Volume 13 Number 01
The Financial and Governance Characteristics of Australian Companies Going Private
John Evans, Melvin Poa and Subhrendu Rath
This study assesses the characteristics of firms involved in going private transactions using a sample of 80 Australian companies going private during 1990 to 1999 and a matched sample of 80 public firms. The firm specific characteristics examined in the study are; free cash flow, growth, leverage, liquidity, R&D expense, managerial ownership in the firm and takeover threats variable. Surprisingly, higher levels of free cash flow are not associated with likelihood of going private. The univariate and multivariate results indicate that going private firms in Australia are likely to be characterised as having high liquidity, lower growth rates, lower levels of leverage and R&D expense. Takeover threats were found to be significant but not in the hypothesised direction.
JEL classifications: G30, G34
Keywords: Going Private; Management Buyouts; Leveraged Buyouts; financial characteristics; free cash flow
Tax Mix and Effectiveness of Government Spending
Y.H. Cheung
The Australian tax reform in July 2000 gave heavier weights to consumption tax in the tax mix at the expense of the income tax. This paper shows that the trade off among the tax-mix policy parameters depends on the structure of the economy. Given that the reform is tax-revenue neutral and no change in monetary stance, an increase in the share of consumption tax in the tax mix may increase the effectiveness of government spending in stabilising the economy. A numerical example is included for illustration purpose.
Keywords: Tax mix; consumption tax; government spending; tax revenue neutrality; Australian tax reform
International Competitiveness and Sugar Strategy Options in Australia, Brazil and the European Union
Shantanu Banerjee
Understanding of international competitiveness has primarily been pursued in terms of economic variables and market conditions. The roles of the government, the socio-cultural-political context in international business, and their effects on competitiveness have largely been ignored. This study involves an investigation into the circumstances of international competitiveness and how it is pursued by firms from different sugar producing and marketing nations. It employs a qualitative method of comparative analysis between Australia, Brazil, and the European Union. This paper highlights the variations of the theme of international competitiveness reflected through different strategies chosen by the three dominant sugar economies
Keywords: Competitiveness, Sugar strategy, Production and marketing regimes, Australia, Brazil, European Union
International Convergence of Accounting Standards: An Investigation of the Use of IAS “Options” Not Acceptable Under US GAAP
Ann Tarca
This study investigates the use of accounting policies contained in national standards or IAS that are not acceptable under US GAAP. Four policy areas (measurement of tangible assets, available-for-sale marketable securities and intangible assets; and the treatment of research and development expenditure) were considered for 506 listed firms from the United Kingdom (UK), Australia, France, Germany and Japan at 1999/2000. The main use of policies equivalent to IAS “options” was among firms from the UK and Australia. The study outlined how IAS adoption in 2005 (in the UK, France, Germany and Australia) and further IASB/FASB convergence activities will impact on policies currently used by firms from the sample countries.
Keywords: International accounting convergence; international accounting standards; IAS; US GAAP; accounting policy choice; measurement of tangible, intangible and financial assets, research and development (R&D) expenditure.
Entry Methods and International Marketing Decision Making: An Empirical Investigation
Demetris Vrontis and Philip J. Kitchen
This paper investigates levels of adaptation and standardisation in international marketing tactics, and examines whether multinational companies are adapting or standardising their marketing mix elements in international markets. It is based on empirical research with some of the largest UK-based multinational companies.
The research shows that both adaptation and standardisation are used at the same time within the respondent group. Levels of integration are dependent upon consideration of the relationship between the rationale for internationalisation and elements identified, and an understanding of how these are affected by a number of factors (one of them being Entry Methods, the factor under consideration here).
Keywords: International marketing planning, standardisation, adaptation, integration