The quasi-linear fuzzy modeling of Filev (1991) is used to estimate the relationship between the number of managers and employees in a firm. The results form the basis for the classification of firms into small and large businesses. Application to a data of Australian firms shows an evolution episode during which firms are driven by various transitional forces. The composition of the transition region suggests that the 2011 small business tax-break cap set by Australian Taxation Office falls short of fully supporting growth as intended. The implications pave the way for improvement to the business tax code aiming at growth and job creation.
{"title":"Small Business Redefined: A Quasi-Linear Fuzzy Classification of Firm Size","authors":"Sasan Bakhtiari","doi":"10.2139/ssrn.2037596","DOIUrl":"https://doi.org/10.2139/ssrn.2037596","url":null,"abstract":"The quasi-linear fuzzy modeling of Filev (1991) is used to estimate the relationship between the number of managers and employees in a firm. The results form the basis for the classification of firms into small and large businesses. Application to a data of Australian firms shows an evolution episode during which firms are driven by various transitional forces. The composition of the transition region suggests that the 2011 small business tax-break cap set by Australian Taxation Office falls short of fully supporting growth as intended. The implications pave the way for improvement to the business tax code aiming at growth and job creation.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2012-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89814253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How does the bargaining power of firms affect trade policy? We address this question in an international, bilateral oligopoly setting where the Home country specializes in final goods and the Foreign country specializes in intermediate inputs. A matched Home-Foreign pair bargains simultaneously over the input price and the level of output, and competes with other matched pairs in markets. In such environments with vertical specialization, we show that the welfare-maximizing Home tariff rate strictly decreases as the bargaining power of Home firms increases. Surprisingly, we find that an increase in Home bargaining power can also raises Foreign profits. These results hold for fairly general demand function and a number of different procurement mechanisms. In an endogenous market structure setting with free entry and matching, the relationship between the tariff and bargaining power is usually non-monotone. In particular, the relationship is U-shaped (resp. inverted U-shaped) if the demand function is strictly concave (resp. convex). If the demand function is linear, free trade is optimal (i.e., optimal tariff is zero) irrespective of the bargaining power. The relationship between welfare and bargaining power is also explored.
{"title":"Bargaining, Tariffs, and Vertical Specialization","authors":"Tomohiro Ara, A. Ghosh","doi":"10.2139/ssrn.2004020","DOIUrl":"https://doi.org/10.2139/ssrn.2004020","url":null,"abstract":"How does the bargaining power of firms affect trade policy? We address this question in an international, bilateral oligopoly setting where the Home country specializes in final goods and the Foreign country specializes in intermediate inputs. A matched Home-Foreign pair bargains simultaneously over the input price and the level of output, and competes with other matched pairs in markets. In such environments with vertical specialization, we show that the welfare-maximizing Home tariff rate strictly decreases as the bargaining power of Home firms increases. Surprisingly, we find that an increase in Home bargaining power can also raises Foreign profits. These results hold for fairly general demand function and a number of different procurement mechanisms. In an endogenous market structure setting with free entry and matching, the relationship between the tariff and bargaining power is usually non-monotone. In particular, the relationship is U-shaped (resp. inverted U-shaped) if the demand function is strictly concave (resp. convex). If the demand function is linear, free trade is optimal (i.e., optimal tariff is zero) irrespective of the bargaining power. The relationship between welfare and bargaining power is also explored.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2012-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74050176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When siblings wish for the wellbeing of their elderly parents, the cost of care giving and long-term commitment creates a free-rider problem among siblings. We estimate a sequential game to investigate externality and strategic interaction among adult siblings regarding their location choice relative to their elderly parents. Using the US Health and Retirement Survey, we find a positive externality and strategic interaction. The first-mover advantage of eldest children and the prisoner's dilemma are likely to exist but their magnitudes are negligible compared with inefficiency in joint utility. Inefficiency is large in a family with an educated, widowed mother and with educated siblings who are younger (relative to parents), married, and similar to each other. Had siblings fully internalized externality and jointly maximized utility sum in 2010, 17% more parents with multiple children would have had a child nearby. Public policies that reduce children's private costs may enhance social welfare.
{"title":"Externality and Strategic Interaction in the Location Choice of Siblings under Altruism toward Parents","authors":"Meliyanni Johar, Shiko Maruyama","doi":"10.2139/ssrn.2003996","DOIUrl":"https://doi.org/10.2139/ssrn.2003996","url":null,"abstract":"When siblings wish for the wellbeing of their elderly parents, the cost of care giving and long-term commitment creates a free-rider problem among siblings. We estimate a sequential game to investigate externality and strategic interaction among adult siblings regarding their location choice relative to their elderly parents. Using the US Health and Retirement Survey, we find a positive externality and strategic interaction. The first-mover advantage of eldest children and the prisoner's dilemma are likely to exist but their magnitudes are negligible compared with inefficiency in joint utility. Inefficiency is large in a family with an educated, widowed mother and with educated siblings who are younger (relative to parents), married, and similar to each other. Had siblings fully internalized externality and jointly maximized utility sum in 2010, 17% more parents with multiple children would have had a child nearby. Public policies that reduce children's private costs may enhance social welfare.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2012-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84361062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using a sample of large Australian firms from 1994 to 2003, we show that variation in firm-level corporate governance mechanisms plays an important role in explaining a firm's cost of capital. Our empirical results show that greater insider ownership, the presence of institutional blockholders and independent boards all serve to reduce the perceived risk of a firm, thereby leading investors to demand lower rates of return on capital provided. This highlights the important role that corporate governance plays in creating value for shareholders by reducing the cost of external financing. Given the inconclusiveness of existing literature that uses Q to measure firm value, this research provides an alternative and potentially more suitable way to investigate the impact of corporate governance on firm value.
{"title":"Corporate Governance and the Cost of Capital: Evidence from Australian Firms","authors":"Jo‐Ann Suchard, Peter K. Pham, Jason Zein","doi":"10.2139/ssrn.1015986","DOIUrl":"https://doi.org/10.2139/ssrn.1015986","url":null,"abstract":"Using a sample of large Australian firms from 1994 to 2003, we show that variation in firm-level corporate governance mechanisms plays an important role in explaining a firm's cost of capital. Our empirical results show that greater insider ownership, the presence of institutional blockholders and independent boards all serve to reduce the perceived risk of a firm, thereby leading investors to demand lower rates of return on capital provided. This highlights the important role that corporate governance plays in creating value for shareholders by reducing the cost of external financing. Given the inconclusiveness of existing literature that uses Q to measure firm value, this research provides an alternative and potentially more suitable way to investigate the impact of corporate governance on firm value.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2012-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91448836","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper sheds new light on the forces shaping outsourcing decision by considering a certain form of non-linearity in overhead costs which effectively discretizes a firm’s size into small and large regimes. Extending Grossman & Helpman (2002) in this line shows that firms unable to fully transition from small to large due to their level of efficiency would outsource to downsize and save on overhead costs. A panel of Australian manufacturing firms is used to construct an instrument for the transitioning firm and to test the hypothesis. In support of the theory, those firms in transition with no growth plans have stronger incentives to contract out and downsize. The findings open a new avenue to rethink growth and job creation amongst small businesses.
{"title":"Size Evolution and Outsourcing: Theory and Evidence from Australian Manufacturing","authors":"Sasan Bakhtiari","doi":"10.2139/ssrn.1984398","DOIUrl":"https://doi.org/10.2139/ssrn.1984398","url":null,"abstract":"This paper sheds new light on the forces shaping outsourcing decision by considering a certain form of non-linearity in overhead costs which effectively discretizes a firm’s size into small and large regimes. Extending Grossman & Helpman (2002) in this line shows that firms unable to fully transition from small to large due to their level of efficiency would outsource to downsize and save on overhead costs. A panel of Australian manufacturing firms is used to construct an instrument for the transitioning firm and to test the hypothesis. In support of the theory, those firms in transition with no growth plans have stronger incentives to contract out and downsize. The findings open a new avenue to rethink growth and job creation amongst small businesses.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2011-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86971997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the role of efficiency in a firm’s decision to contract out. Emphasis is on the heterogeneous nature of firms and when firms are only considering outsourcing to domestic suppliers. Firm-level data on Australian manufacturing reveal an ordering of efficiency between firms that contract out and those that do not, in which contracting-out firms are on aggregate less efficient. The analysis further shows that firms experience improvement in their efficiency soon after contracting out, but only if their performance has been below average prior to contracting out. The results show robustness to the choice of efficiency measure, where efficiency is expressed in both productivity and cost advantage.
{"title":"Efficiency and Outsourcing: Evidence from Australian Manufacturing","authors":"Sasan Bakhtiari","doi":"10.2139/ssrn.1984394","DOIUrl":"https://doi.org/10.2139/ssrn.1984394","url":null,"abstract":"This paper studies the role of efficiency in a firm’s decision to contract out. Emphasis is on the heterogeneous nature of firms and when firms are only considering outsourcing to domestic suppliers. Firm-level data on Australian manufacturing reveal an ordering of efficiency between firms that contract out and those that do not, in which contracting-out firms are on aggregate less efficient. The analysis further shows that firms experience improvement in their efficiency soon after contracting out, but only if their performance has been below average prior to contracting out. The results show robustness to the choice of efficiency measure, where efficiency is expressed in both productivity and cost advantage.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2011-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84164404","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The time evolution of prices and savings in a stock market is modeled by a discrete-delay nonlinear dynamic system. The proposed model has a unique and unstable steady-state, so its time evolution is determined by the nonlinear effects acting out of the equilibrium. We perform the analysis of the linear approximation through the study of the eigenvalues of the Jacobian matrix in order to characterize the local stability properties and the local bifurcations in the parameter space. If the delay is equal to zero, Lyapunov exponents are calculated. For certain values of the parameters, we prove that the system has a chaotic behaviour. The discrete nonlinear model is associated with a discrete stochastic model. For the liniarization of this model, we establish the conditions for which the mean and quadratic mean values of the state variables are asymptotically stable. Some numerical examples are finally given to justify the theoretical results.
{"title":"Stability in a Discrete-Time Dynamic Model with Delay for a Stock Market","authors":"L. Dobrescu, M. Neamţu, D. Opris","doi":"10.2139/ssrn.1987871","DOIUrl":"https://doi.org/10.2139/ssrn.1987871","url":null,"abstract":"The time evolution of prices and savings in a stock market is modeled by a discrete-delay nonlinear dynamic system. The proposed model has a unique and unstable steady-state, so its time evolution is determined by the nonlinear effects acting out of the equilibrium. We perform the analysis of the linear approximation through the study of the eigenvalues of the Jacobian matrix in order to characterize the local stability properties and the local bifurcations in the parameter space. If the delay is equal to zero, Lyapunov exponents are calculated. For certain values of the parameters, we prove that the system has a chaotic behaviour. The discrete nonlinear model is associated with a discrete stochastic model. For the liniarization of this model, we establish the conditions for which the mean and quadratic mean values of the state variables are asymptotically stable. Some numerical examples are finally given to justify the theoretical results.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2011-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91053906","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
It is generally believed that intergenerational coresidence by elderly parents and adult children provides security for parents in their old age. In many countries, such intergenerational coresidence is the most common living arrangement. Using a nationally-representative dataset and a program evaluation technique that accounts for endogenous and heterogeneous treatment effects, we find robust evidence of a negative coresidence effect, contrary to the popular belief. The unintended adverse effect on parental health has significant implications for future informal care policies, given that coresidence is expected to remain the primary form of old age security in the foreseeable future.
{"title":"Does Coresidence Improve an Elderly Parent’s Health?","authors":"Meliyanni Johar, Shiko Maruyama","doi":"10.2139/ssrn.1917206","DOIUrl":"https://doi.org/10.2139/ssrn.1917206","url":null,"abstract":"It is generally believed that intergenerational coresidence by elderly parents and adult children provides security for parents in their old age. In many countries, such intergenerational coresidence is the most common living arrangement. Using a nationally-representative dataset and a program evaluation technique that accounts for endogenous and heterogeneous treatment effects, we find robust evidence of a negative coresidence effect, contrary to the popular belief. The unintended adverse effect on parental health has significant implications for future informal care policies, given that coresidence is expected to remain the primary form of old age security in the foreseeable future.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2011-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85542376","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There are at least three problems in the measurement of skill - aggregation, dynamism, and codification. Skill is an individual and collective capacity, expressed in performance and reflected in outcomes. Aggregate measures relying on proxies such as occupational entry qualifications may not provide the best picture of segmentation and mobility processes. Statistics on training effort have the potential to create a misleading picture of an industry's or firm's commitment to skill-based innovation by failing to distinguish ad-hoc, just-in-time measures to maintain the current capability of a firm's workforce from interventions designed to develop a creative, adaptive capability. To be measured, skills must first be named. Workplace-level skill development requires frameworks for identifying growth opportunities. In exploring these three problems in the Australian and New Zealand context, the paper proposes a dynamic framework for classifying approaches to skilling (not confined to formal trading) on the basis of their contributions to adaptive capability, proposing three types of skill: threshold, platform and growth. The codification problem is particularly severe in 'new economy' service industries, and the paper critiques the attempt to capture under-specified service skills in concepts such as 'soft skills' or 'employability skills.' It suggests an alternative framework for classifying the adaptive and generative processes of workplace learning and their outcomes - an analysis that may have relevance beyond the service sector.
{"title":"Segmented Skilling: Static and Dynamic 'New Economy' Skills","authors":"D. Fraser, Anne Junor, I. Hampson","doi":"10.2139/ssrn.1920006","DOIUrl":"https://doi.org/10.2139/ssrn.1920006","url":null,"abstract":"There are at least three problems in the measurement of skill - aggregation, dynamism, and codification. Skill is an individual and collective capacity, expressed in performance and reflected in outcomes. Aggregate measures relying on proxies such as occupational entry qualifications may not provide the best picture of segmentation and mobility processes. Statistics on training effort have the potential to create a misleading picture of an industry's or firm's commitment to skill-based innovation by failing to distinguish ad-hoc, just-in-time measures to maintain the current capability of a firm's workforce from interventions designed to develop a creative, adaptive capability. To be measured, skills must first be named. Workplace-level skill development requires frameworks for identifying growth opportunities. In exploring these three problems in the Australian and New Zealand context, the paper proposes a dynamic framework for classifying approaches to skilling (not confined to formal trading) on the basis of their contributions to adaptive capability, proposing three types of skill: threshold, platform and growth. The codification problem is particularly severe in 'new economy' service industries, and the paper critiques the attempt to capture under-specified service skills in concepts such as 'soft skills' or 'employability skills.' It suggests an alternative framework for classifying the adaptive and generative processes of workplace learning and their outcomes - an analysis that may have relevance beyond the service sector.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2011-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73633106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Discussion Paper, originally prepared for the NSW Freight Advisory Council, starts from the position that freight logistics must now be seen as part of a global supply chain network. Freight networks consist of multiple visible and invisible economic, social and political connections over time and space- all of which combine to give a working system. Both Sydney and NSW must be seen as polycentric regions, and consideration must be given to sources of friction and blockage, from economic, social, environmental, skills and industrial perspectives as well as geographical ones. This has profound implications for any freight logistics strategy for NSW. It has intergenerational implications for funding, infrastructure and people.
{"title":"A Freight Logistics Strategy for the State of NSW","authors":"Daryll Hull","doi":"10.2139/ssrn.1785965","DOIUrl":"https://doi.org/10.2139/ssrn.1785965","url":null,"abstract":"This Discussion Paper, originally prepared for the NSW Freight Advisory Council, starts from the position that freight logistics must now be seen as part of a global supply chain network. Freight networks consist of multiple visible and invisible economic, social and political connections over time and space- all of which combine to give a working system. Both Sydney and NSW must be seen as polycentric regions, and consideration must be given to sources of friction and blockage, from economic, social, environmental, skills and industrial perspectives as well as geographical ones. This has profound implications for any freight logistics strategy for NSW. It has intergenerational implications for funding, infrastructure and people.","PeriodicalId":23435,"journal":{"name":"UNSW Business School Research Paper Series","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2011-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76467071","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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