Exchange rate exposure and foreign exchange derivatives: do ineffective hedgers modify future derivatives use?

Recent studies examining the relationship between stock returns and exchange rate changes have provided evidence that the exchange rate exposure of non-financial companies is reduced by the use of foreign exchange derivatives. Building on such research, this study investigates whether past ineffective derivative hedging contributes to explaining future derivatives use. To the extent that companies monitor the effectiveness of their currency risk management practices, past ineffective hedgers can be expected to modify their future use of foreign exchange derivatives accordingly. In our study of 94 non-financial US multinationals, we provide evidence that the change in derivatives use from 1996–1998 to 1998–2000 can be explained in part by the ineffective hedging of currency risk in 1996–1998, controlling for variables associated with theories of optimal hedging. Additional analyses confirm that such primary results are robust to firm size, the level of foreign operations, and the use of derivatives to partially hedge currency risk. Our results imply that as exchange markets and risk management practices change, the use of derivatives to manage exchange rate risk also changes. Our contribution to this field of study is that we find evidence that past ineffective hedgers tend to increase their future use of FXDs.     

Through Trial and Error to Collusion*

In this article we study a very simple trial and error learning process in the context of a Cournot oligopoly. Without any knowledge of the payoff functions players increase, respectively decrease, their quantity as long as this leads to higher profits. We show that despite the absence of any coordination or punishing device this process converges to the joint‐profit‐maximizing outcome.     

The FRC AND Accounting Standard‐Setting: Should I Still Call Australia Home?

This paper analyses the decision of the Financial Reporting Council (FRC) to replace Australian accounting standards with international accounting standards on 1 January, 2005. Two main topics are considered: the appropriateness of the FRC's directive, and the case against the proposed adoption date. We argue that the FRC has not conducted sufficient consultation with affected parties and that the hasty implementation will impose costs that could have been avoided with the exercise of more caution.     

Target marketing in a social marketing context: gender differences in importance ratings of promoted intrinsic and extrinsic restricted exchange benefits of military enlistment

Social marketing involves influencing voluntary behaviour of people towards a social end. Examples of social marketing range from campaigns to encourage healthy physical behaviour to efforts to encourage tax support for public education, overcome racism, or stimulate ‘patriotic’ behaviour. Using data from a summer 2001 telephone survey of 600 young adults, this paper investigates how recruitment campaigns may benefit from considering gender differences in importance ratings of a variety of benefits promoted by the military in the USA. Importance ratings are assessed using differences in means and variances tests. Findings identify gender specific differences that may be used to enhance recruitment campaigns. Copyright © 2004 Henry Stewart Publications     

Global Integration in Primary Equity Markets: The Role of U.S. Banks and U.S. Investors

We examine the costs and benefits of the global integrationof initial public offering (IPO) markets associated with thediffusion of U.S. underwriting methods in the 1990s. Bookbuildingis becoming increasingly popular outside the United States andtypically costs twice as much as a fixed-price offer. However,on its own, bookbuilding only leads to lower underpricing whenconducted by U.S. banks and/or targeted at U.S. investors. Formost issuers, the gains associated with lower underpricing outweighedthe additional costs associated with hiring U.S. banks or marketingin the United States. This suggests a quality/price trade-offcontrasting with the findings of Chen and Ritter, particularlysince non-U.S. issuers raising US$20 million–US$80 millionalso typically pay a 7% spread when U.S. banks and investorsare involved.     

Executives’ Orientations as Indicators of Crisis Management Policies and Practices*

ABSTRACT The paper examines effects of executives’ orientations on crisis management awareness and practices, drawing on the simplicity and paradox management theories. It is suggested that a focus on single‐sided management constitutes an antecedent of crisis proneness. Employing a set of key corporate domains and based on a holistic organizational approach, the study aims at assessing the extent to which companies are crisis prone or prepared. In a sample of 82 Istaeli business and not‐for‐profit organizations it was found that human resource management, strategy, structure, and unlearning factors significantly predicted crisis preparedness. These results suggest that unlearning, despite a mere allusion to this correlate in the simplicity and paradox management theories, correlates better with crisis preparedness. By contrast, traditional strategy‐related and structural effects were marginally related to crisis management policies. Implications and suggestions for further research are proposed.     

Professionalisation or incarceration? Household engineering, accounting and the domestic ideal

Social constructionist theories of gender are utilised to explore the relationship between household accounting and patriarchy during the early twentieth century in the USA and Britain. This period witnessed a reformulation of the ideology of domesticity founded on precepts derived from modish scientific management. It is argued that the suite of calculative techniques prescribed by ‘household engineers’ merely attempted to occupy middle class women in the domestic sphere. Rather than offering a source of professionalisation and liberation, the practice of financial management, costing, record keeping and time and motion study, contributed to a reassertion of private patriarchy, confirmed the gendered nature of spatiality, reinforced the role of woman as a consumer and diverted attention from career building outside the home.     

Inflation dynamics in Kazakhstan1

In January 1992, Kazakhstan initiated a reform programme to move towards market-determined prices. The price liberalization process was characterized by large relative price shifts and an increase in the overall price level towards those observed in market economies. The paper shows how the piecemeal manner in which prices were liberalized resulted in strong relative price variability over a prolonged period of time, against a background of high inflation. Convergence towards international relative and absolute price levels has progressed but is not complete, with prices for energy and services in particular still below market economy levels.     

Determining factors in entry choice for international expansion. The case of the Spanish hotel industry

The hotel sector, as a service industry where it is possible to separate capital investment from management skills, is a clear example of how internationalisation can be modelled without shareholding involvement through foreign direct investment. This paper is an empirical examination of the key factors influencing the decision process carried out by Spanish hotel companies in choosing an entry mode for international expansion. The main objective is to verify whether the concepts derived from the transaction-cost, agency and the strategic theories of organisational capability and knowledge in companies can really explain the mode of foreign expansion employed by the Spanish hotel sector. This study will allow comparison of findings on holiday resort hotel chains with other analyses on the international hotel industry.     

Bivariate and multivariate scaled association models. An application to homogamy of social origin and education in Hungary between 1930 and 1979

In this article we compare bivariate and multivariate models for homogamy of social origin and education to test whether bivariate models of homogamy lead to biased results. We use data on Hungarian couples married between 1930 and 1979 and loglinear models of scaled association. The results indicate some differences between bivariate and multivariate analyses. At each point of time bivariate models overestimate homogamy, both with respect to education and social origin. However, results on trends in time do not differ much between the two analyses. The exception is the period 1940–1959, in which bivariate analysis showed decreasing educational homogamy, and multivariate analysis showed an increasing trend. The latter finding can be explained by declining homogamy of social origin, as well as the weaker reproduction and cross-effects in this period.