Risk and adventure education

Fire, an ever present hazard in Australia, causes approximately 100 fatalities and over 3000 injuries per annum. Significant resources are allocated to mitigate the risk. In this study, we estimate the total cost of fire in Australia for 2005 at AUD$12,000 million or 1.3% of GDP. Comparable studies in the UK, USA, Canada, Denmark and New Zealand are reviewed and show that the cost in these countries ranges between 0.8 and 2% of GDP. Breaking the Australian total down into its component parts, we find that 57% relates to costs in anticipation of fire, 29% for response activities and that the remaining 14% results from the consequences of fire. This estimate shows that the investment in mitigation (86% of the total costs) is over five times the consequences (14%) and raises questions as to whether the current system adopted in Australia is economically efficient.     

Longitudinal value relevance of earnings and intangible assets: Evidence from Australian firms

Recent U.S. studies report that earnings value relevance has declined over time. Some authors suggest non-recognition of intangible assets in the U.S. is a major reason for declining earnings value relevance. However, the evidence is mixed on the effect of non-recognition of intangible assets. To examine this conjecture, this paper examines earnings value relevance for Australian firms since Australian GAAP has not prohibited intangible asset recognition. Using a variety of established models and specifications, our results indicate that for the average firm, there is weak evidence of decline in earnings value relevance. However, firms that capitalize intangibles have increasing earnings value relevance. Further, the magnitude of the difference in earnings value relevance between capitalizing firms and non-capitalizing firms is most pronounced in the latter part of the 1990s and this difference is increasing.     

Producer Experience, Learning by Doing, and Yield Performance

Current crop insurance rating procedures consider only performance for the individual crop in question. Recent farm legislation has given producers considerable planting flexibility and, as a result, many have shifted to new crops. Producers without a production history for the new crop may be offered levels of insurance that do not accurately reflect their expected yields. Likewise, premium rates may not reflect a producer's actual risk for a new crop. We examine the extent to which information about expected yields may be gleaned from a consideration of historical performance on other crops. We also consider the extent to which yield performance exhibits learning by doing such that yields improve with experience. Though the results are mixed, we generally find that yield performance tends to improve with experience. However, when yields are conditioned on historical yield performance for other crops, the importance of experience is diminished significantly. Yield performance is related to a number of farm characteristics. Finally, we examine the extent to which yield variability is correlated across crops for individual farmers. Implications for crop insurance rating practices are discussed. The results demonstrate robust correlation between a farm's historical yield on other crops and a newly produced crop—a factor largely ignored in current crop insurance contracts.     

Tinged shareholder theory: or what’s so special about stakeholders?

This paper contrasts the normative foundations of the stakeholder and shareholder theories of the firm. It demonstrates how the shareholder theory of the firm appears to have at least as much normative support as stakeholder theory and suggests that a way forward may be for a variant of pure shareholder theory to emerge.     

Financial applications of semidefinite programming: a review and call for interdisciplinary research

Optimisation problems in finance commonly have non-linear constraints for which previous solutions have required unrealistic assumptions. However, many of these can be efficiently solved as semidefinite programming (SDP) problems, which have less restrictive assumptions. Through review of the literature that uses SDP in finance, two major research streams are identified: portfolio optimisation and option pricing. Nevertheless, many finance researchers are unaware of SDP. One possible reason is that this research is often published in non-finance journals. This paper aims to better integrate the SDP research to promote wider use of current findings and further interdisciplinary research, particularly in environmental finance.     

The UK supermarket industry: an analysis of corporate social and financial performance

In a previous paper (Moore, 2001), the headline findings from a study of social and financial performance over three years of eight firms in the UK supermarket industry were reported. These were based on the derivation of a 16‐measure social performance index and a 4‐measure financial performance index. This paper discusses the formulationof the indices and then reports on: discussions with two supermarket firms concerning the overall results; inter‐relationships between individual financial performance measures; inter‐relationships between individual social performance measures; stakeholder group analysis; and inter‐relationships between turnover, age and gearing with social performance measures. The paper discusses these inter‐relationships, incorporating comments from the interviews with the two supermarket firms, and reports on both factor and cluster analysis. The interviews lend support for Preston and O’Bannon’s (1997) Available Funding Hypothesis in both its positive and negative form. The findings show that there are individual or combinations of related measures that could be used as surrogate measures for social and financial performance, instead of deriving a full index. However, the recommendation is that a full index continues to be used until there is further corroboration of these results. The findings also provide statistically significant support for the Negative Synergy Hypothesis (Preston and O’Bannon, 1997), show a statistically significant association between pre‐tax profits (both lagged and contemporaneous) with community contributions, and show that all statistically significant associations between individual social performance measures are positive – suggesting that they are mutually reinforcing. The association of size with social performance, noted in the previous paper, is also reinforced. Findings in relation to the proportion of women managers and the number of women on the Board and positive associations with other social and environmental performance measures raise interesting gender issues for business ethics. Factor analysis leads to no clear conclusions but cluster does show two or three clear clusters of firms, where size would seem to be the main but not sole factor. Further areas of research are noted.