction, and body surveillance had on the respondent's intention to re‐wear, and a three‐way interaction effect was statistically significant. While individuals with high body satisfaction were likely to be confident about their appearance overall, the feedback from others did not impact their satisfaction. Individuals with low body satisfaction were influenced by others' feedback on their outfit. Individuals with high levels of body surveillance who sensitively monitored others' feedback especially displayed decreased intention to re‐wear when feedback from others on their outfit was negative. This research contributed to the deeper understanding of consumer's clothing behaviour at the post‐purchase stage. Enhanced understanding of lasting satisfaction and benefits pursued throughout the time while using the product would be essential in developing consumer‐centric marketing strategies.