Estimating society's willingness to pay to maintain viable rural communities*

Declining populations in rural and regional areas have become a high political priority in Australia. Calls for measures to support rural communities have been prompted by substantial population declines in some country areas. In Europe and the USA, similar political pressures to halt population losses in rural and regional areas are also apparent; often as a component of the multifunctionality of agriculture. The question addressed in the present paper is whether or not the Australian tax‐paying public would be willing to pay to avoid losses of people from rural and regional areas that may result from environmental protection measures. As an integral component of two recent non‐market, environmental valuation exercises using Choice Modelling, the value of the benefits associated with the maintenance of rural populations has been estimated. The results demonstrate that a positive existence value is held primarily by urban dwellers for rural population levels.     

International Portfolio Diversification and the Magnitude of the Market Timer's Penalty

Market timers without timing skill suffer a penalty relative to buy-and-hold investors in the form of higher portfolio risk. With transactions costs, timers suffer lower expected returns as well. We derive the magnitude of this penalty for a timer randomly switching funds between two or more risky assets. Assuming costless trades, a U.S.-based timer randomly switching between U.S. and Japanese national stock funds can expect to face a 26.2% higher standard deviation than a comparable buy-and-hold investor at the same level of expected return. A timer randomly switching between a globally diversified equity portfolio and U.S. T-bills faces a 50.3% higher standard deviation of return than a comparable buy-and-hold investor.     

Small entrepreneurial ventures culture, change and the impact on HRM: A critical review

Effective management of people is increasingly recognized in the literature as a vital contributor to organizational performance and indeed survival. Nevertheless, studies of the dynamics of human resource management in small entrepreneurial ventures are relatively sparse. In this paper we draw upon a range of behaviourally-informed research publications to demonstrate that a culture of owner-influenced individualism and informality pervades these ventures, affecting prime human resource issues such as performance related practices, training and development, work–life balance and other critical dimensions of employee welfare. A preference for informality and an absence of strategy to inform owner–employee relations sits uneasily alongside growing political pressures toward codification of the management of employees in small entrepreneurial ventures. The response to these pressures may have significant implications both for relationships with employees and for organizational performance.     

Accounting for Executive Stock Options: A Case Study in Avoiding Tough Decisions

We review the development of accounting requirements for executive stock options (ESOs) and find that the standard-setting process has been susceptible to pressure groups including the corporate sector, politicians and even the accounting profession itself. The failure of Australian and overseas accounting regulators to take tough decisions may have created a systematic bias towards the use of ESOs which can result in grossly inefficient compensation structures motivated by a desire to maximise reported profits rather than to create optimal managerial incentives. We conclude that most of the arguments against recognition of stock option expense can be dismissed as blatant self-interest at worst, or remarkably muddled thinking at best.     

Call for papers and participation

Call for papers and participation     

Teaching the coase theorem: Are we getting it right?

The authors examine current textbook representations of Coase's analysis of negative externalities [Coase, 1960]. Standard treatments identify Coase's ideas with Stigler's Coase Theorem: a zero transaction cost world in which efficient solutions emerge automatically, regardless of legal rules and the initial allocation of rights. Yet Coase's seminal paper breaks from this mode of analysis. The authors use this intellectual history to distinguish two approaches to negative externalities: blackboard (Pigou, Stigler, Samuelson) and Coasean. They survey 45 microeconomics textbooks and find that 80 percent misrepresent Coase's arguments. They argue that a Coasean approach increases students' critical thinking skills by challenging them to move beyond simple laissez faire or interventionist solutions.     

Approaches to teleconferencing justification: Towards a general model

For organizations considering teleconferencing, five major justification perspectives are identified: the intuitive leaf; cost efficiency; timeless of decisions, improved work coordination; and reaching out. The perspectives are combined to form a model that charts their likely impacts on productivity. Proper planning through teleconferencing feasibility studies is advocated. That, and learning from others' experience, can help prospective users avert many pitfalls, avoid repeating past failures, and develop a teleconferencing system that will fulfill the promises of the justifications.     

Outlook for the grain market

With all the indications suggesting that the current imbalance between supply of and demand for grain will continue for the foreseeable future, and with a steady surplus both keeping prices down and forcing on governments measures to reduce output and stocks, attention is turning to South East Asia, a region which, due to the rapid growth of both its population and per capita income, seems to offer the best prospects of medium and long-term increases in demand. How realistic are the hopes that South East Asia will be able to absorb a substantial part of the world's grain surplus?     

Long-term valuation effects of stock splits

This study attempts to determine if stock splits affect the long-term stock performance of forms, and to explain cross-sectional variation in this performance proxy among firms. The consequences of both higher percentage transaction cost following a stock split and an investor overreaction hypothesis are expected to render negative effects on stock values. The consequences of any earnings and dividend signaling accompanying splits are expected to have a positive impact on stock values. The results of the analysis suggest that the cumulative abnormal returns (CARs) are positive and statistically significant through the eleventh month after a stock split. The CARs then decrease nearly monotonically through the thirty-sixth month after the split (CAR=?8.23%). This indicates that initially the signaling effects dominate, but later the consequences of investors' downward revisions of previous expectations and the increase in percentage transaction cost dominate. The cross-sectional results indicate that firms with higher earnings-growth rates exhibit higher CARs, and firms with higher share prices just before the split exhibit lower CRRs.