Australia's Implicit Deposit Insurance — Should It Be Reconsidered?

Most major developed countries have bank deposit insurance; the European Parliament recently mandated it for all member countries. One of the characteristics of most deposit insurance schemes to protect depositors is that the banking industry funds the scheme through assessments. Interestingly, Australia does not have explicit deposit insurance and to date there has been little public debate on this subject. This paper proposes that such a debate should be initiated.     

Social and Environmental Disclosure and Corporate Characteristics: A Research Note and Extension

This paper is concerned with the attempts to explain the disclosure of social and environmental information in the annual reports of large companies by reference to observable characteristics of those companies. An extensive literature has sought to establish whether variables such as corporate size, profit and industry segments can explain corporations' disclosure practices. The results from that predominantly North American and Australasian literature are largely inconclusive. This paper provides an extension of that literature by considering a more disaggregated specification of social and environmental disclosure and by employing a detailed time-series data set. By so doing, the paper tests two possible explanations for the inconclusiveness of prior research: namely that any relationships between corporate characteristics and disclosure are dependent upon the type of disclosure and that any such relationships are not stable through time. The results provide support for these explanations as sufficient, if not necessary, conditions for explaining the inconsistency in prior results.     

The changing face of research anddevelopment in the public sector

This paper examines the changes that have occurred in the management and scale of R & D, in the contextof the'gas industry's experience. As a resultof the discovery o f North Sea gas and new and expanding operations, R & D has become larger, more central, and thus more integrated into and accountable to the organization as a whole. This has resulted in greater centralization and planning administered according to the ‘sponsorship’ principle. These changes have highlighted the problems of R & D choice and the comparison of commercial and non-commercial objectives in a public sector industry. The unique constraints under which nationalized industries operate and their commitment to the ‘public interest’ as well as to commercial goals, are discussed. These bear upon the way in which R & D decisions not amenable to cost/benefit analysis (such as the balance between long and short term work) are made. It is emphasized that these decisions are made by the industry as a whole and that R & D must thus be seen to be complying with industry objectives. The example of British Gas R & D Planning is used to show how ‘sponsorship’ operates and its values for R & D and the restof the industry. Comparison with other public sector industries indicates that there is no one great system for R & D and that its administration is a function of the history, technological characteristics, and present situation of the industry. These imply different procedures appropriate for the innovation process within the Industry. The role of British Gas within a national energy policy is discussed. The separation of the fuel industries affects the assumptions on which R & D plans are made and thus the degree of uncertainty inherent in all R & D planning. This raises interest- ing questions about the degree of flexibility possible in defining each industry's own objectives.     

Canadian Dietary Fat Substitutions, 1955–93, and Coronary Heart Disease Costs

In this paper, we use a prevalence-based, cost-of-illness approach to estimate the impact of change in dietary fat intake on coronary heart disease (CHD) costs in Canada. To this end, we review the clinical studies that have examined the relationship between fatty acid consumption and serum cholesterol levels. We estimate the increase in consumption of less saturated vegetable oils, which displaced some of the animal fats in the Canadian diet between 1955 and 1993, was responsible for an estimated 10.1% reduction in the incidence of CHD in Canada. This implies ex post a $832 million reduction in direct and indirect CHD costs in 1993. To put it another way, if Canadians had retained their 1955 diet in 1993, CHD costs would have been $832 million greater. Since many of these costs are external to marketplace, the magnitude of these numbers suggests a need to include health costs in the economic analysis of policies that affect fatty acid intake.     

Relationship between franking credits and the market risk premium: a reply

We have previously documented an inconsistency between the dividend yield implied by the Officer (1994) model with standard Australian regulatory parameters and actual dividend yields of Australian companies. We have shown that, within the Officer framework, this inconsistency can be resolved by setting the assumed value of franking credits (γ) to zero, consistent with the practice of Australian firms and independent valuation experts. Truong and Partington (2008) and Lally (2008) recognize this same inconsistency and propose alternate ways of resolving it. In this paper, we demonstrate that these proposals are outside the Officer framework. The standard set of regulatory parameters cannot be resolved with observed dividend yields within the Officer framework. Whichever method is used to resolve the inconsistency, the effect will be an increase in the estimated after‐tax cost of equity.     

The Divergence in Canada-U.S. Grain and Oilseed Policies

This paper discusses U.S. and Canadian farm programs for grains and oilseeds. In spite of the passage of the U.S. FAIR Act in 1996, where subsidies were to be greatly reduced, subsidies reached an all-time high of over $20 billion in 2000. In Canada, just the opposite occurred, as support for the grains and oilseeds sector has dropped sharply since the mid-1990s. In addition to differences in support levels, the farm prog rams are very different. NISA and AIDA are prominent in the landscape in Canada, while under FAIR, loan deficiency payments are a key ingredient. We provide some explanations for the divergence in farm programs between the two countries, including a discussion of rent seeking and public choice.     

Fine tuning market oriented practices

Being more market oriented—in other words, getting closer to customers while keeping a wary eye on competitors in order to respond quickly and effectively to changing market conditions—has long been viewed as a key way of improving competitive advantage. However, there is still a lack of understanding about how to optimize the implementation of market oriented business strategies, particularly in the service sector. This article addresses that gap by investigating how customer and competitor focused practices can be fine tuned to create differential advantages. An in-depth qualitative study of professional, financial, and business service firms in New Zealand suggests that how well market oriented practices are implemented is much more important than the range of practices that are adopted.     

The internal-external balance trade-off: A graphical analysis

Zusammenfassung Der ?Trade-Off? zwischen internem und externem Gleichgewicht: Eine graphische Analyse. — Es wird gezeigt, da\ Swans klassisches Diagramm der Kombination von internem und externem Gleichgewicht inkonsistent ist, wenn die Kurve des externen Gleichgewichts oberhalb ihres Schnittpunktes mit der Kurve des internen Gleichgewichts eine positive Neigung aufweist. Swans Absicht, die Ungeeignetheit bestimmter Ma\nahmenkombinationen zu verdeutlichen, wird durch die Darstellung einer ?Nullmenge? in einem auf ex-post-Werten aufgebauten Alternativmodell verwirklicht. Das Alternativmodell wird dann dazu verwendet, die Wechselbeziehung zwischen Auslandsinvestition und Inlandsabsorption sowie einen Faktor aufzuzeigen, der zur Erkl?rung der Prebisch-Hypothese beitragen kann.

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Résumé ?Trade-off? entre l’équilibre interne et externe: une analyse graphique. — Il est montré que le diagramme classique de la combinaison de l’équilibre interne et externe par Swan n’est pas consistant si la courbe d’équilibre externe est positivement inclinée au-dessus de l’intersection avec la courbe d’équilibre interne. Le but de Swan, dirigé à montrer qu’il y a des combinaisons des mesures qui sont infaisables, est atteint dans l’article par la démarcation d’une zone de nullité grace à un modèle alternatif qui se fond sur des valeurs ex post. Ensuite, ce modèle est appliqué pour démontrer l’interdépendance entre l’investissement étranger et l’absorption domestique ainsi que pour élaborer un facteur qui peut contribuer à l’explication de l’hypothèse de Prebisch.

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Resumen El ?trade off? entre el balance interno y el balance externo: Un análisis gráfico. — El autor demuestra que el clásico diagrama de Swan sobre el balance interno y externo pierde su consistencia si la curva de balance externo tiene una pendiente positiva por encima del punto de intersección con la curva del balance interno. El objetivo perseguido por Swan de demonstrar la imposibilidad de aplicar ciertas combinaciones de instrumentos, se realiza mediante la representación de un set nulo en un modelo alternativo basado en valores ex post. Este modelo se utiliza a continuación para analizar las interdependencias entre inversiones extranjeras y absorción doméstica, asi como para indicar un factor que contribuya a la explicación de la hipótesis de Prebisch.