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Public services, such as health and other human services, are increasingly being delivered by third‐party providers (providers) under contract to public sector organisations (PSOs). While often advantageous to PSOs, this creates a fragmented service context which is difficult for consumers to navigate. Further, providers often deliver services under multiple contracts to multiple funders, with high reporting requirements, high administrative costs, and low operational sustainability. Policymakers have encouraged co‐commissioning—where PSOs come together to jointly commission services—to increase the efficiency and effectiveness of outsourcing. This article seeks to understand the costs of co‐commissioning in Australia, and consequently the enablers and barriers to co‐commissioning. This qualitative study is based on the early experiences of co‐commissioning by one of 31 Primary Health Networks (PHNs). Using transaction cost economics (TCE) theory, the study explains how the PHN started co‐commissioning services with other PHNs, before co‐commissioning with other types of organisations. The PHN also co‐commissioned relatively simple activities first, before moving on to more complex services. The insights provided using TCE theory help explain why co‐commissioning is initially complicated (and costly), requiring time to understand both the services to be commissioned and the governance requirements of each party involved. While initial transaction costs may be high when co‐commissioning, this may reflect organisational learning and capacity development costs ‐ therefore, costs are expected to reduce over time. Points for practitioners: Fragmentation in policy and funding also leads to fragmentation of human services and high costs to service providers.Co‐commissioning is where multiple funders pool funds and strategically commission services together.Co‐commissioning offers a way to reduce fragmentation and reduce costs to service providers, potentially offering better public value.Co‐commissioning can initially take time and resources to establish.Over time, as organisations learn, the cost of co‐commissioning reduces potentially offering benefits to funders, providers, and service users. [ABSTRACT FROM AUTHOR]

The Green Triangle (GT) region of southern Australia is one of only two jurisdictions globally to licence plantation forestry's groundwater use. In response to declines in groundwater resources caused by historical plantation expansion, reductions in forest water allocations (~50%) are likely for some parts of the region, presenting novel challenges for forest managers in maintaining revenues and timber flows. This article presents a mathematical programming model evaluation of water trade opportunities for plantation forest owners to adapt to reduced water entitlements and explores how tightening groundwater policy could affect forestry returns and land use mix for the region. Results suggest that even absent opportunity to sell water, relatively limited 11% reduction in return could be expected for a large (−50%) water entitlement and (−48%) land‐use change out of forestry. Results suggest that opportunities for forestry companies to sell water entitlements may allow them to maintain or even increase combined returns from forestry and water sales. Whilst the results highlight the adaptive capacity of the plantation forestry sector to operate within reduced water entitlement, a significant sectoral and regional economy adjustment would be likely. The discussion focusses on the potential to realise optimisation model‐identified adaptation opportunities accounting for real‐world thin markets, transaction costs and market friction. [ABSTRACT FROM AUTHOR]

We study the liquidity commonality impact of local and foreign institutional investment in the Australian equity market in the cross‐section and over time. We find that commonality in liquidity is higher for large stocks compared to small stocks in the cross‐section of stocks, and the spread between the two has increased over the past two decades. We show that this divergence can be explained by foreign institutional ownership. This finding suggests that foreign institutional investment contributes to an increase in the exposure of large stocks to unexpected liquidity events in the local market. We find a positive association between foreign institutional ownership and commonality in liquidity across all stocks, particularly in large and mid‐cap stocks. Correlated trading by foreign institutions explains this association. However, local institutional ownership is positively related to the commonality in liquidity for large‐cap stocks only. [ABSTRACT FROM AUTHOR]

Fire is a natural process in tropical savannas, but contemporary cycles of recurrent, extensive, severe fires threaten biodiversity and other values. In northern Australia, prescribed burning to reduce wildfire incidence is incentivised through a regulated emissions abatement program. However, only certain vegetation types are eligible; also, managers of small land parcels are disadvantaged by the program's transaction costs and interannual variability in management outcomes. Both impediments apply to landholders of the Dampier Peninsula, north-west Australia. Nevertheless, Indigenous rangers, pastoralists and other stakeholders have collaborated for 5 years to manage fire across their small holdings (300-2060 km²). We used remote sensing imagery to examine the project's performance against seven fire regime targets related to biodiversity, cultural and pastoral values. At the scale both of individual landholders and the entire Peninsula (18 500 km2), the project significantly reduced the extent of annual fire, high-severity fire, midlate dry season fire, fire frequency and severe fire frequency. The project significantly increased the graininess of burnt and unburnt areas and the extent unburnt for 3þ years more than tripled. The project demonstrates that cross-tenure collaboration can overcome the challenges of managing fire on small land parcels. However, this project's sustainability depends on securing ongoing funding. [ABSTRACT FROM AUTHOR]

Conserving biodiversity and combating ecological hazards require cost‐effective allocation of limited resources among potential management projects. Project priorities, however, can change over time as underlying social‐ecological systems progress, novel priorities emerge, and management capabilities evolve. Thus, reallocation of ongoing investments in response to shifting priorities could improve management outcomes and address urgent demands, especially when additional funding is not available immediately. Resource reallocation, however, could incur transaction costs, require additional monitoring and reassessment, and be constrained by ongoing project commitments. Such complexities may prevent managers from considering potentially beneficial reallocation strategies, reducing long‐term effectiveness. We propose an iterative project prioritization approach, based on marginal return‐on‐investment estimation and portfolio optimization, that guides resource reallocation among ongoing and new projects. Using simulation experiments in 2 case studies, we explored how this approach can improve efficacy under varying reallocation constraints, frequencies, costs, and rates of project portfolio change. Periodic budget reallocation could enhance the management of stochastically emerging invasive weeds in Australia and thus reduce the overall risk by up to 50% compared with a static budget. Reallocation frequency and the rate of new weed incursion synergistically increased the conservation gains achieved by allowing unconstrained reallocation. Conversely, budget reallocation would not improve the International Union for Conservation of Nature conservation status of threatened Australian birds due to slow rates of transition among conservation states; extinction risk could increase if portfolio reassessment is costly. Although other project prioritization studies may recommend periodic reassessment and reallocation, our findings revealed conditions when reallocation is valuable and demonstrated a structured approach that can help conservation agencies schedule and implement iterative budget‐allocation decisions cost‐effectively. Article impact statement: Reallocating funding among conservation projects in response to shifting or emerging priorities may improve outcomes. [ABSTRACT FROM AUTHOR]

Recent analysis of Blockchain use has highlighted considerable potential productivity gains arising from lower transaction costs between buyers and sellers of goods. This has been shown by recent examples of Blockchain use in the Australian grains sector. In this paper, we have further developed and quantified this concept of productivity gain by undertaking several illustrative scenarios using a general equilibrium model of the global economy. Our analysis indicates that an assumed modest growth (five per cent) in productivity due to Blockchain use in the grains sector could raise output by eight per cent over the medium term. If this is accompanied by Blockchain use in the Australian finance sector, grains output could reach ten per cent. This reflects the effect of reduction in transaction costs due to the use of Blockchain technology as a "distributed ledger technology" in grain trading. Further, it is anticipated that the wider effects of Blockchain‐driven productivity enhancement of the Australian finance sector could contribute to approximately 2.5 per cent increase in GDP in the medium term, relative to what would otherwise be. [ABSTRACT FROM AUTHOR]

Water markets are promoted as a demand-management strategy for addressing water scarcity. Although there is an increasing literature on the institutional preconditions required for successful formal water markets, there has been less focus on understanding what drives participation after establishment of the basic enabling conditions. Participation can be measured in terms of either trading activity (conducting either a permanent or temporary water trade) and/or trade volumes across time and market products. Australia's water markets in the Southern and Northern Basins of the Murray-Darling Basin provide a notable example of a 'tale of two water markets', offering insights about the economic policy levers that can drive participation across different hydrological, irrigation, and socioeconomic contexts. Key lessons include: distribution of initial property rights in resource allocation; the need to prepare for and seize opportunities to strengthen property rights; and robust monitoring and compliance requirements—all of which will reduce transaction costs and increase participation. [ABSTRACT FROM AUTHOR]

The study of domestic money goes at the heart of debates about independence and equality in intimate relationships. It provides an important window on the individualization of family life and how couples reconcile ideals around egalitarian marriage ideologies with enduring gender inequality in society and the labor market. This study approaches these issues from the prism of couples’ banking arrangements (separate vs. joint accounts), an aspect of financial organization that approximates the executive management of household resources and which has received comparatively little attention. As such, it is amongst the first to deploy large-scale, household panel data (Household, Income and Labour Dynamics in Australia Survey, n = 15,379 observations from 7,054 couples) and binary and multinomial random-effect logistic regression models to examine trends over time in couples’ banking arrangements and their socio-demographic predictors. Key findings indicate that a large share of couples in Australia favors ‘mixed’ bank account strategies (i.e., holding both joint and separate accounts), but ‘egalitarian’ choices (i.e., dual separate accounts) are prevalent and on the rise. Couples’ bank account choices are influenced in theoretically-meaningful ways by economic resources, transaction costs, relationship history, gender-role attitudes, and family background. [ABSTRACT FROM AUTHOR]

Highlights • Water trade is a key water scarcity risk-management tool for water users. • Behaviour of water markets is controlled by a number of interacting feedback loops. • Systems thinking offers a holistic approach to developing sustainable water markets. Abstract Water trading has become a key water scarcity risk-management tool for irrigators. Effective and enduring water trade systems require approaches that can cope with dynamic complexity and enable the inclusion of multiple stakeholders. Previous efforts to improve water trade systems have largely focused on reductionist approaches, which examine system components in isolation neglecting their interconnected nature. Such approaches to water trade system assessment are at risk of maladaptation resulting in increased market inefficiencies, transaction costs and market failure through barriers to participation. Using a systems thinking approach, we develop a conceptual model of a generalised water trade system in Australia's Murray-Darling Basin (MDB or the Basin). The model visualises the Basin's water trade systems as a whole and identifies feedback mechanisms likely to influence trade development and endurance. We argue that such a conceptual model provides an effective communication tool for achieving a better understanding of market dynamics and alignment of stakeholder priorities to improve enduring market use. It can also serve as an assessment/evaluation tool for water trade policy and identify key leverage points for systemic interventions. [ABSTRACT FROM AUTHOR]

Substantial economic opportunities have been identified in many Australian fisheries but may remain unimplemented due to the perception that the role of government is to ensure harvests are biologically sustainable, while economic decisions should be left to the commercial industry. This paper explores the role of government in driving changes that increase revenue and profit from fisheries (termed economic benefit). Australian fisheries resources are managed by eight different jurisdictions. While each have separate legislation, there is invariably a responsibility to manage on behalf of, and to the benefit of the public, who are the owners of the resource. This paper uses case studies to explore how government can struggle to determine the public interest, separate this from private interests and then implement management changes to ensure the public utility is maximised. Common problems were: (i) overarching economic objectives, which define who should benefit, were often ambiguous and open to interpretation; (ii) the public interest was usually abstract and often under-represented in decision-making processes, (in contrast to industry, who have direct representation); (iii) special interest groups were often able to lobby against changes; and (iv) government was often reluctant to seize opportunities to increase economic benefit when there was significant industry opposition to management changes. In drawing attention to these challenges and how they have been overcome historically, it is argued that government has both a role and requirement under their legislative objectives to take the lead in implementing measures that increase the economic benefit from Australian fisheries. [ABSTRACT FROM AUTHOR]

The direct private cost to landholders of participating in programs that result in improved farming activities (IFAs) is generally well understood. However, the private indirect or transaction costs, such as the cost of a landholder's time and the expense to learn about IFAs and apply for assistance to implement these changes on-farm, are not so well understood. Where these have been studied, they have been shown to be extensive. We assess the extent and causes of private transaction costs incurred by sugarcane growers participating in the Australian Government's Reef Rescue scheme which pays farmers to adopt environmentally beneficial farm management practices. Utilising a mail-out-mail-back survey of 110 growers, we found that the average total transaction cost per farm of participating in the program was AU$8389. The average total transaction costs per farm as a percentage of the average funding provided was 38 per cent. We also assessed which type of improved farming activity (soil, nutrient, pest or water management) generated the greatest transaction costs and how landholder characteristics such as bounded rationality, opportunism and social connection impacted on the extent of transaction costs. [ABSTRACT FROM AUTHOR]

Previous alliancing research has seldom addressed the implication of transaction costs and the impact of transaction attributes on transaction costs in project alliancing. Using multiple regression analysis on a sample of Australian alliances, this study tests the differential impact of uncertainty, frequency, and various dimensions of contracting parties' asset specificity on three individual transaction cost elements (set-up, monitoring, and enforcement costs). The results indicate that the impact of transaction attributes on transaction costs varies. Uncertainty has a positive impact on all three transaction cost elements. Frequency and some dimensions of contracting parties' asset specificity are positively associated with set-up costs and monitoring costs, which, however, does not apply to enforcement costs. The findings provide empirical evidence in support of the transaction cost economics' prediction regarding the influence of transaction attributes on transaction costs in the Australian construction industry, and thereby add another perspective to the knowledge base in the construction management discipline. The measurement methods of transaction attributes and transaction costs presented have valuable implications for future research. [ABSTRACT FROM AUTHOR]

We investigate the claims of superiority of fundamental indexation strategy over capitalisation-weighted indexation using data for Australian Securities Exchange listed stocks. While our results are in line with the outperformance observed in other geographical markets, we find that the excess returns from fundamental indexation in Australian market are much higher. On a rolling 5-year basis, the fundamental index always outperforms the capitalisation-weighted index. Our results suggest that superior performance of fundamental indexation could not be entirely attributed to value, size or momentum effects. The outperformance persists even after adjusting for slightly higher transaction costs related to turnover. [ABSTRACT FROM AUTHOR]

Extensive clearing of native vegetation on rural properties throughout Australia over the last century has generated significant damage to biodiversity. Conservation tenders have been broadly used to reduce the detrimental impact of such widespread clearance. To date, Australian conservation tender research has largely been limited to program evaluations and landholder surveys. This analysis differs by comparing and contrasting the views of non-landholders involved with these programs with those of participant landholders. The non-landholder group consists of individuals with involvement in conservation tenders across Australia. By contrast, the landholder group consists of individuals with participation experience in a series of Victorian tender initiatives. Each group is surveyed to investigate the drivers of cost-effectiveness within tender programs and landholder participation. This analysis explores these two perspectives, revealing important convergences and divergences in opinion. Both practitioners and landholders indicate that programs supported by close agency-landholder relationships and offering flexibility to landholders are most likely to succeed, particularly where landholders perceive the tender instrument to be fair. Whilst practitioners emphasise the role of transaction costs issues and program characteristics in achieving cost-effective biodiversity outcomes, landholders indicate that these factors are less important to participation rates. This research is important to guide future implementation of tender programs both in Australia and internationally. [ABSTRACT FROM AUTHOR]

Transferable offsets are a means of mitigating the adverse environmental impacts of resource developments. Based on insights from institutional economics, there are three elements that need to be in place for offsets to be effective: (1) property rights over the mitigating good can be defined and assigned; (2) a difference exists between the marginal cost of supplying the mitigating good and the community's marginal value for it; and (3) the transaction costs of exchanging the mitigating good are less than the trade benefit. We suggest that these elements can be used to evaluate the design and performance of offset schemes and illustrate how this can be done using two Australian environmental offset schemes. Trade-offs between cost and environmental outcomes are apparent in the design and operation of these schemes. [ABSTRACT FROM AUTHOR]

This study investigates whether passive investment managers can exploit the size and value premia without incurring prohibitive transaction costs or being exposed to substantial tracking error risk. Returns on the value premium are shown to be pervasive across size groups, while the size premium is nonlinear and driven by microcaps. The value premium cannot be explained by the capital asset pricing model; however, returns on value portfolios do covary across monetary regimes. The substantial turnover required to achieve annual rebalancing and the relative illiquidity of Australian small-cap firms means that investing in a portfolio of large-cap value firms appears to be the best way for passive fund managers to exploit the Fama and French (1993) premia. [ABSTRACT FROM AUTHOR]

Abstract: Transaction cost theory and application tells us that when buyers and sellers in a market incur transaction costs, intermediaries may become involved. Specifically, intermediaries influence the cause of the transaction costs to buyers and sellers such that transaction costs are reduced. In this paper we assess if and how this occurs for a number of case study government created and private emergent intermediaries in Australian environmental offset markets. We find that the causes of transaction costs to buyers and sellers in offset markets – asset specificity, uncertainty and transaction frequency are influenced downwards by intermediaries. The degree of influence depends on the nature of the good traded in the offset market. We also assessed if the public intermediaries studied were operating in the offset markets to reduce the incidence of probity hazard (poor transactions) from private intermediaries. We found that this was not the case. [Copyright &y& Elsevier]

Abstract: A multidisciplinary team of researchers made efforts to influence the design and implementation of environmental policy in Australia. A focus of these efforts was the development of the Investment Framework for Environmental Resources (INFFER). In addition, the team undertook a range of communication activities, training, user support, and participation in committees and enquiries. Transaction costs were relevant to these efforts in a variety of ways. Environmental managers perceived INFFER to involve relatively high transaction costs. A balance was struck between the system having simplicity (and low transaction costs) and delivering environmental benefits. Transaction costs were factored into the planning and prioritisation processes developed. For example, public and private transaction costs are accounted for in the calculation of benefit:cost ratios and in the choice of policy mechanisms. There are diverse roles that transaction costs play in the processes of developing, implementing and influencing environmental policy programmes. A key observation is that appropriate strategic investment in transaction costs can improve decisions and increase net benefits from an environmental programme. A well-designed decision process can involve incurring transaction costs at one stage in order to save transaction costs at a later stage. [Copyright &y& Elsevier]

Abstract: Environmental policy instruments generate transaction costs to public and private parties. There is a growing literature reporting on the size of transaction costs produced by environmental policy instruments. This paper extends that literature through an analysis of the factors that influence transaction costs in environmental policy and how this influence occurs. The theory based factors that influence transaction costs are categorised as: 1) transaction characteristics; 2) transactor characteristics; 3) nature of the institutional environment; and 4) nature of the institutional arrangements. We examined how these factors influenced transaction costs through the analysis of two Australian-based development offset schemes with different policy designs. We found evidence of all four theory-based categories of influence in the policy case studies. The degree of influence and how each factor influenced transaction costs varies across the two policies and between parties. Policy design as a component of the institutional environment had a particularly large bearing on transaction costs of offset buyers and the policy administrator. An important contribution to transaction cost theory assumes the institutional environment as given. [Copyright &y& Elsevier]

Abstract: This study employs a comparative analysis of the transaction costs of alternative policy instruments. The institutional approach to the allocation of resources is emerging to supplement traditional analyses of market and government failures. The causes of these failures are many, but often point to high transaction costs that result largely from institutional impediments. Effective institutions can help reduce transaction costs through more effective signals and incentives, including information generation, to help markets function more efficiently and policies to be delivered more successfully. The study, which contributes to transaction costs measurement, finds that the magnitudes and types of transaction costs associated with setting up and implementing three greenhouse gas reduction policy programs in Australia are substantial and different. The estimated transaction costs of the Tradable Permit and Fee System are relatively high compared to those of the mandatory Fuel Label Program and the voluntary Fuel Efficiency Program, which supports the view that market-based policies can also be costly to deliver. Notwithstanding, transaction costs have frequently been ignored in cost–benefit analyses. It is concluded that transaction costs need to be considered alongside other costs and benefits in the assessment of policies. [Copyright &y& Elsevier]

Abstract: In this paper we reflect on the challenge of reallocating water resources from agricultural interests to environmental uses. The area of interest is the Murray–Darling Basin, Australia, although the evidence presented provides salient lessons for a range of settings. We draw on the transaction cost literature where the tasks of re-designing and using institutions can help conceptualise the costs associated with policy change. A framework for improving ex ante assessment of transaction costs and its relationship to transformation or abatement costs is elaborated, especially as it relates to community consultation exercises. Against the background of the water reforms of the past three decades we conclude that policy makers and administrators could limit increases in transformation costs and contain transaction costs by giving greater attention to the form of community consultation, by taking account of the sources of uncertainty that attend policy choices and recognising the potential for consultation fatigue. [Copyright &y& Elsevier]

We examine the determinants of debt maturity in the Australian capital market with the Top 400 firms listed on the Australian Securities Exchange for the period 1989-2006. We find that Australian firms not only exhibit a positive leverage-maturity relationship but also use short-term debt to signal their high quality to the market. Our results are robust to different estimation methods that control for endogeneity and error-dependence. We also find that ignoring the interaction between leverage and maturity can lead to erroneous conclusions about the support for the matching principle, the agency costs hypothesis and the transaction costs hypothesis. [ABSTRACT FROM AUTHOR]

We examine adoption of land demarcation in the British Empire during the seventeenth through nineteenth centuries. We develop a model and test its implications against data from temperate British colonies in North America, Australia, and New Zealand. Three arrangements were implemented: individualized, idiosyncratic metes and bounds; a centralized, uniform rectangular system; and a centralized, nonuniform demarcation system. The choice of arrangement is determined using demarcation, topographical, and soil quality data sets with qualitative, historical information. We find that centralized systems provide coordination benefits, but adoption is less likely when implementation is slow and controlling settlement is costly. In centralized systems, we find that uniform rectangular demarcation lowers transaction costs, but its rigid structure is costly in rugged terrain, and alternatives are adopted. [ABSTRACT FROM AUTHOR]

Many governments have recently gone on record promising large-scale expansions of protected areas to meet global commitments such as the Convention on Biological Diversity. As systems of protected areas are expanded to be more comprehensive, they are more likely to be implemented if planners have realistic budget estimates so that appropriate funding can be requested. Estimating financial budgets a priori must acknowledge the inherent uncertainties and assumptions associated with key parameters, so planners should recognize these uncertainties by estimating ranges of potential costs. We explore the challenge of budgeting a priori for protected area expansion in the face of uncertainty, specifically considering the future expansion of protected areas in Queensland, Australia. The government has committed to adding ∼12 million ha to the reserve system, bringing the total area protected to 20 million ha by 2020. We used Marxan to estimate the costs of potential reserve designs with data on actual land value, market value, transaction costs, and land tenure. With scenarios, we explored three sources of budget variability: size of biodiversity objectives; subdivision of properties; and legal acquisition routes varying with tenure. Depending on the assumptions made, our budget estimates ranged from $214 million to $2.9 billion. Estimates were most sensitive to assumptions made about legal acquisition routes for leasehold land. Unexpected costs (costs encountered by planners when real-world costs deviate from assumed costs) responded non-linearly to inability to subdivide and percentage purchase of private land. A financially conservative approach - one that safeguards against large cost increases while allowing for potential financial windfalls - would involve less optimistic assumptions about acquisition and subdivision to allow Marxan to avoid expensive properties where possible while meeting conservation objectives. We demonstrate how a rigorous analysis can inform discussions about the expansion of systems of protected areas, including the identification of factors that influence budget variability. [ABSTRACT FROM AUTHOR]

We examine the determinants of corporate cash holdings in Australia and the impact on shareholder wealth of holding excess cash. Our results show that a trade-off model best explains the level of a firm's cash holdings in Australia. We find that 'transitory' excess cash firms earn significantly higher risk-adjusted returns compared to 'persistent' excess cash firms, suggesting that the market penalises firms that hoard cash. The marginal value of cash also declines with larger cash balances, and the longer firms hold on to excess cash. The results are consistent with agency costs associated with persistence in excess cash holdings. [ABSTRACT FROM AUTHOR]

It is generally accepted within the extant literature that a size effect exists, whereby smaller firms tend to experience higher rates of return than those of large firms. This small size effect is identified in a number of studies over a variety of equity markets. Despite this, however, no study to date considers the dollar profits attainable by executing a trading strategy that constructs a portfolio based on stocks within the lowest market capitalization decile. Specifically, this paper seeks to identify the existence of a size effect in Australia, but, moreover, attempts to ascertain if a dollar profit can be obtained from executing a trading strategy based on small market capitalization stocks. In doing this, we consider all stocks listed on the Australian stock exchange, and use volume and bid-ask prices to account for liquidity and transactions costs, respectively. Overall, our regression analysis confirms the existence of a size effect within the Australian equity market. However, in executing a trading strategy based on stocks with low market capitalization, we find that after accounting for liquidity and transaction costs the profits obtainable are extremely small and statistically insignificant. This suggests that while the firm size effect exists, the illiquidity and relatively large transaction costs of small stocks eliminate the potential for economic profits. [ABSTRACT FROM AUTHOR]

This study investigates management choice of repurchase method for large Australian industrial companies from 1997 to 2007. We show that managers favour off-market buybacks to distribute excess franking credits to shareholders when the buyback is larger and when the firm is generating more cash. On-market buybacks are more likely when the firm is undervalued. These findings have implications for understanding how corporate managers approach the repurchase decision, the impact of taxes on corporate financial policy, and how transaction costs can influence the choice between an off-market and an on-market buyback. [ABSTRACT FROM AUTHOR]

There is a growing literature reporting the extent of transaction costs for environmental policies. However understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation. Following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies, three key influences to transaction costs in environmental policies are identified. These are the following: 1) the characteristics of the transaction for the environmental good; 2) the nature of the transactors; and 3) the current institutional environment and arrangements. These affect transaction costs to the government and all other parties influenced by a policy. Transaction costs occur due to actions of information collection and policy design, policy enactment and establishment, implementation and contracting, administration and monitoring, and enforcement. An interrogation of transaction cost influences reveals that: 1) the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy; 2) how transaction costs are experienced varies across time; and 3) who experiences transaction costs depends on the policy itself. Future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs. [Copyright &y& Elsevier]

This study investigates the impact of reducing the contract size threshold for off-market trading on transaction costs in an options market. This study provides evidence that market makers compete more aggressively for small-to-medium trades and quote mid-size depths more often after the regime change. Results also indicate that small-to-medium trades incur lower transaction costs; however, large trades that are executed on the central limit order book do not benefit from the structural transition. Given recent frictions imposed by regulators on equity markets, these results suggest that options markets provide an effective means for investors to replicate short-selling in underlying securities. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:361–377, 2010 [ABSTRACT FROM AUTHOR]

A one-time partial allocation of permits would not impair the economic efficiency of the emissions trading scheme, would not have the effect of redirecting existing government expenditures, would minimize transaction costs, and most importantly, would help ensure power system stability throughout this major microeconomic reform. [Copyright &y& Elsevier]

This paper constructs the float adjusted measure of home bias and explores the determinants of Australia's equity home bias by employing the International Monetary Fund's high quality dataset (2001 to 2005) on cross border equity investment. On the empirical front, the paper conducts robustness tests by employing instrumental variables that are standard in the financial economics literature. The paper finds that the share of the number of firms listed in the domestic market and the share of internet users in the total population of the host country has a significant impact on equity home bias. Trade linkages are found to have a mixed impact on equity home bias. The paper also finds that the country's market share of the world market capitalisation and transaction costs do not impact Australia's equity home bias. Investors are found to exhibit low diversification motives. [ABSTRACT FROM AUTHOR]

A salient characteristic of the changing environment in dynamic, knowledge-intensive industries has been the growing adoption of collaborative organisational forms in the international operations of firms. Recent developments in these industries demand a re-evaluation of traditional explanations of these choices as resource constraints mandate collaborative organisational forms while the potential for proprietary knowledge dissipation cautions towards greater control. [ABSTRACT FROM AUTHOR]

The evidence from an empirical study involving 281 Australian organizations suggests that the availability, open nature, and (comparative) ease of implementation of Internet technologies for integration with trading partners, whilst on the one hand providing the means by which organizations can integrate processes and systems in a cost effective way, can amplify the need for both structural change and closer collaboration with trading partners. The relationships proposed and tested in the model are justified and explained based on a number of theoretical perspectives. These include Transaction Cost Economics, Socio-technical Systems, Resource Dependency, Knowledge Based View, Stakeholder Theory and Organizational Learning. The implications of the findings for Transaction Cost Theory are noteworthy firstly because they support the appropriateness of the inter-organizational governance structure in the context of this study, and secondly because although application of these technologies may reduce information search and related costs, whether this necessarily leads to reduced coordination costs is problematic. The potential benefits from improved coordination may be constrained by the perceived costs, and risks, of transition to new structural forms. The implication for practice is that increased use of Internet technologies creates substantial pressure to invest in organizational change. The attractiveness of investing in technologies that place managers in a position where they need to promote organizational change in order to extract adequate returns creates a significant dilemma. On the one hand Internet technologies enable extensive sharing and integration of data among trading partners, but at the same time they create conditions requiring managers to embrace fundamental organizational change in order to leverage the potential of such integration. [Copyright &y& Elsevier]

The article analyzes the difference and similarities between migrants to Australia and the native born population. The analysis indicates that an average of migrants will have less difficulty settling into the economy and on the marketplace, which imposes a low economic transaction costs. On the other hand, an average of migrants may have some difficulty settling into Australian political and civil society.

Scientific, societal, managerial, and political trends are all simultaneously pushing resource management towards more collaborative approaches. In response, innovative collaborative efforts have emerged to address natural resource problems—many of them originating at the local level. Based on research in Australia and the United States, this article highlights five constraints associated with locally based collaboration: transaction costs, limited perspective, organizational sustainability, policy issues, and the adequacy of representation. To overcome these constraints, it is argued that the concept of collaboration should be decoupled from the concept of localism. Collaboration can operate at several different institutional levels, and a nested set of collaborative arrangements in Oregon's Rogue River Basin helps illustrate how constraints related to a locally based approach can be overcome. Furthermore, these structures provide forums for a range of decision makers to address some of the broader and more fundamental natural resource management problems facing society today. [ABSTRACT FROM AUTHOR]

Abstract: Water markets have the potential to greatly improve the productive use of water by reallocating entitlements to where they are most highly valued. However, water markets do not always function efficiently because the property rights structure initially was not designed for market transactions. A major challenge dominating Australia''s water reform agenda is to rationalise the complex and inconsistent water entitlements within and across jurisdictions to facilitate markets. In this paper, a classification framework was developed to identify entitlement types and specify entitlement attributes, and alternative entitlements arrangement options are proposed to minimise transaction costs and streamline administrative processes. Although the study focuses on the reform of water entitlements systems in the Australian context, its broad implications are briefly discussed. [Copyright &y& Elsevier]

The transition into homeownership is becoming increasingly difficult for first-home buyers. In this paper we measure the deposit requirements and the transaction costs associated with purchasing a home for the first time, and whether a reduction in stamp duty obligations will help potential first-home owners' bridge the gap between their savings and the up-front cash requirements that must be met on purchase. We conclude that those with low-to-moderate permanent earnings have particularly large gaps between savings and up-front cash requirements. A key finding is that stamp duties typically account for 23 per cent of total up-front cash requirements, and their formal incidence among potential homebuyers is highly regressive. If all potential homeowners were granted exemption from stamp duties, we estimate that cash requirement gaps are immediately bridged for only 9% of those who cannot currently meet up-front cash requirements from savings. [ABSTRACT FROM AUTHOR]

Should north Australia’s extensive populations of feral animals be eradicated for conservation, or exploited as a rare opportunity for Indigenous enterprise in remote regions? We examine options for a herd of banteng, a cattle species endangered in its native Asian range but abundant in Garig Gunak Barlu National Park, an Aboriginal land managed jointly by traditional owners and a conservation agency in the Northern Territory of Australia. We reflect on the paradoxes that arise when trying to deal effectively with such complex and contested issues in natural resource management using decision-support tools (ecological-economic models), by identifying the trade-offs inherent in protecting values whilst also providing incomes for Indigenous landowners. [ABSTRACT FROM AUTHOR]

Understanding the nature of hospitals and their raison d'étre in an environment of increasing efficiency requirements is crucial for both the administrators of hospitals and health policy makers alike. This paper critically reviews traditional profit/utility maximising models of hospital behaviour and highlights their limitations in explaining this behaviour, especially with respect to nonprofit and public hospitals. Subsequently, the Yang-Ng (1993) new classical model of the firm is applied to the Australian hospital setting and, by referring to the trade-off between transaction costs and economies of specialisation, provides increased insight as to why particular hospitals even exist and the mix of their ownership structure. The low pricing efficiency of 'intangible' medical services necessitates the need to allocate such services within the hospital. However, the co-existence of larger publicly-funded state owned hospitals and non-profit private hospitals is also justified on the grounds that economies of specialisation can be more readily reaped by larger organisations and may be traded-off against transaction costs associated with markets representing intangible services. [ABSTRACT FROM AUTHOR]

Purpose - This paper aims to contribute to the understanding of organisational transformation in light of major perturbatory change agents such as the internet. This is carried out through analysing the dynamics of change in the Australian tourist industry and travel agents in particular. Design/methodology/approach - Population ecology posits that the macro environmental conditions that operate in an industry determine the limits within which industry members can operate. Institutionalism posits that management can make strategic choices. These two theories together suggest that while a major change event like the advent of the internet sets the conditions within which organisations operate, management still had ‘room to play’ and make strategic choices. This paper views the advent of the internet through the tilters of population ecology and institutionalism. Findings - Change becomes a combination of setting macro boundaries influencing the overall direction of change and evolution follows by a micro-level strategic differentiation amongst individual travel agents. Therefore, the dynamics of change is far more complex than mere determinism and/or strategic choice. Originality/value - This paper has two distinct values. Firstly, its focus on the Australian travel agents brings a unique situation into perspective, where, the internet-enabled change is analysed comprehensively and the complexities of an evolutionary change are discussed. Secondly, it proposes a novel approach to viewing change in the industry by combining two theoretical lenses thus addressing the dynamics of change comprehensively. [ABSTRACT FROM AUTHOR]

The theory of induced innovation says that technological innovations which economize on relatively scarce inputs will be invented and adopted. Hayami and Ruttan have hypothesized that this model also holds for institutional innovations. Coase and Williamson suggest that economic organization, such as vertical integration, is the result of transaction cost minimization. Coase discusses the transaction costs of negotiation versus other alternatives for solving externality problems. This paper brings these previously unconnected threads of the literature together and incorporates transaction costs in an induced institutional innovation model. This conceptual model is brought to bear on the issue of institutional innovations over time in relation to the National Native Title Tribunal. In addition to the reductions in transaction costs from a negotiated settlement rather than litigation, there are other advantages of negotiation. These may include improved "quality" of settlements, improved relations between the negotiating parties, and more timely resolution. [ABSTRACT FROM AUTHOR]

The present paper examines the often-overlooked managed fund fee that is incurred when investors enter and exit managed fund products. The present paper documents that transaction costs for investors, measured by the application-redemption spread, are above stock market brokerage rates although they have declined since 1995. The study analyses the relationship between this transaction fee and several variables. In summary, retail fund transaction costs are positively related to retail funds’ assets under management, whilst this relationship is negative for larger wholesale funds, consistent with economies of scale. Direct entry and exit fees and initial commissions are positively related to transaction costs which raises the possibility that the commissions are used to levy soft-dollar payments. The paper also documents a relationship between transaction costs and fund flows which differs between retail and wholesale funds. Overall, the findings are consistent with the proposition that the various fees are used by managers as interchangeable and the different fee regimes reflect different products and markets. [ABSTRACT FROM AUTHOR]

The article presents an update on economic issues. Steven Levitz of the American Economic Association has been awarded the John Bates Clark Medal for 2003. The Research Centre of Increasing Returns and Economic Organisation in Australia has released its journal "Division of Labour and Transaction Costs." David Sappington , director of the Public Policy Research Center at the University of Florida, received the Distinguished Service Award during the 2003 annual conference of the Public Utility Research Center.

The emission of greenhouse gases, particularly carbon dioxide, and the consequent potential for climate change are the focus of increasing international concern. Temporary land-use change and forestry projects (LUCF) can be implemented to offset permanent emissions of carbon dioxide from the energy sector. Several approaches to accounting for carbon sequestration in LUCF projects have been proposed. In the present paper, the economic implications of adopting four of these approaches are evaluated in a normative context. The analysis is based on simulation of Australian farm–forestry systems. Results are interpreted from the standpoint of both investors and landholders. The role of baselines and transaction costs are discussed. [ABSTRACT FROM AUTHOR]