Keeping Two Sets of Books: The Relationship Between Tax and Incentive Transfer Prices

Multinational enterprises use two types of transfer prices: the tax transfer price to achieve optimal tax outcomes and the incentive transfer price to provide appropriate incentives to offshore managers. The two optimal transfer prices are independent if taxable income is assessed using the formula apportionment approach. Under the separate entity approach, however, they are interdependent: they both decrease as the penalty for noncompliance with the arm's length principle increases; and the tax transfer price decreases and the incentive transfer price increases as the marginal cost of production increases. We also examine the case where the incentive transfer price is negotiated rather than dictated by the parent. The results are robust to different market structures and tax environments.     

Motives for a secular pilgrimage to the Gallipoli battlefields

Pilgrimage is a journey to a non-substitutable site embodying the highly valued, the deeply meaningful, or a source of core identity for the traveller. Secular pilgrimage is an important yet under-researched sector of the tourism industry. Where the motives for religious pilgrimage are well documented, little is known of the motives for secular pilgrimages. This paper presents the results of an empirical investigation of one case of secular pilgrimage, the journey of Australians and New Zealanders to the Gallipoli battlefields in Turkey. Five distinct motives for visits to the pilgrimage site are identified – spiritual, nationalistic, family pilgrimage, friendship and travel motives – and differences in their importance noted across seven visitor groups. These motives share some commonality with the motives for religious pilgrimage, and conversely, with the motives for leisure tourism; yet, other motives are unique to the secular pilgrimage. Suggestions for future research on secular pilgrimage are provided.     

Consumption asset pricing and the term structure

We investigate the relationship between consumption and the term structure using U.K. interest rate data. We demonstrate that the term structure contains information about future economic activity as implied by the benchmark time separable power utility consumption based capital asset pricing model (C-CAPM) since the yield spread has forecasting power for future consumption growth. Further, we analyze the ability of this benchmark and two alternative models which adopt utility functions characterized by non-separability, namely, the extension to the habit formation model of Campbell and Cochrane (1999) proposed by Wachter (2006) and the housing C-CAPM proposed by Piazzesi, Schneider and Tuzel (2007). Our findings are supportive of the habit formation specification of Wachter (2006), other models fail to yield economically plausible parameter values.     

The Persistence of Dominant‐Firm Market Share: Raising Rivals' Cost on the New York Stock Exchange

To explain the persistence of dominant New York Stock Exchange (NYSE) market share in stock trading of listed securities from 1992 to 2002, we develop a dominant‐firm price leadership model and hypothesize that NYSE specialists raised the costs of rival market makers. The model predicts that natural and induced cost advantages will determine the NYSE's market share vis‐à‐vis the regional exchanges, electronic trading systems, and NASDAQ dealers. Empirically, NYSE market share increases with economies of scale and scope, abnormal price volatility, high asymmetric information, and with trading practices that raise rivals' costs, such as failure to display limit orders that bettered the existing quotes.     

Retaining volunteers for the cause: Hope and pride associated with cause-related charity events in cancer control

Special charity events are an important source of revenue for non-profit organisations in cancer control yet volunteering is declining and turnover is high. Experiences at cause-related events may influence retention, particularly emotions connected to the cause and ceremonies which honour cancer survivors and remember loved ones. We explore the degree to which emotions associated with cause-related volunteering and collective action in the literature are felt in response to Relay For Life and what emotions predict three indicators of retention: intention to return for future events, satisfaction with volunteering, and organisational commitment. Volunteers (n = 410) completed a cross-sectional survey at Relay For Life events in Queensland, Australia. Multiple regression analyses examined whether emotions associated with events predicted each indicator of retention, adjusting for number of years spent volunteering for events. Sixty-two percent reported an intention to return the following year. The most commonly reported event-related emotions were hope, pride, and empathy (62–69%). Intention to return, satisfaction, and commitment were each significantly predicted by hope and pride. The findings suggest special charity events in cancer control could retain volunteers by fostering pride and hope (e.g., for a cancer free future); however, future prospective research which examines the mechanisms of these relationships is warranted.     

Regime Change and the Role of International Markets on the Stock Returns of Small Open Economies

We examine the influence of US, UK and German macroeconomic and financial variables on the stock returns of two relatively small, open European economies, Ireland and Denmark. Within a nonlinear framework, we allow for time variation via regime switching using a smooth transition regression (STR) model. We find that US (global) and UK and German (regional) stock returns are significant determinants of returns in both markets. Further, global information represented by oil and US asset price movements drive changes between states in each market. Significantly, the role of country‐specific domestic variables is typically confined to a single state while global and regional variables pervade all states.     

Evaluation of a Truthful Revelation Auction in the Context of Energy Markets with Nonconcave Benefits

We describe a Vickrey-Clarke-Groves auction for supply and demand bidding in the face of market power and nonconcave benefits in which bidders are motivated to bid truthfully, and evaluate its use for power and gas pipeline capacity auctions. The auction efficiently allocate resources if firms maximize profit. Simulations, including an application to the PJM power market, illustrate the procedure. However, the auction has several undesirable properties. It risks being revenue deficient, can be gamed by cooperating suppliers and consumers, and is subject to the information revelation and bid-taker cheating concerns that make single item Vickrey auctions rare.     

UK state pension deferral incentives and sustainability

Pay-as-you-go state pension schemes such as that operated in the United Kingdom face growing pressures from the rising old-age dependency ratio and improvements to life expectancies. Alongside compulsory increases in the statutory retirement age, governments have used incentives to encourage workers to postpone voluntarily their exit from employment, deferring their Basic State Pension in exchange for the additional financial reward of an enhanced pension at a later point in time. The impact of pension deferral upon the sustainability of the state pension system is dependent on the interplay of short-term savings from payment delay and increased subsequent longer-term payments to pension recipients. This article presents a model that simulates the financial effect of deferral uptake on the National Insurance Fund over a 40-year projection under alternative scenarios, including current and revised post-2016 deferral incentives. The findings indicate that the recent change in enhancement rate from 10.4 per cent to 5.8 per cent will significantly impact on state pension sustainability while still providing an incentive to defer. We estimate that any reduction below 4 per cent would result in zero uptake of the deferral option, based on a rational financial choice.     

Uptake of organisational work–life balance opportunities: the context of support

This research examines the relationship between structural and cultural dimensions affecting managerial decision-making about work–life balance (WLB) opportunities. Through a top-down study of two contrasting Irish organisations, we identify how each of five dimensions of work–life culture: ‘managerial and organisational support’, ‘organisational time expectations’, ‘career consequences’, ‘gendered perception of policy use’ and ‘co-worker support’ are mediated through managers to affect availability and uptake of WLB opportunities and creating gaps between policy and practice. This study demonstrates how marked distinctions between the personal opportunities managers may wish to offer and the discretion available to them arise. Secondly, the concept of organisational work–life culture is advanced by elaborating the ‘context of support’, namely interdependencies between organisational culture and structure that affect the uptake of WLB opportunities. Implications for researchers and practitioners are also discussed.