Faculty of Economics and Commerce

ARC-funded Research Projects (Discovery and Linkage Grants)
Administering Institution: The University of Melbourne

Accounting and Business Systems

Accelerating Expertise Development Using Knowledge Structures and Expert Systems

ARC Discovery Project DP0878422 (2007 for funding commencing 2008)

There is a shortage of experts among many professional fields in Australia, a problem that is starting to be further exacerbated by a large number of pending retirements. Professions dependent on high-level experts operating in complex decision domains face potential devastation and may fail to continue to exist within Australia. The proposed research directly addresses this looming crisis by presenting a replicable methodology for rapid expertise development that is to be demonstrated within the Australian insolvency environment. However, the methodology will be easily portable to other knowledge work professions facing similar crisis conditions.

Prof SA Leech; Prof SG Sutton; Prof V Arnold; A/Prof J Rose
2008: $160,000
2009: $160,000
2010: $112,00

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An empirical analysis of structural cost management decision making

ARC Discovery Project DP0880031 (2007 for funding commencing 2008)

This study analyses the rationale adopted by firms in implementing cost management choices with significant social and economic consequences. Layoffs, across-the-board cost cuts and off-shoring are significant influences on workforce participation levels in the Australian economy. This study explores the factors associated with firms and managers that lead to systematic preferences for certain types of cost management responses. In analyzing these decisions in a range of organizational settings, and seeking to establish best practice benchmarks in innovative cost management practice, this study directly supports the government's workforce participation agenda.

Prof AM Lillis; A/Prof SW Anderson
2008: $34,000
2009: $20,000
Primary RFCD Code: 3502 – Business and Management

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Modelling the adoption and use of virtual services technologies for rural and regional healthcare: Economic and quality of care perspectives

ARC Linkage Project LP0774949 (2006 Round 1 for funding commencing in 2007)

Rural and regional Australians account for more than a third of the population.   Compared with their urban counterparts, they face higher mortality rates and experience higher hospitalisation rates.  They face significant challenges in accessing healthcare services and expertise.  This research will provide guidelines on the effective and efficient use of virtual services technologies to provide more equitable access to healthcare for rural and regional Australians.  This will enable healthcare providers and government agencies to select and deliver appropriate technology solutions yielding improved quality of care at a reduced cost.  Access delays will be reduced through localised healthcare delivery.

A/Prof MJ Davern; A/Prof KE Stagnitti; Prof CB Ferguson
2007: $62,000
2008: $60,000
2009: $60,000
Primary RFCD Code: 3502 – Business and Management
Partner Organisations: Deakin University; Southwest Alliance of Regional Health (SWARH)

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Modelling factors affecting the long-term demand for and supply of professional accounting and allied services in rural and regional Australia

ARC Linkage Project LP0669235 (2005 Round 2 for funding commencing in 2006)

Rural and regional areas accommodate more than a third of Australia's population and generate two-thirds of its net export income. This project will enable the accounting profession to establish effective strategies and policies for the education, training, and recruitment of professional staff in regional communities. Maintaining the quality and viability of professional services is critical to the economic development of these communities and crucial to maintaining equity between city and country. This project will ensure that professional accounting and allied services can meet future regional demands with the potential for this modelling to be applied to other regional services.

Prof CB Ferguson; Prof BJ Cooper; A/Prof GL Wines; A/Prof BF Jackling

2006: $33,319
2007: $77,216
2008: $80,693
2009: $36,797
Primary RFCD Code: 3506 – Services
Partner Organisations: CPA Australia; RMIT; Deakin University

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Modelling the relations between the incidence of within-firm corporate fraud and the quality of corporate governance structures

ARC Linkage Project LP0453852 (2003 Round 1 for funding commencing 2004)

Organisations operating in market economies have agency problems because the managers of the firm are rarely the owners. One costly outcome is the incidence of fraud within organisations. In recent times organisations have developed and refined corporate governance structures. To date there has been little analysis of the effect that corporate governance has on the incidence of with-in firm fraud. The aim of this research is to build and test a model of the relations between within-firm fraud and corporate governance systems that can be used as a diagnostic tool by industry to monitor and manage risk.

2004: $70,000
2005: $70,000
2006: $70,000

Prof CB Ferguson (with Prof PM Clarkson, Prof AT Craswell, Dr PF Green, Dr L Chapple)
Partner Organisation(s): KPMG; University of Queensland

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Impact of Intelligent Decision Aids on Human Knowledge Acquisition

ARC Discovery Project Grant DP0344241 (commenced 2003)

Our aim is to identify new factors that enhance learning and knowledge acquisition from an intelligent decision aid. The research will assess the ability of alternative designs of an intelligent decision aid's advanced explanation and learning facilities to affect the transfer of complex knowledge structures to novice insolvency practitioners. The result of the study is critical to understanding the factors necessary for successfully deploying and leveraging intelligent decision aids in practice.

Prof SA Leech, A/Prof PA Collier (with Prof SG Sutton, Prof V Arnold)
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Design and Implementation of a Clinical Services Performance Management Model

ARC Linkage Project LP0211548 (2001 for funding commenced 2002)

This project aims to develop and test the efficacy of a balanced scorecard-based performance management model in a large public hospital. The project seeks to address significant performance management issues in the health care sector associated with the need to balance clinical care quality and resource management in an environment where conventional performance measurement systems are inadequate. The outcome will be a performance management model developed in collaboration with clinicians, field tested experimentally in a range of clinical settings and evaluated for effectiveness. The outcomes of the project will make a substantive contribution to the development of 'best practice' management protocols in the health care sector as well as a significant and innovative contribution to the management control literature.

2002: $65,000
2003: $65,000
2004: $61,000

Prof MA Abernethy, Dr AM Lillis (with Prof MK Home, Prof FH Selto)
Partner Organisation(s): Southern Health Network

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Economics

The Economics of Corruption and Institutional Change: Theory and Experiements

The economic and social wellbeing of its neighbours is important for Australia. It results in a more prosperous and safe region. Australia's interest in the wellbeing of its neighbours is often expressed through financial aid and the sharing of expertise. This research will contribute to this expertise by investigating the ways in which changes in political and legal institutions can help reduce corruption and result in economic development. Moreover, the cross country nature of this research project will help increase the level of academic interactions between Australian and foreign universities.
Dr L Gangadharan, Dr N Erkal and A/Prof LA Cameron (with Dr A Chaudhuri)
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Measuring the Effects of Interest Rate Volatility

Interest rate changes have important implications for highly influential macroeconomic variables and, for the investor, have direct implications for asset prices, net worth and future wealth. By considering unresearched areas concerning the behaviour and influence of interest rates our research will be of interest to an academic audience, government, regulators and market practitioners. Attention to Australia, the US and Asia means that the research will be directly relevant to Australian decision makers. Further, the project will yield papers for publication in top international journals, reinforcing Australia's reputation as a leading centre for financial research and enhance it's reputation for cutting edge work.
A/Prof OT Henry, A/Prof N Olekalns and Dr K Shields (with A/Prof MD McKenzie and Dr S Suardi)
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Designing Innovative Allocation Mechanisms for Public Policy

This project applies modern techniques of game theory, auction theory, and experimental economics to public policy design. It can deliver public benefits across a broad front by introducing and demonstrating a new policy design methodology to Australia, by delivering better policy design on specific projects, by building capacity, and by creating a network of collaborators including both University researchers and public sector policy experts.
Prof P Bardsley, Dr L Gangadharan and Dr N Erkal (with Prof Sir J Mirrlees, Prof CR Plott, Mr GC Stoneham, Ms CC Thomas, Mr P Hughes and Mr C Beverly)
Partner Organisation(s):
Victorian Department of Primary Industries
Victorian Department of Treasury and Cabinet
Victorian Department of Sustainability and Environment
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Experimental Evaulation of YP4 - Is 'joining up' services for homeless and jobless people a net benefit to society?

This project will provide evidence on the social costs and benefits of programs that seek to 'join up' delivery of government services with specific reference to young homeless jobseekers. This knowledge has direct application in future design of government policies on implementing programmes for government payment recipients with multiple sources of disadvantage. Furthermore, the project will provide a 'case study' demonstration of the capacity for not for profit organisations to independently undertake policy reform, and to implement that reform in a way that allows rigorous evaluation of its effects. The project will also extend research expertise in the area of program evaluation, particularly as applied in the Australian
context.
Prof JI Borland; Dr Y Tseng; Dr RK Wilkins
Partner Organisation(s)
Hanover Welfare Service
Melbourne Citymission
Brotherhood of St Laurence
Loddon Mallee Housing Services
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Health and Intergenerational Poverty in a Developing Country

The alleviation of poverty is a major policy objective of the Indonesian government. As one of Indonesia 's closest neighbours and allies, Australia has a special interest in the economic and social wellbeing of Indonesia . This interest is often expressed through financial aid and through the sharing of expertise. This research aims to contribute to this expertise by investigating whether health is a mechanism that transmits poverty across generations of Indonesians. Thus, this research contributes to a body of knowledge that informs development policy, leading to more effective use of aid funds and to a more prosperous and safe region.
A/Prof LA Cameron; Dr J Williams
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Modelling the Transmission of International Monetary Policy Shocks: Implications for Australian Asset Markets

Three main outcomes of the project are as follows. First, the relative strengths of the transmission mechanisms linking monetary policy and asset markets will be better identified. This will lead to a better understanding of monetary policy thereby enabling the Reserve Bank to achieve its policy goals of inflation operating at or near the target rate, and for currency markets to exhibit stability. Second, a number of empirical puzzles relating to monetary policy and asset markets in general, that exist in the empirical literature, will be solved. Third, the project will lead to a number of international papers which will add to the international reputation of Australia as a leading research nation.
Prof VL Martin
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Economics of Incomplete Markets and Pricing in Equilibrium

This research has the potential to benefit society by improving the accurary of pricing in securities markets. First, because the research leads to specific predictions about the interaction of prices for different type of assets, it should lead to more accurate pricing across markets, such as housing, stocks and bonds, which currently function largely independentlty. Second, it should lead to more accurate pricing of derivatives in the situations where the execise price of the derivativesdiffers significantly from the current price of the underlying stock.
Dr RN Raimondo
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A Principled Approach to Computer Simulation of Dynamic General Equilibrium Macroeconomic Models

In the last two decades a new generation of computer-intensive modeling techniques has risen to prominence in macroeconomics. These methods have broad policy applications, from public finance and reserve bank operation to analysis of long-run productivity growth, taxation reform, unemployment, international trade policy and natural resource conservation. The size and complexity of these models means that even computer-based techniques will rely for the foreseeable future on efficient program design to solve them. The project will construct a comprehensive set of solution techniques and software forthis class of macroeconomic models, including detailed mathematical analysis on accuracy of model output.
Dr J Stachurski
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The Economic Design Network - Practical Policy Tools for Industry, Infrastructure, Services and the Environment

The Economic Design Network will integrate research, communication, education, and policy development in the rapidly emerging discipline of Economic Design in complex systems. Based on the core disciplines of Economic Theory and Experimental Economics, but with extensive links into other areas of economics and interdisciplinary policy, it is concerned with the design of institutions and policies when rational economic agents (individuals or firms) are embedded in complex biological, social or technological systems. Examples of such systems include the bioeconomic and biophysical systems of the Murray Darling Basin, telecommunication networks and the internet, power distribution grids and markets, health and insurance networks, and information networks (including systems of intellectual property). Economic design principles are fundamental to many current policy debates.
Prof P Bardsley ( Network Convenor)
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Linear and non-linear Price Decentralization

General equilibrium theory provides the conceptual foundation for our understanding of efficiency and welfare economics. However, at present it does not provide for an adequate understanding in many settings: for instance, in the case of incomplete financial markets and markets with imperfect information. This project is part of the ongoing and broad research program in the Economic Theory Center of The University of Melbourne on general equilibrium theory and mathematical economics. It seeks to extend the classical theory of price decentralization and rectify some of the defects of modern general equilibrium theory.
Prof R Tourky
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Worker Flows and Labour Market Policy in Australia

We propose to undertake a detailed analysis of flows in the Australian labour market. Monthly data on flows of males and females between four labour market states (employed full-time, employed part-time, unemployed and not in the labour force) over the period 1980 to 2003 will be analysed. The project will extend the theory of flows and it will use up-to-date time series econometric analysis coupled with theories of labour market behaviour to build models of the flows. The aim is to better understand trend, cyclical, seasonal and policy influences on labour market flows and to reveal any structural changes which have occurred. This will provide more detail on the underlying causes of unemployment in Australia and especially the manner and the speed of response of males and females to changes in labour market policy and in economic conditions.
Dr RJ Dixon Prof JW Freebairn A/Prof GC Lim
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Understanding the Labour Market for Professional Nurses: An Economic Analysis of Skill Shortages, Nurse Retention and Turnover

There is currently a worldwide shortage of nurses. This shortage is particularly acute in a number of publicly dominated health care systems including the Australian, British and Canadian systems. Given that nurses are a key input in the production of health care and therefore health, the need to address this issue by increasing the number of school-leavers entering the profession and/or improving the retention of training nurses is of paramount importance. This project will use high quality cross-sectional and longitudinal data on nurses to provide a detailed investigation of the retention and turnover behaviour of nurses and inform the policy debate.
Dr M Shields
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Causes and Consequences of Short Selling for Equity Returns

Short selling involves holding negative quantities of an asset. As prices fall, the short position makes profit. Short selling is thought to reflect the market's expectation of future underperformance. This study aims to explore the determinants and consequences of short selling. In particular we aim to address the following:

  1. Do short sales create excessive volatility?
  2. Can we price the volatility associated with short selling in a modern risk management framework?
  3. What factors underlie the volume of short sales?
  4. Should we distinguish between long and short transactions, or is gross traded volume a sufficient measure of turnover?

Dr OT Henry (with A/Prof MD McKenzie)
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Tackling Nurse Shortages in Australia

There is currently a shortage of registered nurses in Australia . To date, however, there has been only limited detailed micro-level analysis of the nursing workforce. In this project, we will use microeconomic and advanced econometric tools to investigate a number of important issues related to nursing and help inform the policy debate. In particular, we will examine trends in workforce participation of nurses, the determinants of nurse labour supply and job turnover and provide a comparative analysis of wages of nurses with other similar occupational groups. Throughout the project, we will provide special attention to designing policies aimed at promoting nurse labour supply in rural areas. Promoting an adequate supply of registered nurses is central to meeting the National Research Priority of 'Promoting and Maintaining Good Health'.
Dr M Shields, Prof JI Borland
Partner Organisation(s) - Victorian Department of Treasury and Finance - APA(I) Award(s):
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Finance

Management

The Psychological Contract: Bridging Human Resource Management Practices and Organisational Effectiveness

Many managers believe that recent changes in management practice are responsible for Australia's high labour productivity but very little is known about the mechanisms through which such effects are transmitted. Will HRM enable Australian organisations to generate and maintain a competitive advantage in the global context? In this project we draw on theoretical frameworks established in the behavioural sciences to understand how HRM practices influence employee reactions and impact organisational effectiveness, such as labour productivity. The results will be of direct benefit to Australian organisations designing, evaluating, or reconfiguring their HRM practices in line with their competitive strategy.
Prof C Kulik; Dr C Cregan; Dr M Brown; Dr MI Metz
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Employment Systems and Organisational Outcomes: Managing Employee Expectations Through HRM Practice

This project contributes to our understanding of the factors that influence organisational effectiveness. Australian employers are facing competitive business conditions and changing demographics. In this challenging environment, employers and employees must develop a clear understanding of what they can expect from one another. Unfulfilled expectations can lead to workplace cynicism and have a negative effect on organisational performance. The project findings will help organisations become more competitive in the global marketplace by designing HRM practice configurations that are best fit to the needs of their employees and that establish converging expectations about the employment relationship.
Prof C Kulik; Dr M Brown; Dr C Cregan; Dr MI Metz
Partner Organisation(s):
Australian Human Resource Institute
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Systemic Corruption and Regime Change: State, Business and Political Elites in Indonesia and Implications for Governance Reform

The development of a stable, prosperous and democratic Indonesia is fundamental to Australia 's long-term security. Systemic corruption has been identified as a fundamental impediment to such development and the Australian Government through AUSAID funds institutional reform programs. Yet formal law remains ineffective and corruption has continued to flourish, pointing to weaknesses of policy design. This project will explain how competing political elites systematically use the leverage of the state to redistribute resources within business and society and seek to identify theformal and informal rules that underpin such behaviour. Outcomes will be better models and more effective governance reforms.
A/Prof HW Dick
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Babel in business: how language differences influence management in multinationals

Management of cultural and language differences is crucial to successful international expansion, which for countries with small domestic markets, such as Australia , is imperative to prosper or even survive. The recommendations of this project with regard to managing language differences will therefore be of interest and benefit to Australian multinationals and

Australian companies intending to internationalise. Its results are also expected to increase the perceived importance of improving Australians' foreign language skills. Learning languages enhances the ability to understand other people and their way of thinking. This project therefore indirectly address the national research priority 'Understanding our region and the world'.
A/Prof A.W.K. Harzing
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Idea Sources for Product Innovation in Australian Frontier Technology: The Case of the Australian IT Industry

The source of new product ideas, and how new ideas are generated, is a research area that is not well understood in the management literature and frontier industries such as information technology. The aim of the proposed study is to identify and compare what idea sources (e.g., competitor sources or customer sources) are most useful for Australian firms to generate breakthrough product innovations in frontier industries (in this case the IT industry). It also aims to improve our theoretical understanding of the link between market orientation and innovation sources.
A/Prof B Lukas; A/Prof GJ Whitwell; Prof RE Widing
APA(I) Award(s): 1
Partner Organisation(s) Hansen Corporation
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Assessment of Innovation Capability Models to Create Innovation Driven Companies

The aim of the proposed study is to develop and test innovation management capability models. After general development of the central constructs, application to nationally important areas of e-commerce, sustainable development, and new product development (NPD) will be conducted. The project will develop and validate Best Practice Innovation Capability models for the creation of innovation-driven companies.The proposal responds to the Australian Government's Innovation Report (2001) call for '..the strategic vision and long term commitment to create an environment that encourages ideas-an environment in which innovation will thrive'. This research will provide an integrated approach to innovation management for both researchers and practitioners.
Prof D Samson, Dr M Terziovski
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Innovation Management Strategies and Practices to Accelerate the Commercialisation Process in the Biotechnology Industry

The innovation cycle is a complex and misunderstood area of management, particularly in the Biotechnology Industry where the innovation cycle can take up to 15 years. The management literature provides anecdotal information, however, lacks theoretical models which provide guidance to Managers on how to shorten the innovation process. Therefore, the aim of this PhD research, which is "a world first", is to develop and test an innovation cycle model through quantitative and qualitative research. Expected outcomes include developing a valid and reliable model for measuring and predicting relationships between innovation practice and innovation performance and developing case studies for teaching purposes.
Assoc. Prof Mile Terziovski and Prof. Danny Samson
Partner Organisation(s): AusBiotech Ltd, Whitehorse Strategic Ltd, APA(I) Award(s):
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The Effects of Corporate Strategy on Organisational Crisis Management and Survival Funding:

While a company can communicate to its stakeholders using a variety of methods in normal market conditions, in a crisis situation the key method of communication is via the media. There are many anecdotal studies in the literature that provide companies with advice on how to deal with crisis situations. However, there is a lack of empirical evidence grounded in strategic management theory which predict outcomes under different situations. Therefore the aim of this PhD research project is to identify and test several theoretical models by conducting quantitative and qualitative research in the public and private sectors. The research results will provide a strategic approach to enhance firm survival during a crisis.
Assoc. Prof M Terziovski
Partner Organisation(s): Elam Marketing Communications PTY LTD trading as Media Manoeuvres - APA(I) Award(s):
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Work and Social Cohesion Under Globalisation

The project will explore how innovation and improvement in productivity can be accommodated with notions of fairness at
workplace and industry level. The impact of increasingly competitive markets on the nature of work and society and the relationships between employers and employees in five industries: finance, tourism, health, ICT and automotive
components, will be examined. The views of a wide cross-section of employees and managers in five key industries,
complemented by existing survey data, will be analysed. A major outcome will be five industry workshops promoting
productivity, partnership and social cohesion in a competitive global environment. Policy implications for the wider
economy will be developed in the final report.
Prof D Samson; Mr RH Gough; A/Prof JW Benson; Dr JR Doughney; Prof AF Rainnie; Dr ML MacIntosh
Partner Organisation(s):
National Australia Bank Limited
Australian Council of Trade Unions
Members Equity
Multiplex Constructions Pty Ltd
Schneider (Australia) Consulting
Ernst & Young
Corrs Chambers Westgarth
Linfox
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Business Profitability and Long Term Industrial Change in Twentieth-Century Australia

This project will establish Australia as a pioneer in longitudinal research into business profitability in terms of assembling new data and its use to analyse the relationship of profitability with capital formation and structural change in the economy. It will extend our knowledge of long-term returns to equity investment, a category of savings and pension funding now common to most Australians, and contribute to our understanding of Australia's comparative business performance in light of current debates regarding the alleged limited global competitiveness and corporate governance shortcomings of leading Australian corporations.
A/Prof D Merrett (with Prof S Ville)
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Melbourne Institute of Applied Economic and Social Research

Labour Market Transitions and Dynamics in Australia: An Analysis of the Household, Income and Labour Dynamics in Australia Survey

As stated in the National Research Priorities, 'in the decade ahead, it will be vital to understand and support the drivers for workforce participation and the broader social and economic trends influencing Australian families and communities'. Improving our understanding of these drivers is the main objective of this project. Specifically, the outcomes from this project will result in a richer comprehension of the interaction between the social safety net and economic participation, and especially labour force participation. This research will thus directly support the Government's welfare reform and participation agendas, and thus should feed into improved policy decision making, especially in the areas of employment and income support.
Prof MP Wooden; Prof JI Borland; Dr K Mavromaras
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Uncertainty and the Success of Innovation

This proposal outlines an empirically oriented project, with strong conceptual foundations, that will add significantly to our understanding of the barriers to successful commercial exploitation of innovations in Australia. There is currently no other applied work in this area in Australia of this scope and empirical content. Our approach adopts a rigorous approach to the measurement of innovation and performance, and looks at the effect of uncertainty on the relationship between the two. The results of this exercise will translate into both government and corporate policy.
Dr EM Webster, Dr J Yong, Dr PH Jensen and Dr A Palangkaraya (with Ms KC Collins)
Partner Organisation(s):
IP Australia
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Measuring Hospital Performance: Outputs, Quality of Care, Competition and Efficiency l

Hospitals are a critical component of the health infrastructure.  An understanding of the performance of hospitals is important in shaping an overall health care strategy.  Unfortunately, assessing hospital performance has been fraught with difficulties.  A  major obstacle is in defining and measuring the outputs and quality of hospitals. Collaborating with the Victorian Department of  Human Services, and using the Department's VAED datasets, we aim to develop a framework within which unobservable quality dimensions can be estimated, so that hospital output and quality can be accounted for.  The framework will be useful for addressing pertinent health policy issues, including hospital funding, specialisation, and competition issues.
P Dr J Yong, Dr EM Webster, Prof WE Griffiths, Prof DL Bosworth (with Dr P Rosendale)
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The evolution of Australian enterprises, 1990 to 2007 : An empirical analysis of the relationship between turbulence among firms, productivity, growth and exports.

This project will examine determinants and effects of enterprise entry and exit on growth, export and productivity in Australian industry using innovative panel enterprise data sets which have been collated and linked from existing ABS surveys, administrative data and accounting data. Currently, there is only one short longitudinal enterprise data set in Australia. Further data sets are required if policy makers are to understand patterns and causes of growth and business survival in Australia. Understanding provided from these studies should significantly improve our understanding of how businesses perform.
Dr EM Webster, Dr J Yong (with A/Prof TR Fry, Mr MJ Klee, Mr T Harcourt)
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