IT'S A SMALL WORLD AFTER ALL: INTERNET ACCESS AND INSTITUTIONAL QUALITY

Using a panel of up to 114 countries covering the years 1990 through 2010, we estimate the effect of Internet use on changes in countries' Economic Freedom of the World (EFW) scores. The point estimates suggest that the marginal effect is generally positive. However, starting from above‐average EFW scores (>7.7 out of 10; examples in 2010 include the UK, Switzerland, and Hong Kong) the marginal effect turns negative. Taking this interaction into account, the marginal effect is positive and statistically significant for countries starting at initial EFW scores of around 6 or less. Examples of countries with 2010 EFW scores near this threshold include China, Nigeria, and Pakistan. We discuss mechanisms that potentially generate this conditional relationship between Internet use and institutional change. (JEL O10, O43, P48)     

Reputation and value creation in search shops

We look at reputation effects in firms which create value by finding valuable objects, which we label search shops. The paper examines and validates different measures of value creation and reputation in search shops and finds partial support for our hypothesis that higher reputation is associated with higher value creation. The negative findings are instructive as they suggest that future studies of search shops, such as petroleum exploration units, must take care when using simple counts of success to measure value created. The paper provides empirical data on three key success factors in search shops and concludes with tactics for increasing a search shop's reputation.     

The international fund for Ireland: Some findings on its patterns of expenditure

The International Fund for Ireland (IFI) was established by the Irish and British governments as part of the Anglo-Irish Agreement of November 1985. In 1994 the total resources available to the Fund were approximately £280 million. Both Unionists and Nationalists have expressed opposition to the Fund and concern over the Fund's objectives. Despite the considerable degree of controversy which surrounds the Fund, there has been no systematic analysis of the Fund's expenditure. This article begins such an analysis by presenting findings on the geographical distribution of the Fund's expenditure over the period 1986/87-1994. Findings on the distribution of the Fund's expenditure by the various initiatives and programmes which it sponsors (eg Business Enterprise, Tourism, etc) are also presented. The article also presents detailed findings on the allocation of the Fund's expenditure in one particular area of Northern Ireland, West Belfast. A number of policy recommendations are made on methodological issues surrounding the evaluation of the Fund and measures which the Fund could implement to reduce the suspicion and controversy which surround it.     

A Balanced Scorecard for State U's Facilities Management Division?*

This case introduces students to building and implementing a balanced scorecard (BSC) in a setting with which they are familiar — cleaning, maintenance, management, and construction of a university's buildings and grounds. Students are asked to construct or critique a BSC for the facilities management division of a university. This may lead to a discussion of the causal linkages implied in the BSC and how one would implement a BSC in a governmental setting.     

The Coffee Pot: A management control exercise

Managers use management control systems to actively steer their organizations towards strategic success. The Coffee Pot is a short, in-class exercise that provides a hands-on opportunity for students to diagnose and solve an organization’s management control issues using Simons’ Levers of Control Framework. The exercise features a chain of coffee shops, a business most students should be familiar with, and asks students to discuss why the new CEO is having trouble improving her firm’s performance, even after she has introduced a winning strategy.     

A comparison of national and international aggregate supply and demand var models: The United States,Japan and the European economic community

Zusammenfassung Ein Vergleich von nationalen und internationalen VAR-Modellen mit Angebots- und Nachfrageaggregaten: USA, Japan und Europ?ische Wirtschaftsgemeinschaft. - Es wird gezeigt, da\ für nationale Volkswirtschaften und auch für supranationale Gebilde vektorautoregressive Modelle konstruiert werden k?nnen, die Ergebnisse liefern, welche mit einem theoretischen Rahmen für Aggregate des Angebots und der Nachfrage in Einklang stehen. Energiepreise sind in allen Modellen einigerma\en wichtig, aber Geldangebot und Zinsen sind in dem EWG-Modell ziemlich unbedeutend. Natürlich kann dieses Ergebnis auf die Unterschiede zwischen der EWG, den USA und Japan zurückzuführen sein oder auf die Aggregation innerhalb des EWG-Modells. Trotzdem stimmt dieses Ergebnis mit den theoretischen Erwartungen überein, wonach alle Volkswirtschaften gemeinsamen weltweiten Angebotsschocks gegenüberstehen, aber - bei manipulierten floatenden Wechselkursen - eine gewisse monet?re Unabh?ngigkeit besitzen.

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Resumen Comparación de modelos autoregresivos de oferta y demanda agregada nacionales e internacionales: EE.UU., Japón y la Comunidad Económica Europea. - Se demuestra que los modelos VAR pueden ser construidos para economias tanto nacionales como supranacionales con resultados consistentes con el marco teórico de oferta y demanda agregadas. Los precios de energia tienen una cierta importancia en todos los modelos; la oferta monetaria y las tasas de interés no son importantes en el modelo para la CEE. Sin embargo, este resultado es consistente con expectativas teóricas segiín las cuales todas las economias enfrentan shocks de oferta globales comunes, pero disponen de un cierto grado de independencia monetaria en el marco de una flotatión administrada del tipo de cambio.

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Résumé Une comparaison entre des modéles VAR nationaux et internationaux d’offre et demande agrégée: les E.U., le Japon et la CEE. - Les auteurs demontrent que les modéles vecteurautorégressifs peuvent etre construits pour des économies nationales aussi bien que supranationales et que ces modeles produisent des résultats qui s’accordent avec le cadre théorique de l’offre et de la demande agrégée. Les prix d’énérgie sont importants dans tous les modéles jusqu’a un certain point, mais la masse monétaire et les taux d’ interet sont moins importants dans le modéle CEE. Naturellement, ce résultat peut etre expliqué par les différences entre la CEE et les E.U. et le Japon ou par l’agrégation dans le modéle CEE. Cependant, ce résultat est consistant avec des expectatives théoriques car toutes les économies sont confrontees avec des chocs d’offre communs globaux mais disposent de quelque independance monétaire grace au systéme de changes flottants dirigés.

     

Protecting the Most Vulnerable in Consumer Credit Transactions

There are two key ways in which the Australian Uniform Consumer Credit Code seeks to protect consumers in relation to consumer credit transactions. The first is by means of disclosure regulation where information is required to be disclosed to the consumer before the credit contract is entered into and the second is by way of “safety net” provisions, where contracts can be varied or set aside in the event of hardship, a finding that the transaction was unjust, or a finding of unconscionable fees or charges. This article explores the limitations of both of these means of protection, particularly in the case of vulnerable, low-income consumers. In order to highlight the inadequacies of these forms of consumer protection and the need for regulatory reform, we draw on interviews conducted with 30 low-income consumers who had recently signed a credit contract, focusing on their understanding of information disclosed in the contract, as well as their responses to hypothetical unfair terms and their understanding of their rights, for example in the event of an unjust transaction. These interviews were conducted as part of a joint research project between Brotherhood of St Laurence and Griffith University’s Centre for Credit and Consumer Law, funded by Consumer Affairs Victoria.

Stock prices and volume

We undertake a comprehensive investigation of price and volumeco-movement using daily New York Stock Exchange data from 1928to 1987. We adjust the data to take into account well-knowncalendar effects and long-run trends. To describe the process,we use a seminonparametric estimate of the joint density ofcurrent price change and volume conditional on past price changesand volume. Four empirical regularities are found: (i) positivecorrelation between conditional volatility and volume; (ii)large price movements are followed by high volume; (iii) conditioningon lagged volume substantially attenuates the 'leverage' effect;.and (iv) after conditioning on lagged volume, there is a positiverisk-return relation.     

Myth and Reality in Chinese Financial Cliques in 1936

Much of current scholarly work argues that China and Chinesecommunities are distinguished by a culturally specific and uniquepattern of networking based on personal relations (guanxi),but there is little agreement about whether such personal relationsproduce discrete factions or more disbursed, weblike connections.The literature on banking networks is similarly unclear, andmost discussion has focused on regional groups, such as a cliquemade up of natives from Zhejiang and Jiangsu provinces, or sharedprofessional values among bankers. None of these approachesadequately describes actual connections, and this case studyprovides a new and empirically broad approach that applies toolsof network analysis to interlocking bank directorships in 1936.This analysis shows the existence of twenty-four isolated banks;three very small, discrete, and regionally based groups; andone huge, diffuse, and weblike bank network that included virtuallyall Chinese bank assets and extended to most of China’seconomically developed regions. This network had a multicentercore made up of densely linked large banks and a number of smallstart-ups associated with prominent individuals. Diffuse connectionsalso characterized networks of individual bankers, though denseties existed either among the most important bankers who eachsat on numerous boards of directors (suggesting associationsbased on business ties, professional interests, and the importanceof banks) or among individuals who shared common native place,defined at the level of adjacent counties (suggesting the simultaneousexistence of strong but very local guanxi ties). In the end,bank networks arose as much from historical contingency as fromcultural predisposition.