Does market misvaluation help explain share market long‐run underperformance following a seasoned equity issue?

We examine the relation between pre‐seasoned equity offering (SEO) announcement date misvaluation and long‐run post‐SEO performance for a large sample of Australian SEOs made between 1993 and 2001. Our study is motivated by inconsistent findings across countries with respect to the SEO long‐run underperformance anomaly first documented in the USA, inconclusive findings with respect to the hypothesis that managers exploit market misvaluation when timing equity issues, and a recent Australian Stock Exchange proposal to loosen SEO regulation. We find SEO firms underperform common share market benchmarks for up to 5 years after the announcement. Using a residual income valuation method, we show that this underperformance is related to pre‐announcement date misvaluation. An unexpected result is that underperformance and misvaluation are more severe for private placements than rights issues. Institutional factors unique to the Australian setting, particularly the large number of smaller loss‐making firms among private placement issuers, appear to explain the poorer performance of placement firms. Our results are robust to various measurement methods and assumptions, and demonstrate the importance of researching SEO performance in alternative institutional settings.     

The Emergence of Post-Suburban Landscapes on the North Coast of New South Wales: A Case Study of Contested Space

Since 1980, population trends in Australia have indicated new patterns of urbanization involving substantial growth not only in the dominant conurbations, but also in suburban areas and in an extensive coastal zone (Paris, 1994). Comparisons can be made with the emergence of post-suburban forms and processes in other parts of the world (Kling et. al., 1991). The principal aim of this paper is to present an analysis of some of the major local development conflicts and planning and environmental protection issues that are being faced by developers, planners and local communities as the urban restructuring of Australia takes place. The paper draws on evidence of urbanization on the upper North Coast of New South Wales and provides a detailed examination of two shires in the region — Ballina and Byron — where a study was carried out by the authors in 1994 and 1995. Previous research on the population and development trends in Australia is reviewed to provide a context within which the patterns in New South Wales and its North Coast may be placed, and a discussion is presented of the implications of new development with reference to Ballina Shire and Byron Shire. The usefulness of the postfordist model as an explanatory framework for examining these post-suburban landscapes and contested space issues on the North Coast of NSW is also explored.     

Calculating Least-Cost Machinery Size for Grain Farms Using Electronic Spreadsheets and Microcomputers

Proper machinery sizing for a given farm has the potential of reducing costs and thereby increasing profits substantially. The microcomputer and the electronic spreadsheets now available are the latest tools farm business managers can use to solve this recurrent, complex and important problem. This paper finds the least-cost combination of machinery taking into account fixed, variable and timeliness costs. The model is solved using a microcomputer spreadsheet.
La bonne grosseur d'équipement en proportion avec la grosseur de la ferme vont de pair et donne comme résultat une réduction des coûts et par le fait même augmenteles profits. Le micro-ordinateur et les chif-friers électroniques maintenant disponibles sont les derniers appareils que le ǵerant d'affaires de ferme peut se servir pour résoudre le problème complexe de choisir l'équipement approprié. Cette étude determine la combinaison de machines requises qui est la plus économique en tenant compte des couts fixes et variables ainsi que des couts opportuns. Ce modele est resolu avec l'aide d'un chiffrier de micro-ordinateur.     

Identifying Decision Useful Information with the Matrix Format Income Statement

We conduct an experiment to investigate the potential benefits of an alternative format for the income statement, the matrix format, initially developed by the International Accounting Standards Board (IASB) and UK Accounting Standards Board in their joint project on performance reporting. Sophisticated financial statement users (financial analysts and professional accountants) and less sophisticated financial statement users (MBA students) were asked to extract information from a set of financial statements that included an income statement either in the IAS 1 format or in the matrix format. We find that the matrix format improves the accuracy with which users extract financial information. This result is driven by greater accuracy, for all user groups, on “below‐the‐line” items. Furthermore, despite lack of familiarity with the matrix format, its use did not appear to affect the time taken, the ease of extracting financial information, or users' task completion confidence; further experience with the matrix format could lead to benefits along these lines as well. Our findings may assist the FASB and IASB in their joint project on financial statement presentation.     

Corporate governance,accounting and finance: A review

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.     

Measures of the Timeliness of Earnings

We explore relationships among four measures of ‘timeliness’ in the financial accounting research literature: the Ball and Brown (1968) measure; Dyer and McHugh's (1975) reporting lag; the Khan and Watts (2009) measure; and the Beekes and Brown (2006) measure. There are good reasons why the measures might be related and also why they might differ. Thus we examine the extent to which they are empirically related, using data for a sample of Australian companies over the period 1994 to 2005. Overall, we find the four measures share a common label, ‘timeliness’, but not much else.     

A method for assessing highway qualities to integrate values in highway planning

Highway infrastructure planning is most often oriented toward assessing and maintaining physical inventories but it is often the lack of social knowledge about how people perceive, value and use a transportation system that generates the greatest user conflict and mistrust of public agency behavior. Using results from a 2001 statewide survey of Alaska residents, this paper presents a methodology for examining highway systems as a collection of intrinsic highway qualities and special places that provide a spectrum of highway experience opportunities. The concept of a highway experience opportunity spectrum is described and a number of potential dimensions for creating experience opportunity classes are suggested. With knowledge of spatial locations of intrinsic highway qualities, transportation planners can make informed choices to maintain or alter the set of highway experience opportunities associated with a highway system.     

The Price is Right? Pay Settlements and Nominal Wage Rigidity in Britain

We examine representative, group‐level wage settlement data to augment the debate on nominal pay rigidity in Britain. We investigate the characteristics of groups that settle at zero and the role of within‐firm and external influences. Nominal settlement cuts are rare. Zero nominal wage settlements are more common, but still relatively unusual, highest during (low‐inflation) recessionary periods. Small groups, above all firms under duress, appear most likely to settle at zero. Once a group settles at zero it is unlikely to do so again in the short run.