Credit agency regulation and the impact of credit ratings in the international bond market

The use of credit ratings in financial and other legal documents — both in the USA and Europe —, has led to a situation in which the major rating agencies have become (largely unwilling) participants in the legislative process. This situation has become partly formalized in the US (and is being repeated elsewhere in the European Union, Eastern Europe and Latin America) through the creation of officially ‘recognized’ agencies whose ratings now carry the imprimatur of the Securities and Exchange Commission. The purpose of this paper is to contribute to the debate on the necessity for formal legal status to be sustained in the market for bond credit ratings. In this context, the criteria for a credible rating agency are examined and evidence is provided on one element of the criteria which is under-researched: namely, the impact of the ratings in the market place. The influence of rating agencies in international capital markets is assessed through an analysis of the impact of ratings on the yields of bonds, represented by a comprehensive sample of actively traded debt. The sample contains analysis of ratings introductions on both new and seasoned debt and also examines the impact of ratings revisions. It is concluded that official recognition has no market-based role and it is argued that ratings are used by regulators because of the success of the major agencies in performing their market function.     

Robust Non‐nested Testing for Ordinary Least Squares Regression when Some of the Regressors are Lagged Dependent Variables*

The problem of testing non‐nested regression models that include lagged values of the dependent variable as regressors is discussed. It is argued that it is essential to test for error autocorrelation if ordinary least squares and the associated J and F tests are to be used. A heteroskedasticity–robust joint test against a combination of the artificial alternatives used for autocorrelation and non‐nested hypothesis tests is proposed. Monte Carlo results indicate that implementing this joint test using a wild bootstrap method leads to a well‐behaved procedure and gives better control of finite sample significance levels than asymptotic critical values.     

Rethinking tomorrow's cities: Emerging issues on city foresight

Rethinking tomorrow's cities now, builds our capacity to act with foresight and create resilient and liveable places. I use methods from the futures studies field, particularly macrohistory, to provoke our current patterns of city making. From macrohistory, the grand patterns of social change reveal some of the key systems dynamics influencing the rise and fall of cities in civilisation. The key urban system dynamics in the broadest sense provide a meta-framework of emerging issues shaping new urban challenges or opportunities for our towns and cities. The hope drawn from the past and present is to focus our urban interventions in the key areas to create future cities of wonder and purpose. The implications of the emerging issues (critical focus areas of city foresight) that arise from the macrohistorical analysis are discussed using the case study of the Maroochy 2025 community visioning project.2025 is a community driven project to develop shared visions and action plans for the Maroochy Shire¹ towards the year 2025, for the purpose of creating an empowering and community owned response to the challenges facing them locally and globally.     

Behavioral changes following the collaborative development of an accounting information system

This research examines physician response to implementation of an activity-based costing (ABC) system developed and designed with physician input. We analyze changes in resource utilization for treatment of cataract patients and find changes in practice patterns, where physicians redeployed resources toward more severely ill patients and decreased average length of stay. We also find preliminary evidence of improvement in financial performance. We contribute to research investigating the influence of user participation on accounting system success, ABC system success, and hospital accounting information systems.     

The Efficacy of Official Intervention in the Foreign Exchange Market in Malawi

Abstract: This paper analyses the effectiveness of foreign exchange market interventions by the Reserve Bank of Malawi (RBM). We use a GARCH (1, 1) model to simultaneously estimate the effect of intervention on the mean and volatility of the Malawi kwacha. Results from the GARCH model indicate that net sales of US dollars by the RBM depreciate, rather than appreciate, the kwacha. Empirically, this implies the RBM ‘leans against the wind’, that is, the RBM intervenes to reduce, but not reverse, exchange rate depreciation. On the other hand, results for the GARCH model for the post‐2003 period indicate the RBM intervention in the market stabilizes the kwacha. In general, results for the entire study period show that the RBM interventions have been associated with increased exchange rate volatility, with the only exception being the post‐2003 period. The implication of this finding is that intervention can only have a temporary influence on the exchange rate.     

Book review

Abstract

This article employs the methodology of contextual cultural studies to explore the protest strategies of ‘Lesbians for Liberty’, a group of fans who staged a ‘kiss‐in’ during every time‐out of a nationally televised game between the Women’s National Basketball Association’s (WNBA) New York Liberty and Miami Sol. Designed as a way to challenge homophobia and lesbian invisibility sanctioned by the New York Liberty management, this article suggests the fans’ kissing activism promotes visibility and single‐issue identity politics as strategies for change. While the fans’ actions make lesbian bodies intelligible in a sporting and leisure space that too frequently imagines heteronormativity, a closer analysis reveals the rhetoric of Lesbians for Liberty and the WNBA’s marketing strategies are both complicit with ideologies and shifting processes characteristic of late capitalist profit‐enhancing practices. This article concludes by offering a discussion of queer and feminist writings that attempt to again theorise resistance in light of late capitalist marketing strategies, which have co‐opted the rhetoric of equality in the service of capital. The ultimate goal of this analysis is to join broader dialogues about the efficacy of identity‐based models of resistance by using the Lesbians for Liberty’s desire and actions as productive sites from which to rethink bodies, pleasures and resistance differently.     

Trust restoration: an examination of senior managers' attempt to rebuild employee trust

This article advances discussions surrounding the extent to which senior management can rebuild damaged trust relationships in a context where the founding principle of respect had been contravened. More specifically, our article is concerned with a senior management team's attempt to regain trust through addressing workplace bullying. The study draws on a quantitative methodology where the population of the case study organisation were surveyed (n = 206) at two points in time (2004 and 2007). The findings revealed that managements’ actions had a significant effect on perceptions of bullying. T‐tests, however, provided only partial support for the notion that trust had improved as a result of management actions. In particular, there were significant differences in the levels of loyalty and benevolent motives and also openness, whereas no significant changes were observed for other dimensions of trust (integrity, competence, consistency and respect).