An Error Component Logit Analysis of Corporate Bankruptcy and Insolvency Risk in Australia

This paper introduces a four-state failure model to depict a wider range of distress scenarios that public companies typically face in the real world. We use a multinomial error component logit model to analyse firm failure, a major advance on the modelling techniques used in previous research. The error component logit model, being an extension of the more familiar mixed logit model, relaxes several questionable statistical assumptions associated with standard models. Using a sample of Australian firms we provide an interpretative illustration of the error component logit model and contrast its behavioural performance with the standard logit model widely used in previous research.     

An Empirical Examination of the Market Returns and Financial Performance of Entities Engaged in Sustainability Reporting

The importance of sustainability reporting to external stakeholders is reflected in the advent of various reporting guidelines and government inquiries. However, evidence of the inadequacy of such reporting, coupled with limited evidence of its use by market participants (such as investors and creditors) for resource-allocation decisions, raises questions about the overall value-relevance of sustainability reporting. This study seeks to identify, in the Australian context, whether the level of sustainable reporting is associated with a range of financial and market performance attributes of the firm.     

用好EVA指挥棒——EVA，一个讲实话的指标

经济增加值（EVA）被誉为20世纪末“最炙手可热的财务概念”，财经产生便受到国际上著名大公司的推崇，作为一个被称作是一个“真正能够讲实话”的指标，亦受到了中国企业的广泛关注。     

Performance Measures and Cost Containment in the New Zealand Health Sector: A Case of Iatrogenic Disorder

An iatrogenic disorder is the name given to a disease or illness that is actually created by medical interventions. This paper suggests an analogous disorder caused by accounting interventions. Attempts to introduce greater accountability and associated accounting technology can lead to disorder, the treatment for which is often prescribed as more of what caused the problem. The example illustrated in this paper is that of the New Zealand public health system. Policies introduced by well-meaning politicians and bureaucrats have created the opposite condition to that desired. Until an iatrogenic disorder is recognised, it is hard to see an appropriate solution.     

FISCAL ILLUSION (THE FLYPAPER EFFECT) AND GOVERNMENT SPENDING IN AUSTRALIA*

Work in the US and Canada has found the flypaper effect to be evident at the national as well as the sub-national government level. This paper uses the methodology developed by Robert R. Logan (1986) to examine how the payment of inter-governmental grants has affected government expenditure in Australia. The analysis is of both the recipient and payee governments.     

The Significance of the Profit and Loss Account in Nineteenth-Century Britain: A Reassessment

This article presents a reassessment of the development of regulated financial disclosure in nineteenth-century British companies legislation. Most accounting historians have emphasized the importance of the balance sheet under the disclosure requirements of various Acts. The relative importance of the profit and loss account has been largely neglected by historians. This paper contends that the profit and loss account was a considerably more important document in the financial regulation of companies than previously contemplated. In fact, the profit and loss account was required in the disclosure regulations of numerous Acts, including the Joint Stock Banks Act (1844), the Regulation of Railways Act (1868), the Life Assurance Companies Act (1870) and the Building and Friendly Societies Act (1874).     

A Theory of Takeovers and Disinvestment

We present a real‐options model of takeovers and disinvestment in declining industries. As product demand declines, a first‐best closure level is reached, where overall value is maximized by closing the firm and releasing its capital to investors. Absent takeovers, managers of underleveraged firms always close too late, although golden parachutes may accelerate closure. We analyze the effects of takeovers of under‐leveraged firms. Takeovers by raiders enforce first‐best closure. Hostile takeovers by other firms occur either at the first‐best closure point or too early. Closure in management buyouts and mergers of equals happens inefficiently late.