The effects of the late 2000s global financial crisis on Australia's construction demand

An accurate measurement of the impacts of external shocks on construction demand will enable construction industry policymakers and developers to make allowances for future occurrences and advance the construction industry in a sustainable manner. This paper aims to measurethe dynamic effects of the late 2000s global financial crisis on the level of demand in the Australian construction industry. The vector error correction (VEC) model with intervention indicators is employed to estimate the external impact from the crisis on a macro-level construction economic indicator, namely construction demand. The methodology comprises six main stages to produce appropriate VEC models that describe the characteristics of the underlying process. Research findings suggestthat overall residential and non-residential construction demand were affected significantly by the recent crisis and seasonality. Non-residentialconstruction demand was disrupted more than residential construction demand at the crisis onset. The residential constructionindustry is more reactive and is able to recover faster following the crisis in comparison with the non-residential industry. The VEC model with intervention indicators developed in this study can be used as an experiment for an advanced econometric method. This can be used to analyse the effects of special eventsand factors not only on construction but also on other industries.

Board committee meetings and firm financial performance : an investigation of Australian companies

This article examines how the frequency of board committee meetings impacts on Australian firms’ financial performance. Data were collected from 118 Australian listed companies – including 26 financial firms and 92 nonfinancial firms – for the period 1999–2007. Analysis of that data shows that the frequencies of audit committee meetings and remuneration committee meetings are positively and significantly associated with return on equity and return on assets. The frequencies of risk committee meetings do not show any significant effects on the financial performance of Australian firms. Estimated results are found to be robust after controlling for internal as well as external governance mechanisms that might affect Australian firm performance.

Leave entitlements, time off work and the household financial impacts of quarantine compliance during an H1N1 outbreak

Background The Australian state of Victoria, with 5.2 million residents, enforced home quarantine during a H1N1 pandemic in 2009. The strategy was targeted at school children. The objective of this study was to investigate the extent to which parents’ access to paid sick leave or paid carer’s leave was associated with (a) time taken off work to care for quarantined children, (b) household finances, and (c) compliance with quarantine recommendations. Methods We conducted an online and telephone survey of households recruited through 33 schools (85% of eligible schools), received 314 responses (27%), and analysed the subsample of 133 households in which all resident parents were employed. Results In 52% of households, parents took time off work to care for quarantined children. Households in which no resident parent had access to leave appeared to be less likely to take time off work (42% vs 58%, p=0.08) although this difference had only borderline significance. Among parents who did take time off work, those in households without access to leave were more likely to lose pay (73% vs 21%, p<0.001). Of the 26 households in which a parent lost pay due to taking time off work, 42% experienced further financial consequences such as being unable to pay a bill. Access to leave did not predict compliance with quarantine recommendations. Conclusions Future pandemic plans should consider the economic costs borne by households and options for compensating quarantined families for income losses.

Financial development, shocks, and growth volatility

This paper uses spectral theory to develop the following two testable hypotheses in a unified framework for the predictions of business-cycle and endogenous growth models: (i) financial development affects only business-cycle volatility; and (ii) shocks affect both business-cycle volatility and long-run volatility of GDP growth. In other words, volatility caused by shocks is more persistent than that caused by financial underdevelopment. We decompose the business-cycle and long-run volatility by the spectral method and then test the hypotheses at the cross-country level. Empirical evidence provides support for both hypotheses. Higher private credit, a bank-based measure of financial development, dampens business-cycle volatility but not long-run volatility. Volatility of shocks, as measured by the volatility of changes in the terms of trade, magnifies both business-cycle and long-run volatility. The results are robust to accounting for endogeneity, a market-based measure of financial development, and an alternative method of volatility decomposition.

Impact of policy changes on the efficiency and returns-to-scale of Japanese financial institutions: an evaluation

This paper examines the impact of FSA's (Financial Services Agency) recent policy changes on the efficiency and returns-to-scale (RTS) of Japanese financial institutions including banks, securities companies and bank holding companies. Three kinds of efficiency are investigated namely, technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) using the non-parametric methodology named data envelopment analysis (DEA). The DEA analysis shows a substantial improvement in the overall efficiency of Japanese banks, albeit a significant difference of efficiency scores between the major/city banks and the regional banks. Results are robust to alternative specifications of efficiency and scale changes.

Application of the reporting entity concept and lodgement of special purpose financial statements

This Research Report analyses the application of the reporting entity concept and the adoption of special purpose financial reporting, particularly by entities lodging financial statements with the Australian Securities and Investments Commission (ASIC) and with state-based regulators in Australia’s three most populous states, namely, Consumer Affairs Victoria, NSW Fair Trading and Queensland Office of Fair Trading. This Report does not cover entities that have their equity interests traded in a public market, such as listed companies, and some other entities with ‘public accountability’.