Ownership, corporate governance and timeliness of price discovery : Australian evidence

This study investigates whether and how a firm’s ownership and corporate governance affect its timeliness of price discovery, which is referred to as the speed of incorporation of value-relevant information into the stock price. Using a panel data of 1,138 Australian firm-year observations from 2001 to 2008, we predict and find a non-linear relationship between ownership concentration and the timeliness of price discovery. We test the identity of the largest shareholder and find that only firms with family as the largest shareholder exhibit faster price discovery. There is no evidence that suggests that the presence of a second largest shareholder affects the timeliness of price discovery materially. Although we find a positive association between corporate governance quality and the timeliness of price discovery, as expected, there is no interaction effect between the largest shareholding and corporate governance in relation to the timeliness of price discovery. Further tests show no evidence of severe endogeneity problems in our study.

Industrial land price and its impact on urban growth : a Chinese case study

China is experiencing rapid progress in industrialization, with its own rationale toward industrial land development based on a deliberate change from an extensive to intensive form of urban land use. One result has been concerted attempts by local government to attract foreign investment by a low industrial land price strategy, which has resulted in a disproportionally large amount of industrial land within the total urban land use structure at the expense of the urban sprawl of many cities. This paper first examines “Comparable Benchmark Price as Residential land use” (CBPR) as the theoretical basis of the low industrial land price phenomenon. Empirical findings are presented from a case study based on data from Jinyun County, China. These data are analyzed to reveal the rationale of industrial land price from 2000 to 2010 concerning the CBPR model. We then explore the causes of low industrial land prices in the form of a “Centipede Game Model”, involving two neighborhood regions as “major players” to make a set of moves (or strategies). When one of the players unilaterally reduces the land price to attract investment with the aim to maximize profits arising from the revenues generated from foreign investment and land premiums, a two-player price war begins in the form of a dynamic game, the effect of which is to produce a downward spiral of prices. In this context, the paradox of maximizing profits for each of the two players are not accomplished due to the inter-regional competition of attracted investment leading to a lose-lose situation for both sides’ in competing for land premium revenues. A short-term solution to the problem is offered involving the establishment of inter-regional cooperative partnerships. For the longer term, however, a comprehensive reform of the local financial system, more adroit regional planning and an improved means of evaluating government performance is needed to ensure the government's role in securing pubic goods is not abandoned in favor of one solely concerned with revenue generation.

Modeling electricity price events as point processes

Energy prices are highly volatile and often feature unexpected spikes. It is the aim of this paper to examine whether the occurrence of these extreme price events displays any regularities that can be captured using an econometric model. Here we treat these price events as point processes and apply Hawkes and Poisson autoregressive models to model the dynamics in the intensity of this process.We use load and meteorological information to model the time variation in the intensity of the process. The models are applied to data from the Australian wholesale electricity market, and a forecasting exercise illustrates both the usefulness of these models and their limitations when attempting to forecast the occurrence of extreme price events.

In the shadow of the enlightenment : Le Corbusier, Le Faisceau and Georges Valois

On 9 January 1927 Le Corbusier materialised on the front cover of the Faisceau journal edited by Georges Valois Le Nouveau Siècle which printed the single-point perspective of Le Corbusier’s Plan Voisin and an extract from the architect’s discourse in Urbanisme. In May Le Corbusier presented slides of his urban designs at a fascist rally. These facts have been known ever since the late 1980s when studies emerged in art history that situated Le Corbusier’s philosophy in relation to the birth of twentieth-century fascism in France—an elision in the dominant reading of Le Corbusier’s philosophy, as a project of social utopianism, whose received genealogy is Saint-Simon and Charles Fourier. Le Corbusier participated with the first group in France to call itself fascist, Valois’s militant Faisceau des Combattants et Producteurs, the “Blue Shirts,” inspired by the Italian “Fasci” of Mussolini. Thanks to Mark Antliff, we know the Faisceau did not misappropriate Le Corbusier’s plans, in some remote quasi-symbolic sense, rather Valois’s organisation was premised on the redesign of Paris based on Le Corbusier’s schematic designs. Le Corbusier’s Urbanisme was considered the “prodigious” model for the fascist state Valois called La Cité Française – after his mentor the anarcho-syndicalist Georges Sorel. Valois stated that Le Corbusier’s architectural concepts were “an expression of our profoundest thoughts,” the Faisceau, who “saw their own thought materialized” on the pages of Le Corbusier’s plans. The question I pose is, In what sense is Le Corbusier’s plan a complete representation of La Cité? For Valois, the fascist city “represents the collective will of La Cité” invoking Enlightenment philosophy, operative in Sorel, namely Rousseau, for whom the notion of “collective will” is linked to the idea of political representation: to ‘stand in’ for someone or a group of subjects i.e. the majority vote. The figures in Voisin are not empty abstractions but the result of “the will” of the “combatant-producers” who build the town. Yet, the paradox in anarcho-syndicalist anti-enlightenment thought – and one that became a problem for Le Corbusier – is precisely that of authority and representation. In Le Corbusier’s plan, the “morality of the producers” and “the master” (the transcendent authority that hovers above La Cité) is lattened into a single picture plane, thereby abolishing representation. I argue that La Cité pushed to the limits of formal abstraction by Le Corbusier thereby reverts to the Enlightenment myth it first opposed, what Theodor Adorno would call the dialectic of enlightenment.

The impact of the clean development mechanism (CDM) on the cost price of wind power electricity : a China study

As a renewable energy source, wind power is playing an increasingly important role in China’s electricity supply. Meanwhile, China is also the world’s largest market for Clean Development Mechanism (CDM) wind power projects. Based on the data of 27 wind power projects of Inner Mongolia registered with the Executive Board of the United Nations (EB) in 2010, this paper constructs a financial model of Net Present Value (NPV) to analyze the cost of wind power electricity. A sensitivity analysis is then conducted to examine the impact of different variables with and without Certified Emission Reduction (CER) income brought about by the CDM. It is concluded that the CDM, along with static investment and annual wind electricity production, is one of the most significant factors in promoting the development of wind power in China. Additionally, wind power is envisaged as a practical proposition for competing with thermal power if the appropriate actions identified in the paper are made.

The effect of consumer education on unit price usage : an early exploratory study

Consumer awareness and usage of Unit Price (UP) information continues to hold academic interest. Originally designed as a device to enable shoppers to make comparisons between grocery products, it is argued consumers still lack a sufficient understanding of the device. Previous research has tended to focus on product choice, effect of time, and structural changes to price presentation. No studies have tested the effect of UP consumer education on grocery shopping expenditure. Supported by distributed learning theories, this is the first study to condition participants over a twenty week period, to comprehend and employ UP information while shopping. A 3x5 mixed factorial design was employed to collect data from 357 shoppers. A 3 (Control, Massed, Spaced) x 5 (Time Point: Week 0, 5, 10, 15 and 20) mixed factorial analysis of variance (ANOVA) was performed to analyse the data. Preliminary results revealed that the three groups differed in their average expenditure over the twenty weeks. The Control group remained stable across the five time points. Results indicated that both intensive (Massed) and less intensive (Spaced) exposure to UP information achieved similar results, with both group reducing average expenditure similarly by Week 5. These patterns held for twenty weeks, with conditioned groups reducing their grocery expenditure by over 10%. This research has academic value as a test of applied learning theories. We argue, retailers can attain considerable market advantages as efforts to enhance customers’ knowledge, through consumer education campaigns, can have a positive and strong impact on customer trust and goodwill toward the organisation. Hence, major practical implications for both regulators and retailers exist.

Monitoring the price and affordability of foods and diets globally

Food prices and food affordability are important determinants of food choices, obesity and non-communicable diseases. As governments around the world consider policies to promote the consumption of healthier foods, data on the relative price and affordability of foods, with a particular focus on the difference between ‘less healthy’ and ‘healthy’ foods and diets, are urgently needed. This paper briefly reviews past and current approaches to monitoring food prices, and identifies key issues affecting the development of practical tools and methods for food price data collection, analysis and reporting. A step-wise monitoring framework, including measurement indicators, is proposed. ‘Minimal’ data collection will assess the differential price of ‘healthy’ and ‘less healthy’ foods; ‘expanded’ monitoring will assess the differential price of ‘healthy’ and ‘less healthy’ diets; and the ‘optimal’ approach will also monitor food affordability, by taking into account household income. The monitoring of the price and affordability of ‘healthy’ and ‘less healthy’ foods and diets globally will provide robust data and benchmarks to inform economic and fiscal policy responses. Given the range of methodological, cultural and logistical challenges in this area, it is imperative that all aspects of the proposed monitoring framework are tested rigorously before implementation.

City relative price dynamics in Australia : are structural breaks important?

This paper examines the dynamic behaviour of relative prices across seven Australian cities by applying panel unit root test procedures with structural breaks to quarterly consumer price index data for 1972 Q1–2011 Q4. We find overwhelming evidence of convergence in city relative prices. Three common structural breaks are endogenously determined at 1985, 1995, and 2007. Further, correcting for two potential biases, namely Nickell bias and time aggregation bias, we obtain half-life estimates of 2.3–3.8 quarters that are much shorter than those reported by previous research. Thus, we conclude that both structural breaks and bias corrections are important to obtain shorter half-life estimates.

On the allocation of a takeover purchase price under AASB1013

The purpose of this paper is to document and explain the allocation of takeover purchase price to identifiable intangible assets (IIAs), purchased goodwill, and/or target net tangible assets in an accounting environment unconstrained with respect to IIA accounting policy choice. Using a sample of Australian acquisitions during the unconstrained accounting environment from 1988 to 2004, we find the percentage allocation of purchase price to IIAs averaged 19.09%. The percentage allocation to IIAs is significantly positively related to return on assets and insignificantly related to leverage, contrary to opportunism. Efficiency suggests an explanation: profitable firms acquire and capitalise a higher percentage of IIAs in acquisitions. The target's investment opportunity set is significantly positively related to the percentage allocation to IIAs, consistent with information-signalling. The paper contributes to the accounting policy choice literature by showing how Australian firms make the one-off accounting policy choice in regards allocation of takeover purchase price (which is often a substantial dollar amount to) in an environment where accounting for IIAs was unconstrained.

Shadow boxing with an imaginary enemy : a response to "Law and Order Blues"

In our rejoinder to Don Weatherburn's paper,"Law and Order Blues", we do not take issue with his advocacy of the need to take crime seriously and to foster a more rational approach to the problems it poses. Where differences do emerge is (1) with his claim that he is willing to do so whilst we (in our different ways) are not; and (2) on the question of what this involves. Of particular concern is the way in which his argument proceeds by a combination of simple misrepresentation of the positions it seeks to disparage, and silence concerning issues of real substance where intellectual debate and exchange would be welcome and useful. Our paper challenges, in turn, the misrepresentation of Indermaur's analysis of trends in violent crime, the misrepresentation of Hogg and Brown's Rethinking Law and Order, the misrepresentation of the findings of some of the research into the effectiveness of punitive policies and the silence on sexual assault in "Law and Order Blues". We suggest that his silence on sexual assault reflects a more widespread unwillingness to acknowledge the methodological problems that arise in the measurement of crime because such problems severely limit the extent to which confident assertions can be made about prevalence and trends.

Shadow boxing with an imaginary enemy : a response to “law and order blues”

In our rejoinder to Don Weatherburn's paper, “Law and Order Blues”, we do not take issue with his advocacy of the need to take crime seriously and to foster a more rational approach to the problems it poses. Where differences do emerge is (1) with his claim that he is willing to do so whilst we (in our different ways) are not; and (2) on the question of what this involves. Of particular concern is the way in which his argument proceeds by a combination of simple misrepresentation of the positions it seeks to disparage, and silence concerning issues of real substance where intellectual debate and exchange would be welcome and useful. Our paper challenges, in turn, the misrepresentation of Indermaur's analysis of trends in violent crime, the misrepresentation of Hogg and Brown's Rethinking Law and Order, the misrepresentation of the findings of some of the research into the effectiveness of punitive policies and the silence on sexual assault in “Law and Order Blues”. We suggest that his silence on sexual assault reflects a more widespread unwillingness to acknowledge the methodological problems that arise in the measurement of crime because such problems severely limit the extent to which confident assertions can be made about prevalence and trends.

The greatest shadow on Earth

In a total solar eclipse, the Moon completely covers the Sun, casting a shadow several hundred km wide across the face of the Earth. This paper describes observations of the 14 November 2012 total eclipse of the Sun visible from north Queensland, Australia. The edge of the umbra was captured on video during totality, and this video is provided for teaching purposes. A series of simple 'kitchen' experiments are described which demonstrate the 'sunset' effect seen on the horizon during a total solar eclipse and also the curved umbra seen in the sky when the eclipsed Sun is relatively close to the horizon.

Transfer pricing and multinational financial institutions : the case for replacing arm’s length price with a unitary approach

The international tax system, designed a century ago, has not kept pace with the modern multinational entity rendering it ineffective in taxing many modern businesses according to economic activity. One of those modern multinational entities is the multinational financial institution (MNFI). The recent global financial crisis provides a particularly relevant and significant example of the failure of the current system on a global scale. The modern MNFI is increasingly undertaking more globalised and complex trading operations. A primary reason for the globalisation of financial institutions is that they typically ‘follow-the-customer’ into jurisdictions where international capital and international investors are required. The International Monetary Fund (IMF) recently reported that from 1995-2009, foreign bank presence in developing countries grew by 122 per cent. The same study indicates that foreign banks have a 20 per cent market share in OECD countries and 50 per cent in emerging markets and developing countries. Hence, most significant is that fact that MNFIs are increasingly undertaking an intermediary role in developing economies where they are financing core business activities such as mining and tourism. IMF analysis also suggests that in the future, foreign bank expansion will be greatest in emerging economies. The difficulties for developing countries in applying current international tax rules, especially the current traditional transfer pricing regime, are particularly acute in relation to MNFIs, which are the biggest users of tax havens and offshore finance. This paper investigates whether a unitary taxation approach which reflects economic reality would more easily and effectively ensure that the profits of MNFIs are taxed in the jurisdictions which give rise to those profits. It has previously been argued that the uniqueness of MNFIs results in a failure of the current system to accurately allocate profits and that unitary tax as an alternative could provide a sounder allocation model for international tax purposes. This paper goes a step further, and examines the practicalities of the implementation of unitary taxation for MNFIs in terms of the key components of such a regime, along with their their implications. This paper adopts a two-step approach in considering the implications of unitary taxation as a means of improved corporate tax coordination which requires international acceptance and agreement. First, the definitional issues of the unitary MNFI are examined and second, an appropriate allocation formula for this sector is investigated. To achieve this, the paper asks first, how the financial sector should be defined for the purposes of unitary taxation and what should constitute a unitary business for that sector and second, what is the ‘best practice’ model of an allocation formula for the purposes of the apportionment of the profits of the unitary business of a financial institution.

Demand-side response model to avoid spike of electricity price

The aim of this work is to develop a demand-side-response model, which assists electricity consumers exposed to the market price to independently and proactively manage air-conditioning peak electricity demand. The main contribution of this research is to show how consumers can optimize the energy cost caused by the air conditioning load considering to several cases e.g. normal price, spike price, and the probability of a price spike case. This model also investigated how air-conditioning applies a pre-cooling method when there is a substantial risk of a price spike. The results indicate the potential of the scheme to achieve financial benefits for consumers and target the best economic performance for electrical generation distribution and transmission. The model was tested with Queensland electricity market data from the Australian Energy Market Operator and Brisbane temperature data from the Bureau of Statistics regarding hot days from 2011 to 2012.

Defining expected cost for the air conditioning to avoid a price spike of electricity market under DSR model

This work presents a demand side response model (DSR) which assists small electricity consumers, through an aggregator, exposed to the market price to proactively mitigate price and peak impact on the electrical system. The proposed model allows consumers to manage air-conditioning when as a function of possible price spikes. The main contribution of this research is to demonstrate how consumers can minimise the total expected cost by optimising air-conditioning to account for occurrences of a price spike in the electricity market. This model investigates how pre-cooling method can be used to minimise energy costs when there is a substantial risk of an electricity price spike. The model was tested with Queensland electricity market data from the Australian Energy Market Operator and Brisbane temperature data from the Bureau of Statistics during hot days on weekdays in the period 2011 to 2012.