How we finance our new and growing firms

Entrepreneurs are the engines that drive new companies and financing is the fuel that propels them. One form of that financing is called informal investing, sometimes called ''business angel activity'' (which we reserve for more professional and commercial investors). Informal investors use their own money and carry out their own due diligence to invest in the entrepreneurial opportunities of other entrepreneurs.

Interjurisdictional allocation of multinational banking income : aligning taxation principles with economic activity

This thesis argues that one type of multinational entity – the multinational bank – poses particularly significant challenges to the international tax regime in terms of its current profit allocation rules. Multinational banks are a unique subset of multinational entities, and as a consequence of their unique traits, the traditional international tax regime foes not yield an optimal interjurisdictional allocation of taxing rights. The opportunity for tax minimisation, achievable because of the unique traits, and realised through exploitation of the traditional source and transfer pricing regime, results in a jurisdictional distribution of taxing rights which does not reflect economic reality. There are two distinct ways in which the traditional international tax regime fails to reflect economic activity. The first way that economic activity may not be reflected in the distribution of the taxing rights to income from multinational banking is through the application of traditional source rules. The traditional sources rules allocate income where transactions are completed rather than where the intermediation services are arranged. As a result of their unique commercial role as financial intermediaries, by separating intermediary economic activity from legal transactions with third parties, multinational banks may distort the true location of the activity giving rise to income. The second way in which the traditional tax regime may fail to reflect economic activity is through the traditional transfer pricing regime requiring related or internal transaction to be undertaken at an arm’s length price. The arm’s length pricing requirement is theoretically deficient in its failure to recognise the highly integrated nature of multinational banking. In practice, the arm’s length pricing requirement is also difficult, if not impossible, to apply to multinational banks because of the requirement of comparability. The difficulties associated with the current model have resulted in a subtle move by multinational banks towards global formulary apportionment. This thesis concludes that, for the international taxation of multinational banks, the current source regime should be replaced with a system that allocates profits for tax purposes on the basis of income source, with source determined using a unitary taxation or global formulary apportionment system. It is argued that global formulary apportionment is a theoretically superior model that provides both jurisdiction to tax and allocated profits on the basis of the economic activity that generates the income.

Macroeconomic impact of foreign aid to developing countries

The thesis looks at the macroeconomic impact of foreign aid. It is specially concerned with aid's impact on the public sector of less developed countries < LDCs> . Since the overwhelming majority of aid is directed to the public sector of LDCs, one can only understand the broader macroeconomic impact of aid if one first understands its impact on this sector. To this end, the thesis econometrically estimates " fiscal response" models of aid. These models, in essence, attempt to shed light on public sector fiscal behaviour in the presence of aid inflows, being specially concerned with the way aid is used to finance various categories of expenditures. The underlaying concern is to extent to which aid is " fungible" -that is, whether it finances consumption expenditure and reductions in taxation revenue in LDCs. A number of alternative models are derived from a utility maximisation framework. These alternatives reflect different assumptions regarding the behaviour of LDC public sectors and relate to the endogeniety of aid, whether or not recurrent expenditure is financed from domestic borrowing and the determination of domestic borrowing. The original frameworks of earlier studies are extended in a number of ways, including the use of a public sector utility function which is fully consistent with expected maximising behaviour. Estimates of these models' parameters are obtained using both time-series and cross-section data, dating from the 1960s, for Bangladesh, India, Pakistan and the Philippines. Both structural and reduced-form equations are estimated. Results suggest that foreign aid is indeed fungible, albeit at different levels. Moreover, the overall impact of aid on public sector investment, consumption, domestic borrowing and taxation varies between countries. Generally speaking, aid leads to increases in investment and consumption expenditure, but reduces taxation and domestic borrowing. Comparative analysis does, however, show that these results are highly sensitive to alternative behavioural assumptions and, therefore, model specification.

Citation patterns within the leading top-tier finance journals implications for journal rankings and other issues

This paper examines all citations and self-citations to a list of 95 finance journals appearing in the Journal of Finance, Journal of Financial Economics and Review of Financial Studies from 1995 through 2005. Additionally, the publication profile of 100 prolific authors in top-tier finance journals is tabulated for these 95 journals. Citations to non-finance journals in economics and accounting are also tabulated for comparison with their finance counterpart along with working papers. Six ranking schemes are constructed with each scheme identifying the top fifty finance journals. Citations to finance journals are highly concentrated within ten journals and similarly for self-citations. Authors of papers appearing in top-tier finance journals pay scant attention to the bulk of research published in other finance journals. Furthermore, these authors cite other economic journals with greater frequency than their counterpart in finance. Of the top fifty finance journals identified in this paper, only 21 are listed in Social Sciences Citation Index (SSCI), and this compares to approximately 500 listed economic journals. Some glaring omissions from SSCI are identified, but most notably the Journal of Applied Corporate Finance, Journal of Financial Research, Journal of Empirical Finance and Journal of Fixed Income. An analysis of 2006 citations patterns is also presented. The top-tier mantra assigned to finance journals has a void with the decision by the Journal of Business to cease publication with the November 2006 issue. This paper identifies five finance journals anyone of which could potentially fill the void.

Behavioural finance theory : implications for retirement savings

This paper contains an overview of the life-cycle model and the behavioural finance theories that assist in explaining why individual savings behaviour deviates from what is predicted by this model. According to Bernstein (1996), the behavioural research evidence suggests irrationality, inconsistency and incompetence in the way individuals approach and arrive at decisions and choices when faced with uncertainty. The review of literature undertaken in this paper confirms that numerous individuals are not adequately equipped to handle the complex decisions required to properly plan and save for their retirement. While the targeting of educational resources to those individuals who are prepared to actively engage in the management of their retirement funds is likely to be beneficial, there is a need for behavioural factors to underpin future retirement savings policies.

Options for change in the Australian cervical cancer screening program in context of HPV detection and vaccination

Introduction:
Cervical cancer screening has been implemented for over a decade in Australia and has significantly reduced the mortality and morbidity of the disease. The emergence of new technologies for cervical cancer, such as the Human Papillomavirus (HPV) vaccine and DNA testing has encouraged debate regarding the effective use of resources in cervical cancer prevention. The present study evaluates the cost-effectiveness, from a health sector perspective, of various screening strategies in the era of these new technologies.

Methods:
A stochastic epidemiological model using a discrete event and continuous algorithm was developed to describe the natural history of cervical cancer. By allowing one member of the cohort into the model at a time, this micro-simulation model encompasses the characteristics of heterogeneity and can track individual life histories. To evaluate the cost-effectiveness of the HPV vaccine a Markov model was built to simulate the effect on the incidence of HPV and subsequent cervical cancer. A number of proposed screening strategies were evaluated with the stochastic model for the application of HPV DNA testing, with changes in the screening interval and target population. Health outcomes were measured by Disability-Adjusted Life-Years (DALYs), adjusted for application within an evaluation setting (i.e. the mortality component of the DALY was adjusted by a disability weight when early mortality due to cervical cancer is avoided). Costs in complying with the Australian updated guidelines were assessed by pathway analysis to estimate the resources associated with cervical cancer and its pre-cancerous lesion treatment. Sensitivity analyses were performed to investigate the key parameters that influenced the cost-effectiveness results.

Results:
Current practice has already brought huge health gain by preventing more than 4,000 deaths and saving more than 86,000 life-years in a cohort of a million women. Any of the alternative screening strategies alter the total amount of health gain by a small margin compared to current practice. The results of incremental analyses of the alternative screening strategies compared to current practice suggest the adoption of the HPV DNA test as a primary screening tool every 3 years commencing at age 18, or the combined pap smear/HPV test every 3 years commencing at age 25, are more costly than current practice but with reasonable ICERs (AUD$1,810 per DALY and AUD$18,600 per DALY respectively). Delaying commencement of Pap test screening to age 25 is less costly than current practice, but involves considerable health loss. The sensitivity analysis shows, however, that the screening test accuracy has a significant impact on these conclusions. Threshold analysis indicates that a sensitivity ranging from 0.80 to 0.86 for the combined test in women younger than 30 is required to produce an acceptable incremental cost-effectiveness ratio.

Conclusions:
The adoption of HPV and combined test with an extended screening interval is more costly but affordable, resulting in reasonable ICERs. They appear good value for money for the Australian health care system, but need more information on test accuracy to make an informed decision. Potential screening policy change under current Australian HPV Vaccination Program is current work in progress. A Markov model is built to simulate the effect on the incidence of HPV and subsequent cervical cancer. Adoption of HPV DNA test as a primary screening tool in the context of HPV vaccination is under evaluation.

Optimal redistribution when educational background matters

Higher education plays an important role in determining individuals lifetime
earnings. In turn, the decision to become educated depends to a large extent on innate ability and on family characteristics, including both family
wealth and educational background. In this paper, we abstract from family
income differences to concentrate on the effects of fiscal policies on the
decision to undertake higher education when the educational background
matters. In a dynamic framework, where successive generations are linked by educational background, we consider a government that uses both linear income taxation and a lump-sum subsidy to education. Conditions for
optimality of each policy are derived. The factors that determine the sign
and magnitude of the tax rate and the subsidy are identified and include
concerns for redistribution, efficiency and the educational externality on
future generations