Formal Rehabilitation Procedures and Insolvent Firms: Empirical Evidence on the British Company Voluntary Arrangement Procedure

The British Company Voluntary Arrangement (CVA) is a relatively new debtor rehabilitation process intended to help financially troubled companies, particularly SMEs, resolve their difficulties without being forced into liquidation by secured creditors anxious to recover their funds. This paper is based on a survey conducted by Milman and Chittenden for the Association of Chartered Certified Accountants that is the largest and most comprehensive on the subject of British CVAs. It has three principal objectives: (i) to outline the defining characteristics of CVAs; (ii) to analyse the relationships between CVA performance and contextual factors; (iii) to provide policy recommendations based on those findings. Among other things we find that CVA success is most closely associated with sound fundamental prospects for recovery and supportive creditors. Our principal recommendation is that ways should be found of lowering the fixed costs of CVAs to make the procedure feasible for a larger number of small firms.     

Real Wages in Australia and Canada, 1870–1913: Globalization versus Productivity

Australia's and Canada's real wage experiences between 1870 and 1913 were distinctive. Faster productivity growth underpinned Canada's overtaking of Australia's wage levels. The globalization forces of migration and trade also shaped their comparative wages, principally by reducing wage growth in Canada. Immigration increased slightly Australia's real wages, but reduced wage levels in Canada, and tempered there the beneficial effects of rising productivity and improving terms of trade. In contrast, wage earners' share of national income rose after 1890 in Australia, with the productivity slowdown hitting chiefly rents and profits. Distributional shifts favouring wage earners in Australia, and the depressing effects of mass immigration on wages in Canada, limited Canada's wage lead before 1914, despite her faster productivity growth.     

Stackelberg thresholds in network routing games or the value of altruism

It is well known that the Nash equilibrium in network routing games can have strictly higher cost than the optimum cost. In Stackelberg routing games, where a fraction of flow is centrally-controlled, a natural problem is to route the centrally-controlled flow such that the overall cost of the resulting equilibrium is minimized.We consider the scenario where the network administrator wants to know the minimum amount of centrally-controlled flow such that the cost of the resulting equilibrium solution is strictly less than the cost of the Nash equilibrium. We call this threshold the Stackelberg threshold and prove that for networks of parallel links with linear latency functions, it is equal to the minimum of the Nash flows on links carrying more optimum flow than Nash flow.Our approach also provides a simpler proof of characterization of the minimum fraction that must be centrally controlled to induce the optimum solution.     

Too Much Monitoring, Not Enough Performance Pay

This paper endogenises the internal organisation of competitive firms in a simple general equilibrium framework. The options are monitored teams, unmonitored teams motivated by collective performance pay, and self-employment. The choice of incentive scheme depends on market price and also affects price through its influence on output. As more people opt for self employment, pecuniary externalities increase the pressure on the rest to follow suit and Pareto rankable multiple equilibria arise. The conditions for a competitive equilibrium to be constrained efficient are restrictive and everyone may gain from policies limiting monitoring and self employment and from the imposition of entry taxes.     

Economic contribution of French serradella (Ornithopus sativus Brot.) pasture to integrated weed management in Western Australian mixed‐farming systems: an application of compressed annealing*

Sowing phases of French serradella (Ornithopus sativus Brot.) pasture between extended cropping sequences in the Western Australian wheatbelt can sustain grain production through restoring soil fertility and reducing selective herbicide use. The objective of this article is to investigate the profitability of rotations involving this pasture under a variety of weed management scenarios to obtain greater insight into its value for mixed farming systems in this region. A stochastic search procedure, compressed annealing, is used to identify profitable sets of weed management strategies in a simulation model representing a large number of potential combinations of chemical and non‐chemical forms of weed control. In contrast to a continuous‐cropping sequence, the inclusion of a serradella phase in a rotation is profitable at high weed densities and with increasing levels of herbicide resistance. A single year of pasture in the rotation is optimal if resistance to Group A selective herbicides is present at the beginning of the planning horizon, but a three‐year phase is required if resistance to multiple herbicide groups is observed. Sowing a serradella pasture twice over a two‐year phase is also shown to be economically attractive given benefits of successive high weed kills.