What drives the commodity price beta of oil industry stocks

We test theoretical drivers of the oil price beta of oil industry stocks. The strongest statistical and economic support comes for market conditions-type variables as the prime drivers: namely, oil price (+), bond rate (+), volatility of oil returns (−) and cost of carry (+). Though statistically significant, exogenous firm characteristics and oil firms' financing decisions have less compelling economic significance. There is weaker support for the prediction that financial risk management reduces the exposure of oil stocks to crude oil price variation. Finally, extended modelling shows that mean reversion in oil prices also helps explain cross-sectional variation in the oil beta.

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.

An approach for identifying the limit states of resilience of a water supply system

This paper presents an approach for identifying the limit states of resilience in a water supply system when influenced by different types of pressure (disturbing) forces. Understanding of systemic resilience facilitates identification of the trigger points for early managerial action to avoid further loss of ability to provide satisfactory service availability when the ability to supply water is under pressure. The approach proposed here is to illustrate the usefulness of a surrogate measure of resilience depicted in a three dimensional space encompassing independent pressure factors. That enables visualisation of the transition of the system-state (resilience) between high to low resilience regions and acts as an early warning trigger for decision-making. The necessity of a surrogate measure arises as a means of linking resilience to the identified pressures as resilience cannot be measured directly. The basis for identifying the resilience surrogate and exploring the interconnected relationships within the complete system, is derived from a meta-system model consisting of three nested sub-systems representing the water catchment and reservoir; treatment plant; and the distribution system and end-users. This approach can be used as a framework for assessing levels of resilience in different infrastructure systems by identifying a surrogate measure and its relationship to relevant pressures acting on the system.

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.

Designing innovative business models: Five emerging meta-models

Business models to date have remained the creation of management, however, it is the belief of the authors that designers should be critically approaching, challenging and creating new business models as part of their practice. This belief portrays a new era where business model constructs become the new design brief of the future and fuel design and innovation to work together at the strategic level of an organisation. Innovation can no longer rely on technology and R&D alone but must incorporate business models. Business model innovation has become a strong type of competitive advantage. As firms choose not to compete only on price, but through the delivery of a unique value proposition in order to engage with customers and to differentiate a company within a competitive market. The purpose of this paper is to explore and investigate business model design through various product and/or service deliveries, and identify common drivers that are catalysts for business model innovation. Fifty companies spanning a diverse range of criteria were chosen, to evaluate and compare commonalities and differences in the design of their business models. The analysis of these business cases uncovered commonalities of the key strategic drivers behind these innovative business models. Five Meta Models were derived from this content analysis: Customer Led, Cost Driven, Resource Led, Partnership Led and Price Led. These five key foci provide a designer with a focus from which quick prototypes of new business models are created. Implications from this research suggest there is no ‘one right’ model, but rather through experimentation, the generation of many unique and diverse concepts can result in greater possibilities for future innovation and sustained competitive advantage.

Design led innovation : shifting from smart follower to digital strategy leader in the Australian airport sector

This paper presents and discusses organisational barriers and opportunities arising from the dissemination of design led innovation within a leading Australian airport corporation. This research is part of a greater action research program which aims to integrate design as a strategic capability through design led innovation within Australian businesses. Findings reveal that there is an opportunity to employ the theoretical framework and tools of design led innovation in practice to build collaborative idea generation by involving customers and stakeholders within the proposal of new to world propositions. The iterative gathering of deep customer insights also provided an opportunity to leverage a greater understanding of stakeholders and customers in strengthening continuing business partnerships through co-design. Challenges to the design led approach include resistance to the exploratory nature of gathering deep customer insights, the testing of long held assumptions and market data, and the disruption of an organisational mindset geared toward risk aversion instilled within the aviation industry. The implication from these findings is that design led innovation can provide the critical platform to allow for a business to grow and sustain internal design capabilities necessary to challenge prevailing assumptions about how its business model operates to deliver value to customers and stakeholders alike. The platform of design led innovation also provides an avenue to support a cultural transformation towards anticipating future needs necessary for establishing a position of leadership within the broader economic environment.

Ultimate flexural limit states analysis of prestressed concrete sleeper

Railway is one of the most important, reliable and widely used means of transportation, carrying freight, passengers, minerals, grains, etc. Thus, research on railway tracks is extremely important for the development of railway engineering and technologies. The safe operation of a railway track is based on the railway track structure that includes rails, fasteners, pads, sleepers, ballast, subballast and formation. Sleepers are very important components of the entire structure and may be made of timber, concrete, steel or synthetic materials. Concrete sleepers were first installed around the middle of last century and currently are installed in great numbers around the world. Consequently, the design of concrete sleepers has a direct impact on the safe operation of railways. The "permissible stress" method is currently most commonly used to design sleepers. However, the permissible stress principle does not consider the ultimate strength of materials, probabilities of actual loads, and the risks associated with failure, all of which could lead to the conclusion of cost-ineffectiveness and over design of current prestressed concrete sleepers. Recently the limit states design method, which appeared in the last century and has been already applied in the design of buildings, bridges, etc, is proposed as a better method for the design of prestressed concrete sleepers. The limit states design has significant advantages compared to the permissible stress design, such as the utilisation of the full strength of the member, and a rational analysis of the probabilities related to sleeper strength and applied loads. This research aims to apply the ultimate limit states design to the prestressed concrete sleeper, namely to obtain the load factors of both static and dynamic loads for the ultimate limit states design equations. However, the sleepers in rail tracks require different safety levels for different types of tracks, which mean the different types of tracks have different load factors of limit states design equations. Therefore, the core tasks of this research are to find the load factors of the static component and dynamic component of loads on track and the strength reduction factor of the sleeper bending strength for the ultimate limit states design equations for four main types of tracks, i.e., heavy haul, freight, medium speed passenger and high speed passenger tracks. To find those factors, the multiple samples of static loads, dynamic loads and their distributions are needed. In the four types of tracks, the heavy haul track has the measured data from Braeside Line (A heavy haul line in Central Queensland), and the distributions of both static and dynamic loads can be found from these data. The other three types of tracks have no measured data from sites and the experimental data are hardly available. In order to generate the data samples and obtain their distributions, the computer based simulations were employed and assumed the wheel-track impacts as induced by different sizes of wheel flats. A valid simulation package named DTrack was firstly employed to generate the dynamic loads for the freight and medium speed passenger tracks. However, DTrack is only valid for the tracks which carry low or medium speed vehicles. Therefore, a 3-D finite element (FE) model was then established for the wheel-track impact analysis of the high speed track. This FE model has been validated by comparing its simulation results with the DTrack simulation results, and with the results from traditional theoretical calculations based on the case of heavy haul track. Furthermore, the dynamic load data of the high speed track were obtained from the FE model and the distributions of both static and dynamic loads were extracted accordingly. All derived distributions of loads were fitted by appropriate functions. Through extrapolating those distributions, the important parameters of distributions for the static load induced sleeper bending moment and the extreme wheel-rail impact force induced sleeper dynamic bending moments and finally, the load factors, were obtained. Eventually, the load factors were obtained by the limit states design calibration based on reliability analyses with the derived distributions. After that, a sensitivity analysis was performed and the reliability of the achieved limit states design equations was confirmed. It has been found that the limit states design can be effectively applied to railway concrete sleepers. This research significantly contributes to railway engineering and the track safety area. It helps to decrease the failure and risks of track structure and accidents; better determines the load range for existing sleepers in track; better rates the strength of concrete sleepers to support bigger impact and loads on railway track; increases the reliability of the concrete sleepers and hugely saves investments on railway industries. Based on this research, many other bodies of research can be promoted in the future. Firstly, it has been found that the 3-D FE model is suitable for the study of track loadings and track structure vibrations. Secondly, the equations for serviceability and damageability limit states can be developed based on the concepts of limit states design equations of concrete sleepers obtained in this research, which are for the ultimate limit states.

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.