This paper presents the findings of a comparative study of dividend policies in Australia and Japan. It examines panel data from the constituent stocks of the ASX 200 Index of the Australian stock market and the Nikkei 225 Index of the Japanese stock market. The evidence that Australia, with an imputation tax system which favors dividends over capital gains, has a significantly higher dividend payout than Japan lends support to the influence of environment on dividend policy. Dividend policies in Australia and Japan are affected by different financial factors. Fixed effects regression models indicate that dividend policies are affected positively by size in Australia and liquidity in Japan, and negatively by risk in Japan only. An industry effect is found to be significant in both countries. (JEL G30, O50); Int'l Advances in Econ. Res., 9(2): pp. 91-100, May 03. ©All Rights Reserved.

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The speed with which information is impounded in security prices is evaluated with respect to several market microstructure variables in the context of a dynamic, rapidly-changing market, the Warsaw Stock Exchange. The dynamic nature of this market allows for predictions concerning pricing efficiency in more mature markets as they merge or expand their number of offerings. The results indicate that the performance of the Warsaw Exchange compares favorably with that of the average security traded on the NASDAQ. To the extent that recent mergers of several exchanges have had the effect of engaging more market participants and enhancing trading opportunities through expanded hours, trading efficiency has been positively affected. There is also weaker support for the view that consolidating securities on fewer exchanges will improve informational efficiency as well. (JEL G10, D40, L10); Int'l Advances in Econ. Res., 9(2): pp. 101-13, May 03. ©All Rights Reserved.

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One of the major long-run problems facing the economies in transition is whether their productive potential will achieve the average per capita levels typical of the EU member countries in the foreseeable future. If so, what possible measures should be taken to reach this end? This issue applies in particular to Poland with a GDP per capita being roughly a half of what it is in Greece or Portugal. An attempt to give an answer to these questions is given in the paper by means of simulations based on the W8-D model for the Polish economy. The model served as a tool to elaborate a long-term forecast and run alternative policy scenarios to cover realistic boundaries of the future economic development of Poland up to the year 2025. (JEL O57); Int'l Advances in Econ. Res., 9(2): pp. 114-22, May 03. ©All Rights Reserved.

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This study presents theoretical arguments and evidence that attempt to show the contribution of economic mechanisms typical of a business for resolving problems of environmental protection. Firstly, a brief synopsis is given of the classic solutions that environmental economics proposes for correcting environmental externalities. Next, the benefit of expanding these two mechanisms is discussed so that they include those intermediate mechanisms for which it is not possible to clearly establish if they are developed within the domain of the market or the business. The study's focus resides in the fact that the explicit expansion of the range of solutions proposed from a macroeconomic point of view establishes a connecting point between environmental economics and business economics, an area in which academic attention to environmental matters has been significantly less. (JEL D23, K32); Int'l Advances in Econ. Res., 9(2): pp. 123-32, May 03. ©All Rights Reserved.

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Economic growth and the several topics related to it have been studied by economists since their earliest publications. Two different approaches to this area can be found in Neoclassical and Endogenous growth models. The economic growth analysis has focused its attention on the factors that influence the growth of nations, such as fiscal policy or improvement of human capital. Nevertheless, it is also interesting to study the effects of income distribution on economic growth to determine if it has positive effects on growth. The aim of this paper is to study these effects. The authors will develop a theoretical model in which they will introduce public capital in a typical Cobb-Douglas production function. They will estimate OLS, GLS, and SUR fixed effects models for time series and cross-sectional data. (JEL 040); Int'l Advances in Econ. Res., 9(2): pp. 133-39, May 03. ©All Rights Reserved.

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A foreign trade model is estimated for two South East Asian countries, selected because they represent two extremes as far as the current account balance is concerned---Malaysia, deficit, Singapore, surplus. The specification highlights, (a) the simultaneous interdependence of exports and import flows---a result of what Krugman [1995] denotes as the slicing up of the production process---and, (b) the impact of investment on imports as a result of productivity shocks on the current account. The estimation results point to the instability of the market for foreign exchange. Using an intertemporal framework, a methodology to derive the external long run equilibrium is applied to the estimated model. The implied constraint on domestic growth turns out to be mild. (JEL C53, F41); Int'l Advances in Econ. Res., 9(2): pp. 140-51, May 03. ©All Rights Reserved.

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Earnings Management by Firms Announcing Earnings after SEC Filing

KWANG-HYUN CHUNG, RUDOLPH A. JACOB, AND YA B. TANG

This study examines motivation and stock market reactions of firms announcing earnings in the Wall Street Journal (WSJ) after filing with the Security Exchange Commission (SEC). Most firms announce earnings in the WSJ before SEC filing. Firms that reverse this sequence are voluntarily delaying public earnings announcements. The authors find that these firms are not only poor financial performers but also engage in earnings managements. They are delaying their WSJ announcements to postpone announcing bad news. The authors find significant stock price reactions to both the SEC filing and the WSJ announcement. The price reaction to earnings is incomplete at the SEC filings. The market continues reacting to firms' subsequent WSJ announcements as if the SEC filing fails to communicate earnings information to some investors. (JEL G10); Int'l Advances in Econ. Res., 9(2): pp. 152-62, May 03. ©All Rights Reserved.

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Rational Expectations and M2 Demand

RUSSELL RHINE

This essay expands on existing studies of M2 money demand. It differs in that it applies a rational expectations approach to an adaptive expectation model. Unlike the adaptive expectations models, the author includes an explanatory variable for expectations of future inflation. The expectation variables used are: the actual inflation rate (t+1) and the Livingston Survey from the Philadelphia Fed. By using the different measures of expectations the author is able to compare several adaptive expectations models that appear in the literature and the rational expectations models for fit and forecast ability. The empirical results are such that the importance of including the rational expectations variable is evident even though the overall fit of the equation is comparable to one of the existing adaptive expectations models. (JEL E4); Int'l Advances in Econ. Res., 9(2): pp. 163-66, May 03. ©All Rights Reserved.

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