Money,interest rates,and risk

This paper analyzes the role of the risk in the form of the volatility of open market interest rates as a factor in the demand for money. We demonstrate, using an inventory theoretic model of money demand, that increases in interest rate volatility will increase the demand for money. We then present empirical evidence that the demand for money has been influenced by alterations in the volatility of open market rates using standard specifications of the demand for money.     

Impact of stakeholder characteristics on voluntary dissemination of interim information and communication of its level of assurance

Equity of access to information for listed entities is a key principle in an efficient and effective market. Direct mailing is a mechanism for achieving this. This study examines equity of access by identifying the half‐yearly financial information, if any, voluntarily mailed out by Australian listed entities and associated stakeholder characteristics. We find that certain stakeholder characteristics (presence of audit committee and shareholder dispersion) are associated with voluntary mail‐out of half‐yearly financial information, along with certain control variables (size of entity, industry and audit opinion). This study further identifies that there are very few instances of the higher level of assurance (audit) being chosen, and where half‐year information is disseminated there are very few instances of the level of assurance on this information being communicated to shareholders.     

Fee pressure and audit quality

This study investigates the association of audit fee pressure with an inverse measure of audit quality, misstatements in audited data, during the recent recession. Fee pressure in a year is measured as the difference between benchmark “normal” audit fees and actual audit fees. We find fee pressure is positively and significantly associated with accounting misstatements in 2008, the center of the recession. Our results suggest that auditors made fee concessions to some clients in 2008, and that fee pressure was associated with reduced audit quality in that year.     

Audit Market Structure and Competition in Australia

The purpose of this review is to synthesise the existing research literature regarding the underlying structure and competitiveness of the Australian audit market. We consider the findings of Australian academic research, which has examined audit fees, non‐audit fees, market concentration, auditor choice, auditor switching and audit firm mergers. We identify the key metrics used to evaluate market structure in the academic literature and then document changes in these metrics in the Australian audit market for listed company audits during the period 2000–2011. Our analysis shows that the audit market is both highly segmented and supplier‐concentrated. We find that audit fees in Australia have increased over this period, which can be attributed to increased regulation and resulting increased audit effort needed to complete audit engagements in times of regulatory change and more recently, the global financial crisis. We provide regulators, standard setters and the profession with an evidenced‐based perspective on the market for the listed company audits, which is an important input into any future proposals to regulate the Australian audit market.     

Getting By with a Little Help from Your Family: Toward a Policy-Relevant Model of the Household

Recent decades have seen dramatic changes in the ways in which households in developed Western economies gain their livelihoods, with marked elements of a return to old ways of working. There has been a shift from reliance upon one family wage to the need for family employment as well as growing reliance on self-employment and small business. These changes mean that childcare for working parents, and the promotion of new small enterprise, are key areas of policy concern. Drawing on original English empirical research around both these themes, this article shows the ways in which UK households draw on redistribution between the generations as a v - v generally decommodified v - v contribution to livelihoods and "getting by." We argue that these results confound widely utilized models of how people behave, and take particular issue with how economists and policy-makers model the household and its boundaries as the institutional context for individual decisions.     

The farm, the city, and the emergence of social security

We study the social, demographic and economic origins of social security. The data for the U.S. and for a cross section of countries suggest that urbanization and industrialization are associated with the rise of social insurance. We describe an OLG model in which demographics, technology, and social security are linked together in a political economy equilibrium. In the model economy, there are two locations (sectors), the farm (agricultural) and the city (industrial) and the decision to migrate from rural to urban locations is endogenous and linked to productivity differences between the two locations and survival probabilities. Farmers rely on land inheritance for their old age and do not support a pay-as-you-go social security system. With structural change, people migrate to the city, the land loses its importance and support for social security arises. We show that a calibrated version of this economy, where social security taxes are determined by majority voting, is consistent with the historical transformation in the United States.     

Stakeholders,industry knowledge and adaptive management in the Australian whale-watching industry

Whale watching has become an economically valuable tourism sector. The whale-watching industry is complex, involves multiple stakeholders and can involve multilevel governance. This paper uses the concept of adaptive management to underpin an investigation of industry knowledge and information exchange between two key stakeholder groups in whale watching in Australia – whale-watching operators and environmental resource managers. Twenty commercial operators and nine environmental resource managers were interviewed using both quantitative and open-ended questions. Findings showed key differences between stakeholders involved, and inconsistent perspectives across the industry. Resource managers found biological issues, species health and numbers and interpretation important; operators sought clear and consistent knowledge on compliance, legislation and rules. Only half of the operators had direct access to research and researchers. Managers found the industry to be relatively unprofessionally qualified, especially small and non-specialised operators. Whale-watching operators did not specify that any information (about new knowledge, regulations or policy) was obtained from environmental resource managers through information exchanges. There was inconsistent contact between stakeholders, limiting information exchange and the knowledge-building potential of the industry. Improved dialogue between these groups may not only address existing uncertainties, but also lead to more sustainable outcomes across the industry.     

In Advertising We Trust: Religiosity's Influence on Marketplace and Relational Trust

Trust is a critical component of marketing for both brands and consumers. Competing theories suggest that high-religiosity consumers could be either more or less trusting of marketing. Thus, this article explores religiosity's influence on broad marketplace trust that influences more specific relational trust in the context of advertising messages. Study 1 shows that marketplace and relational trust positively mediate the relationship between religiosity and product evaluations. Studies 2 and 3 test moderators to this relationship based on three dimensions of religiosity: affective, behavioral, and cognitive.     

Virtue Remains After Removing Sin: Finding Skill Amongst Socially Responsible Investment Managers

We examine the investment skill of socially responsible investment (SRI) fund managers. Prior studies use the ‘alpha’ from standard asset pricing models as a proxy for management skill. However, implicit in the use of such models is that managers operate under no investment constraints. In the SRI context, this is patently false and can lead to biased alpha estimates and false conclusions about the existence of skill. We introduce a novel three-factor Fama–French asset-pricing model with the aim of estimating alpha more accurately and hence investment skill, without bias. This model excludes SRI-prohibited industries such as defense, alcohol, tobacco and gambling in the construction of the Fama–French market, value and size risk factors. We show that the exclusion of the SRI-prohibited industries leads to subtle and complex changes to the risk factors that drive SRI returns. When we re-estimate alpha using the new model we find, in contrast to the conventional Fama–French model, evidence of statistically and economically significant alpha. Furthermore, the risk loadings on the new risk factors are similar to those of the original Fama–French model suggesting that changes in risk loadings are not responsible for the finding of significant skill.