Factor Substitutability in Australian Manufacturing with Emphasis on Energy Inputs*

In this paper a model of the production structure in the aggregate Australian manufacturing sector is estimated, emphasizing the use this sector makes of energy inputs. A translog cost function is estimated with time-series data for four inputs, capital services, labour services, energy and materials and likewise an energy submodel is estimated for solid fuels, oil, electricity and gas. The substitutabilily and the complementarity relationships between the various factor inputs and between the various fuels are examined: an interesting finding is that capital and energy are substitutes and labour and energy are complements. Factor price elasticities are calculated and turn out to be quite significant. The study concludes that rising energy prices will induce significant shifts in both the mix of fuel inputs and the level of aggregate energy utilization.     

Seasonality Estimation in Thin Markets

The greater availability of daily data in the U.S. has led to a number of studies of the seasonality of daily stock (index) returns. While the studies recognized the potential impacts of nontrading and price-adjustment delays in general, no formal analyses of such impacts were presented; in this paper analytic results are presented for the articulation between these phenomena. The implications of the analysis are discussed and shown to be consistent with a sample of U.K. index data. A modified form of the negative weekend effect is found to be present in the U.K. data analyzed.     

THE REDUNDANCY OF EARNINGS LEVERAGE IN A COST OF CAPITAL DECISION FRAMEWORK

We hope to make clear why earnings-per-share financial leverage analysis is inadequate as a management tool for financial structure determination. We argue that under either of the currcntly received cost of capital theories, the "traditional" theory or the "Modigliani-Miller" theory, earnings leverage analysis as it is used adds nothing to our understanding of the capital structure issue. We maintain further, that for security analysis there are better tools.
Le but de cette discussion est d'éclaircir la raison pour laquelle on a reconnu que "l'analyse des bénéfices par action en rapport au leverage financier' s'avère être une méthode insuffisante àétablir la structure financière. Que l'on s'appuie sur les théories établies relatives au coüt du capital, sur la théorie traditionnelle ou sur la théorie "Modigliani-Miller", 'l'analyse des bénéfices par action bade sur le leverage financier' telle qu'elle se présente ne nous apprend rien de nouveau au sujet de la structure financière. Dans cet article, nous affinnons plus loin que de emilleurs moy-ens existent pour l'analyse des titres.
Dieser Beitrag versucht zu erklären, warum der Gewinn pro Actie-Leverage-Analyse unzureichend als Unternehmensleitungsinstrument bezüglich der Kapitalstrukturplanung ist. Nach der traditionellen, sowie der Modigliani-Miller Theorie der Kapitalkosten, trägt Gewinn pro Atkie-Leverage-Analyse nichts zum Verständnis des Kapitalstrukturproblems bei. Es wird auch behauptet, dass es bessere Instrumente für eine Wertpapieranalyse gibt.     

A Labour Monopolies Commission to Reduce Unemployment

Mr Tebbitt's proposals to reduce union obstructiveness have not taken account of their power as monopoly suppliers of labour. A pressing priority for the current session of Parliament should be the introduction of legislation to eradicate legal privilege which does not reflect market reality.     

Nonsynchronous Security Trading and Market Index Autocorrelation

The theoretical portfolio autocorrelation due solely to nonsynchronous trading is estimated from a derived model. This estimated level is found to be substantially less than that observed empirically. The theoretical and empirical relationship between portfolio size and autocorrelation also is investigated. The results of this study suggest that other price-adjustment delay factors in addition to nonsynchronous trading cause the high autocorrelations present in daily returns on stock index portfolios.