Causes and Implications of the Decline of the Economics Majors: A Focus on Australia

This paper analyses the causes and implications of declining economics major in Australia. Based on a brief review of the relevant literature and an analysis of the Australian time series data, it is found that economics continues to be less attractive to students in relative terms. Three major factors contribute to this phenomenon: less than appropriate product for an increasingly diverse clientele, the introduction of more attractive and business, commerce and industry-oriented programs such as finance, accounting and commerce, and business majors geared to the needs of the real world, and the use of less experienced teaching staff in lower undergraduate courses. It is argued that stemming the tide against the economics discipline would require a significant rethink of development of products more vocational and real world-oriented, market segmentation for different clientele types, and marshalling of more experienced and capable teaching staff for lower undergraduate levels.

The value of dividend imputation tax credits in Australia

A dividend imputation tax system provides shareholders with a credit (for corporate tax paid) that can be used to offset personal tax on dividend income. This paper shows how to infer the value of imputation tax credits from the prices of derivative securities that are unique to Australian retail markets. We also test whether a tax law amendment that was designed to prevent the trading of imputation credits affected their economic value. Before the amendment, tax credits were worth up to 50% of face value in large, high-yielding companies, but Subsequently it is difficult to detect any value at all. (C) 2003 Elsevier B.V. All rights reserved.

Management motivation for using financial derivatives in Australia

This study takes a direct approach to determine management motivation for the use of financial derivatives. We survey a sample of Australian firms on attitudes to derivative use and financial risk management. Management views are sought on the importance of a series of theoretical reasons for using derivatives. Generally, we find that managers are focused on the broad reduction of risk and volatility of cash flows and earnings in using derivatives. Specific issues such as reducing bankruptcy costs, debt levels and taxation are not considered as important. A further interesting result from this research is that even though firms may use derivatives they may not necessarily hedge all of their annual exposures across different financial risks. This helps explain the inconsistency of results in many empirical studies on the determinants of derivative use.