Volume 09 Number 02
A Comparison Of Single Factor Models For Australian Short-Term Interest Rates
Steven Li
In this paper, the single factor interest rate models are considered in the Australian context. The generalised method of moments (GMM) is employed to estimate model parameters. Monte Carlo simulations are carried out for all estimated models and the performance of the models is assessed based on the simulated results and the historical data. It is shown that the unrestricted single factor model best fits the historical interest rates. Interestingly, the optimal exponent of the dependence of interest rate volatility on its level for Australia is found to be higher than that for the UK, but less than that for the US.
Key words: interest rate; single factor model; GMM estimate; Monte Carlo simulation
Abnormal Item And AAS 1/AASB 1018 Section 5.4 Judgements And Disclosures
Errol R Iselin and Takiah M Iskandar
The purpose of this research was to study the change in accounting standards AAS 1/AASB 1018 from abnormal item disclosures to Section 5.4 disclosures, to evaluate the change and assess its likely impact on disclosures in the Statement of Financial Performance. The nature of both types of disclosure is studied as are problems associated with them. The study reveals that the two types of disclosure are similar and that they have similar problems. One major problem concerns the lack of professional guidelines regarding the appropriate disclosure threshold. The absence of a guideline has resulted in earnings management in respect of abnormal items and it is expected this will also occur with Section 5.4 disclosures. The earnings management has allowed companies to down-play losses and expenses. While Section 5.4 disclosures appear to be an improvement over abnormal item disclosures, they do not appear to be a complete solution to earnings management problems. We argue that a more complete solution requires professional guidelines regarding disclosure thresholds and the prevention of differences between gain and loss thresholds. The paper goes on to study abnormal item thresholds empirically. We argue these thresholds may be a good guide to Section 5.4 thresholds, and that if professional guidelines are developed, our findings will make a contribution to the deliberations that must occur. The results show that: (1) abnormal item thresholds are significantly higher than disclosure thresholds, (2) abnormal item thresholds are 14.7% of net profit and disclosure thresholds are 9.77%, (3) within the range of comparative figures studied (70-130% of the latest year's figure), they did not affect abnormal item thresholds. The paper discusses the implications of these findings.
Key words: abnormal items; Section 5.4 disclosures; materiality
Participatory Desire And Deprivation Among Workers In India
Abdul Gani
Although workers' participation in management continues to be one of the most widely and forcefully debated issues of labour relations across the globe, little systematic research has, so far, been conducted in India to study a more fundamental issue of the participatory desire and deprivation among workers. Based on the data collected through personal interviews of 250 workers and 60 managers (using a structured questionnaire), selected at random from five large Indian organisations, the present study addresses, on the basis of selected indicators, a fundamental question of whether or not the workers and management want workers' involvement in decision making, and, if yes, then in what areas, to what extent and how? The results point to a participatory deprivation among all the respondents, for all the decision categories and in all the organisations under study, which can lead to adverse reactions. The study provides a review of research on the subject and attempts to distil insights and implications of practical importance for effectively reducing the current widespread participatory deprivation and creating a sustainable participative culture.
Key words: workers; management participation; decision making, influence; involvement; India
China's Entry Into The World Trade Organisation: Implications For Singapore Companies
Douglas Sikorski and Kevin Yip Chun Hong
The objective of this paper is to examine what Singapore businesses anticipate will be the implications of China's entry into the WTO (World Trade Organisation), with the specific intention of understanding the effects on Singapore's manufacturing sector and economy. Primary data was collected through telephone surveys of Singapore businesses with operations in China. Secondary data was also gathered from journals, newspapers, books, periodicals, the WTO and several other websites. The analysis was structure around hypotheses derived from economic theory. A flow-chart model was developed to facilitate understanding of the relationships between survey responses and the implications of China's entry into the WTO. After factor analysis and reliability tests were performed to ensure that the constructs were internally consistent and accurate measurements, the model linking the various hypotheses was tested using Structural Equation Modelling software AMOS (Version 4.0). Broadly speaking, China's entry into the WTO was perceived by Singapore businesses to have significantly positive effects on the local economy. Specific implications will be discussed including a hypothesised increase in Foreign Direct Investment (FDI) in China, a favourable terms-of-trade for Singapore companies, and an increase in transparency in China following its WTO accession.
Key words: WTO; China; Singapore; FDI; free trade; liberalization
Ownership Types, Job Turnover And Technical Efficiency In China
Clement Kong-Wing Chow, Michael Ka-Yiu Fung and Hang-Yue Ngo
In this paper, we investigate the relationship between job turnover and technical efficiency of manufacturing firms across various types of ownership in socialist China during the period of 1989-1992. Data Envelopment Analysis (DEA) is used to compute the measure of technical efficiency for each enterprise. Our empirical results show that: (1) there is a U-shaped relationship between job turnover and technical efficiency; (2) the turning point of other enterprises (composed largely of private enterprises) is higher than that of state-owned enterprises (SOEs); and (3) the technical efficiency of international joint ventures (IJV) is increasing for any positive value of job turnover.
Key words: ownership type; China; job turnover; technical efficiency; employment reforms; data envelopment analysis
Multinational Corporation Subsidiary Roles: Reflections From A Policy Perspective
Ron W Edwards
Many countries have policies designed to attract foreign direct investment. Some target multinational corporations looking to establish regional headquarters as these bring considerable advantages to the host economy. However, multinational corporations adopt a range of different organisational structures, some of which have no clear role for regional headquarters, but which still offer significant advantages to host countries. Policy initiatives may therefore be targeting too narrow a range of subsidiaries. Subsidiaries with a specialist global function also offer significant advantages and should not be ignored.
Key words: multinational corporations; strategy; regional headquarters; government policy; subsidiary mandates; FDI