Franchisees' trust in and satisfaction with franchise partnerships

This paper aims to establish the relationship between the antecedents of trust, trust itself, and franchisee satisfaction. Taking its cue from power-dependence, international business, and social exchange theories, the paper contributes to the franchise literature by offering a more comprehensive theoretical perspective to aid understanding of trust development in and satisfaction with franchise partnerships. Drawing on a multi-sector survey of Turkish franchisees, the study provides empirical evidence of the impact of the franchisors' role performance and cultural sensitivity on franchisees' trust in and satisfaction with franchise partnerships. Furthermore, this research demonstrates the central role of communication in the development of franchisees' trust.     

Conservatism correction for the market-to-book ratio and Tobin’s q

We decompose the market-to-book ratio into two additive components: a conservatism correction factor and a future-to-book ratio. The conservatism correction factor exceeds the benchmark value of one whenever the accounting for past transactions has been subject to an (unconditional) conservatism bias. The observed history of a firm’s past investments allows us to calculate the magnitude of its conservatism correction factor, resulting in an average value that is about two-thirds of the overall market-to-book ratio. We demonstrate that our measure of Tobin’s q, obtained as the market-to-book ratio divided by the conservatism correction factor, has greater explanatory power in predicting future investments than the market-to-book ratio by itself. Our model analysis derives a number of structural properties of the conservatism correction factor, including its sensitivity to growth in past investments, the percentage of investments in intangibles, and the firm’s cost of capital. We provide empirical support for these hypothesized structural properties.     

The Role of Accounting Information in Valuing Unlisted Shares

Little research has been conducted on how professional accountants value unlisted shares. The study reported in this paper analyses the accounting and other data drawn from 185 actual unlisted share valuation reports within seven major Canadian accounting firms to estimate a model of and to explain variations in the values placed on unlisted shares.

The findings suggest that valuation of unlisted shares can be explained largely in terms of historic accounting data, the main sources being earnings, earnings stability and asset book value. A high degree of consensus on the importance of variables was found across accounting firms. The implications of these findings are discussed.     

The Government/Democrats' package of changes in indirect taxes

Australia is faced with a comprehensive package of changes to its indirect tax system, including the introduction of a GST. The Government's only quantitative analysis in formulating the package employed PRISMOD, an archaic input-output price model. PRISMOD sheds dim light on a very limited range of policy-relevant variables. This article explains how PRISMOD works; this is of continuing relevance because PRISMOD results are a benchmark in negotiations concerning the price effects of the tax package. Then an assessment of the package is made using MONASH, a comprehensive dynamic general equilibrium model. Overall, the conclusions are negative: the package is welfare-reducing and unnecessary.     

Changes in Technology and Preferences: A General Equilibrium Explanation of Rapid Growth in Trade

We use a computable general equilibrium model in an explanation of the recent rapid growth in Australia's trade, particularly intra-industry trade. Relative to previous studies of trade growth based on multiple regression analysis, our approach allows us to: (i) work at a detailed industry level; (ii) use primary variables to represent changes in technology and preferences rather than proxies; and (iii) use a framework based on explicit microeconomic foundations. We find that most of the growth in Australia's trade relative to GDP is explained by changes in technology and preferences.     

You can't have a CGE recession without excess capacity

Simulations with dynamic, single country, CGE models typically imply that reductions in domestic demand, e.g. a cut in investment, generate increases in exports and reductions in imports facilitated by real depreciation. However, currently in the U.S. a large reduction in investment is occurring simultaneously with a contraction in exports and little movement in the real exchange rate. We show that to describe this situation it is necessary to drop the standard CGE assumption that capital is always fully employed in every industry. After introducing an excess capacity specification, we simulate the U.S. recession with and without the Obama stimulus package.     

Body scanning as a new anthropometric measurement tool for health‐risk assessment

The study explored the accuracy of body measurements gathered from trained observers employing a tape measure compared with those generated by the 3D body scanner. Tape measurements of body circumferences are routinely used for assessing future risk to health, as increased circumference of the waist vs. hip is associated with greater chronic disease rates later in life. Findings indicated that significant differences existed between circumference measurements calculated by the body scanner and those which were gathered from a tape measure. This research indicates that utilization of the body scanner as an anthropometric measurement tool for the assessment of health risk has tremendous benefits.     

Bubbles: Some Perspectives (and Loose Talk) from History

Bubbles are a topic of great importance and great controversy.This paper discusses alternative perspectives on the economicmeaning and origin of bubbles. Drawing on historical approachesto bubbles, this article sets out a taxonomy of approaches usedto explain the nature of bubbles. The paper also considers issuesconnected with the scientific thinking surrounding bubbles.