Market Reaction to Multiple Contemporaneous Earnings Signals: Earnings Announcements and Future Earnings Guidance

We examine market reactions to contemporaneous announcements of current earnings and future earnings guidance for evidence on how investors trade off relevance and reliability. Current earnings are more reliable than future earnings guidance, but future earnings guidance may be more relevant for predicting future performance. We find that current earnings are more strongly associated with announcement-period returns than concurrently disclosed future earnings guidance, consistent with investors’ relative preference for reliability. We find similar return reactions to stand-alone earnings and to earnings released with guidance. In contrast, return reactions are lower for guidance announced simultaneously with current earnings than for stand-alone guidance.     

A time series analysis of causality between aggregate merger and stock prices: the case of Canada

It is widely agreed that a positive relationship exists between measures of aggregate merger activity and measures of stock market performance, at least for the USA. Evidence from other countries is relatively sparse. in this paper we pursue the causality question using Canadian data. Most of the previous studies used only a bivariate system (merger and stock prices). We have extended the analysis to trivariate system (merger, stock prices and interest rate) to better reflect the capital market conditions argument for changes in merger activity. The results suggest a bidirectional causality between mergers and stock prices.     

A Cost-Benefit Analysis of the Thailand Taxpayer Survey

We investigate whether more resources should be devoted to a Thai tax enforcement program which is aimed at bringing small businesses into the tax system. We show that the appropriate criteria for determining whether more resources should be devoted to tax enforcement is whether the Atkinson–Stern condition for the optimal provision of a publicly-provided good is satisfied, or equivalently, whether the marginal cost of finds obtained through additional tax enforcement, SMCF_p, is less than the marginal cost of funds obtained through raising tax rates, SMCF_t. In our base case scenario, the SMCF_p is 11.60 which exceeds our estimate of the SMCF_t for an across-the-board increase in income tax rates on wage earners. The use of pro-poor distributional weights makes expanding the survey less attractive if the alternative way of obtaining additional tax revenue is an across-the-board income tax rate increase, while aversion to tax evasion makes it more attractive.     

Road traffic injuries in Thailand: Trends,selected underlying determinants and status of intervention

Injuries and deaths from traffic crashes have become a major public health and socio-economic problem in Thailand. Injuries, fatalities and economic losses due to traffic crashes have increased with the rising level of motorization. This study analyzes hospital-based data compiled by the Ministry of Public Health, data compiled by the National Police Office and data compiled by the traffic engineering division of the Department of Highways, Ministry of Transport and Communications. Analysis reveals that 70% of the people injured or killed in traffic crashes are aged 10-39. Men are at four to five times higher risk of death and injury due to traffic crashes than women. The number and rate of traffic injury in Thailand swung from a record low during the economic recovery in the 1980’s to record a high during the bubble economy, then declined with the economic crisis in 1997. The economic costs were estimated at U.S.$1.6 billion in 1995. An urban-rural difference in traffic injuries has been recorded with a higher rural case-fatality rate. A number of known behavioral risk factors have been identified, i.e., drunk driving, speeding, substance abuse and failure to use helmets and seat belts. However, determinants of behavior need further investigation. Hazardous road locations have also been mapped. Trends of traffic injuries seem to follow trends of economic growth. Without effective policy and implementation programs to control the determinants, it is expected that traffic injuries will increase as the country recovers from economic crisis. A major pitfall to many current government programs is that they incorporate no systematic evaluation. The fragmented structure of road safety authorities further complicates collaboration and coordination. A broad coalition of stakeholders is needed to catalyze policy action.     

The establishment of injury surveillance in Thailand

The Provincial Injury Surveillance System was initiated in Thailand in 1993 to establish a database for assessment of the quality of acute care and referral services provided to the injured at the provincial level, and to facilitate injury prevention and control at both local and national levels. An injury surveillance system model that adopted a trauma registry as the record form, was established in five selected large hospitals, one from Bangkok and four from major regions of Thailand. Data analysis was undertaken and utilized at both local and national levels. The Epidemiology Division of the Ministry of Public Health supervised and assessed the data quality. Evaluators from the School of Public Health identified problems in operating the system at the provincial level and assessed the feasibility of expanding the project. The data of 66,895 injuries including 1,755 deaths reported in 1995; revealed fundamental problems in the emergency medical services. Causes of major injuries were identified and their epidemiology described. The coverage of reporting was over 90%. The completeness and reliability of recording ranged from 80.6–100%. This model of sentinel surveillance is appropriate for injury problems, which are of large magnitude and are at the early phase of problem solving. Development of the information systems administration and human resource in computer technology are necessary to cope with the problems of increased workload in data collecting and processing. This model of surveillance is feasible for expansion but its data system has to be appropriately integrated into the existing systems of the hospitals.     

Tax policy and reform in Asian countries: Thailand''s perspective

This paper gives overviews of Thailand's tax system covering major taxes administered by the central government and the local taxes administered by the local government. Recent tax reform experiences are discussed at length starting from the introduction of value added tax (VAT) replacing the business tax to customs tariff reform. Current issues on taxation are also highlighted ranging from tax base, direct and indirect taxation, decentralization impediments. Furthermore, the government is implementing modern and cutting-edge technology in tax administration, thereby providing effective and efficient e-government services to the Thai people. This paper discusses the Roadmap for Tax Reform that would outline the framework for future direction of taxation in Thailand. Finally, the paper gives important insights on tax issues, and draws important conclusions for the future of tax reform in Thailand.     

ASEAN FTA,distribution of income,and globalization

This paper examines the impact of Free Trade Agreements on income distribution within the Association of Southeast Asian Nations (ASEAN) and between the members and their trading partners outside ASEAN. The study uses a Computable General Equilibrium model, a modified version of the 57 sector, 87 country, Global Trade Analysis Project (GTAP) integrated model of national input–output tables, version-6.2 (2001 database) with its reserve matrix facility, to simulate income distribution results as an outcome of certain parameter changes that appear in intra and inter regional trade.Within ASEAN, trade liberalization will stimulate the output of each country within the region according to their comparative advantage. Since trade liberalization tends to increase output of capital-intensive goods more than labor-intensive goods, the less-developed countries within the region tend to get smaller benefits compared to other member countries. In addition, the physical means of production tend to gain more relative to the gains of labor from the FTAs. This tends to widen the income gap between high-income and low-income households within ASEAN.Comparing ASEAN and the developed non-ASEAN countries, an FTA within ASEAN tends to reduce the returns to labor of the developed non-member countries and narrow the income gap between ASEAN, as a whole, and those rich countries since capital-intensive products of developing countries are often labor-intensive goods of developed countries.     

Financial integration in the pacific basin region: RIP by PANIC attack?

We exploit advances in panel data econometrics to test whether real interest parity holds in the Pacific Basin region. We test for a unit root in the difference between either the US, Japanese or Euro area real interest rate and the real interest rates from a panel of eleven Pacific Basin economies. Unlike extant studies that test for RIP using panel data, we use Bai and Ng’s (2004) PANIC test which allows for a very general model of cross-section dependence, including the possibility of cross-unit cointegration. Ignoring the possibility of cross-unit cointegration can lead to severe size distortions and to an over-rejection of the null hypothesis of a unit root. We overturn earlier findings based on first-generation panel tests, and demonstrate that cross-unit cointegration leads to incorrect conclusions. We find that RIP holds in the Pacific region. Real interest rates converge to the US rate. We find no support for the hypothesis that Pacific Basin real interest rates converge to either the Japanese or Euro area rates.     

Does Allocation of Public Spending Matter in Poverty Reduction? Evidence from Thailand*

The present paper uses a panel dataset to estimate the marginal returns to different types of government expenditure on agricultural growth and rural poverty reduction in Thailand. The study finds that additional government spending on agricultural research provides the largest return in terms of agricultural productivity and has the second largest impact on rural poverty reduction. Increased investment in rural electrification has the largest poverty reduction impact, mainly through improved nonfarm employment. Rural education has the third largest impact on both productivity and poverty reduction. Irrigation has a positive impact on agricultural productivity, but regional variation is considerable. Government spending on rural roads has no significant impact on agricultural productivity and its poverty reduction impact ranks last among all investment alternatives considered. Additional investment in the Northeast Region has a greater impact on poverty reduction than in other regions.