Strategic interventions in intellectual asset flows

The rise of the knowledge economy brings to the foreground questions of how firms might best capture the value of their intellectual assets. In this article I introduce the notion of strategic interventions in intellectual asset flows designed to influence the level and composition of intellectual asset scarcity, with implications for firm performance. I also present propositions that explain and predict how contingencies at differing levels of analysis influence the choice of strategic intervention.

Size and book to market effects and the Fama French three factor asset pricing model: Evidence from the Australian stockmarket

The present study adds to the sparse published Australian literature on the size effect, the book to market (BM) effect and the ability of the Fama French three factor model to account for these effects and to improve on the asset pricing ability of the Capital Asset Pricing Model (CAPM). The present study extends the 1981–1991 period examined by Halliwell, Heaney and Sawicki (1999) a further 10 years to 2000 and addresses several limitations and findings of that research. In contrast to Halliwell, Heaney and Sawicki the current study finds the three factor model provides significantly improved explanatory power over the CAPM, and evidence that the BM factor plays a role in asset pricing.

A note on execution costs for stock index futures: Information versus liquidity effects

This paper examines execution costs and the impact of trade size for stock index futures using price-volume transaction data from the London International Financial Futures and Options Exchange. Consistent with Subrahmanyam [Rev. Financ. Stud. 4 (1991) 11] we find that effective half spreads in the stock index futures market are small compared to stock markets, and that trades in stock index futures have only a small permanent price impact. This result is important as it helps to better understand the success of equity index products such as index futures and Exchange Traded Funds. We also find that there is no asymmetry in the post-trade price reaction between purchases and sales for stock index futures across various trade sizes. This result is consistent with the conjecture in Chan and Lakonishok [J. Financ. Econ. 33 (1993) 173] that the asymmetry surrounding block trades in stock markets is due to the high cost of short selling and the general reluctance of traders to short sell on stock markets. (C) 2004 Elsevier B.V. All rights reserved.

Asset Price Instability and Policy Responses: The Legacy of Liberalization

The problem of asset price bubbles, and more generally of instability in the financial system, has been a matter of concern since the 1980s but has only recently moved to the center of the macroeconomic policy debate. The main concern with bubbles arises when they burst, imposing losses on investors holding the bubble assets and potentially on the financial institutions that have extended credit to them. Asset price volatility is an inevitable consequence of financial market liberalization and, in extreme cases, generates asset price bubbles, the bursting of which can impose substantial economic and social costs. Policy responses within the existing liberalized financial system face daunting levels of uncertainty and risk. Given the pattern of increasing asset market volatility over recent decades and the policy issues highlighted in this paper, the future looks uncertain. Another significant cycle of asset price movements, especially in one of the major economies, could see a fundamental revision of thinking about the costs and benefits of liberalized financial systems.

The forgotten CGT events: Are asset revaluation reserve distributions by trustees of discretionary trusts capital gains?

It is the present practice that asset revaluation reserve distributions by trustees of discretionary trusts are not taxed in Australia. Are such distributions not meant to be taxed, or have relevant sections in the Income Tax Assessment Acts been overlooked? This article will review how trustees of discretionary trusts perform asset revaluation reserve distributions. It then challenges the current accepted view that they can be distributed tax-free to discretionary beneficiaries by analysing relevant CGT events, which the authors regard as forgotten events. It will be submitted that a discretionary beneficiary in receipt of an asset revaluation reserve distribution may have a capital gain which is required to be included in its assessable income. This liability for tax is regardless of the government's recent introduction of s 109XA to address the practice of asset revaluation reserve distributions bypassing the operation of Div 7A of the ITAA 1936 with such distributions.