Clusters in regional tourism An Australian case

With changing industrial patterns in regional Australia, tourism has gained increasing currency as an agent for regional economic development. This paper investigates the applicability of cluster theory in supporting the movement from comparative advantage to competitive advantage for four regional towns located on the Murray River in Australia. Thus far cluster analysis has largely been applied in the manufacturing industry. This paper reports on its potential as an analytical tool in service-based tourism and, through the cases studied, identifies vital attributes of clusters that are lacking in the least economically successful region in the study area.     

International trade and face-to-face diplomacy

Review of World Economics - This paper examines the effects of foreign visits by public officials on international trade. Using an original database that gathers more than 13,000 visits of French...     

Gambling Taxation: Public Equity in the Gambling Business

Government's intrinsic role in sustaining a viable gambling industry, and its significant revenue stake in industry profitability, can make the public effectively shareholders in the industry. An important social cost of gambling is the potential for corruption of democratic processes through close industry and government links. Government can increase gambling revenues by expanding the tax base, rather than by raising tax rates. Gambling tax rates have fallen in recent decades, while revenues have increased dramatically. This paper analyses the forces encouraging governments to give excessive priority to protecting gambling revenues. It finds gambling taxation is regressive, and increasingly so as access widens. 'Children, madmen and fools' are significant to the market. The transition to a goods and services tax, along with the recent inquiry by the Productivity Commission into gambling, provides an opportunity for gambling policy to be made in a coherent social and economic framework, rather than as ad hoc and short-term solutions to State governments' revenue problems. Such an outcome rests on the Commonwealth government playing a leadership role.     

Financing the entrepreneurial decision: an empirical approach using experimental data on risk attitudes

This paper empirically examines the role of personal capital in the entry decision for US high-technology entrepreneurs. Our innovative approach utilizes both survey data and data from economics-based field experiments, which enables us to elicit and control for the risk attitudes of individual entrepreneurs in the study. Empirical findings suggest that (1) Small Business Innovation Research (SBIR) grants, (2) credit cards, and (3) earnings from a salaried job are among the most important sources of funds for entrepreneurs in their decision to start up a firm. Our findings support Evans and Jovanovic (Journal of Political Economy 97(4):808–827, 1989) in that wealth appears to have a positive impact on the probability of starting up a firm, even when controlling for risk attitudes; however, risk attitudes do not appear to have a strong role to play in the entry decision overall. Policy implications suggest that firm start-ups are dependent on access to capital in both initial and early stages of development, and that government funding, including SBIR grants, is an important source of capital for potential and nascent high-technology entrepreneurs.     

Coping with a natural disaster: Losses, emotions, and impulsive and compulsive buying

Using data collected from 427 US Gulf Coast residents who were impacted by Hurricane Katrina, a structural model based on life event theory is proposed and empirically tested. Results show that perceived lack of control and loss of possessions contribute directly to stress, and event-induced stress impacts depression. Depressive states, in turn, lead to impulsive and compulsive buying behaviors. Multi-group analysis reveals that income moderates the relationship between depression and compulsive buying, but age, gender, and insurance coverage do not. The depression–impulsive buying relationship is not moderated by any of these factors. Disaster victims engage in distinct purchasing behaviors to manage emotional states, recoup losses, and restore their sense of self. In the aftermath of a traumatic event, impulsive buying appears to be a rational and beneficial behavior; compulsive buying does not. The results heed valuable ethical and social responsibility implications to marketers and public policy makers.

Incorporating consumers' motivations into the theory of reasoned action

Consumers are motivated to engage in activities for many varied reasons. The present study broadens the theory of reasoned action model to include three variables reflecting motivations: hedonic involvement, self‐expressive involvement, and self‐concept congruity. It is suggested that eagerness to engage in a behavior encapsulates emotional commitment, and including this affective variable would further broaden the cognitive approach taken to model a consumer's intention to engage in a behavior. A model that links hedonic involvement, self‐expressive involvement, self‐concept congruity, subjective norm, and attitude toward the behavior to both intentions and eagerness is proposed. In addition, eagerness is posited as a mediator linking these three new variables to intentions. The models are tested with the use of data from 717 adults. © 2005 Wiley Periodicals, Inc.     

Corporate Social Responsibility and Firm Value: Disaggregating the Effects on Cash Flow,Risk and Growth

This paper investigates the effect of corporate social responsibility (CSR) on firm value and seeks to identify the source of that value, by disaggregating the effects on forecasted profitability, long-term growth and the cost of capital. The study explores the possible risk (reducing) effects of CSR and their implications for financial measures of performance. For individual dimensions of CSR, in general strengths are positively valued and concerns are negatively valued, although the effect is not universal across all dimensions of CSR. We show that these valuation effects are principally driven by CSR performance associated with better long run growth prospects, with an additional minor contribution made by a lower cost of equity capital.     

IFRS adoption and analysts’ earnings forecasts: Australian evidence

We study 145 large listed Australian firms to explore the impact of international financial reporting standards (IFRS) adoption on the properties of analysts’ forecasts and the role of firm disclosure about IFRS impact. We find that analyst forecast accuracy improves, and there is no significant change in dispersion in the adoption year, suggesting that analysts coped effectively with transition to IFRS. However, we do not observe the expected relationship between firms’ IFRS impact disclosures in their financial statements issued at the end of the transition year with forecast error and dispersion in the adoption year. The results question the timeliness and usefulness of financial statement disclosure, even in a setting where disclosure was mandated by accounting standards (AASB 1047 and AASB 1) and firms had strong incentives to provide information to analysts.     

The wage impact of undocumented workers: Evidence from administrative data

Using administrative, individual level, longitudinal data from the state of Georgia, this article finds that rising shares of undocumented workers results in higher earnings for documented workers, but by a small amount. A one percentage point increase in the share of undocumented workers in a documented worker's county/industry results in an average wage boost of 0.44%. Within the firm, a one percentage point increase in the percent of undocumented workers employed by the firm boosts wages by 0.09% (0.11, 0.12, and 0.04 in low, medium, and high skill firms, respectively). Potential explanations for a positive wage impact are discussed.