Co-movement in Stock Prices in Emerging Economies: The Case of the Caricom Region

The Grand Anse Declaration of 1989 recognised the need for financial integration within the emerging economies that comprise the CARICOM region, as a way of furthering the wider process of economic integration and, indeed, economic development in that region. Using co-movement as a measure of financial integration, this paper investigates the co-movement in stock prices among the Barbados, the Jamaica and the Trinidad and Tobago Stock Exchanges, the three major exchanges within the CARICOM region. It also examines how integrated these exchanges are with the New York Stock Exchange. The GARCH-Copula methodology and, to a lesser extent, estimated correlation coefficients, are used to attain this objective. There appears to be co-movement in stock prices and returns within the CARICOM stock markets and significant dependence structures between the returns of the three CARICOM stock markets. However, there is considerably less evidence of integration between the CARICOM markets and the New York Stock Exchange.     

The Rise and Rise of Public Private Partnerships: Challenges for Public Accountability

The increasing popularity of public private partnerships (PPPs) thrusts on to centre stage the inherent tension between accountability and transparency on the one hand, and efficiency and commerciality on the other. This paper explores a number of accountability issues that are exacerbated by a public private partnership structure. The organisational structure of a PPP, where much of the activity associated with the delivery of a public service is embedded in a private-sector entity, increases the likelihood that public scrutiny of decisions and actions is significantly inhibited     

The FRC AND Accounting Standard‐Setting: Should I Still Call Australia Home?

This paper analyses the decision of the Financial Reporting Council (FRC) to replace Australian accounting standards with international accounting standards on 1 January, 2005. Two main topics are considered: the appropriateness of the FRC's directive, and the case against the proposed adoption date. We argue that the FRC has not conducted sufficient consultation with affected parties and that the hasty implementation will impose costs that could have been avoided with the exercise of more caution.     

The 1986 U.K. Insolvency and Company Directors' Disqualification Acts: An evaluation of their impacts upon small firm financing decisions

This paper examines the potential impact of the 1986 U.K. Insolvency and Company Directors' Disqualification Acts on small firm financing decisions. With the aid of a simplified Black and Scholes (1973) option model of financing decisions, the paper illustrates how the 1986 legislation reduces the incentives for owner-managers to gamble with creditor claims, particularly in situations of financial distress, by making them personally liable for unmet claims and/or by disqualifying them from holding office for a fixed period. For instance, example 3 in the paper shows the conflict that could result from the owner-manager reducing his/her opening equity position and it further argues how the legislation should act to alleviate the situation. It remains, however, an empirical question as to whether this reduction in creditors' exposure to the risk of uncompensated wealth transfers will ultimately result in a significantly greater number of company liquidations and disqualifications, particularly during a prolonged economic downturn, or an improved/less costly supply of finance to small firms.     

Road infrastructure and economic development in the periphery: the case of A55 improvements in North Wales

This paper examines the impact of a major road improvement programme on the economic development of North Wales. The paper identifies the economic impacts of the road on a selection of firms and organisations in North Wales, and provides a modelling framework to examine the static and dynamic effects of road improvements. Road improvements across North Wales are found to be a necessary, but not sufficient, condition for economic development in this peripheral area.     

“De‐risking” Corporate Pension Plans: Options for CFOs

Until the stock market bubble burst in 2000–2002, most CFOs viewed their defined benefit pension plans as profit centers and relatively risk‐free sources of income. Since neither pension assets nor liabilities were reported on corporate balance sheets, and expected returns on pension stocks could be substituted for actual returns when reporting net income, the risks associated with DB plans were masked by GAAP accounting and thus assumed to have no bearing on corporate capital structure. But when stock prices and corporate profits fell together, the risks associated with conventional stock‐heavy pension plans showed up first in reduced pension surpluses (or, in many cases, deficits) and then later in higher required cash contributions and lower reported earnings. As a consequence, today's investors (and rating agencies) are viewing pension and other legacy liabilities as corporate debt, and demands for transparency and increased funding have triggered accounting changes and proposed legislative reforms that will further unmask the economics. This article aims to provide both private‐sector and public‐sector CFOs with suggestions for reducing and controlling the cost of providing for the retirement of their employees. Profitable, tax‐paying companies with DB plans should consider (1) funding any unfunded liabilities (if necessary, by issuing debt) and (2) reducing pension equity and interest rate exposures by shifting some (if not all) pension assets into bonds and defeasing the pension liability (achieving a tax arbitrage in the process). And in cases where the expected costs of maintaining DB plans outweigh the benefits, companies should consider freezing or terminating their plans and switching to a defined contribution (DC) or some form of hybrid plan. The authors also propose similar changes for public pension plans, where underfunding and mismatch problems are greater, less transparent, and in some ways less tractable than those of corporate DB plans.     

Schools of thought in organizational learning

This article attempts to bring coherence to the diversity that characterizes organizational learning research. It argues that organizational learning is embedded in four schools of thought: an economic school, a managerial school, a developmental school, and a process school. The article provides a comprehensive analysis of the schools, describes how they differ from each other, and outlines how each of them can be employed effectively. To demonstrate the benefits of theoretical plurality, the four schools are applied to the key marketing topics of market orientation and new product development. Implications for future research in marketing are provided. Simon J. Bell is a lecturer in marketing in the Faculty of Economics and Commerce at the University of Melbourne. Gregory J. Whitwell is an associate professor of marketing in the Faculty of Economics and Commerce at the University of Melbourne. Bryan A. Lukas is an associate professor of marketing and director of the Master of Applied Commerce Program in the Faculty of Economics and Commerce at the University of Melbourne.     

A Global Ex-vessel Fish Price Database: Construction and Applications

Synopsis We describe the first effort at creating a global ex-vessel fish price database, which is required for understanding the economic behavior of participants in the world’s fisheries. We demonstrate potential applications of the database by linking it to a spatially defined catch database, which makes it possible to attach landed values to species in both time and space. This is the first database available publicly where interested members of the public, researchers and managers can easily find and access ex-vessel prices of the world’s major commercial fish species. Preliminary results indicate that the average real price of a number of species have declined between 1950 and 2002. The estimated landed value of fish globally, in year 2000 dollars, was about US$24 billion in 1950. It increased steadily to about US$90 billion in the early 1970s, reached a peak of US$100 billion at the end of the 1980s, and declined to about US$80 billion in 2000. The top 15 fishing countries cumulatively account for 79% of total real landed value, with Japan leading, even though the value of its landings has been declining.      

Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?

This paper asks whether the income gap between rich and poor nations can be explained by multiple equilibria. We explore the quantitative implications of a simple two-sector general equilibrium model that gives rise to multiplicity, and calibrate the model for 127 countries. Under the assumptions of the model, around a quarter of the world’s economies are found to be in a low output equilibrium. We also find that, since the output gains associated with an equilibrium switch are sizeable, the model can explain between 15 and 25% of the variation in the logarithm of GDP per worker across countries.