Interest on bank reserves and optimal sweeping

A key rationale offered by the Federal Reserve for the payment of interest on reserves was to remove the incentive for banks to operate sweep accounts. Sweeping shifts funds from transactions deposits subject to reserve requirements to non-reservable deposits. This paper extends a conventional banking model to analyze sweeping behavior. Sweeping responds positively to increases in bank loan rates and reserve ratios and negatively to increases in the interest rate on reserves or exogenous increases in bank equity. Sweeping generates greater responsiveness in lending to changes in loan rates or the interest rate on reserves and lower responsiveness to changes in reserve ratios or equity than in its absence. Empirical analysis of an explicit condition that we derive suggests that, with an unchanged reserve requirement, the Fed could eliminate sweeping by setting the interest rate on reserves to no less than approximately 4% points below the market loan rate.     

A collective,undifferentiated accounting profession: an Australian study

A study of 386 potential and current members of the accounting profession in Australia and South‐East Asia provides evidence of the importance of three attributes – brand/reputation, international recognition of qualifications and career opportunities – in the decision to join a professional accounting body. While these attributes are important, logit regression models indicate that they are not discriminatory in the choice of professional body and suggest a perception of a collective, undifferentiated accounting profession. The marketing of brand/reputation and membership benefits may be a more efficient and effective strategy in attracting members and differentiating the profession if undertaken by a combined or coordinated professional body.     

Small Firm Capital Structure and the Syndicated Loan Market

We show that small firms using syndicated loans for their mid- and long-term financial needs have significantly higher leverage than firms that do not borrow in this market. This difference cannot be attributed to firm characteristics like the availability of growth opportunities, asset tangibility, R&D spending, profitability and net sales that are known to influence capital structure. We also find that the capital structure of other firms that borrow in the syndicated loan market is not different from those that do not. We show that already highly leveraged small firms are more likely to borrow in the syndicated loan market than other firms. The higher debt in the capital structure of small firms that rely on syndicated loans consequently can be attributed to the availability of capital rather than demand for capital, as shown more generally by Faulkender and Petersen (Rev Financ Stud 19(1):45?C79, 2006).     

Market intermediaries,storage and policy reforms

Intermediaries play a crucial role in the functioning of agricultural and food markets in developing countries through linking production, imports and storage with consumption. We analyse how competition in the intermediary sector and alternative forms of intermediaries determine the incentives for storage and market outcomes more generally. We apply this framework to the Egyptian wheat sector as an illustrative case study, a country where food security is a priority, where both forms of intermediaries co-exist and undertake storage but where issues of reforms to the role of intermediaries have been raised. Through stochastic simulation, we analyse two changes in government policy: first, the effects of changing the policy instruments with both types of intermediaries undertaking storage; second, relating to market reforms where the private sector replaces the storage function of the parastatal. These issues have wider significance for addressing the interaction between food security and a wide range of policy reforms including de-regulation of parastatals in developing countries.     

Consumer demand by Black Americans

This article investigates the consumption patterns of black Americans for five different commodity groups: food, housing, clothing, health care, and transportation. The black consumer’s demand for these products is hypothesized as describable by the linear expenditure system. The system allows the investigation of changing relative commodity prices and income. The system also establishes a basic consumption bundle as an estimable parameter of the system. The basic bundle allows for changes in composition due to increased product familiarity, habit formation, and emulation by black consumers. Product familiarity and habit-formation play a role in determining the black consumer’s demand for the commodities food, housing, and clothing. This demand is also partially determined by the consumer’s “emulation” of consumption standards established by society in general. The article is not a comparison study of black-white differences in consumer behavior; however, the possible existence of an emulation effect in black consumer behavior suggests an interrelation of black-white consumer welfare which might fruitfully be studied by future researchers.     

TO TAX OR NOT TO TAX? THE CASE OF ELECTRONIC COMMERCE

Despite the intensifying debate over the taxation of Internet commerce, the relevant issues have not been given a systematic treatment in the context of the literature on optimal taxation. This article presents such an analysis and investigates separately the taxation of business purchases of intermediate goods, the taxation of consumer purchases of final goods and services, and the various issues of administration and compliance costs as they apply to the development of E-commerce. The authors conclude that generally the optimal tax literature cannot be used in support of a blanket tax exemption for Internet purchases. Certain conditions could lead to the optimality of an exemption, but those conditions are not likely to be met in practice.     

CEOs who have COOs: contingency analysis of an unexplored structural form

We use contingency theory to examine, for the first time, the incidence and effectiveness of CEO/COO duos. We argue that industry dynamism, extraordinary organizational task demands, and the CEO's own professional limitations will influence the decision to have a COO, as well as its effect on performance. Based on a large 10‐year sample, we find some support for the contingency view in explaining the presence of COOs; we particularly find that CEOs who lack experience in operational activities and in managing the focal firm are relatively likely to have COOs. We find, however, essentially no support for the contingency view in explaining when COOs are most beneficial. Instead, we find strong evidence of a very substantial negative main effect: CEOs who have COOs deliver lower organizational performance than those who do not. Copyright © 2004 John Wiley & Sons, Ltd.     

Fertility and Economic Growth: Do Immigrant Maids Play a Role?

A significant source of child-care services in East and South-East Asia are provided by immigrant maids. Using a modified version of the model used in Galor and Weil (1996), the present paper analyses the impact of this source of child-care services on women's labor market participation, fertility behavior and the household purchase of child-care services. The results show that a lower price for the maid service leads to a lower savings rate, a higher demand for children and less time being spent with children. We also find that hiring immigrant maids leads to lower economic growth in the long run.     

Environmental social controls and capital investments: Australian evidence

Environmental social controls (ESCs) such as mandatory disclosure, regulations, subsidies, and stakeholder opinion are intended to improve firm environmental performance. This paper reports ESC importance to Australian financial managers in making capital investment decisions. A decision‐making experiment showed managers to be most responsive to stakeholder opinion (42 per cent), followed by subsidization (26 per cent) and regulatory cost (22 per cent). Mandatory disclosure has very little influence (10 per cent). ESC interaction effects are limited so coordination of ESC policy is not a primary concern. High degrees of managerial self‐insight suggest policy changes would be enhanced by close consultations with the managers involved.