Farmland prices, structural breaks and panel data

Previous time series evidence has indicated that farmland prices and cash rents are not cointegrated, a finding at odds with the present value model of farmland prices. We argue that this failure to find cointegration may be due to low power of tests and to the presence of structural change representing a shifting risk premium on farmland investments. To accommodate this possibility, we use panel unit root and cointegration methods that are more powerful than conventional time series methods and allow for breaks in the cointegration relationship. Our results, based on a large panel covering 31 US states between 1960 and 2000, suggest that the present value model of farmland prices cannot be rejected. © Oxford University Press and Foundation for the European Review of Agricultural Economics 2007; all rights reserved.

Disproportional ownership structure and pay–performance relationship: evidence from China’s listed firms

This paper examines the impact of ownership structure on executive compensation in China's listed firms. We find that the cash flow rights of ultimate controlling shareholders have a positive effect on the pay–performance relationship, while a divergence between control rights and cash flow rights has a significantly negative effect on the pay–performance relationship. We divide our sample based on ultimate controlling shareholders' type into state owned enterprises (SOE), state assets management bureaus (SAMB), and privately controlled firms. We find that in SOE controlled firms cash flow rights have a significant impact on accounting based pay–performance relationship. In privately controlled firms, cash flow rights affect the market based pay–performance relationship. In SAMB controlled firms, CEO pay bears no relationship with either accounting or market based performance. The evidence suggests that CEO pay is inefficient in firms where the state is the controlling shareholder because it is insensitive to market based performance but consistent with the efforts of controlling shareholders to maximize their private benefit.

Management trading in Chinese entrepreneurial firms on the ChiNext

We examine management trading in Chinese entrepreneurial firms on the ChiNext. We find that management shareholdings are considerably high, and executives tend to sell their shares after the IPOs on the ChiNext. The propensity for executives to sell shares is negatively correlated with the firms corporate governance and current operating cash flows, but the amount they sell is only positively correlated with the level of management holdings. Both the management selling decision and percentage of selling do not associate with firms earnings and sales growth. This suggests that managers are profit makers rather than informed traders in their selling activities on the ChiNext. We also find that the market reaction to management selling is substantially negative, which implies a herding effect of investors following executives to sell shares.

Predicting future earnings growth: a test of the dividend payout ratio in the Australian market

This paper examines the use of the payout ratio as a predictor of a firm’s future earnings growth. Recent evidence rejects the hypothesis that firm which retain a large portion of their earnings have strong future earnings growth. Higher dividend payout ratios instead correspond to higher future earnings growth. Examining both listed and delisted firms on the Australian stock exchange over the period 1989 to 2008, we provide further evidence that the dividend payout ratio is positively linked to future earnings growth. The results hold over both one, three and five year periods. Furthermore, our results rejected claims that such a relationship was caused by simple mean reversion in earnings. We find no evidence to support the cash flow signaling and free cash flow hypotheses as an explanation for this relationship.

Inflation tax in the lab: a theoretical and experimental study of competitive search equilibrium with inflation

In this paper we measure the effect of the inflation tax on economic activity and welfare within a controlled setting.To do so,we develop a model of price posting and monetary exchange with inflation and finite populations.The model,which provides a game–theoreticfoundation to Rocheteau and Wright(2005)'s competitive search monetary equilibrium, is used to derive theoretical propositions regarding the effects of inflation in thisenvironment, which we test with a laboratory experiment that closely implements the theoretical framework.We find that the inflation tax is harmful – with cash holdings, production and welfare all falling as inflation rises – and that its effect is relatively larger at low inflation rates than at higher rates.For instance,for inflation rates between 0%and5%, welfare in the two markets we consider (2[seller] 2[buyer] and 3 2) falls by roughly 1 percent for each percentage–point rise in inflation, compared with 0.4 percent over the range from 5% to 30%.Our findings lead us to conclude that the impact of the inflation tax should not be underestimated, even under low inflation.

Perks and the informativeness of stock prices in the Chinese market

While the literature shows that perks can affect firm values positively or negatively, we argue that firms with higher perks are more likely to be associated with a lower quality of financial reporting, which, in turn, can affect the informativeness of stock prices. Based on hand-collected data on perks from Chinese listed firms, we find that firms with lower perks are associated with higher informativeness of stock prices (or lower R-square). Moreover, the positive association between perks and R-square is shown to be weaker for firms with higher financial reporting quality through audit and earnings quality measures.

The role of leverage in cross-border mergers and acquisitions

We examine the relationship between leverage and cross-border mergers and acquisitions. Using a sample of 85,560 cross-border mergers and acquisitions in 57 countries over the period 1990 to 2010, we find that firms with higher leverage are less likely to acquire foreign targets, whereas firms with lower leverage tend to be targets acquired by foreign firms. These effects are more pronounced in Asian countries than North America. Acquisition premium, the likelihood of all-cash offer and the percentage of cash in the acquisition offer decrease with leverage in cross-border mergers and acquisitions. Foreign targets gain positive abnormal returns in the both short run and long run, while acquirers earn positive abnormal returns in the short-run, but negative returns in the long run. We also find that firms adjust their capital structure after the acquisition by issuing more equity if they were overleveraged, or issuing more debt if they were underleveraged before the acquisition. Our results provide international evidence on how leverage affects managerial decision to acquire foreign targets, payment method and acquisition premium in cross-border mergers and acquisitions. This study shows that the interdependent relationship between investment decision and financing decision exists worldwide.

A random coefficient approach to the predictability of stock returns in panels

© The Author, 2014. Most studies of the predictability of returns are based on time series data, and whenever panel data are used, the testing is almost always conducted in an unrestricted unit-by-unit fashion, which makes for a very heavy parametrization of the model. On the other hand, the few panel tests that exist are too restrictive in the sense that they are based on homogeneity assumptions that might not be true. As a response to this, the current study proposes new predictability tests in the context of a random coefficient panel data model, in which the null of no predictability corresponds to the joint restriction that the predictive slope has zero mean and variance. The tests are applied to a large panel of stocks listed at the New York Stock Exchange. The results suggest that while the predictive slopes tend to average to zero, in case of book-to-market and cash flow-to-price the variance of the slopes is positive, which we take as evidence of predictability.

Exporting social policy from Latin America to the Philippines: Securitisation, neoliberalism and multilateral mediation of poverty policies

Recent years have seen an increased acceptance of social transfers as part of renewed efforts at poverty alleviation policies based on social risk management. There has been an instance in the use and promotion of conditional cash transfer (CCT) policies by multilateral development agencies (MDAs). One case is the Philippines. The ideational basis of CCTs can be traced to the influence of neostructuralism in Latin America. One facet of this was an attempt to reconcile neoliberal strategies of development with aspirations for guaranteed minimum incomes. The adoption of CCTs was mediated by MDA s that further reduced the modest concessions to poor people's rights implicit in Latin American programs. The Philippines demonstrates that MDAs have promoted a more heavily securitised and compliance-focused versions of CCTs that was derived the Colombian security state. Although small grants are welcomed by poor households, they have acted to further enforce state control while maintaining a neoliberal policy focus.

Capital structure of Chinese listed SMEs: an agency theory perspective

Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives’ shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage, whereas the percentage of tradable shares increases leverage. In contrast, institutional investors’ shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

Do corporate policies follow a life-cycle?

We examine whether corporate investment, financing, and cash policies are interdependent and follow a predictable pattern in line with the firm life-cycle. We find that investments and equity issuance decrease with firm life-cycle, while debt issuance and cash holdings increase in the introduction and growth stages and decrease in the mature and shake-out/decline stages of the firm's life-cycle. These results are robust after using various proxies for life-cycle and controlling for firm, CEO and board level characteristics. Collectively, our results show that corporate policies follow a firm life-cycle.

An ethnography of bitcoin: towards a future research agenda

Cryptocurrencies such as Bitcoin are a recent socio-technical innovation that seeks to disrupt the existing monetary system. Through mundane uses of this new digital cash, they provide a social critique of the centralised infrastructures of the banking industry. This paper outlines an ethnographic research agenda that considers how the social uptake and use of cryptocurrencies such as Bitcoin represents alternative views towards value exchange and critiques existing financial structures. We begin by arguing that the use of Bitcoin can be seen as an act of social resistance that is intended to bridge socio-economic inequalities within the context of a digital community. We then outline the disruptive nature of borderless, affordable and instantaneous international transfers in the form of remittances within social practice. Finally, we identify the possible permutations of trust that may be found in the technical affordances of Bitcoin technology and how these relate to user (pseudo)anonymity, cybertheft, cyberfraud, and consumer protection. Bringing together these three key areas, we highlight the importance of understanding the ordinary (rather than extra-ordinary) uses of cryptocurrencies such as Bitcoin. We contend that focusing upon users’ interactions with Bitcoin as a payments system and community culture will shed light upon mundane acts of socio-technical disruption, acts that critique and provide alternative financial exchange practices to the payments and regulatory financial infrastructures of the banking industry.

Examining the approaches to diminish judicial intervention in statutory adjudication in Australia

In Australia, statutory construction adjudication is a fast payment dispute resolution process designed to keep the cash flowing down the hierarchical contractual chain in construction projects. Its rapid, highly regulatory and temporarily binding nature have led to it being often described as a ‘quick and dirty’ process that delivers ‘rough and ready’ justice. Adjudicators often have to grapple with complex legal issues related to jurisdictional facts and interpretation of contract provisions, though the majority of them are not legally trained. This has often led to a poor quality of adjudication outcome for large and complex payment claims which has, in turn, led to a mounting dissatisfaction due to the many judicial challenges to adjudicators’ determinations seen in recent years. The evolving tension between the object of the security of payment legislation and excessive involvement of the courts has often been the subject of comment by the judiciary. This paper aims to examine the legislative and judicial approaches to support the object of the security of payment legislation to ease cash flow. The paper adopts a desktop study approach whereby evidence is gathered from three primary sources – judicial decisions, academic publications and governmental reports. The paper concludes that there is a need to adopt other measures which can provide more convenient relief to aggrieved parties to an adjudication process, such that the adjudication process is kept away from the courts as far as is possible. Specifically, it is proposed that a well-designed expanded legislative review scheme of allegedly flawed adjudication, based on that provided in the Western Australian legislation, might stand as a promising remedy to eliminate the evolving tension.

Ultimate controlling shareholders and dividend payout policy in Chinese stock market

Departing from the traditional cash flow rights-dividend policy framework, this study investigates whether the level of control rights and the types of ultimate controlling shareholders (UCSs) of listed firms in China influence their cash dividend payout. We find that the level of control rights is positively associated with both the probability to pay and the level of cash dividend payout, which indicates that UCSs use cash dividends to reduce the agency cost of free cash flow and redirect listed firms' cash balance. Furthermore, different types of UCSs influence dissimilarly on the controlled firms' cash dividends, which can be attributed to the backgrounds of these UCSs originating from China's unique partial share issuance privatization process.

Neil Taylor’s experimental animation: the technical habitus as aesthetic trace

This essay examines Neil Taylor’s (1945-) animations, situated between the moving image, performance and sculpture and in the shadows of his recognised wire-based sculptural practice. Taylor’s animations automatically inscribe the surfaces of flipbooks and note pads, (Short Lives 1980-90) cash register rolls (Roll Film 1990) and are enhanced by hand-made ‘machines’ (Copy Copy 1998) designed to shape this idiosyncratic activity. These short films are part of an avant-garde project ‘that continues to explore the physical properties of film and the nature of perceptual transactions which take place between viewer and film.’ (John Hanhardt, 1976: 44). Taylor’s practice is additionally placed, through Vilem Flusser’s ‘technical image’ in relation to the ascendancy of digital culture, and Pierre Bourdieu’s ‘habitus’ is used to frame both Taylor’s art and teaching practice, in order to examine the discounting of the technical classes that these fields of production consistently perform.