MACROECONOMIC ADJUSTMENT AND POVERTY IN AFRICA: AN EMERGING PICTURE

The view that macroeconomic adjustment disproportionately hurtsthe poor in Africa has become commonplace. The popular mediaand the nongovernmental aid community frequently express thisview in critiques of Bankfunded economic reform programs. Yetthe evidence on which the claim has been based is flimsy andanecdotal. The emergence of more convincing data, from detailedhousehold surveys in Africa, provides an opportunity to setthe record straight. The evidence from six African countries reviewed in this articledemonstrates that poverty was more likely to decline in thosethat improved their macroeconomic balances than in those thatdid not. The critical factor is economic growth: the economygrew more rapidly and poverty declined faster in countries thatimproved macroeconomic balances, depreciating the real effectiveexchange rate. Changes in the real exchange rate also immediatelyand favorably affected rural incomes, benefiting the poor bothdirectly and indirectly. But the findings also highlighted threecauses for policy concern. First, many African governments haveyet to display a real commitment to macroeconomic reform; second,the poorest of the poor have not benefited from recent growthin some countries; and, third, the prospects for the poor arenot rosy unless there is more investment in human capital andbetter targeting of social spending.      

Excess market value,market power,and inside ownership structure

This study is an empirical investigation of whether principal-agent problems do in fact significantly affect corporate managers' decision making, and hence the price of the firms' securities. If inside ownership structure of firms is reflected in firm market value, then agency theory leads one to expect that market value will be a positive function of the degree of inside ownership. This study demonstrates that rational investors recognize inside ownership and its resultant effect on market value. Furthermore, it is shown that excess market value as measured by the Tobin's Q-ratio is related to the level of advertising and R&D expenditure, the degree of market power as proxied by the Lerner Index, leverage, and firm size.     

Do Investor Demand and Market Timing Affect Convertible Debt Issuance Decisions by REITs?

The unique regulatory environment of REITs casts doubt on the traditional theoretical process by which REIT managers base their convertible debt issuance decisions on issuer condition and prospects. Anecdotal evidence shows that REITs may have catered to demand by investors, including a demand by convertible bond arbitrageurs when issuing convertible debt. This study examines the rationale behind convertible debt issuances by REITs, focusing on the possible impacts of investor demand and market timing. The results suggest that investor demand significantly affects convertible debt issuance decisions by REITs while certain unknown factors appear to have contributed to the sudden increase of convertible debt offerings in 2006 and 2007. REITs also time the market to conditions in the public debt market. The results only partially support the offered risk-shifting, risk-uncertainty, backdoor-equity, and sequential-financing hypotheses.     

GAME THEORY AND THE AUDITOR'S PENALTY REGIME

This paper models the audit as a cooperative game played by the auditor and auditee within a penalty regime imposed by a regulatory authority. The paper investigates the relationship between the penalties set by the regulator and the jointly agreed strategy of the auditor and auditee, and discusses how the penalty regime might be employed so as to induce a particular strategic outcome such as high effort levels on the part of the auditee and/or auditor.     

Rationale behind IPO Underpricing: Evidence from Asian REIT IPOs

This article examines the rationale behind IPO underpricing using a sample of REIT IPOs in Asia. Although the IPOs registered an average initial return of 3.08%, the issuers were able to sell the IPO shares above their fundamental values by timing the listings in periods when existing REIT stocks are traded at a premium to their net asset values (NAV). An IPO could therefore be underpriced and yet produce a net gain for the issuer. The issuers’ net gain from IPO is, however, negatively related to long‐run performance of REIT IPOs.     

Customer loyalty to newly opened cafés and restaurants in Malaysia

An extended review of the literature indicates that there is an insufficient number of past studies which test the SERVQUAL model (tangibles, reliability, responsiveness, assurance, empathy) in the food and beverage industry. Therefore, this research attempts to provide new insight into the impact of service quality on customer loyalty in the food and beverage industry. The purpose of the research is to determine the impact of service quality and price fairness on customer loyalty in the food and beverage industry in Penang, Malaysia. This article surveyed the customers of newly opened cafés and restaurants in Penang, Malaysia, by using a structured questionnaire. The research revealed that service quality (tangibles, reliability, assurance, and empathy) and price fairness have a positive relationship with customer loyalty. However, responsiveness had no relationship with customer loyalty. This article includes an additional independent variable, price fairness, to investigate customer loyalty.     

The Wealth Effects of Property Acquisitions: Evidence from Japanese and Singaporean REITs

This article examines the wealth effects of 228 property acquisition announcements made by REITs publicly traded in Singapore and Japan, which are the two largest REIT markets in Asia. Adopting an aggressive growth‐by‐acquisition strategy, the newly listed REITs acquired a number of properties within a short time period. Despite their regular activities, we observe the acquisition announcements are associated with a significantly positive abnormal increase in shareholder wealth averaging 0.38% in a 5‐day window around the event date. Controlling for the method of payment, buyer's acquisition strategy and seller's relationship with the acquiring REIT, the regression results show that the likely sources of economic gains associated with acquisitions are economies of scale and better management by acquiring firms. We also find strong evidence that the market reacts less favorably to acquisitions involving a portfolio of properties as opposed to a single property and weaker evidence that it reacts less favorably to mixed‐use acquisitions. These findings suggest the presence of premiums on transparency and corporate focus.     

Asset Growth and Stock Performance: Evidence from REITs

In this article, we examine the impact of asset growth rates on the future stock performance of 308 publicly traded real estate investment trusts (REITs). We observe that fast‐growing REITs tend to underperform slow growing REITs. However, we find evidence that the growth effect is significantly less negative for REITs selling at a premium to net asset value. In addition, we observe the asset growth effect only in the subsample of REITs that engages in equity issuance over the next 12 months. The combined evidence suggests contemporaneous equity dilution, which has not been considered in previous studies, may provide an explanation for the underperformance of fast‐growing firms.     

Managing mobile phones: a work/non-work collision in small business

We can see technology changing people's private and working lives. But what happens when these two worlds collide? This paper explores two small organisations that have taken different approaches to the use of mobile phone technology. This area of contested terrain is becoming increasingly present on the landscape of the employment relationship.