A dynamic panel analysis of the profitability of Australian tax entities

This paper investigates the determinants of profitability of Australian tax entities using data for 91 different industries over the period 1991/92 to 1996/97. A simple oligopoly model is augmented with lagged profitability to allow for persistence of profitability shocks. The Wansbeek-Bekker estimator is used to control for endogeneity of this lagged dependent variable, whilst simultaneously controlling for observed and unobserved entity heterogeneity. Aggregate results suggest that profitability in the previous year, capital intensity, and barriers to entry have the expected positive association with current profitability. Market share—and to a lesser extent concentration—have a U shaped relationship with profitability.This paper is the result of work being undertaken as part of a collaborative research program entitled The Performance of Australian Enterprises: Innovation, Productivity and Profitability. This project is generously supported by the Australian Research Council and the following collaborative partners: The Australian Tax Office, Commonwealth Office of Small Business, IBIS Business Information Pty Ltd, Productivity Commission, and Victorian Department of State Development. The views expressed in this paper represent those of the authors and not necessarily the views of the collaborative partners. We are grateful to Badi Baltagi, David Prentice, John Creedy and two anonymous referees for helpful comments.First version received: December 2001 / Final version received: December 2003     

On the trait antecedents and outcomes of service worker job resourcefulness: A hierarchical model approach

In a series of three studies, a four-level hierarchical model of personality was employed to identify the antecedents and three validating criteria of a newly developed trait labeledjob resourcefulness (JR). JR is defined as an enduring disposition to garner scarce resources and overcome obstacles in pursuit of job-related goals. Across three service contexts, JR was shown to predict customer orientation, self-rated performance, and supervisor-rated performance. The results also revealed that the hierarchical model accounted for more variance in performance ratings than one version of the 5-Factor Model of personality. Results are discussed in terms of their implications for selecting high-performing service employees. Jane W. Licata (jwlicata@sosu.edu) is an associate professor of marketing at Southeastern Oklahoma State University. She has published articles in theJournal of Public Policy and Marketing, theJournal of Marketing Research, and theJournal of Business Research. John C. Mowen (jcmmkt@okstate.edu) is Regents Professor and holds the Noble Chair of Marketing Strategy at Oklahoma State University. He has published articles in numerous journals, including theJournal of the Academy of Marketing Sciences, theJournal of Marketing Research, theJournal of Marketing, Decisions Sciences, theJournal of Applied Psychology, and theJournal of Personality and Social Psychology. Eric G. Harris (eharris@lklnd.usf.edu) is an assistant professor of marketing at the University of South Florida. He has published articles inPsychology & Marketing and theJournal of Marketing Management. Tom J. Brown (tomb@okstate.edu) is an associate professor of marketing at Oklahoma State University. He has published in numerous journals, including theJournal of Marketing, theJournal of Marketing Research, and theJournal of Consumer Research.     

PLANT-LEVEL ANALYSIS USING THE ARD: ANOTHER LOOK AT GIBRAT'S LAW

This study uses the Annual Respondents Database to test whether Gibrat's law of proportionate effect holds for the UK manufacturing industry during the period 1973–1998. For a sample of manufacturing industries, four different panel unit root tests were carried out to test the relationship between growth and size for three measures of size: gross output, employment and gross value added. The tests were applied to unbalanced plant‐level panel data. The results show that there is strong evidence to reject Gibrat's law that firm growth is a random process in favour of the alternative proposition of mean reversion.     

A shift to external alliances for product development in the pharmaceutical industry

For a number of years, pharmaceutical companies have been departing from a tradition of strict vertical integration, looking to external sources for at least some of their novel technology and products. The aim of this study was to determine whether (1) this is a long term, industry-wide trend, or (2) merely a temporary or local response to acquire the technical capabilities of the biotechnology revolution of the 1970's, after which, with the new generation of technology in-house, they will revert to primarily in-house innovation. Analysis of secondary data on a representative sample of the fifteen largest drug companies in the United States, the United Kingdom, Germany and Switzerland indicated that between 1977 and 1987, these pharmaceutical companies increased their external R&D alliances nearly six-fold on average. A large and growing proportion of pharmaceutical companies' R&D alliances are formed with biotechnology firms which have proprietary technology, due to financial and innovative pressures. Far from being temporary, this resort to external sources of technology in the pharmaceutical industry follows the trends of the wider industrial world towards functional specialization. Thus, biotechnology companies are increasingly taking on the role of suppliers of innovation.     

Corporate social responsibility and the wealth gains from dividend increases

This study examines whether corporate social responsibility (CSR) influences the stock price response to dividend increase announcements and changes in subsequent operating performance. We find that dividend increasing firms with lower CSR scores elicit higher abnormal announcement returns and greater improvements in industry‐adjusted operating performance. These findings support the argument in the literature that socially responsible firms are more transparent and commit to higher ethical standards than other firms, suggesting that they suffer fewer agency and informational problems (Kim, Park, & Wier, 2012). Consequently, larger dividend payouts reduce agency costs in firms with lower CSR commitments, thereby generating higher wealth gains for shareholders.     

Precautionary Insurance Demand With State-Dependent Background Risk

This article considers a zero‐mean background risk that is uncorrelated with insurable losses, but is not necessarily statistically independent. In particular, the size of the background risk can vary in different insurable‐loss states. We show how a prudent individual will buy either more insurance or less insurance than with no background risk, depending on the relative size of the background risk in the loss states vis‐á‐vis the no‐loss states. If we consider two individuals, with one more risk averse than the other, we need to compare the intensities of their precautionary motives, in addition to their measures of risk aversion, before we can determine who buys more insurance coverage in the presence of the state dependent background risk.     

Demand patterns and Canada’s trade in services

Canada’s trade in commercial services appears inconsistent with what manufacturing-oriented Heckscher-Ohlin theory predicts. Canada’s services trade is overwhelmingly intra-industry, involving countries whose factor proportions and demand patterns are similar—findings consistent with the ‘new’ trade theory, and the Linder hypothesis: that there is a uni-directional causal relationship flowing from the similarity (convergence) in demand patterns amongst trading partners, to Canada’s exports to those partners. Support for this conjecture is found for the US, the UK, and Japan. We infer that liberalization of trade in commercial services is likely welfare enhancing, with gains greater within trade arrangements and entities such as the NAFTA, the EU, and the OECD.     

Capitalizing on the cultural and linguistic diversity of mobile talent: lessons from an Australian study

Abstract

To date, acknowledgement of where culturally and linguistically diverse talent is located in organizations has been largely neglected in scholarship, policy and practice. As such, we have limited understanding of whether or not we are ‘capitalizing’ on the capabilities of culturally and linguistically diverse workers and, the implications of not doing so. Accordingly, the paper sheds light on the cultural and linguistic diversity (CALD) of the talent pipeline and senior leadership suite in multinational professional services firms located in Australia by surveying over 4000 staff members. The paper presents how we identify, measure and evaluate CALD in a meaningful way by drawing on insights offered by talent management and diversity management researchers, which informs the development of a unique methodological tool to survey respondents. As such, in addition to the empirical contribution, the paper also contributes to a broad field of scholarship while signalling lessons for senior managers and policy-makers.     

Are employers assessing the right traits in hiring? Evidence from Hong Kong companies

Employers constantly function as information processors. The personnel selection process requires employers to decide among candidates characterized by multiple attributes. The purpose of this study (N = 300) was to develop an understanding of the selection decision process of recruiters, and to identify inconsistencies, if any, between recruiters' perception on the ideal qualities for effective performance and qualities actually assessed during interviews. Moreover, the paper compares the direct and indirect approaches in attribute importance estimation. Conscientiousness was the ideal quality for effective performance and Extraversion was most assessed during interviews, unveiling the possibility that managers may not be assessing the right traits and hiring the right candidate. This paper is of significance because it provides useful feedback for HR professionals and hiring managers in understanding their cognitive and actual behaviour and heightens the need for better selection strategies.