Is land condition a useful indicator of soil organic carbon stock in Australia?

The grazing lands of northern Australia contain a substantial soil organic carbon (SOC) stock due to the large land area. Manipulating SOC stocks through grazing management has been presented as an option to offset national greenhouse gas emissions from agriculture and other industries. However, research into the response of SOC stocks to a range of management activities has variously shown positive, negative or negligible change. This uncertainty in predicting change in SOC stocks represents high project risk for government and industry in relation to SOC sequestration programs. In this paper, we seek to address the uncertainty in SOC stock prediction by assessing relationships between SOC stocks and grazing land condition indicators. We reviewed the literature to identify land condition indicators for analysis and tested relationships between identified land condition indicators and SOC stock using data from a paired-site sampling experiment (10 sites). We subsequently collated SOC stock datasets at two scales (quadrat and paddock) from across northern Australia (329 sites) to compare with the findings of the paired-site sampling experiment with the aim of identifying the land condition indicators that had the strongest relationship with SOC stock. The land condition indicators most closely correlated with SOC stocks across datasets and analysis scales were tree basal area, tree canopy cover, ground cover, pasture biomass and the density of perennial grass tussocks. In combination with soil type, these indicators accounted for up to 42% of the variation in the residuals after climate effects were removed. However, we found that responses often interacted with soil type, adding complexity and increasing the uncertainty associated with predicting SOC stock change at any particular location. We recommend that caution be exercised when considering SOC offset projects in northern Australian grazing lands due to the risk of incorrectly predicting changes in SOC stocks with change in land condition indicators and management activities for a particular paddock or property. Despite the uncertainty for generating SOC sequestration income, undertaking management activities to improve land condition is likely to have desirable complementary benefits such as improving productivity and profitability as well as reducing adverse environmental impact.

Low-Volatility Anomaly in Helsinki Stock Exchange

International research shows that low-volatility stocks have beaten high-volatility stocks in terms of returns for decades on multiple markets. This abbreviation from traditional risk-return framework is known as low-volatility anomaly. This study focuses on explaining the anomaly and finding how strongly it appears in NASDAQ OMX Helsinki stock exchange. Data consists of all listed companies starting from 2001 and ending close to 2015. Methodology follows closely Baker and Haugen (2012) by sorting companies into deciles according to 3-month volatility and then calculating monthly returns for these different volatility groups. Annualized return for the lowest volatility decile is 8.85 %, while highest volatility decile destroys wealth at rate of -19.96 % per annum. Results are parallel also in quintiles that represent larger amount of companies and thus dilute outliers. Observation period captures financial crisis of 2007-2008 and European debt crisis, which embodies as low main index annual return of 1 %, but at the same time proves the success of low-volatility strategy. Low-volatility anomaly is driven by multiple reasons such as leverage constrained trading and managerial incentives which both prompt to invest in risky assets, but behavioral matters also have major weight in maintaining the anomaly.

An evaluation of carbon offset supplementation options for beef production systems on coastal speargrass in central Queensland, Australia

In 2014, the Australian Government implemented the Emissions Reduction Fund to offer incentives for businesses to reduce greenhouse gas (GHG) emissions by following approved methods. Beef cattle businesses in northern Australia can participate by applying the 'reducing GHG emissions by feeding nitrates to beef cattle' methodology and the 'beef cattle herd management' methods. The nitrate (NO3) method requires that each baseline area must demonstrate a history of urea use. Projects earn Australian carbon credit units (ACCU) for reducing enteric methane emissions by substituting NO3 for urea at the same amount of fed nitrogen. NO3 must be fed in the form of a lick block because most operations do not have labour or equipment to manage daily supplementation. NO3 concentrations, after a 2-week adaptation period, must not exceed 50 g NO3/adult animal equivalent per day or 7 g NO3/kg dry matter intake per day to reduce the risk of NO3 toxicity. There is also a 'beef cattle herd management' method, approved in 2015, that covers activities that improve the herd emission intensity (emissions per unit of product sold) through change in the diet or management. The present study was conducted to compare the required ACCU or supplement prices for a 2% return on capital when feeding a low or high supplement concentration to breeding stock of either (1) urea, (2) three different forms of NO3 or (3) cottonseed meal (CSM), at N concentrations equivalent to 25 or 50 g urea/animal equivalent, to fasten steer entry to a feedlot (backgrounding), in a typical breeder herd on the coastal speargrass land types in central Queensland. Monte Carlo simulations were run using the software @risk, with probability functions used for (1) urea, NO3 and CSM prices, (2) GHG mitigation, (3) livestock prices and (4) carbon price. Increasing the weight of steers at a set turnoff month by feeding CSM was found to be the most cost-effective option, with or without including the offset income. The required ACCU prices for a 2% return on capital were an order of magnitude higher than were indicative carbon prices in 2015 for the three forms of NO3. The likely costs of participating in ERF projects would reduce the return on capital for all mitigation options. © CSIRO 2016.

Non executive employee stock options and corporate innovation

We provide empirical evidence on the positive effect of non-executive employee stock options on corporate innovation. The positive effect is more pronounced when employees are more important for innovation, when free-riding among employees is weaker, when options are granted broadly to most employees, when the average expiration period of options is longer, and when employee stock ownership is lower. Further analysis reveals that employee stock options foster innovation mainly through the risk-taking incentive, rather than the performance-based incentive created by stock options.

Incentives to underprice

an initial public offering, the choices made by issuers, such as the offer price, might not appear to be wealth maximizing. In this article, we argue that the choices are strategic. Based on the model developed by Barry (1989), we show that the average change in the issuer's wealth (4.52 per cent) is lower than the average loss implied by underpricing (12.09 per cent). Our results support the notion that the choices issuers make at the offering generate a compensatory benefit in the aftermarket. That the issuer may well not suffer a net wealth loss from the offering is in accordance with continued initial public offering activity.

Financial incentives and advanced construction procurement systems

Construction clients often use financial incentives to encourage stakeholder motivation and commitment to voluntary higher-order project goals. Despite the increased use of financial incentives, there is little literature addressing means of optimizing outcomes. Using a case study methodology, the examination of a successful Australian construction project demonstrates the features of a positively geared procurement approach that promotes the effectiveness of financial incentives. The research results show that if the incentive system is perceived to be fair and is applied to reward exceptional performance, and not to manipulate, then contractors are more likely to be positively motivated.

Motivating construction organisations through incentives : a case study for client-side project managers

Client-side project managers face challenges in motivating project organisations to pursue exceptional design and construction performance. One approach to improving the motivation of project organisations is by offering a financial incentive reward for the achievement of voluntary performance standards above the minimum required standard. However, little investigation has been undertaken into the features of a successful incentive system as a part of an overall procurement strategy. In response to a lack of information available to client-side project managers tasked with the initial design of an incentive system, the paper explores motivation under a successful incentive and identifies key learnings for client-side project managers to consider when designing incentives. Our findings are based on the results of a large Australian case study which is interpreted against a conceptual framework based on both economic and psychological perspectives of motivation. The results suggest that motivation towards incentive goals is influenced by the value the project organisations place on the incentive reward as a commercial opportunity to increase their profit margins. However, perhaps more important are the relationship management processes that promote commitment to the project; and pride in the achievement of project goals. In the case study, these processes intensified the direct motivational effect of the incentive reward on offer. The findings also highlight the importance of ensuring that incentive goals and performance measurement processes remain relevant to the organisations throughout a project to continuously encourage motivation under changing project conditions.

Don’t judge a superannuation default investment option by its name

With the massive decline in savings arising from the Global Financial Crisis (GFC), it is timely to review superannuation fund investment and disclosure strategies in the lead-up to the crisis. Accordingly, this study examines differences among superannuation funds’ default investment options in terms of naming and framing over three years from 2005 to 2007, as presented in product disclosure statements (PDSs). The findings indicate that default options are becoming more alike regardless of their name, and consequently, members may face increasing difficulties in distinguishing between balanced and growth-named default options when comparing them across superannuation funds. Comparability is also likely to be constrained by variations in the framing of default options presented in investment option menus in PDSs. These findings highlight the need for standardisation of default option definitions and disclosures to ensure descriptive accuracy, transparency and comparability.