Does managerial ability facilitate corporate innovative success?

This paper examines whether managerial ability facilitates corporate innovative success. First, we show that managerial ability is positively associated with innovative output. Second, we show that the positive association between managerial ability and innovative output is weaker for older CEOs and managers who stay in the same job for longer, suggesting a preference for a 'quiet life' by long serving CEOs. Third, we find that the equity market values patents generated by more able managers more positively, suggesting that equity holders deem better skilled managers more effective at converting innovative ideas into valuable new products. Finally, we show that managerial ability is positively associated with more 'radical' innovations, which are outside of the firm's knowledge base. Overall, our results suggest that managerial ability is an essential component of corporate innovative success.

Bureaucratic, corporate/market and network governance : shifting spaces for gender equity in education

Education as a field of policy, research and practice has been reconfigured over four decades by economic, social and cultural globalization in conjuncture with neoliberal policies premised upon markets and new managerialism. One effect has been shifting boundaries between, and understandings of what constitutes the public and the private with regard to the role of the state vis-á-vis the formation of gendered subjectivities and civil society and the gendering of public– private relations in and between family and work. Drawing on feminist readings of Bourdieu and critical policy sociology, I consider the implications of a move from bureaucratic educational governance framed by state welfarism to corporate or market governance framed by the post-welfare state, and consider whether particular constructions of globalization and corporate/market governance lead to network governance. Network governance, it is argued, is premised on new forms of sociality and institutional reconfigurations of knowledge-based economies and a spatialized state that coordinates rather than regulates multiple public– private providers. The question is how each mode of governance frames various possibilities and problems for gender equity in education.

Basel risk weights, asset correlations, and book-to-market equity: evidence from Asian countries

We examine the effect of firm book-to-market equity values (BE/ME) on asset correlations which play an important role in determining risk weights under the current Basel capital requirements. Using firms in China, Hong Kong, Japan, Korea, Singapore and Taiwan over a sample period from 1988 to 2013, we find that BE/ME has a negative effect on asset correlations. This suggests a role for BE/ME as an additional factor in determining asset correlations, and thus risk weights, also potentially reducing incentives for regulatory capital arbitrage.

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.

The health equity dimensions of urban food systems

There is increasing recognition that the nutrition transition sweeping the world’s cities is multifaceted. Urban food and nutrition systems are beginning to share similar features, including an increase in dietary diversity, a convergence toward “Western-style” diets rich in fat and refined carbohydrate and within-country bifurcation of food supplies and dietary conventions. Unequal access to the available dietary diversity, calories, and gastronomically satisfying eating experience leads to nutritional inequalities and diet-related health inequities in rich and poor cities alike. Understanding the determinants of inequalities in food security and nutritional quality is a precondition for developing preventive policy responses. Finding common solutions to under- and overnutrition is required, the first step of which is poverty eradication through creating livelihood strategies. In many cities, thousands of positions of paid employment could be created through the establishment of sustainable and self-sufficient local food systems, including urban agriculture and food processing initiatives, food distribution centers, healthy food market services, and urban planning that provides for multiple modes of transport to food outlets. Greater engagement with the food supply may dispel many of the food anxieties affluent consumers are experiencing.

Costs of raising equity capital by renounceable rights issues in Australia

Rights issues remain a common method for raising equity capital in Australia for companies listed on me Australian Stock Exchange. This study investigates the capital raising costs of Anstralian renounceable equity rights issues from 2001 to 2006. Both direct and indirect costs are investigated and the explanatory power of potential influencing factors is analyzed. The total direct costs averaged nearly 4% of gross proceeds raised and the mean offer price was discounted around 17% from the current market price. Issue size, percentage underwritten, concentration of ownership and issuer risk significantly influence the percentage direct costs of the rights issue. The age of the issuer, the average historical volume of shares traded and the offer price appear to influence the percentage discount.

Do retail option traders know better about market volatility?

This paper examines the informational content and predictive power of implied volatility over different forecasting horizons in a sample of European covered warrants traded in the Hong Kong and Singapore markets. The empirical results show that time-series-based volatility forecasts outperform implied volatility forecast as predictors of future volatility. The finding also suggests that implied volatility is biased and informationally inefficient and that covered warrants are typically overvalued. The results are attributable to the fact that, in Hong Kong and Singapore, the covered warrants markets are dominated by retail investors who tend to use covered warrants' leverage to speculate on the price movements of the underlying assets rather than to express their view on volatility. Arbitrage is not possible in the markets as short-selling of covered warrants is prohibited.

Stock market efficiency withstands another challenge : solving the “sell in May/buy after Halloween” puzzle

Examining the years 1970 to 1998, Bouman and Jacobsen (2002) document unusually high monthly returns during the November-April periods for both United States (U.S.) and foreign stock markets and label this phenomenon the Halloween effect. Their research suggests that the Halloween effect represents an exploitable anomaly and has negative implications for claims of stock market efficiency.

Re-examining Bouman and Jacobsen’s empirical results for the U.S. reveals that their results are driven by two outliers, the “Crash” of October 1987 and the collapse of the hedge fund Long-Term Capital Management in August 1998. After inserting a dummy variable to account for the impact of the two identified outliers, the Halloween effect becomes statistically insignificant. This anomaly is not economically exploitable for U.S. equity markets. We extend the research to the S&P 500 futures contract and find no evidence of an exploitable Halloween effect over the period April 1982-April 2003.

Understanding property cycles in a residential market

Purpose – This paper aims to review property cycle theory and the relevance of the larger body of knowledge about cycles with reference to the housing market. It also aims to highlight the lack of research into property cycles in the residential sector on a suburb or smaller region basis, as well as the potential for increased knowledge about cycles to assist to avoid housing stress.

Design/methodology/approach – The paper conducts a literature review of previous cycle research and encourages the use of cycle theory. It discusses the established body of knowledge about business cycles and the office market sector, as well as investigating levels of housing affordability and how detailed knowledge about property cycles can assist to decrease housing affordability in residential areas, which will eventually experience a downturn.

Findings – It is argued that an increased level of certainty about cycle behaviour in particular suburbs will give households a higher level of confidence when considering whether and when to enter the market. Property cycle research has the potential to assist low-income homeowners to better understand the characteristics of cycles and associated risks in each residential.

Research limitations/implications – This is a conceptual paper and has conducted a review of cycle research and housing affordability in certain countries. Some areas or countries may be affected to varying degrees by property cycles and levels of housing affordability.

Practical implications – In extended periods of high volatility it is argued that a better understanding of housing cycles will allow more homeowners to avoid negative equity and the stress associated with repossessions. Property cycles are unavoidable although there is typically relatively little information available in the open market about the timing and amplitude of cycles in individual areas.

Originality/value – This paper is unique as it highlights the potential for property cycles to be used to avoid housing stress in the residential market. Traditionally cycle research is used to increase returns and avoid downturns in the office and/or business sectors.

The halloween effect and Japanese equity prices : myth or exploitable anomaly

Bouman and Jacobsen (American Economic Review 92(5), 1618–1635, 2002) examine monthly stock returns for major world stock markets and conclude that returns are significantly lower during the May–October periods versus the November–April periods in 36 of 37 markets examined. They argue that, in general, the Halloween strategy outperforms the buy and hold strategy thereby casting doubt on the validity of the efficient market paradigm. More recently, Maberly and Pierce (Econ Journal Watch 1(1), 29–46, 2004) re-examine the evidence for U.S. equity prices and conclude that Bouman and Jacobsen’s results are not robust to alternative model specifications. Extending prior research, this paper examines the robustness of the Halloween strategy to alternative model specifications for Japanese equity prices. The Halloween effect is concentrated in the period prior to the introduction of Nikkei 225 index futures in September 1986. After the internationalization of Japanese financial markets in the mid-1980s, the Halloween effect disappears.

An examination of conditional asset pricing models in the Australian equities market

This article examines the link between macroeconomic variables and equity returns in Australia by testing conditional asset pricing models. We find that conditioning the Fama-French model with a series of macroeconomic variables does not considerably improve its performance. However, we do find that the Fama-French factors, SMB and HML, retain their ability to explain equity returns even after the model is conditioned on macroeconomic variables. Our findings suggest that investors do not adjust their risk premiums according to the changes in the macroeconomic variables we employ.