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.     

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.     

A variety-increasing view of the development of the semiconductor industry in Taiwan

The development of the semiconductor industry depends on its interactions with the environment. Developing countries face more constraints and the environmental interactions seem more complicated. The development process of the semiconductor industry could be better understood with regard to the interactions and social changes. This study proposes a variety-increasing viewpoint based on the concepts of variety increasing and internal learning to analyze the developmental experience of the semiconductor industry in Taiwan. The result shows that the development of Taiwanese semiconductor industry is a continuous variety-increasing process, which is achieved by searching and establishing successful associations in an increasingly wider and complex environment. Implications on the ongoing development of Taiwan's semiconductor industry and the development experiences of other East Asian countries are discussed.     

“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.     

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.     

Rock Paper Scissors

Rock Paper Scissors is used to resolve conflict when a compromise is not possible. Individuals playing ``games' tend to have biases they prefer to play. I show that Rock Paper Scissors with biased players results in a player with a high valuation for winning being victorious with a probability greater than a player with a low valuation. Thus, it frequently achieves the efficient outcome. Furthermore, as the benefit to victory increases for all players, victory for each player becomes equally likely. Therefore, it is often efficient for minor conflicts while it performs no better than a coin-flip for major conflicts.      

Pricing access in network competition

We compare various access pricing rules in the two-way access model. We show that the Generalized Efficient Component Pricing Rule (TECPR) leads to a lower equilibrium price than does the Efficient Component Pricing Rule, (ECPR) marginal cost pricing, (MCP) and any non-negative fixed access charges.