Free cash flow, debt-monitoring and managers' LIFO/FIFO policy choice

This paper explores the explanatory power of Jensen's free cash flow hypothesis in managers' choice of LIFO versus FIFO. The association between FCF, and choice of inventory methods is based on the assumption that there is a potential conflict of interest between managers and shareholders when LIFO is the tax minimization method and that non-value-maximizing managers of firms with the FCF problem have incentives to choose FIFO, an income increasing method, in order to increase their compensation. However, since debt can act as a monitoring device and mitigate the agency problems of FCF, managers of firms with high FCF and high debt are less likely to choose FIFO than managers of firms with high FCF and low debt. The evidence is consistent with this expectation.     

Squatting as a transition problem in South Africa

This paper applies principles of transition to land tenure and squatting in South Africa. Political transition in South Africa reassigned political property rights, which produced contestable, and rent‐seeking incentives for squatting as a means to privatize land and redistribute wealth. Government failure to establish and protect private property rights in a squatter camp resulted in common‐pool problems that resisted private and public resolution with consequent rent dissipation and social loss. In response to this retreat from duty, informal agents emerged to claim their own share of the prize. Without enforceable rules of capture, the growth of squatter camps in South Africa will continue. JEL classification: D7, H8, K1, K4, R1, R4.     

HYDCOND: A Computer Program to Calculate Hydraulic Conductivity from Grain Size Data in Saudi Arabia

Hydrogeologists always look for reliable techniques to determine the hydraulic conductivity of the aquifers with which they are concerned, for better groundwater management and conservation. The use of grain size distribution for unconsolidated aquifer materials is considered feasible and sound. Several empirical equations to calculate hydraulic conductivity using grain size distribution are well established in the literature. The present paper describes a computer program, HYDCOND, which is designed to calculate hydraulic conductivity using grain size data. In addition, the program calculates grain size statistics and classifies the aquifer materials in terms of their main size percentage. HYDCOND is menu-driven, interactive and user friendly program. It was tested extensively and successfully using materials from Minjur aquifer in central Saudi Arabia. The results were found to be reliable and comparable to those obtained using other, costly techniques. HYDCOND can be implemented successfully to calculate hydraulic conductivity in all types of aquifers in Saudi Arabia and other regions of the world.     

Search and Liquidity in Single-Family Housing

A two-stage least squares model of housing prices is estimated with data collected from 3358 single-family home transactions. The results provide evidence for an optimal marketing period and indicate that a liquidity premium is priced in single-family home sales. Consistent with the hypothesis derived from economic search models, the model shows higher selling prices for houses having longer expected marketing periods. The model also shows a price premium for houses that sell faster than expectations. This effect supports the concept that liquidity is a value-enhancing characteristic.     

The Quality of Smallholder Coffee in South Sumatra: The Production of Low-Quality Coffee as a Response to World Demand 1

Improving the quality of Indonesia's coffee exports has been a priority of government and the Association of Indonesian Coffee Exporters for some years. Efforts to achieve this objective have, however, been hampered by misconceptions about the reasons why coffee producers and traders at each point in the marketing network do not deliver a higher quality product. The research reported here shows that price premia for higher quality coffee are not large enough to encourage greater quality enhancement. The world market for low to medium grades, used in the production of instant coffee, is much larger than that for high-quality coffee, and this preference is transmitted in the form of low incentives to improve the product. Failure to understand this has led to government policies which at best do not solve the quality problem and at worst exacerbate it.     

ORGANIZATIONAL CONTEXT AND THE INTERPRETATION OF STRATEGIC ISSUES: A NOTE ON CEOS’ INTERPRETATIONS OF FOREIGN INVESTMENT*

This paper explores the relationship between organizational context and the interpretation of strategic issues by examining the hypothesis that CEOs' interpretations of foreign investment in the USA are influenced by the organizational context in which they are embedded. Three aspects of organizational context - the global business experience of the firm; the firm's level of organizational inertia (as represented by firm age and size); and the resources available for responding - are examined as predictors of CEOs' perceptions of foreign investment as a threat or an opportunity. Analysis of data from 320 organizations, controlled by industry, shows that global business experience, firm size, and perceived capability are significant predictors of the perception of threat and opportunity. the discussion addresses the implications of these findings for future research on issue interpretation and organizational context.     

Trends in Hydrological Parameters of a Southern Brazilian Watershed and its Relation to Human Induced Changes

The Piracicaba river basin is a subtropical watershed located in the southeastern region of Brazil. With an area of 12 400 km², the basin is a typical example of new landscape resulting from development in tropical and sub-tropical regions: establishment of intensive industrial and agricultural processes were followed by significant population growth and water management. This scenario has led to significant increase in water demand and decrease in water quality. The main objective of this study is the detection of changes in the patterns of flow and precipitation in the basin, and its possible relation to man-induced changes. Statistical analyses were performed on records of precipitation, evapotranspiration and streamflow, from 1947 to 1991. Precipitation and evapotranspiration totals showed significant increasing trends for the entire basin. From eight streamflow gauge stations, half showed significant decreasing trend. The most probable cause of such trends is the export of water from the basin to the metropolitan region of São Paulo city.