A General Stationary Stochastic Regression Model for Estimating and Predicting Beta

A beta regression model is proposed where the coefficients follow a general class of stationary stochastic processes. The procedure identifies the process and estimates the parameters of the model simultaneously from the information contained in the return series. The returns of each of the Dow Jones 30 securities are examined. Betas of 5 of the securities are nonstationary and do not appear to follow a particular form of nonstationarity. Conclusions of many earlier studies may be suspect since they are based on procedures tailored to adoption of a specific form of beta nonstationarity and, thereby, based on an erroneous a priori assumption regarding such form. The ordinary least squares model is also found to be quite robust, providing reliable beta and intercept estimates not materially different from the more complex procedure with 25 of the return series.     

Planning Host and Guest Interactions: Moving Beyond the Empty Meeting Ground in African Encounters

In many senses viewing the ‘other’ has always been a part of the tourist activity of dominant cultures. The ‘other’ has been seen as a source of difference and excitement with possibilities for exotic pleasure while at the same time dominant cultures have reinforced their own sense of superiority through viewing the ‘other’. The view from the ‘other’ is now becoming a part of tourism research and enabling mechanisms for this view are being developed in tourism planning. This paper seeks to examine how we can move beyond MacCannell’s view of the contact between tourists and hosts as an ‘empty meeting ground’. Just as postcolonial theorists have been critical of the exclusion of the ‘other’ in tourism theory, we argue for the voice of the ‘other’ to be heard in tourism planning practices. In this paper we examine the extent this is able to bring benefits to the process of community-based tourist development in developing countries such as Tanzania and Kenya. The paper theoretically scrutinises the relation between and the fluidity of the concepts of tourism, communities and power and the actuality of approaches to tourism planning that do not involve a submissive, subservient, exoticised and inferiorised view of the ‘other’. The particulars of inclusion of the voice of the ‘other’ bring some fresh insights to Western notions of community-based tourism planning.     

Momentum investing and the asset allocation decision

This study examines the active asset allocation decisions of Australian multisector fund managers to determine whether active fund managers engage in momentum strategies. We find evidence supporting the existence of momentum investing in active asset allocation strategies. This evidence exists in the Australian Equities, Australian Fixed Interest and Listed Property asset classes. Interestingly, balanced funds adopt contrarian strategies in the International Equities asset class. We also examine whether there is any association between a fund's market timing skill and the execution of momentum strategies. Our results show that fund managers with no market timing skill are momentum investors.     

Are special items informative about future profit margins?

Most proponents of using profit margins in forecasting models suggest that unusual items be removed from income to create a core profit margin. We investigate the appropriateness of this assumption over short and long horizons. Specifically, we explore the association between profit margins and special items over windows of increasing length, from one to five years. We find that the association between past special items and future profit margins differs markedly between firms with low and high core profitability. For low profitability firms, past special items have no association with future profit margins, even over windows of five years. In sharp contrast, for high profitability firms, negative special items are associated with lower future profit margins. This suggests that some firms maintain high core profitability by becoming serial chargers and special items differ from core earnings only to the extent that the allocation process induces timing errors in reported earnings.     

A possible solution to tropical troubles? : Debt-for-nature swaps

Two major problems spurred the development of debt-for-nature swaps —the high rate of destruction of tropical forests and the heavy debts accumulated by these countries. Debt-for-nature agreements are part of a new wave of thinking about the links between the environment and debt. With funds procured through conservation organizations, debt-for-nature swaps and funds have been arranged in several developing countries. This article examines myriad proposals to reduce the debt burden, identifies the link between debt, development and the environment, and clarifies the conceptual framework of the debt-for-nature swaps approach. Debt-for-nature swaps are analysed in terms of sovereignty, socioeconomic impacts and policy implications. It is concluded that the debt-for-nature swaps approach is not intended to provide debt relief on any significant scale nor resolve the debt crisis. Their nominal impact on the debt situation does not imply failure: they improve the management of natural resources. It is a strategy in which a number of goals converge for different groups in developing as well as developed countries.     

A content analysis of the comment letters to the FASB and IASB: Accounting for contingencies

In this study, we read and analyze 369 comment letters written in response to the IASB's Exposure Draft (ED) of Proposed Amendments to IAS 37 and the FASB's Exposure Draft of Proposed Amendments to FASB Statement No. 5. We also examine how responses to the IASB ED are affected by whether or not the use of IFRS is mandated or permitted by the respondent's country. Although responses were overwhelmingly unfavorable to both EDs, more support was shown for the IASB's proposal to eliminate the probability recognition criterion than for the FASB's proposal to amend the U.S. GAAP disclosure rules. Users responding to the FASB ED provided significantly more intense support than corporate preparers, financial preparers, and legal practitioners. Significantly more respondents to the IASB ED were from countries required or permitted to use IFRS than from countries required to report under their national GAAP. In addition, constituents required or permitted to use IFRS were significantly more likely to express an unfavorable response to the ED and to cite relevance to support their position.     

Testing conditional asset pricing models: An emerging market perspective

The CAPM as the benchmark asset pricing model generally performs poorly in both developed and emerging markets. We investigate whether allowing the model parameters to vary improves the performance of the CAPM and the Fama–French model. Conditional asset pricing models scaled by conditioning variables such as Trading Volume and Dividend Yield generally result in small pricing errors. However, a graphical analysis reveals that the predictions of conditional models are generally upward biased. We demonstrate that the bias in prediction may be the consequence of ignoring frequent large variation in asset returns caused by volatile institutional, political and macroeconomic conditions. This is characterised by excess kurtosis. An unconditional Fama–French model augmented with a cubic market factor performs the best among some competing models when local risk factors are employed. Moreover, the conditional models with global risk factors scaled by global conditioning variables perform better than the unconditional models with global risk factors.     

The Spirituality of Innovation: Learning from Stories

Sooner or later, most established companies face a mid-life crisis. Just like many people, these companies somehow lose the drive, the excitement, and the enthusiasm of their youth. Rather than continue to push the envelope, these companies focus on their core competencies and try to maintain order through a proliferation of policies and procedures. On the other hand, some companies (and some people) manage to sustain their innovative, entrepreneurial spirit. A handful of mature companies somehow maintain an environment in which employees continually generate added value for customers and the company alike. How do they do it? How do these mature companies continue to foster invention and innovation? Recognizing that stagnation and decline are not faits accomplis for all companies, Karen Anne Zien and a cross-functional team conducted in-depth interviews at several highly innovative firms. The interviewees provided insight into the culture, the characteristics, and the principles that set these companies apart from the competition. Perhaps the greatest insight comes from the stories these people tell. These war stories—the corporate myths and legends—provide a simple means for communicating and reinforcing the shared values that distinguish these companies. For example, a manager's recollection of Hewlett-Packard's effort to develop a pen plotter (and in particular, Bill Hewlett's role in this development) demonstrates that innovation is a companywide activity that requires the active, ongoing involvement of leaders at the highest levels of the organization. Senior people in these innovative companies foster a sense of community and common purpose and thus create an environment that encourages employees to explore new ideas and, if necessary, break the old rules. Through both formal and informal means, these companies also encourage frequent interaction between technical and marketing people. Corporate leaders energize these mature, but still innovative, companies, by providing context and communicating a dynamic vision. Storytelling offers a particularly evocative medium for articulating this vision. Rather than bore newcomers with hoary tales of the good old days, however, the most effective leaders continually reshape these stories to offer fresh insights, uncover new challenges, and reinforce the notion that every employee can and should contribute their full potential.