Contracts for dummies? The performance of investors in contracts for difference

Investors widely use contracts for difference (CFDs) to leverage and short sell underlying financial assets. We investigate the after cost performance of investors in Australian Securities Exchange listed share CFDs, and find that market order CFD trades earn small positive returns at the daily horizon, with negative returns reported for one month to one year horizons due to financing costs. Market orders also net sell positions, which suggests that investors use CFDs for shorting opportunities. Overall, we find that liquidity demanders in CFDs obtain favourable execution, which is inconsistent with the view that CFDs are used by naive individuals.     

The German bank–growth nexus revisited: savings banks and economic growth in Prussia†

This article provides evidence that smaller, regional public financial intermediaries contributed to Germany's industrial development, using a new dataset of the foundation year and location of Prussian savings banks. This extends the bank–growth nexus beyond its traditional focus on large universal banks. Since savings banks were public financial intermediaries, our results further suggest that state intervention can be successful in the financial sector, particularly at the early stages of industrial development when capital requirements are manageable, and access to international capital markets is limited.     

Speedier delivery: coastal shipping times and speeds during the Age of Sail †

There is a debate about whether coastal shipping experienced substantial productivity growth prior to the advent of steam power. To study changes over the long eighteenth century, this article uses thousands of coastal journey times culled from Board of Trade crew lists between 1835 and 1844 and coastal port books for the mid‐to‐late 1600s, along with a newly digitized coastal network. Comparisons between matched samples show that journey speeds, defined as miles sailed per day, were significantly higher in the crew lists compared to the port books, and that voyage cycle times, defined as days between starting two identical voyages, were substantially lower. The study also shows that voyage times in the east coast coal trade were substantially lower around 1840 than around 1700, but the difference was much smaller when peace years are compared. These new data imply that total factor productivity growth in the east coast coal trade was significant, especially if one accounts for gains from peace after 1815. The findings contribute to the larger literature studying the rate and sources of productivity growth during the industrial revolution.     

Auditors' Fee Premiums and Low‐Quality Internal Controls*

We examine the relation between low‐quality internal controls and audit fee premiums. Using a novel data set of audit hours and audit fees we find, consistent with the audit risk model, that auditors increase their effort (hours) owing to low internal control quality. We find that auditors also charge a significant fee premium to clients with internal control weaknesses. This premium is observed for severe internal control weaknesses and companies with low‐quality alternative governance mechanisms. The results are robust to multiple methods to address endogeneity, including company fixed effects, difference‐in‐differences design, and a propensity score‐matched sample. Taken as a whole, low internal control quality leads to fee premiums, which are a deadweight loss to client companies.     

Moderating effects of the fit between service tangibilization and organizational performance

As the significance of service industry grows, its relationship to overall economic growth and organizational performance (OP) has also become an issue of prominence. Tangibilization is widely known as one of the means of overcoming the weaknesses of service intangibility and improving OP. This research explores the relationship between service tangibilization and OP. Furthermore, the moderating effect of the fit between service tangibilization and OP will also be discussed in the business context. Specifically, the Korean natural gas industry is selected to test the developed hypotheses. The managers who have experience with managing a service business in either the wholesale or retail sector of this industry were surveyed. The results imply that there exists a significant relationship between service tangibilization and OP, with the mental fit positively strengthening some of the relationships between these two constructs. It can be inferred from this that it is important for companies in the natural gas industry to attain the right fit of mental tangibilization in order to effectively deploy service tangibilization and maximize their OP.     

Smallholder Demand for Maize Hybrids in Zambia: How Far do Seed Subsidies Reach?

We add to an emerging body of literature on input subsidies in Africa south of the Sahara. Our analysis focuses on demand for seed, characterising smallholders with a high predicted demand for hybrid seed who were not reached by the subsidy programme. We use cross‐sectional data from the 2010 agricultural season and an instrumented control function approach to test the hypothesis that the subsidy on hybrid maize seed in Zambia is selectively biased. Consistent with other literature, we find that the subsidy is a recursive determinant of seed demand, but in 2010, its recipients had more land, more assets, and lower poverty rates. Findings illustrate the social costs of the programme as currently designed and highlight the need to build alternative supply channels if poorer maize growers are to grow hybrid seed.     

Price integration in the Australian rock lobster industry: implications for management and climate change adaptation

Rock lobster fisheries are Australia's most valuable wild fisheries in terms of both value of production and value of exports. Different states harvest and export different lobster species, with most of the landings being sent to the Hong Kong market. A perception in the Australian lobster industry is that the different species are independent on the export market, such that a change in landings of one species has no impact on the price of the others. This study investigates the market integration of Australian exports to Hong Kong for the four species and different exporting states. Our results indicate all four species and producers/export states are perceived to be substitutes for one another, so that, in the long run, prices paid to operators in the industry will move together. The integrated nature of the Hong Kong export market for Australian lobster suggests that the potential impacts of alternative fisheries management and development strategies at state and species levels cannot be considered in isolation, at least from an economic perspective. In addition, impacts of external shocks affecting production in one state (e.g. climate change) can be expected to affect all Australian lobster fisheries.     

Introducing OMOV: The Labour Party–Trade Union Review Group and the 1994 Leadership Contest

Most scholars conclude that the introduction of one member, one vote (OMOV) into the electoral college that chooses the Labour leader demonstrates a new, reduced role for the party's affiliated trade unions. This article examines the adoption of OMOV by Labour. It looks at discussions in the Labour party–trade union review group that moulded the decision to adopt OMOV during 1992–1993. Drawing on the full breakdown of results, it goes on to examine the outcome of the 1994 leadership contest. The distribution of votes, union by union, indicates that, contrary to the conventional view, trade union leaderships retained the capacity to shape the pattern of voting through their ability to nominate candidates. The article concludes that the introduction of OMOV did not reduce the role of trade union leaderships in Labour's internal affairs in the manner that many scholars have concluded to be the case.