Overnight information flow and realized volatility forecasting

This study compares various approaches for incorporating the overnight information flow for forecasting realized volatility of the Australian index ASX 200 and seven very liquid Australian shares from March 2007 to January 2014. The analysis shows that considering overnight information separately rather than adding it to the daily realized volatility estimates leads consistently to better out-of-sample results despite the higher number of involved parameters. A novel, very promising approach is to combine the assets’ own overnight returns with realized volatility estimates of related assets from other markets for which intraday data is available while the Australian exchange is closed.     

Analysing the performance of managed funds using the wavelet multiscaling method

We propose a new approach for investigating the performance of managed funds using wavelet analysis and apply it to an Australian dataset. This method, applied to a multihorizon Sharpe ratio, shows that the wavelet variance at the short scale is higher than that of the longer scale, implying that an investor with a short investment horizon has to respond to every fluctuation in the realized returns, while for an investor with a much longer horizon, the long-run risk associated with unknown expected returns is not as important as the short-run risk. Using multihorizon Sharpe ratios of six groups of managed funds, we find that none of the fund groups are dominant over all time scales.

Externally reported performance measures and benchmarks in Australia

We survey 116 Australian CFOs from the top 700 Australian Securities Exchange‐listed firms regarding externally reported performance measures and benchmarks. CFO responses are not always consistent with theory, and a comparison with a similar U.S. survey highlights differences consistent with the respective institutional settings. Conditional analyses of responses also find that characteristics such as firm size that differentiate the Australian market from the U.S. market are associated with differences in opinion between the CFOs in each domain. The key message to accounting researchers is that, given significant institutional differences, it is unwise to infer that U.S. findings will apply to Australia and similar market settings.     

Stakeholder perceptions of performance audit credibility

This paper examines the credibility of performance audit at the micro-level of practice using the general framework of Birnbaum and Stegner's theory of source credibility in which credibility is dependent upon perceptions of the independence of the auditors, their technical competence and the usefulness of audit findings. It reports the results of a field study of a performance audit by the Australian National Audit Office conducted in a major government department. The paper establishes that problems of auditor independence, technical competence and perceived audit usefulness continue to limit the credibility of performance auditing.     

Merging time‐series Australian data across databases: challenges and solutions

This study discusses the differences in company identification across sources of Australian data and raises important issues which should be considered prior to merging across databases. In particular, we show that the practice among accounting databases of overwriting prior identifiers used by a given company, with its most recent, results in failure to match data which actually exists. We suggest a method for reconciling these differences and show that our method results in a match rate of 97 percent with the Aspect company identification file, and 94 percent after missing accounting data is considered. This contrasts with a match rate of only 71 percent when performing a direct merge.     

Spatial price mimicking on Airbnb: Multi-host vs single-host

This paper studies the existence of two different supply operators in the peer-to-peer accommodation rental market for the city of Madrid. We specifically analyse spatial dependencies in price formation and whether the so-called professional hosts (i.e. those who have several Airbnb listings) set prices differently from single-property hosts. To this end, hedonic price models are estimated with and without spatial price dependence. Listings’ structural characteristics and accessibility measures to transportation hubs and sightseeing spots are considered in the regressions. Results provide clear evidence that price mimicking is higher among non-professional hosts whereas professional hosts set prices more independently.     

The Political Power of Big Business: A Response to Bell and Hindmoor

There has been a recent resurgence of interest in debates about the power of business (Culpepper 2011 Culpepper, P. (2011). Quiet Politics and Business Power: Corporate Control in Europe and Japan, Cambridge: Cambridge University Press. [Google Scholar]; Bell 2012 Bell, S. (2012). The Power of Ideas: The Ideational Mediation of the Structural Power of Business. International Studies Quarterly, 56(4), 661–73. doi: 10.1111/j.1468-2478.2012.00743.x[Crossref], [Web of Science ®] , [Google Scholar]) and Bell and Hindmoor (2013 Bell, S., Hindmoor, A. (2013). The Structural Power of Business and the Power of Ideas: The Strange Case of the Australian Mining Tax. New Political Economy, ,forthcoming. Available from: http://dx.doi.org/10.1080/13563467.2013.796452 [19 (3), pp. 470–486, cross-references updated] [Google Scholar]) make an important, theoretically informed, but empirically rooted, contribution to that debate. In this response, we address both aspects of their contribution, arguing that their treatment of Lindblom is partial and, consequently, so is their explanation of the case. As such, we largely rely on their narrative of the evolution of the Australian mining tax, focusing first on critically examining Bell and Hindmoor's theoretical position, before turning to their analysis of the case.     

Towards a Conceptualization of Unethical Marketing Practices in Tourism: a Case‐Study of Australia's Inbound Chinese Travel Market

This paper has a twofold purpose: to identify the types and impacts of unethical practices in an international travel market and to offer a generic model to enhance our understanding of the causes and consequences of such practices. The Chinese outbound market is used as a case study. The choice of China is timely and appropriate, given that the country is forecast to be one of the world's major outbound markets by 2010 with over 100 million leaving mainland China (World Tourism Organization [WTO], 2006 World Tourism Organization. 2006, November 7. The Chinese outbound tourism market Retrieved March 19, 2007, from http://www.unwto.org/media/Releases/2006/november/chineseoutbound.htm [Google Scholar]). The research setting is the Chinese inbound tourism market to Australia where the Chinese market has grown substantially since Approved Destination Status (ADS) was granted in 1999. The implications of this research for European and North American tourism operators are significant, given the 2005 agreement between the European Commission and the Chinese authorities that allows group travel from China into Europe. Using the long‐interview technique with industry participants in Australia and China a conceptual framework of the environment in which unethical practices occur is provided. A model illustrating antecedents, impacts, and outcomes of unethical practices is offered. Key managerial findings include the unhealthy consolidation of channel power in the Chinese market and the influence of ethnic networks across borders. Several key issues requiring further research are highlighted.     

Latin American Tourism

Summary

Blessed with a great diversity of natural and cultural assets, the countries of Latin America should be thriving as international tourist destinations. The reality is, however, that the region is a long way from reaching its full potential. This paper reports the findings of a survey that investigated the reasons why Australian travel agents and tour operators thought that Latin America was receiving so few tourists from Australia. The main finding of the study was that there is a lack of knowledge among travel agents about the Latin American region. Many of them could only identify a limited number of tourist attractions in the region. While the study has an Australian focus, the authors suggest that the barriers underlying the lack of international demand for Latin American tourism products are similar to those that exist in other potential source markets.     

The effect of financial constraints,investment policy,product market competition and corporate governance on the value of cash holdings

This study empirically investigates the value shareholders place on excess cash holdings and how shareholders’ valuation of cash holdings is associated with financial constraints, firm growth, cash‐flow uncertainty and product market competition for Australian firms from 1990 to 2007. Our results indicate that the marginal value of cash holdings to shareholders declines with larger cash holdings and higher leverage. However, firms that are more financially constrained, that have higher growth rates and that face greater uncertainty exhibit a higher marginal value of cash holdings. These findings are consistent with the explanation that excess cash holdings are not necessarily detrimental to firm value. Firms with costly external financing and that also save more cash for current operating and future investing needs find that the market values these cash hoarding policies favourably. Finally, there is limited evidence of an association between various corporate governance measures and the value of cash holdings for a shorter sample period.