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.     

The effect of geographical deregulation on bank acquisition premiums

In recent years, many state legislatures have passed laws allowing greater geographical expansion by banking organizations, including interstate acquisitions. The reduction of barriers to geographic expansion may be expected to affect signficantly the prices paid in bank acquisitions. According to the excess demand hypothesis, merger premiums should be larger because of an increase in the number of potential bidders. According to the barriers to entry hypothesis, however, premiums should decrease as the constraints on geographic expansion are relaxed. This study presents empirical results that are consistent with the excess demand theory. Bank merger premiums are significantly larger in states that permit interstate banking. Furthermore, premiums appear to increase significantly in the year following the passage of enabling legislation. Premiums are also greater in states that allow unlimited intrastate holding company acquisitions. Some evidence also exists to support the barriers to entry hypothesis.     

The relevance of democracy to organizational management

The relationship between democratic ideals and organizational structuring and functioning receives attention in this article. After a brief historical consideration of liberal democracy in the United States, we analyze social, managerial, ethical, and economic issues defining the relevance of democracy to organizational management. These issues lead to a presentation of specific purposes that particular mechanisms of organizational democracy can serve. Because of other scholarly attention to participative management and employee ownership, hierarchical constraints receive emphasis here.     

Technical Progress and Product Reliability under Competition and Monopoly

Technical progress lowers costs and prices but appears to have an ambiguous effect on product reliability. This paper presents a simple model which explains this observation. Copyright © 2013 John Wiley & Sons, Ltd.     

Risk-return measures of hedging effectiveness: The case of multiple cash and futures markets

In this article we consider the measure of hedging effectiveness proposed by Howard and D' Antonio (HD) when there are multiple cash and futures markets. It is found that the HD measure can be decomposed into two components: one solely determined by the futures market conditions, the other affected by both cash and futures markets as well as the hedger's cash portfolio. We then analyze the impacts of optimal cash portfolios on the HD measure. Although the Ederington hedging effectiveness is bounded over all cash portfolios, the conclusion does not apply to the HD measure.     

Asymmetric effect of basis on dynamic futures hedging: Empirical evidence from commodity markets

The dynamic minimum variance hedge ratios (MVHRs) have been commonly estimated using the Bivariate GARCH model that overlooks the basis effect on the time-varying variance–covariance of spot and futures returns. This paper proposes an alternative specification of the BGARCH model in which the effect is incorporated for estimating MVHRs. Empirical investigation in commodity markets suggests that the basis effect is asymmetric, i.e., the positive basis has greater impact than the negative basis on the variance and covariance structure. Both in-sample and out-of-sample comparisons of the MVHR performance reveal that the model with the asymmetric effect provides greater risk reduction than the conventional models, illustrating importance of the asymmetric effect when modeling the joint dynamics of spot and futures returns and hence estimating hedging strategies.     

Asymptotics for LS,GLS, and feasible GLS statistics in an AR(1) model with conditional heteroskedasticity

We consider a first-order autoregressive model with conditionally heteroskedastic innovations. The asymptotic distributions of least squares (LS), infeasible generalized least squares (GLS), and feasible GLS estimators and $t$ statistics are determined. The GLS procedures allow for misspecification of the form of the conditional heteroskedasticity and, hence, are referred to as quasi-GLS procedures. The asymptotic results are established for drifting sequences of the autoregressive parameter ${\rho }_n$ and the distribution of the time series of innovations. In particular, we consider the full range of cases in which ${\rho }_n$ satisfies $n(1?{\rho }_n)\to \infty$ and $n(1?{\rho }_n)\to h_1\in [0,\infty )$ as $n\to \infty$, where $n$ is the sample size. Results of this type are needed to establish the uniform asymptotic properties of the LS and quasi-GLS statistics.     

THE POLITICAL ECONOMY OF CONTINGENT PROTECTION

In recent years, several empirical studies have attempted to investigate the key influences, or determinants, of the anti-dumping and countervailing duty (AD/CVD) decision-making process. As a consequence, several different empirical modelling approaches have been developed using alternative, and in some cases, competing theoretical frameworks. Each approach tests empirically aspects of the AD/CVD decision-making process for evidence of particular forms of pressure that contribute to protectionist outcomes. However, the results of these studies have been somewhat inconsistent and inconclusive, possibly because the analytical scope of these studies appears to be too narrow. Hence, the current article sets for itself the important objective of developing a more general framework for modelling contingent protection empirically. A taxonomy is introduced that suggests that the types of bias affecting AD/CVD decision-makers may be separated into three broad categories: political supply pressure, industry demand pressure, and regulatory process pressure. This approach is then used to analyse recent Australian anti-dumping outcomes. The empirical results generated from the Australian data, using the taxonomy, suggest that from the supply side, the Australian government appears to be biased against the provision of AD/CVD protection. On the other hand, the results suggest that a demand-side bias appears to be present. That is, the Australian AD/CVD process appears to be weighted towards a demand, rather than supply, orientation contrary to political economy suggestions that AD/CVD policy is used as a politically driven trade policy device.