Prohibitions on punishments in private contracts

In most contemporary economies loan contracts that mandate exclusionary penalties such as imprisonment or other non-pecuniary punishments for defaulting debtors are illegal, despite the fact that in some cases contracting parties might gain by being able to use them. A possible rationale for contracting restrictions of this type is that exclusion imposes negative externalities on individuals not party to the original loan contract. We explore the ability of such externalities to account for these restrictions. We contrast exclusion with enforceable collateral seizure, a widespread feature of developed financial systems. We also consider “behavioral” agents who underestimate their chances of being punished, and show that overconfidence of this type is a less compelling justification for restrictions on exclusionary punishments than is often argued.     

Research productivity of Australian accounting academics

In recent decades, substantial changes have impacted the global academy, such as the increasing use of key performance metrics for academics. This study provides recent evidence of Australian accounting academics’ performance in publishing in A/A* journals during the period 2010–2018. We find that the top 25 percent of Australian academics produce approximately 60 percent of published journal articles through an analysis of the A/A* Australian Business Deans′ Council (ABDC) accounting journal listing. The majority of published Australian co‐authored research output in the sample is in A ranked journals (80 percent), with only 20 percent observed in A* ranked journals.     

THE DECADES‐LONG DISPUTE OVER SCALE EFFECTS IN THE THEORY OF ECONOMIC GROWTH

The so‐called “new growth theory” is characterized by the now Nobel Prize winning insight that ideas are a nonrival input to and output from endogenous investment in innovation. Nonrivalry implies increasing returns to scale, but this also unintentionally creates an empirically disputed scale effect that a growing population implies an ever‐increasing growth rate. Empirical evidence supports fully‐endogenous growth without scale effects, but theoretical issues sustain the decades‐long dispute over exactly how to negate the scale effect. This article surveys theoretical approaches to resolving the scale effect and shows how four generations of endogenous growth theory are defined by the maturing of modeling techniques for constraining increasing returns. The synthesis suggests that the dispute over scale effects is really a narrative about how the powerful application of increasing returns has followed a standard theoretical development pattern. This implies that a fourth generation is now emerging that negates the scale effect while retaining fully‐endogenous growth without relying on assumptions of linearity. Instead, the market response to excessive increasing returns to innovation constrains explosive growth by expanding the market, rather than by a linear assumption. This latest class of endogenous growth models may be the final chapter to resolving the long‐running dispute.     

Commercial Real Estate Returns: An Anatomy of Smoothing in Asset and Index Returns

In this article, we investigate the commonly used autoregressive filter method of adjusting appraisal‐based real estate returns to correct for the perceived biases induced in the appraisal process. Many articles have been written on appraisal smoothing but remarkably few have considered the relationship between smoothing at the individual property level and the amount of persistence in the aggregate appraisal‐based index. To investigate this issue we analyze a large sample of appraisal data at the individual property level from the Investment Property Databank. We find that commonly used unsmoothing estimates at the index level overstate the extent of smoothing that takes place at the individual property level. There is also strong support for an ARFIMA representation of appraisal returns at the index level and an ARMA model at the individual property level.     

Ways of Experiencing Leisure

This study used phenomenography to describe different experiences of leisure meanings and to interpret experiences in terms of the complexity in understanding. Four multi-dimensional experiences differing in their phenomenal, contextual, and temporal relations were described. Leisure as achieving fulfillment was judged the most complex understanding, followed by escaping pressure, exercising choice and passing time. More complex understandings resulted in fewer distinctions between leisure and other phenomena, higher levels of contextual diversity and inclusivity in meanings, and greater flexibility in temporal awareness of leisure. Results suggest meanings can be operationalized as a continuum of experiences that display a progression in understanding.     

Trade costs and multimarket collusion

Contrary to conventional wisdom, this article argues that trade liberalization may facilitate collusion and reduce welfare. With the help of a duopoly model in which firms interact repeatedly in multiple markets, we first show that, if trade costs (i.e., tariffs/transport costs) and discount factors are not too high, efficient cartel agreements necessitate the cross‐hauling of goods, as that entails lower deviation incentives. In this setting, we then demonstrate that reciprocal trade liberalization always raises total output when trade costs are within a range whose lower bound exceeds a threshold level, but may reduce total output (and thus be pro‐collusive) when trade costs are below that threshold level.     

How the automotive insurance claims experience affects customer retention

The authors were commissioned to carry out a study of the way in which the experience of automotive insurance companies of claiming after an accident affected their attitude to companies and their subsequent loyalty. A consumer omnibus study was used to identify relevant market segments and to provide an estimate for the overall number of claims. This indicated that under half of all motorists had claimed on either their own or on another driver's insurance. A telephone questionnaire was then used to determine customers' actual experience of the claims process and their attitudes to insurance companies and to car insurance in general. Three hundred telephone interviews were conducted with motorists using a bought-in list of drivers. These respondents were distributed throughout the UK. There was an equal split of men and women drivers. All those interviewed were responsible for arranging and purchasing their own motor insurance. The study found that whether a replacement car was provided and the standard of the replacement car had a strong effect on customers' subsequent loyalty. It also identified many aspects of the automotive claims experience that could be improved to the benefit of both customers and insurers.     

A Web Of Shocks: Crises Across Asian Real Estate Markets

The behaviour of real estate markets during the 1997–98 Financial crisis in Asian economies has received little attention despite the extensive research on other asset markets over this time. This paper examines the transmission of shocks across national real estate markets prior to and during the Asian crisis using a multivariate latent factor framework. The results reveal that diversification opportunities prior to the crisis are much reduced during the crisis. A comparison with regional equity markets shows that the transmission of shocks differs across the real estate and equity markets, providing evidence that investment in multiple asset classes provides some protection from large market downturns.     

Coordinating development: Can income-based incentive schemes eliminate Pareto inferior equilibria?

Individuals' inability to coordinate investment may significantly constrain economic development. In this paper we study a simple investment game characterized by multiple equilibria and ask whether an income-based incentive scheme can uniquely implement the high-investment outcome. A general property of this game is the presence of a crossover-investment point at which an individual's incomes from investment and non-investment are equal. We show that arbitrarily small errors in the government's knowledge of this crossover point can prevent unique implementation of the high-investment outcome. We conclude that informational requirements are likely to severely limit a government's ability to use income-based incentive schemes as a coordination device.     

Reputational Effectiveness in Cross-Functional Working Relationships

The work of innovation management involves cross‐functional coordination among specialists and managers with different work orientations, time horizons, professional backgrounds, and values ( Ford and Randolph, 1992 ). While strong connections across functions are critical for new product development success ( Green et al., 2000 ), some managers may be more adept at fostering effective cross‐functional relationships than others. In this article, the authors empirically examine the factors that distinguish reputationally effective innovation workers from their less effective peers. Drawing on the work of Tsui (1984, 1994) , reputational effectiveness is defined as the degree to which a manager has been responsive to the needs and expectations of constituents. This research examines the relational skills and interaction patterns of more (versus less) reputationally effective managers. A large business unit of a Fortune 500 telecommunications firm provided the context for our study. Using a two‐phase approach, the authors first captured the social network patterns of 268 managers from marketing, research and development (R&D), manufacturing, and other business functions that were involved in the new product development process. In addition, the reputational effectiveness of each person who was identified as a member of the network was measured. In the second phase, the authors examined the relational competencies (e.g., role‐taking ability, interpersonal control, openness) of the managers who participated in Phase I of the research. As predicted, the results indicate that role‐taking ability is related positively to a manager's reputational effectiveness. No support, however, was found for the relationship between interpersonal control and reputational effectiveness. Interestingly, the authors found evidence of an inverse relationship between openness and effectiveness. By sharing too much information—or alternatively information that does not relate to the task at hand—the reputational effectiveness of a manager is damaged. Importantly, the results reveal that the social network characteristics of a reputationally effective manager differ from those of less effective managers. Closeness centrality, a measure of the degree of access one has to other organizational members, was associated strongly with reputational effectiveness. The results demonstrate that managers who are successful in working across functions appreciate the cognitive and emotional perspectives of diverse constituents and develop relationship ties that provide them with ready access to others across the organization.