Does Local Competition Impact Interest Rates Charged on Small Business Loans? Empirical Evidence from Canada

Using a unique survey database of Canadian small business loans,we find a negative and statistically significant relation between the number of localcompetitors and small business loan rates. This result is robust to the presence of a wide varietyof covariates intended to proxy the effects of both loan specific details and individualcharacteristics. These findings further suggest that the local markets definition applied to small businessloans is still relevant, despite recent technological innovation such as internet banking.     

Pricing interest-rate-derivative securities

This article shows that the one-state-variable interest-ratemodels of Vasicek (1977) and Cox, Ingersoll, and Ross (1985b)can be extended so that they are consistent with both the currentterm structure of interest rates and either the current volatilitiesof all spot interest rates or the current volatilities of allforward interest rates. The extended Vasicek model is shownto be very tractable analytically. The article compares optionprices obtained using the extended Vasicek model with thoseobtained using a number of other models.     

Components of CEO Remuneration and Non‐GAAP Disclosure

This paper provides evidence of the effect of chief executive officer (CEO) remuneration on decisions to disclose voluntary non‐generally accepted accounting principles (non‐GAAP) financial measures. We investigate profit announcements that focus on the most emphasised part, which includes mandatorily identified information (results for the announcement to the market) and the least emphasised part, which incorporates other sections. By reading the profit announcements and manually collecting non‐GAAP financial measures (NGFM) data, there is no reliance on keyword search strings and as such we uncover the pervasiveness of the use of NGFM. Results show that the base component of CEOs’ remuneration plays a significant role in reporting NGFM in the most emphasised part of the profit announcement. Conversely, all three (base, short‐term and long‐term incentives) components of the remuneration package have a significant relationship with the reporting decisions in the least emphasised part of the statement. We find that, depending on the regulatory imposition and the emphasis assigned to the section of the profit announcement, the motive for voluntary disclosure of NGFM can be explained as altruistic (informative) or opportunistic (misleading). We contribute evidence on ‘pay–action’ rather than ‘pay–performance’ by incorporating all three components simultaneously into the framework to maintain the assumption of correspondence and internal consistency among those components.     

Impacts of free concessionary travel: Case study of an English rural region

Concessionary fares are offered to those aged 60 and over for bus travel in Britain. This study examines the effects of replacing a half-fare concession in England by free travel in April 2006. Aggregate data are used to examine trends; in addition, a large sample was obtained of pass holders in the Salisbury area, which enables a clear distinction to be drawn between increased travel by those who already held a half-fare pass, and travel by those taking up the pass for the first time. These data are then used to derive fare elasticities, and compare the characteristics of new passholders and those previously holding a half-fare pass. Comparisons are made with studies elsewhere. Overall policy implications are reviewed.     

Pricing of Payment Services: A Comparative Analysis of Paper-based Banking and Electronic Banking

This paper aims at comparing paper-based banking and electronic banking in terms of cost-efficiency and pricing. The focus is primarily on giro payments made manually by mail and electronically via the Internet, but also by cash over the counter. The paper presents principles of efficient pricing in terms of production fees and capacity fees. It also demonstrates that the current pricing of payment services in Norway and Sweden is far away from these principles as production fees are set below marginal costs while capacity fees are in many cases above capacity costs. Such deviations may stimulate customers to an excess demand for electronic payments while paper-based payments will be depressed.     

Issues and Opportunities in the Professional Services

Professional practice management has been a largely ignored discipline for many years. Most universities do not offer courses in administration and marketing as they are not considered appropriate for the professional. Yet with threats created by public intervention, technological change, rapidly rising practice costs, high practice failure rates, increased competition and high promotion costs, new and unique strategies for professional practice administration are required. This study focuses on the issues and new strategies available to those in professional services.     

Government and industry performance: a comparative study

A number of UK industries are heavily dependent on the government as a major purchaser. The Ministry of Defence and the National Health Service are essentially monopsonists for the industries supplying them. As a monopsonist, government can influence the size, structure, conduct and performance of the industries. This paper examines wheather industries relying heavily on government purchases will differ in their structure, conduct and performance-characteristics and whether dependence on goverment can have favourable or adverse effects on industry performance. The hypothesis is tested by comparing the performance of industries dependent on government purchasing – defence, pharmaceuticals and medical equipment – with a control group of other non-dependent industries.