Real Investment Implications of Employee Stock Option Exercises

This paper examines a real cost of awarding employee stock options. Based on the observation that managers are extremely concerned about earnings-per-share dilution in equity related compensation, we predict and find that firms experiencing significant employee stock option (ESO) exercises shift resources away from real investments towards the repurchase of their own stocks. We further find weak evidence of a decline in subsequent firm performance (as measured by return on assets) for several years following the cut in discretionary investments as a result of stock option exercises, though this result is sensitive to the metric used to measure performance. Collectively, our findings indicate that ESO exercises potentially impose a real cost on the firm in terms of foregone investment opportunities.     

E–Commerce and the Australian Economy

This paper considers the likely impact of e–commerce and the Internet on the Australian economy. It surveys literature on the extent and development of e–commerce in Australia and its impact on the shape of the Australian economy. Evidence for the 'renewal' of the Australian economy is presented and examined, especially the question of whether Australia has enjoyed increases in productivity as a result of the production and/or use of new information and communications technology. Australia is seen as broadly well placed to benefit from the Internet and e–commerce. Traditionally isolated from the world's main economic centres and reliant on commodities in international trade, the advent of the Internet is ideal for a country in transition to a service–orientated, knowledge–based economy. As the composition of Australia's exports becomes more service–orientated and knowledge–intensive, traditional trading links with Europe and North America may strengthen relative to those with Asia.     

Extracting the information: espionage with double crossing

This paper addresses two very old issues in human society: espionage and double crossing. Our major conclusion points out that there will be a serious over rewarding problem in the direct mechanism due to double crossing in espionage, and a competitive mechanism with a relative performance regime can possibly mitigate the over rewarding problem and still extract the information.      

Assessing Applied Protection across the World*

This paper presents MAcMap–HS‐6, a database providing a consistent, ad valorem equivalent measure of tariff duties and tariff rate quotas for 163 countries and 208 partners, at the six‐digit level of the Harmonized System (5111 products), accounting for all preferential agreements. We describe the methodology used to compute and aggregate an ad valorem equivalent of applied protection. Emphasis is placed on minimizing the endogeneity bias in the aggregation procedure, while acknowledging structural differences in export specialization. The resulting quantitative assessment is illustrated by giving an overview of applied protection across the world in 2001, in terms of average as well as distribution.     

Understanding the Large Negative Impact of Oil Shocks

This paper offers a plausible explanation for the close link between oil prices and aggregate macroeconomic performance in the 1970s. Although this link has been well documented in the empirical literature, standard economic models are not able to replicate this link when actual oil prices are used to simulate the models. In particular, standard models cannot explain the depth of the recession in 1974–75 and the strong revival in 1976–78 based on the oil price movements in that period. This paper argues that a missing multiplier-accelerator mechanism from standard models may hold the key.     

Domestic Support and Border Measures for Processed Horticultural Products

In horticultural markets, trade barriers often apply to the processed products whereas domestic support applies to farm-produced raw commodities. Here we assess the effects of such trade barriers and domestic support by simulating the effects of policy reform on global processing tomato markets, which are faced with modest processed product tariffs and high domestic support in the European Union (EU). Both protection and EU subsidy drive down world welfare, but we find that reducing import tariffs for tomato products would yield greater effects on markets and larger welfare impacts outside Europe than would reductions in EU domestic support.     

Predicting the budgetary funding need of education in the three-year budget for 2008–2010

The paper presents a technique developed by the authors, which makes it possible to determine the necessary amount of financing for education at all the budget system levels for 2008-2010, based on the Russian average value of financing, taking into account the budget expenditures index for two variants of student population, i.e. the actual number of on-budget students and the number of students required to meet the economy’s need for trained workers. The technique was developed and the calculations were made on the basis of Russian long-term forecasts and the Russian three-year federal budget for 2008–2010.     

Issues Facing Small Accounting Practices in Regional North Queensland: An Exploratory Study

Small accounting practices (SAP), most of which are sole principals, are an important part of the accounting profession and the Australian economy. This exploratory study identifies issues and challenges experienced by small accounting principals in Far North Queensland, Australia. The findings generally correspond with previous research, ranking staffing and keeping up to date through professional development as key areas of concern, and also highlighting the expectation gap between SAP principals and their clients. Stress emerged as a major concern for principals, and new areas of possible conflict of interests were uncovered. A number of potential areas for future research, including comparative studies in city and suburban areas, have been identified.