ACCOUNTABILITY AND VALUE FOR MONEY IN PRIVATE FINANCE INITIATIVE CONTRACTS

Within the context of New Public Management (NPM), successive UK governments have claimed that PFI projects provide more accountability, and arguably, more value for money (VFM) than conventional procurement for the public ( HM Treasury 1995, 2000, 2003a and 2003b ). However, recent empirical research in the UK on PFI has indicated its potential limitations for accountability and VFM ( Broadbent, Gill and Laughlin, 2004 ; Edwards, Shaoul, Stafford and Arblaster, 2004 ; Shaoul, 2005 ; and Ismail and Pendlebury, 2006 ) albeit these are based on either published accounts or a limited number of key stakeholders. This paper attempts to partially redress this gap in the literature by presenting an interesting case of the impact of PFI on accountability and VFM in Northern Ireland's education sector. The findings of this research, based on forty two interviews with a wide range of key stakeholders, suggest that stakeholders have different and often conflicting expectations and the actual PFI accountability and VFM benefits are much more obfuscated than those claimed in Government publications.     

The Importance of the Sequence in UK Rights Issues

Abstract:  This study examines the market reaction to UK rights issues announcements and also investigates the position of these issues in the sequence in which the firms make multiple rights issues. The sample consists of 569 rights issues made by 243 industrial and financial firms over the period 1988–1998. The results suggest that the UK market responds negatively to earlier issues in the sequence made by multiple rights issuers. This negative reaction diminishes and becomes insignificant at or after the third issue. In addition, the study shows that the favourable response to later rights issues in the sequence is due to the diminishment in the level of information asymmetry around such issues.     

Convergence and risk-return linkages across financial service firms

We examine the risk and return linkages across US commercial banks, securities firms, and life insurance companies during the 1991–2001 period. After controlling for changes in the broader stock market, interest rates, and foreign currency values, we find that return and risk interdependencies across these financial firms are significant and size-varying; larger institutions display stronger volatility transmission linkages, while smaller ones exhibit more prominent return-related linkages. The tighter link in risk among large financial institutions (FIs) suggests stronger convergence, employment of common models of risk measurement and risk management, and more intense inter-industry competition, particularly between large banks and large securities firms, compared to smaller institutions. Lack of risk spillover among smaller FIs confirms the intuition that they typically assume more localized and idiosyncratic risk. The co-movement of stock returns among smaller FIs has been helped by the effects of locally based factors, such as economic conditions and state regulations, on all such institutions, and a less diversified product set. Differences in spillover patterns between large and smaller institutions have implications on investment choices and mergers and acquisitions in the industry. Introduction of the Gramm-Leach-Bliley Act (1999) has had dissimilar effects on the riskiness of large versus smaller life insurance and securities firms, and an insignificant effect on commercial banks.     

Pakistan's development: An overview

This is the text of two lectures given in the summer of 1980, one at the Institute of Strategic Studies, Islamabad, and the other at the National Defense College, Rawalpindi, Pakistan. The lectures attempted to identify some non-economic determinants of Pakistan's economic performance since the standard economic explanations are not very satisfactory for analysing the country's rather erratic performance over the last three decades. The lectures reviewed Pakistan's economic history from 1947, the time of independence, to 1977, when political power moved once again from a civilian government to a military regime. The lectures underscored the importance of the nature of external economic development, the extent of government commitment to development and the level of participation in economic management as important determinants of economic performance. One of the important conclusions reached was that the governments in the Third World must pay heed to these factors in planning for the difficult times that lie ahead.     

The Impact of Deregulation during 1990–1997 on Banking in Austria

The operating environment for banking in Austriachanged substantially during 1990–1997. The changes during the periodcan be seen as a gradualadjustment towards adherence to European banking standards, which becamea legal requirement on Austria's entry, in 1995, into the European Union. Inthis paper, we investigate the relative performance of Austrian banksduring this period and thereby test the hypothesis of increasedcompetition. The study reveals that Aktiengesellschaften hadconsistent productivity improvement over the period, Sparkassen,and Volksbanken exhibited a turnaround in productivity in 1997,and Raiffeisenbanken experienced consistent productivity decline.Overall, Austrian banks experienced a decline in average efficiencyand productivity until 1996 with slight improvements in 1997. Thestudy reveals evidence of product diversification rather thanincreased price competition; a decrease in the spread of prices paidfor inputs indicates increased competitiveness over the period, whichcan be attributed to deregulation brought about by EU-membership.     

Quantifying the housing recovery: which MSAs are experiencing bubbles?

The housing market is one of the most cyclical parts of the U.S. economy and played a leading role in the Great Recession. While house prices have recovered, the extent of the recovery varies considerably across markets. We evaluate housing prices in 20 MSAs and find that 12 out of them show a consistent pattern of behavior relative to the nation, while eight cities’ house price indices (HPIs) are characterized as having inconsistent behavior. Our analysis found breaks in the time series behavior of all HPIs. Furthermore, some MSAs, such as New York and Miami, began to recover much sooner than others. Granger causality test results suggest that some MSAs lead the national average and most of the other MSAs. Thus, our study suggests that changes in housing prices in a number of MSAs would provide an early warning for price moves at the national and regional levels.     

Predicting future financial performance of banks from management’s tone in the textual disclosures

Quality & Quantity - Predicting bank performance is important for investors and regulatory authorities. Previous research on non-financial firms has shown that augmenting the numeric...     

Board independence and market reactions around news of stock option backdating

This study focuses on whether board independence explains stock price reactions to backdating and factors that explain backdating decision. Consistent with previous studies, we find negative stock returns around backdating news. Although our findings show that board independence variables fail to explain the incidence of backdating, our regression results show that stockholders consider these variables to be important. Abnormal stock returns around news of backdating are higher when firms have higher proportion of outside directors and when outside directors have lower stock ownership in the firm.     

De facto financial openness and capital mobility

This paper shows that de facto financial openness does (does not) increase capital mobility in developing (developed) countries and that capital is (is not) freely mobile in the most financially open developing (developed) countries.