Impact of the Corporate Law Economic Reform Program Act 1999 on initial public offering prospectus earnings forecasts

Commencing 13 March 2000, the Corporate Law Economic Reform Program Act 1999 (Cth) introduced changes to the regulation of corporate fundraising in Australia. In particular, it effected a reduction in the litigation risk associated with initial public offering prospectus disclosure. We find that the change is associated with a reduction in forecast frequency and an increase in forecast value relevance, but not with forecast error or bias. These results confirm previous findings that changes in litigation risk affect the level but not the quality of disclosure. They also suggest that the reforms' objectives of reducing fundraising costs while improving investor protection, have been achieved.

Implications of seasonal climate forecasts on world wheat trade: a stochastic, dynamic analysis

Improvements in seasonal climate forecasts have potential economic implications for international agriculture. A stochastic, dynamic simulation model of the international wheat economy is developed to estimate the potential effects of seasonal climate forecasts for various countries' wheat production, exports and world trade. Previous studies have generally ignored the stochastic and dynamic aspects of the effects associated with the use of climate forecasts. This study shows the importance of these aspects. In particular with free trade, the use of seasonal forecasts results in increased producer surplus across all exporting countries. In fact, producers appear to capture a large share of the economic surplus created by using the forecasts. Further, the stochastic dimensions suggest that while the expected long-run benefits of seasonal forecasts are positive, considerable year-to-year variation in the distribution of benefits between producers and consumers should be expected. The possibility exists for an economic measure to increase or decrease over a 20-year horizon, depending on the particular sequence of years.