The Effects of Unanticipated Macroeconomic News on Debt Markets

We examine the effects of unanticipated macroeconomic news on two interest rate futures using intraday data. The surprises are identified on the basis of their potential effects on debt markets (positive or negative) and by their size (large, medium, or small). The results show distinct ex‐post return patterns associated with different categories of news surprises. For example, large surprises have the strongest immediate effects whereas negative surprises have the longest persisting effects. Tests that examine the separate effects of each announcement suggest that debt responses vary with the size and potential effect of the news surprise in each announcement.     

Entry strategies for ‘planned giving’ donor products adopted by British charities: An empirical investigation

In April 2000 the British Government legislated to provide UK citizens with a wide range of tax concessions on charitable donations, enabling registered UK charities to develop and launch new donor products similar in form to the ‘planned giving’ instruments that for many years have been available to supporters of US nonprofit organisations. This paper presents the outcomes to a study of the progress so far achieved by a sample of 89 British charities in their attempts to introduce planned giving products. The investigation explored the roles of certain market and other situational factors in motivating charities to establish planned giving instruments, the antecedents and consequences of heavy investment in the marketing of these new donor products, the main marketing methods employed; and the respondents' perceptions of the major problems involved and barriers to successful introduction.     

Valuing New South Wales rivers for use in benefit transfer

The results from seven choice modelling applications designed to value improved river health in New South Wales are reported. These applications were designed to provide value estimates that could be used, through benefit transfer, to value improvements in the health of other rivers within the state. Because of limitations on the number of rivers that could be valued and populations sampled, a pooled model for use in benefit transfer was also estimated. The results indicate that both use and non-use values were found to exist for all catchments. In addition, value estimates were found to differ across catchments when populations resident within catchments were sampled. However, when populations resident outside catchments were sampled for two of these catchments, value estimates were found to be statistically similar. This indicates the importance of valuing improved river health in specific catchments by sampling populations within catchments. Yet, it also indicates that it is less critical to conduct multiple surveys of residents outside catchments to value improved river health.     

Farm-Level Economic Performance of Genetically Modified Cotton in Maharashtra, India

A study of the commercial growing of Bacillus thuringiensis (Bt) cotton in India, compares the performance of over 9,000 Bt and non-Bt cotton farm plots in Maharashtra over the 2002 and 2003 seasons. Results show that since their commercial release in 2002, Bt cotton varieties have had a significant positive impact on average yields and on the economic performance of cotton growers. Regional variation showed that, in a very few areas, not all farmers had benefited from increased performance of Bt varieties.     

LIQUIDITY AND MATURITY EFFECTS AROUND NEWS RELEASES

We study the effects of liquidity and term-to-maturity following macroeconomic news announcements. To do this we select five instruments that differ in liquidity, or term-to-maturity, or both, and examine their response to the release of macroeconomic news. The results from this study suggest that variance on announcement days is higher in more liquid, longer term-to-maturity instruments. When instruments differ in both term-to-maturity and liquidity, term-to-maturity effects dominate. Tests for persistence in higher volatility in the five instruments following news releases show that most of the effects of the announcements seem to be well absorbed within fifteen minutes of the announcements. However, the evidence also suggests that the effects persist for longer periods in instruments that are more liquid. Term-to-maturity appears to have little or no effect in this instance.     

Deregulation,news releases,and price discovery

We hypothesize that the firm’s regulatory environment influences the sensitivity of its equity value to information. Using intraday stock price data of utilities operating in differing regulatory environments we test for systematic differences between the responsiveness of stock prices of utility firms operating in deregulated and regulated environments to a common information set. Our findings reveal sharp differences in responses, with those of utilities operating in deregulated environments the strongest, and the responses of utilities in highly regulated environments the weakest. While the evidence supports our hypothesis, in a broader sense, the evidence suggests that deregulation aids in the process of price discovery. We also find evidence that suggests that deregulation, per se, does not lead to higher stock price volatility.      

EVA,not EBITDA: A New Financial Paradigm for Private Equity Firms

Private equity firms have boomed on the back of EBITDA. Most PE firms use it as their primary measure of value, and ask the managers of their portfolio companies to increase it. Many public companies have decided to emulate the PE firms by using EBITDA to review performance with investors, and even as a basis for determining incentive pay. But is the emphasis on EBITDA warranted? In this article, the co‐founder of Stern Stewart & Co. argues that EVA offers a better way. He discusses blind spots and distortions that make EBITDA highly unreliable and misleading as a measure of normalized, ongoing profitability. By comparing EBITDA with EVA, or Economic Value Added, a measure of economic profit net of a full cost‐of‐capital charge, Stewart demonstrates EVA's ability to provide managers and investors with much more clarity into the levers that are driving corporate performance and determining intrinsic market value. And in support of his demonstration, Stewart reports the finding of his analysis of Russell 3000 public companies that EVA explains almost 20% more than EBITDA of their changes in value, while at the same time providing far more insight into how to improve those values.     

The Role of Commercial Non-profit Organizations in the Provision of Public Services

In this paper we discuss the role of commercial non-profit firmsin the provision of public services, referring to three casestudies to illustrate the main issues. We consider problemsof corporate governance, including the role of the board ofmembers and the scope for performance-related pay. We discussthe performance of such non-profit firms in terms of qualityand costs, the particular finance problems of these firms andthe implications for risk taking. We also suggest various aspectsof non-profit behaviour in public service provision that presentinteresting avenues for future research.     

Estimating society's willingness to pay to maintain viable rural communities*

Declining populations in rural and regional areas have become a high political priority in Australia. Calls for measures to support rural communities have been prompted by substantial population declines in some country areas. In Europe and the USA, similar political pressures to halt population losses in rural and regional areas are also apparent; often as a component of the multifunctionality of agriculture. The question addressed in the present paper is whether or not the Australian tax‐paying public would be willing to pay to avoid losses of people from rural and regional areas that may result from environmental protection measures. As an integral component of two recent non‐market, environmental valuation exercises using Choice Modelling, the value of the benefits associated with the maintenance of rural populations has been estimated. The results demonstrate that a positive existence value is held primarily by urban dwellers for rural population levels.     

Corporate sponsored image films

The vast number of high quality corporate image and advocacy films, combined with the many other instruments of persuasion and control by corporations, powerfully direct the attitudes of the populace. In the absence of equal access, the best protection against deception from any powerful institution is skepticism — minds trained in critical thinking. But technically proficient, expensive films (costing from $50,00 to $600,000) encourage credulity instead of thought. The schools should train young people, therefore, how to resist corporate film propaganda by teaching them the kinds of questions to ask. An analysis of Chesebrough-Pond Corporation's Family offers an effective method through combining traditional rhetorical awareness of the speaker in a communication, knowledge of informal fallacies, the National Council of Teachers of English Committee on Public Doublespeak's ‘intensify/downplay’ approach, and Richard Ohmann's method in ‘Doublespeak and Ideology in Ads’.