Elisabeth Sinnewe

Is biggest best? a comparative analysis of the financial viability of the Brisbane City Council

Structural reform through forced mergers has been a dominant feature of Australian local government for decades. Advocates of compulsory consolidation contend that larger municipalities perform better across a wide range of attributes, including financial sustainability. While empirical scholars of local government have invested considerable effort into investigating these claims, no-one has yet examined the performance of Brisbane City Council against other local authorities, despite the fact that it is by far the largest council in Australia. This paper seeks to remedy this neglect by comparing Brisbane with Sydney City Council, an average of six south east Queensland councils and an average of ten metropolitan New South Wales councils against four measures of financial performance over the period 2008 to 2011.

Trial by Media: An Empirical Investigation of Corporate Reputation and Stock Returns in Australia

This article examines whether investors are able to generate abnormal risk-adjusted returns in the Australian market based on media-specific firm reputational factors under market uncertainty between 2004 and 2012. The findings suggest that after controlling for crisis-centric time periods and market risk factors, contrarian trading strategies produce abnormal returns for poor corporate reputation firms but not for their good corporate reputation counterparts. Corporate reputation may be a driver of performance for poorly performing Australian firms and could be considered a stimulus for trading activity due to its explanatory capabilities.

A review of superannuation fund performance studies: empirical evidence from Australia – 2000 to 2014

Purpose - The purpose of this paper is to showcase empirical findings in the literature relating to Australian superannuation fund performance in the pre-reform period, from 2000 to 2014. Design/methodology/approach - The authors synthesize Australian superannuation performance studies in an attempt to identify empirical approaches employed in the academic literature, showcase findings and uncover themes for future research. Findings - The review highlights the following findings in the literature: actively managed “retail” superannuation funds appear to underperform passive index and/or portfolio approaches; high management fees and preference for liquid, less growth-orientated assets may be further undermining performance. It also reveals the need for future research to assess whether the recent government inquiries and the related reformative measures have achieved the desired effect of improving the Australian superannuation system. The authors therefore identify three areas of investigation that will cater for this research need: the fund performance of not-for-profit fund and self-managed super fund; the efficiency of super funds; and the appropriateness of wholesale fund benchmarks. Originality value - It is expected that superannuation fund performance will be subject to heightened scrutiny to assess the effectiveness of recent legislative changes resulting from the Stronger Super reform and other public inquiries. This study provides a timely, substantive and informative review of empirical findings pertaining to Australian superannuation performance in the pre-reform period to assist researchers looking to conduct further empirical research on this topic.

Religion and earnings: evidence from Germany

Purpose – The purpose of this paper is to estimate the association between religious affiliation and the rate of return to human capital for German men and women. Design/methodology/approach – This paper employs data from the 1997, 2003, 2007 and 2011 waves of the German Socio-Economic Panel for German men and women in full-time employment between the age of 25 and 54. The association between religious affiliation and wages was estimated using a conventional human capital model. Findings – This paper finds that Catholic men (women) received a wage premium of 4 per cent (3 per cent) relative to their Protestant counterparts, even after controlling for an extensive range of demographic, economic and social characteristics. Originality/value – The study contributes to the literature by providing – to the best of the authors’ knowledge – the first results on the wage premium received by Catholic men and women in the German labour market.

Are covered calls the right option for Australian investors

Purpose The purpose of this paper is to examine whether superior risk-adjusted returns can be generated using monthly covered call option strategies in large capitalized Australian equity portfolios and across varying market volatility conditions. Design/methodology/approach The authors construct monthly in-the-money (ITM) and out-of-the-money (OTM) S&P/ASX 20 covered call portfolios from 2010 to 2015 and use standard and alternative performance measures. An assessment of variable levels of market volatility on risk-adjusted return performance is also carried out using the spread between implied and realized volatility indexes. Findings The results of this paper show that covered call writing produces similar nominal returns at lower risk when compared against the standalone buy-and-hold portfolio. Both standard and alternative performance measures (with the exception of the upside potential ratio) demonstrate that covered call portfolios produce superior risk-adjusted returns, particularly when written deeper OTM. The 36-month rolling regressions also reveal that deeper OTM portfolios deliver greater risk-adjusted returns in the majority of the sub-periods investigated. This paper also establishes that volatility spread variation may be a driver of performance for covered call writing in Australia. Originality/value The authors suggest that deeper OTM covered call strategies based on large capitalized portfolios create value for investors/fund managers in the Australian stock market and can be executed in volatile market conditions. Such strategies are particularly useful for those seeking market neutral asset allocation and less risk exposure in volatile market environments.

Church attendance, faith and the allocation of time: evidence from Australia

Purpose To examine the determinants of church attendance and the formation of ‘religious human capital’ using a Becker-inspired allocation-of-time framework. Design/methodology/approach Data derived from three waves of the Household, Income and Labour Dynamics in Australia (HILDA) Survey were used to estimate a reduced form two-equation system where the endogenous variables were frequency of attendance at religious services and intensity of faith. Findings Our results indicate that while the hourly wage rate accounts for some of the variation in our attendance and faith regressions (i.e., higher wages lead to lower levels of attendance and faith), ‘allocation of time’ variables like working long hours also influence these dimensions. Our findings also suggest that the decision to attend or not or to have any faith at all is generally independent from economic factors. However, once the decision to attend or to have faith is made, an individual’s wage influences the degree of attendance or faith to a significant level. Originality/value Our study contributes to this embryonic body of empirical literature by providing – to the best of our knowledge – the first results for Australia.

India’s Indigenization of Military Aircraft Design and Manufacturing: Towards a Fifth-Generation Fighter

India has traditionally looked northward towards Pakistan as a potential aggressor. Since the creation of the separate states of Pakistan and India in 1947, there have been four wars between the two nations, one of which was undeclared, in addition to numerous border skirmishes. One might well imagine that India will continue to keep a close eye on its northern neighbour into the future. However, with the rapid emergence of China as a major geopolitical influence in the broader Asian region, it has become clear that Indian military strategists are now viewing China — a nation traditionally friendly to Pakistan — as the greater rival and threat. Despite the increasing strength in economic ties between China and India, as evidenced by China being India’s largest trading partner (Krishnan, 2011), China’s expanding military capabilities have not gone unnoticed by India. With its intention to develop a US-style carrier battle group, and the likelihood of deploying an indigenous fifth-generation air superiority fighter in the future (which could have a carrier-based application), China poses a credible future threat to Indian dominance over the Bay of Bengal and Indian airspace in the north of the country (Garver, 2002). In particular, China is seeking to develop an almost completely indigenous military equipment manufacturing capacity, which is best evidenced by an emerging view that it will soon develop its own locally designed aircraft carrier to complement the Soviet-era carrier that it has already acquired (Pasandideh, 2014).

Three of a Kind? The Special Case of Australia's Island Councils

In common with many other countries, Australian local government policymakers have focussed heavily on improving financial sustainability and operational efficiency through structural change and other modes of systemic reform. However, this system-wide approach cannot adequately deal with small island councils due to their sui generis characteristics. In an effort to fill this gap in the literature, this article examines the financial sustainability of Australia’s three island councils – Flinders, Kangaroo and King – over the period 2008–2013 in order to determine whether alternative organisational arrangements may be better suited to their unique circumstances. In so doing, our study contributes to the literature by providing the first empirical analysis of the financial viability of Australia’s island councils while considering the need for an alternative organisation entity in an effort to enhance their long-term financial sustainability.