Are User Perceptions of Chairman Addresses Managed through Syntactical Complexity and Rationalisation?

This study assesses whether or not the preparers of chairman addresses of large listed Australian firms manage user perceptions through the syntactical complexity of the provided information and/or the rationalisation of unwanted information. It applies an innovative assessment approach for the rationalisation of unwanted information. The study analyses the chairman addresses of 87 firms included in the Standard & Poor's ASX200 index using the Flesch readability formula, as well as the relative occurrence frequency of sentences with particular connotations within each analysed report. The findings of this study demonstrate that although the comprehension difficulty of chairman addresses is generally high, preparers do not attempt to manage user perceptions through syntactical complexity or rationalisation. Specifically, the study finds no evidence that chairman addresses that contain predominantly negative news are more difficult to comprehend than chairman addresses that contain predominantly positive news. Furthermore, it is concluded that preparers do not use rationalisations to manage user perceptions. Prior literature has thus far failed to investigate the rationalisation of information as a potential perception management tool and no other recent contribution to the literature has investigated the syntactical complexity of Australian chairman addresses that contain predominantly positive or negative news. This study aims to fill that gap.     

Accreditation without Impact: The Case of Accreditation by Professional Accounting Bodies in Australia

Australian tertiary accounting education relies on a variety of accreditation processes to develop, manage and assure the learning outcomes of students. This research focuses on the impact of professional accounting body accreditation on Australian higher education providers (HEPs). It explores the process and rigour with which HEPs utilise the objectives and standards within this accreditation process to evaluate and improve their degree programs. This research uses interview data with HEP staff who have led accreditation processes of bachelor‐level accounting degrees. Data were analysed using a narrative framework to establish a range of discourses that explore the engagement of HEPs with: the process; the level of trust HEP staff have in the process; and the processes’ benefits. This research demonstrates that the current accreditation process does not achieve its stated outcomes and is unable to improve the alignment of student learning with professional expectations. Professional body accreditation fails to achieve its objectives because HEPs consider accreditation to be a ‘tick‐box’ process without consequence and are mistrustful of the veracity of several aspects within the process. Building on these findings, this research provides insights into the challenges associated with accreditation and explores how a previously impactful accreditation process has become largely inconsequential.     

NPD speed vs. innovativeness: The contingent impact of institutional and market environments

Whereas new product development (NPD) speed and product innovativeness are two critical strategic determinants of firm performance, previous studies show inconclusive findings about their effects. Drawing on institutional and contingency perspectives, this study elucidates value appropriation issues in NPD and examines how the effects of NPD speed and technological radicalness are contingent on institutional frameworks and market conditions. Results from 244 high-tech companies in China show that dysfunctional competition enhances the effect of NPD speed, but legal inadequacy hinders the impact of technological radicalness on firm performance. Market growth strengthens the performance effect of NPD speed but restrains the effect of technological radicalness. In addition, technological radicalness demonstrates stronger effects on firm performance when demand uncertainty is high.     

The Risk Microstructure of Corporate Bonds: A Case Study from the German Corporate Bond Market

This article presents joint econometric analysis of interest rate risk, issuer‐specific risk (credit risk) and bond‐specific risk (liquidity risk) in a reduced‐form framework. We estimate issuer‐specific and bond‐specific risk from corporate bond data in the German market. We find that bond‐specific risk plays a crucial role in the pricing of corporate bonds. We observe substantial differences between different bonds with respect to the relative influence of issuer‐specific vs. bond‐specific spread on the level and the volatility of the total spread. Issuer‐specific risk exhibits strong autocorrelation and a strong impact of weekday effects, the level of the risk‐free term structure and the debt to value ratio. Moreover, we can observe some impact of the stock market volatility, the respective stock's return and the distance to default. For the bond‐specific risk we find strong autocorrelation, some impact of the stock market index, the stock market volatility, weekday effects and monthly effects as well as a very weak impact of the risk‐free term structure and the specific stock's return. Altogether, the determinants of the spread components vary strongly between different bonds/issuers.     

Monetary and fiscal policy interactions in a New Keynesian model with capital accumulation and non-Ricardian consumers

The paper examines simple monetary and fiscal policy rules consistent with determinate equilibrium dynamics in the absence of Ricardian equivalence. Under this assumption, government debt turns into a relevant state variable which needs to be accounted for in the analysis of equilibrium dynamics. The key analytical finding is that without explicit reference to the level of government debt it is not possible to infer how strongly the monetary and fiscal instruments should be used to ensure determinate equilibrium dynamics. Specifically, we identify bifurcations associated with threshold values of steady-state debt, leading to qualitative changes in the local determinacy requirements.     

Are financial constraints of corporate activist investors perceived negatively?

This paper shows that financial constraints of corporate activist investors are negatively perceived by the market. By conducting an event study on a sample of 561 Schedule 13(D) filings disclosed by US corporations in the years 1996–2016, abnormal share price reactions in the [?10, \(+\)3] event window are about 10.8% lower for targets of financially constrained corporate investors. The average abnormal return for all targets is equal to 13.4%. This positive market response suggests that activism results in actual value improvement for the target. Yet, our analyses show that value improvements crucially depend on the investor’s access to external financing.     

Moving the status quo: the growth of trade union political funds[1]

In the compulsory review ballots on trade union political funds all 38 unions voted overwhelmingly for their retention. Since then 17 unions have adopted a political fund for the first time. This article analyses the reasons for this and examines the position of trade unions which have decided against balloting.     

When do cooperation and commitment matter in a monetary union?

This paper offers a framework to study strategic interactions between private players, national fiscal authorities and a common central bank in monetary unions. We establish general conditions, in terms of restrictions on spillover effects of actions by private and public players, under which games that differ in the degree of cooperation and commitment can admit the same equilibrium outcome. We use these conditions to characterize benchmark results on the irrelevance of cooperation and commitment established in recent literature. Moreover, we show for a general setting, in which the benchmark results do not apply, that gains from fiscal cooperation depend on the number of countries and increase as this number gets larger.     

Okun's Law Does the Austrian unemployment–GDP relationship exhibit structural breaks?

Okun's Law postulates an inverse relationship between movements of the unemployment rate and the real gross domestic product (GDP). Initial empirical estimates for US data indicate that a two to three percent GDP growth rate above the natural or average GDP growth rate causes unemployment to decrease by one percentage point and vice versa. In this investigation we check whether this postulated relationship exhibits structural breaks by means of Markov-Chain Monte Carlo methods. We estimate a regression model, where the parameters are allowed to switch between different states and the switching process is Markov. As a by-product we derive an estimate of the current state within the periods considered. Using quarterly Austrian data on unemployment and real GDP from 1977 to 1995 we infer only one state, i.e. there are no structural breaks. The estimated parameters demand for an excess GDP growth rate of 4.16% to decrease unemployment by 1 percentage point. Since only one state is inferred, we conclude that the Austrian economy exhibits a stable relationship between unemployment and GDP growth. First version received: January 2000/Final version received: October 2000