Initial public offerings of energy companies

This study analyses 158 energy company initial public offerings (IPOs) in Australia from January 1994 to December 2010, including the period of the global financial crisis (GFC). The study finds that energy company IPOs had an average 22.0 % underpricing and that those IPOs that sought to raise more equity capital and engaged underwriters had lower underpricing. There is also evidence that suggests energy company IPOs that offered options to their underwriters had higher underpricing returns, effectively cancelling the lower underpricing effect of the underwriting itself. The energy IPOs that raised equity capital after the 2007/8 global financial crisis do not appear to have offered on average, significantly different underpricing returns to their investors compared to those energy IPOs that raised capital prior to this GFC period. The findings of this study offer insights for issuers who seek to lower underpricing, for underwriters involved in the capital raising and for investors who are looking to invest in Australian energy company IPOs.

Do financial reforms improve the performance of financial holding companies? The case of Taiwan

We examine the performance of financial holding companies (FHCs) in Taiwan after the financial reform that removes the separation of banking, securities, insurance, and other financial services. Using data envelopment analysis, we find that FHCs fail to improve technical efficiencies in the post-reform era. They also do not outperform independent commercial banks after the financial reform. Lower technical efficiency caused by excess operating expenses appears to be the primary source of inefficiency. While scale efficiency may improve as FHCs grow larger, the benefits are marginal and insufficient to offset the potential costs of organizational diseconomies. Our findings suggest that increasing the size and scope of financial activities alone do not necessarily improve the performance of financial firms.

A novel trust measurement method based on certified belief in strength for a multi-agent classifier system

A novel trust measurement method, namely, certified belief in strength (CBS), for a multi-agent classifier system (MACS) is proposed in this paper. The CBS method aims to improve the performance of the constituent agents of the MACS, viz., the fuzzy min-max (FMM) neural network classifier. Trust measurement is accomplished using reputation and strength of the constituent agents. Trust is built from strong elements that are associated with the FMM agents, allowing the CBS method to improve the performance of the MACS. An auction procedure based on the sealed bid, namely, the first price method, is adopted for the MACS in determining the winning agent. The effectiveness of the CBS method and the bond (based on trust) is verified by using a number of benchmark data sets. The results demonstrate that the proposed MACS-CBS model is able to produce better accuracy and stability as compared with those from other existing methods. © 2012 Springer-Verlag London.

E-commerce trust management system reliability

Various solutions have been proposed in managing trust relationship between trading partners in eCommerce environment. Determine the reliability of trust management systems in eCommerce is most difficult issue due to highly dynamic nature of eCommerce environments. As trust management systems depend on the feedback ratings provided by the trading partners, they are fallible to strategic manipulation of the feedback ratings attacks. This paper addressed the challenges of trust management systems. The requirements of a reliable trust management are also discussed. In particular, we introduce an adaptive credibility model that distinguishes between credible feedback ratings and malicious feedback ratings by considering transaction size, frequency of ratings and majority vote to form a feedback ratings verification metric. The approach has been validated by simulation result.

Securing recommendations in grouped P2P e-commerce trust model

In dynamic peer to peer (P2P) e-commerce, it is an important and difficult problem to promote online businesses without sacrificing the desired trust to secure transactions. In this paper, we address malicious threats in order to guarantee secrecy and integrity of recommendations exchanged among peers in P2P e-commerce. In addition to trust, secret keys are required to be established between each peer and its neighbors. Further, we propose a key management approach gkeying to generate six types of keys. Our work mainly focuses on key generation for securing recommendations, and ensuring the integrity of recommendations. The proposed approach presented with a security and performance analysis, is more secure and more efficient in terms of communication cost, computation cost, storage cost, and feasibility. © 2012 IEEE.

The soft systems approach to understanding trust in alliances in Australia

Alliances are complex projects with high levels of risk and uncertainty. Despite the pain share and gain share commercial arrangement in alliances, Trust is still an issue between the Alliancing Leadership Team (ALT) and Alliancing Management Team relationship (AMT). Although the concept and components of trust have been discussed by various researchers, the characteristic of trust under different situations has not been tested within the procurement research domain. Based on semi-structured interviews with the members of the ALT and AMT of an alliance project in Australia the underlying trust based relationships between the AMT and ALT were investigated using the Soft Systems Methodology (SSM). Results demonstrate that cognitive, affect, system and cognitive-affect based trust are mediated by common good, needs, sharing, breach temptation and mishap situations. This research demonstrates that the adversarial culture of the Australian construction industry cannot be changed by the implementation of trust principles alone. The culture of suspicion dominating the ideological view of the construction industry requires organizational learning between alliance parties to execute appropriate behaviours, aligned with the alliancing philosophy, to effectively achieve ideal collaboration.

Trust evaluation for indirectly connected nodes using link community information

Inspired by recent empirical research on link communities, we borrow some important ideas and concepts for our own research to provide a more reasonable computation model of transitive trust. The key advantages of using link community methodology is to reflect on the nature of the social network features of Hierarchy and Overlap. Our research mainly resolves the computation of trust transitivity in which two nodes do not have any direct links to any link community. In this research, we discover a new direction analyzing trust transitivity. By using a social network game, we found that the link community methodology is a natural way to analyze trust in social networks. We also discovered, even in a small social network, trust has certain community features.

Costs and benefits of mandatory auditing of for-profit private and not-for-profit companies in Australia

This paper addresses the paucity of research surrounding the mandatory auditing of for-profit private and not-for-profit companies in Australia. We document the various mandatory auditing provisions under the Corporations Act and identify over 22 000 companies that lodge audited accounts with the regulator under federal law. In 2011, 6339 large proprietary companies, 186 small proprietary companies, 2797 foreign-owned companies, 3985 unlisted public companies and 8404 public companies limited by guarantee had an obligation under the Corporations Act to lodge audited accounts. While large proprietary and foreign-owned companies have an option to apply to the Australian Securities and Investment Commission for audit relief, we estimate that less than 10% are granted audit exemption. We document that since 1995 an additional 1500 large proprietary companies that should have lodged under the size provisions of the Corporations Act have been granted exemption from doing so (i.e., grandfathered), although these firms appear to be subject to an annual audit even though they do not lodge accounts. We estimate the costs and discuss the potential public interest and firm-level benefits associated with the mandatory auditing of for-profit private and not-for-profit companies in Australia.