Hedging,Financing and Investment Decisions: A Simultaneous Equations Framework

We empirically investigate the interactions among hedging, financing, and investment decisions. We argue that the way in which hedging affects a firm's financing and investing decisions differs for firms with different growth opportunities. We find that high growth firms increase their investment, but not leverage, by hedging. However, we also find that firms with few investment opportunities use derivatives to increase their leverage.     

Current state of the electrification of Russia

The current progress of electrification in Russia is clearly insufficient compared with G8 countries. At the same time, economy sectors have a high potential for energy saving. The electricity consumption of households depends on their cash income and the growth rate of electricity tariffs.     

The economic performance of the Russian economy in 2006 and a forecast for 2008–2010

This article examines the economic outcome of 2006 and builds a forecast for 2007–2010. The medium-term development risks of the Russian economy are analyzed.     

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.     

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.     

Service Competitiveness – An Anglo-US Study

This article reports on the latest in a series of international comparisons of management practices and performance outcomes of industries in various countries. Here, it is the service industries in the UK and the US which come under the microscope. Among the companies surveyed, there were more world-class performers in the US than the UK, but also more low performers. The concluding part of the article is diagnostic – the authors also suggest measures which could improve performance.     

Is the International Convergence of Capital Adequacy Regulation Desirable?

The merit of international convergence of bank capital requirements in the presence of divergent closure policies of different central banks is examined. The lack of a complementary variation between minimum bank capital requirements and regulatory forbearance leads to a spillover from more forbearing to less forbearing economies and reduces the competitive advantage of banks in less forbearing economies. Linking the central bank's forbearance to its alignment with domestic bank owners, it is shown that in equilibrium, a regression toward the worst closure policy may result: The central banks of initially less forbearing economies also adopt greater forbearance.     

Fiscal sustainability and solvency: theory and recent experience in Indonesia

A major challenge for Indonesian economic policy makers is to avoid the recurrence of conditions that could trigger a new economic crisis. One of the important dimensions of this challenge will be to conduct fiscal policy in a way that is sustainable, given the level of interest rates and the rate of growth of the economy. This paper synthesises various approaches to the measurement of fiscal sustainability that have appeared in the economic literature, relates these measures to the fundamental concept of fiscal solvency, and applies the framework to Indonesia over the period 1991–2003. The domestic and foreign debt positions of the central government are treated separately, to capture the influence of exchange rate changes on the relative costs of domestic and foreign borrowing. The empirical analysis indicates that Indonesia has met the fiscal sustainability criterion in recent years, except when the rupiah has depreciated heavily.