In this paper, a model is set up for valuing a firm with stochastic earnings. It is assumed that the earnings of the considered firm follow a time-varying mean reverting stochastic process. It is shown that the value of the firm satisfies a boundary value problem of a second-order partial...

In this paper, we use event study methodology to examine the effect of two highly publicized accounting failures, at Enron and WorldCom both audited by Arthur Andersen, on the total stock returns of some companies in the UK also audited by Arthur Andersen. The results vary substantially between...

This paper is concerned with some corporate governance issues related to newly listed firms in China based on a sample of 329 firms commencing listing on Shanghai Stock Exchange (SHSE) and Shenzhen Stock exchange (SZSE) during the period from 1998 to 2000. We first investigate the impact of...

This paper investigates arbitrage opportunities from the Australian market using the futures and futures option contracts traded on the Sydney Futures Exchange (SFE) within a put-call-futures-parity (PCFP) framework. A thorough ex post analysis is first carried out. Tick-by-tick transaction...

This paper is concerned with the relationship between the adoption rate of Internet banking and electronic connectivity. Electronic connectivity is measured using three components: personal computer connectivity, Internet connectivity and mobile phone connectivity. Regression is used to analyse...

In this paper, we consider the optimal asset allocation problems under VaR constraints. It is shown that the separation property holds to a certain extent. The optimal allocation of funds in risky assets is dependent on the distribution of the returns of risky assets and the VaR level, but...

Influential contemporary performance budgeting models have sought to tighten the link between results and budgets. This paper considers three approaches – budget-linked performance targets, budgeting based upon output or outcome costs, and budgetary performance incentives – and assesses...

The paper explores whether a social learning model helps explain the observed conformity and compliance with social norms after the unification of Germany. We compare tax morale, (the willingness to pay taxes), between inhabitants of East and West Germany during the post-unification period,...

Do people prefer a society with an extensive social welfare system with high taxes, or low taxes but lax redistributive policies? Although economists have for a long time investigated the trade-off mechanism between equity and efficiency, surprisingly little information is available about...

Policymakers often propose strict enforcement strategies to fight the shadow economy and to increase tax morale. However, there is also a bottom-up approach: decentralizing the political power to those who are close to the problems and give them a direct political say. This paper analyses the...