The effect of more rules‐based guidance on expense disclosure under International Financial Reporting Standards

International Financial Reporting Standards (IFRS) are often described as principles‐based; however, we show that IFRS and Australian pre‐IFRS expense‐related standards are more rules‐based than pre‐IFRS expense disclosure in New Zealand. Thus, we examine expense disclosure in New Zealand and Australia around IFRS adoption to provide evidence on the effect of more or less rules‐based standards on voluntary disclosure. First, we add to the rules versus principles‐based standards debate by finding higher voluntary expense disclosure under more rules‐based standards (e.g. IFRS). This contrasts with expectations, as we would expect fewer voluntary disclosures under more rules‐based standards as there would be fewer possible voluntary disclosures. Second, we document that New Zealand firms have significantly less voluntary expense disclosure than size‐ and industry‐matched Australian firms in both the pre‐ and post‐IFRS period. However, all measures of expense disclosure significantly improved post‐IFRS for New Zealand, whilst little change occurred for Australian firms. Thus, there is greater financial statement comparability across these countries post‐IFRS, but not full harmonization. Third, we show that the relationship between most firm characteristics and expense disclosure is weaker post‐IFRS. In addition, cross‐listed firms and loss‐making firms have a higher level of expense disclosure, as contrasted with firms in the investment and property industry which have a lower percentage of unspecified expenses but also report fewer voluntary expenses.     

Cross-ownership as a structural explanation for over- and underestimation of default probability

Based on the work of Suzuki, we consider a generalization of Merton’s asset valuation approach in which two firms are linked by cross-ownership of equity and liabilities. Suzuki’s results then provide no arbitrage prices of firm values, which are derivatives of exogenous asset values. In contrast to the Merton model, the assumption of lognormally distributed assets does not result in lognormally distributed firm values, which also affects the corresponding probabilities of default. In a simulation study we see that, depending on the type of cross-ownership, the lognormal model can lead to both over- and underestimation of the actual probability of default of a firm under cross-ownership. In the limit, i.e. if the levels of cross-ownership tend to their maximum possible value, these findings can be shown theoretically as well. Furthermore, we consider the default probability of a firm in general, i.e. without a distributional assumption, and show that the lognormal model is often able to yield only a limited range of probabilities of default, while the actual probabilities may take any value between 0 and 1.     

Comparison of Mean-Risk Efficient Portfolios in Asia-Pacific Capital Markets

In order to analyze the performance of mean-risk efficient portfolios, several methods of portfolio comparison have been developed. In this paper we analyze the second-order stochastic dominance efficiency of portfolios on the mean-risk efficient frontier assuming that the risk is represented by standard deviations and concordance matrices set up on the basis of Pearson's linear correlation, Spearman's rho, or Kendall's tau. Empirical analysis of the market returns of selected Asia-Pacific stock markets is carried out considering both the U.S. dollar and euro as reference currencies, and different periods: before and during the subprime crisis. Measures and portfolios on the mean-risk efficiency frontier that should be of interest to at least one risk-averse investor are empirically documented.     

Working the skies: Changing representations of gendered work in the airline industry, 1930–2011

The influence of the media, whether print, celluloid or contemporary electronic, on life and career choices, particularly from a gender perspective is well documented. Indeed, the power of today’s e-media imagery has, arguably, a more ubiquitous influence on such decisions than was in the case for previous generations. However, both traditional print and more contemporary media influencers remain important and, therefore, gaining an understanding of their role in the representation of gendered work, both historically and in a modern context, is of considerable value. Working in the sky, whether as a pilot or member of the cabin crew, continues to hold a fascination and attraction for potential entrants that far exceeds the technical demands or financial rewards of the reality of such work. Perceived as ‘glamorous’ work since the early days of commercial flight in the 1930s, this tag has largely remained, despite major changes to the business and workplace environment in the intervening years. Commercial aviation is an area of work that has inspired a genre of influential romantic literature and numerous ‘real-life’ recollections alongside serious academic analysis. This paper charts the representation of, in particular, female flight attendant work from its ‘golden era’ through to the present context where the influence of the low-cost airline model has radically impacted upon the working environment within the sector. The discussion focuses on the broad ‘genre’ of airline-related employment literature, drawing on romantic, comic and biographical accounts alongside sources that address this theme from academic/research perspectives, in order to ask whether contemporary representation is any more a true reflection of this work than that during previous generations. In undertaking this analysis, this paper draws upon the role and career representation literature, particularly with respect to embodied and gendered work.     

NO‐ARBITRAGE PRICING UNDER SYSTEMIC RISK: ACCOUNTING FOR CROSS‐OWNERSHIP

We generalize Merton’s asset valuation approach to systems of multiple financial firms where cross‐ownership of equities and liabilities is present. The liabilities, which may include debts and derivatives, can be of differing seniority. We derive equations for the prices of equities and recovery claims under no‐arbitrage. An existence result and a uniqueness result are proven. Examples and an algorithm for the simultaneous calculation of all no‐arbitrage prices are provided. A result on capital structure irrelevance for groups of firms regarding externally held claims is discussed, as well as financial leverage and systemic risk caused by cross‐ownership.     

The Role of Expectations in Explaining the Cross-Section of Stock Returns

We find highly significant results when the cross-section of market-adjusted stock returns is regressed against changes in analyst expectations this year about: (1) this year's earnings, (2) next year's earnings, (3) long-term earnings growth, and (4) noise (measured as the standard deviation of analyst forecasts). Surprisingly, changes in expectations about this year's earnings are not significant in a multiple regression with the other independent variables. Changes in expectations about next year's earnings are highly significant but with an impact that is much smaller than that of changes in expectations about the long-term growth in earnings. Changes in noise are also statistically significant and are negatively related to market-adjusted returns, an indication that the signal to noise ratio, rather than merely the signal, is what drives price adjustments to new information.     

The Meaning of Applied Creativity in the Culinary Industry

ABSTRACT

The purpose of this article is to present a study which explores the origin of applied creativity in the culinary industry, in Taiwan. A total of 36 Chinese and Western cuisine chefs from five-star hotels and top restaurants were interviewed to provide the data from this study. The findings indicate that the role of applied creativity in the culinary industry has played a key role in culinary change and evolution in Taiwan. Culinary creativity has its own distinct characteristics, such as time limitations and market acceptance, which are acquired through building blocks of professional skills and experience. The study contributes to understanding the role of applied creativity in the culinary industry.     

HEGY Tests in the Presence of Moving Averages*

We analyze the asymptotic distributions associated with the seasonal unit root tests of Hylleberg et al. (1990) for quarterly data when the innovations follow a moving average process. Although both the t‐ and F‐type tests suffer from scale and shift effects compared with the presumed null distributions when a fixed order of autoregressive augmentation is applied, these effects disappear when the order of augmentation is sufficiently large. However, as found by Burridge and Taylor (2001) for the autoregressive case, individual t‐ratio tests at the semi‐annual frequency are not pivotal even with high orders of augmentation, although the corresponding joint F‐type statistic is pivotal. Monte Carlo simulations verify the importance of the order of augmentation for finite samples generated by seasonally integrated moving average processes.     

The proletarianisation of academic labour

This article looks at industrial relations changes, conflict and control in higher education, particularly among university academics. It suggests a tendency towards proletarianisation, and a focus on the academic labour process is useful in explaining growing conflict. An apparent HRM agenda and (reluctantly) increasing managerialism are forms, not causes, of change which is driven by funding pressures similar to those affecting other HE systems.