Sovereign risk and the impact of crisis: evidence from Latin America

We utilize the default by Argentina in 2001 and the Global Financial Crisis in 2008, as natural experiments, to monitor the complex interactions between sovereign bonds when subjected to endogenous and exogenous shocks. By forming pairs of Latin American sovereign bonds, bundled into similar maturity class, the analysis highlights the complex nature of risk shifting, and the temporal nature of the volatility transmission and sharing mechanisms in the lead up to, and after, a crisis period. The results show that shorter maturity groups and longer maturity groups behave in fundamentally different ways in terms of volatility transmission, while one or two leading countries act as regional benchmarks. The dynamics are consistent with temporal but segmented investor preferences, with the arrival of crisis contributing to a breakdown in the previous relationships. In addition, there is additional economic benefit from utilizing knowledge of the volatility structure underlying the historic transmission channels to improve the portfolio outcomes of market participants.

The real impact of stock market mispricing — evidence from Australia

Using a large panel of Australian firms, we investigate if mispricing in the stock market has an impact on firm-level investment. A significantly positive relation is documented between investment and theproxies for mispricing, suggesting that overpriced (underpriced) firms tend to overinvest (underinvest). Furthermore, we find that equity-dependent firms display a more pronounced sensitivity of investment to stock misvaluation than do nonequity-dependent firms. Taken together, our findings evidence that mispricing in Australian capital markets may have significant influence on the real economy, and the influence works though an equity-financing channel.© 2007 Elsevier B.V. All rights reserved.

Modelling linkages between Australian financial futures markets

This paper investigates the dynamic interdependence of the Australian financial futures markets. A multivariate EGARCH model is developed to investigate linkages and stochastic volatility interactions between the 10-year Treasury bond, 90-day bank-accepted bill, and the All Ordinaries share price index futures markets. In this analysis, the empirical results strongly suggest that significant volatility interactions are evident across the 3 markets.

Environmental factors and product adaptation in Middle Eastern markets : the experience of Australian companies

This paper examines the impact that environmental factors have on the decision of Australian companies to adapt products for Middle Eastern markets. It  concludes that of all product aspects, labeling requires the greatest amount of adaptation and that socio-cultural factors have the greatest influence on overall product adaptation. Furthermore, environmental factors impact on product   adaptation in different ways, reflected in the adaptation of different aspects of the overall product.

Career progression, human capital and pay equity in Australian public sector labour markets

This study uses data from the Victorian Public Sector Census 2004 to identify the extent of equity in pay and career progression (promotion). A system of three equations is developed to capture the endogeneity between human capital and promotion and the interdependence between promotion, pay and human capital. The results indicate that there are substantial differences in the average wages earned by public sector employees in different Equal Employment Opportunity (EEO) groups. While some of these differences arise from factors beyond the control of the public sector employers, others arise from bias in the public sector employment system and procedures. The earnings of individual employees in the public sector are determined in a systematic way by the wage structures in the different sub-sectors, the skill base of the employee on recruitment, sub-sector specific promotion rates, acquisition of formal and informal training and the apparent bias within recruitment and promotion systems in dealing with particular groups. The apparent bias of recruitment and promotion systems is complex in makeup and varies within EEO groups as well as between EEO groups. Most of the difference in pay across employees can be explained as an outcome of individual choice and labour market conditions external to the public sector. After adjusting for sectoral wage differences, skill base when recruited, sectoral promotion rate differences, experience in the public sector, whether individuals are employed on a full-time or part-time basis and individual training decisions, the statistical evidence is consistent with the finding that public sector recruitment and promotion systems tends to be biased, on average, against females and those from culturally diverse backgrounds. Achievements in formal education are important for salary progression. This is particularly the case for women. The main drivers of participation in formal education were employer support in both financial and non-financial terms. Promotion rates were important factors in explaining wage differences. Women tended to receive slightly fewer promotions than men, but women received, on average, greater rewards for each promotion.

Modelling the linkages between the Australian and G7 stock markets : common stochastic trends and regime shifts

This paper examines whether the Australian equity market is integrated with the equity markets of the G7 economies by applying both the Johansen (Statistical analysis of conintegrating vectors, Journal of Economic Dynamics and Control, 12, 231-54, 1988) and Gregory and Hansen (Residual-based tests for cointegration in models with regime shifts, Journal of Econometrics, 70, 99-126, 1996) approaches to cointegration. Some evidence of a pairwise long-run relationship between the Australian stock market and the stock markets of Canada, Italy, Japan and the United Kingdom is found, but the Australian equity market is not pairwise cointegrated with the equity markets of France, Germany or the USA.

Convergence among the sub-markets in Australian regional building and construction sector

Studies on market convergence are well considered in the literature. However, the majority of the previous research focused on housing markets and few studies have concentrated on construction markets. Owing to a simultaneously dramatic increase in the construction prices of the sub-markets in the building construction sector in Australia, this paper aims to identify the convergence among these markets, involving house construction market, other-residential building construction market, and non-residential building construction market. To achieve it the Granger causality test and generalized response function depending on the vector error correction model with the quarterly data of Australia’s eight states from 1998 to 2010 will be applied. Based upon the econometric tests, the price diffusion patterns among these construction markets have been identified. Research on the convergences of construction markets not only helps construction firms perform well in business operations and arbitrage activities, but also provides policy makers with useful information for enacting effective construction policies for national perspectives and approaches to infrastructure planning.

Australian and US interest rate swap markets : comparison and linkages

We investigate and compare the determinants of US and Australian interest rate swap spreads and the linkages between these markets. The slope of the risk-free term structure is the most significant determinant and its importance is greater for longer terms to maturity. Interest rate levels and, in Australia, the default premium also have some impact. The influences of interest rate volatility, the liquidity premium and (in the USA) the default premium are small or negligible. We hypothesise, and our evidence confirms, that the US swap market significantly affects the Australian swap market but not vice-versa.

What drives the adoption of electronic markets in Australian small-and-medium sized enterprises? – an empirical study

This paper reports a study of the critical determinants for adopting electronic markets (e-Market) in Australian small-and-medium sized enterprises (SMEs) within the technology-organization-environment (TOE) framework. Structural equation modelling and logistic regression are used for identifying the critical determinants for the adoption of e-Markets by Australian SMEs through testing a proposed conceptual model and proposing an alternative model. This study contributes to existing research by enriching an understanding of the critical determinants of adopting an e-Market in Australian SMEs and by providing a validated model for the interrelationships of the determinants in technology adoption.

Does organisational heritage matter in the development of offshore markets? the case of Australian life insurers

The globalization of financial markets over the past decade has focused the spotlight on the responsiveness of financial firms to international pressures. Insurance markets have traditionally relied on global networks not only to expand the insurers' sphere of influence but also to support domestic business. Until relatively recently, Australian insurance companies have not played a significant role in the development of international markets. However, in the last decade of the twentieth century Australian insurers ventured overseas on a scale without precedence. This article presents an historical perspective on the internationalization of the Australian life-insurance market with a view to understanding why these firms have been classified "late starters" in the internationalization stakes. In a broader capacity it provides insights into the impediments to overseas expansion and the forces encouraging or discouraging the development of cross border networks.

Establishing insurance markets in settler economies. a comparison of Australian and South Africa insurance markets, 1820-1910

How did insurance markets in the settler economies of Australia and South Africa develop? This paper investigates the establishment of the local insurance industries in two settler economies in the wake of the absence of comparative studies in the emergence of insurance markets in the periphery. The paper compares conditions in these settler economies and notes the innovative role of local entrepreneurs. British insurance companies extended operations into the British colonies, but local interests emerged to challenge their dominance. Innovations in organisational form, product offerings and distribution channels afforded local entrepreneurs a competitive advantage in the life market. Collusion in the fire market restricted innovative practices and retained foreign control. This article explains the agency of local entrepreneurs in the emergence of insurance markets in two settler societies at the end of the nineteenth century. This historical development path has notable implications for the current development of insurance markets in Africa.

Moving beyond mateship:reconstructing Australian men's practices

In this chapter I will explore the implications of the definitively Australian
style of masculine behaviour called 'mateship' for gender relations in
Australia. Mateship is part of the Australian male heritage; it originated in
colonial days and was glorified in war and sport. The feminist movement
in Australia has challenged the dominant form of masculinity inherent in
mateship and the basic rationale for gender relations that flow from it. In
this context, I will discuss Australian profeminist men's attempts to challenge patriarchal gender relations and construct non-patriarchal subjectivities and practices. Theorizing about masculinity in Australia has tended to be derivative of overseas literature. This is partly because publishers are looking for overseas markets for their books so they discourage writers on masculinity from grounding men's practices in a specifically Australian context. While there are benefits in generalizing about western masculinities, such writing misses the uniqueness of the lived experiences of Australian men. It is this uniqueness that I will address in this chapter. As McGrane and Patience (1995: 15) note, 'Australian masculinism has a history of its own that needs to be recognized at the same time as it can be usefully compared to the masculinisms of similar cultures'.