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Researchers have mostly estimated the performance–innovation nexus as a one-way relationship at macro levels. However, the possibility of reverse causality has not yet been given the attention it deserves. In this study, we consider the adoption of information and communication technology (ICT) to innovate processes, products, marketing and organisations among small and medium enterprises (SMEs) in the Western Downs region of Queensland, Australia. We employed a simultaneous equation model to capture the joint determination. The results indicate the existence of a feedback effect on the performance–innovation relationship. Specifically, the effect of innovation can be attributed to marketing and organisational innovation. The use of ICT strategies and the Internet for business purposes have a significant effect on the performance of SMEs. A change mindset is also strongly related to using the Internet to search for business opportunities, while mindset and usage have some effect on innovation, particularly when the performance is not endogenous. Finally, the agricultural sector is found to lag in performance and innovation relative to the non-agricultural sector. Previous models might have misspecified the performance–innovation relationship because the simultaneity bias was not accounted for; a situation that could mislead policy decisions. This study provides new empirical evidence on location-specific research for strategic interventions.

Purpose The purpose of this paper is to understand whether or not factors that impact the performance–innovation nexus differ from one percentage level of performance to another among small- and medium-sized enterprises in regional Australia, with a specific focus on e-innovation by strategic and non-strategic firms in the agricultural sector and in other industries. Design/methodology/approach Researchers implicitly assumed that the performance–innovation relationship is uniform across high-level, mid-level and low-level performing small- and medium-sized enterprises. In this study, the authors analysed performance at different percentage levels. Findings The findings indicate that the levels of small- and medium-sized enterprises performance have a significant difference in terms of the factors influencing their performance. The industry may be a determinant of performance, which is similar in the case of the topmost performers in the non-agricultural sector. The major findings of this study are as follows: the performance–innovation relationship differs by the percentage level of small- and medium-sized enterprises performance; and Solow’s productivity paradox exists at the firm level. Practical implications The authors recommend that rural policies should target low-performing firms. Moreover, researchers should adopt methodologies that shed light on the differences in the performance–innovation nexus across performance levels rather than one-size-fits-all methodologies that are often adopted. Originality/value The major contributions of this study are that the performance–innovation relationship differs by the level of small- and medium-sized enterprises performance, and Solow’s productivity paradox exists at the firm level.

Wheat is key global food crop that is heavily influenced by climatic variability. There has been extensive research on improving forecasts and management practices to minimise climate related yield losses, but less on how to handle yield losses caused by climate variability. We investigated whether index insurance could be used to manage climate related losses, specifically from winter rainfall drought for wheat crops in Australia. We utilised 31 years of yield data from 15 of Australia’s key wheat producing regions. The winter rainfall index was developed and tested using generalised additive regression models, allowing for non-linear effects. Models with the winter rainfall index explained significant variation in wheat yields in each of the regions assessed. Wheat yield models had cross-validated R2 values > 0.5 for two-thirds of the 15 regions modelled and best explained wheat yields in the Mallee, Western Australia (cross-validated R2 of 0.70). Calculated fair premiums ranged from $8.62 to $77.1 AUD/ha, while maximum liability was $59.25 to $212.12 AUD/ha. Throughout the eastern most wheat growing regions the winter rainfall index was consistently inefficient (i.e. not beneficial). In contrast, the winter rainfall index was financially efficient (i.e. beneficial) in the western wheat regions of eastern Australia and parts of Western Australia, with benefits of up to $97 AUD/ha and loss reductions of $9 AUD/ha. The spatial variability in insurance efficiency was explained by rainfall variance. As rainfall variance increased the efficiency of the winter rainfall index insurance for wheat decreased. Our findings have two important policy implications; (1) in areas where climate change is anticipated to increase rainfall variability risk-transfer options, such as index insurance, may become less viable and as such policies that support the development of index insurance without acknowledging or adjusting for variability in its benefit could lead to inefficient outcomes for both government and agricultural producers; and (2) where index rainfall insurance is not efficient then greater emphasise may need to be placed on developing alternate types of index insurance (e.g. using satellites) and/or on risk-management and climate adaptation strategies that minimise losses. Keywords: Climate variability, Drought, Wheat, Risk transfer, Climate adaptation

Managing the risks of climate variability on crop production is central to ensuring financially viable farming systems and sustainable food production. Insurance provides a mechanism to manage and transfer climate risks. However, traditional multi-peril crop insurance (MCPI) is often too expensive and so other methods, such as index insurance, are being explored as a cheaper way to insure farmers against climate induced crop losses. Here we investigate the potential financial benefits of index insurance (protecting against excessive rainfall) for agricultural producers, namely sugar cane farmers in Tully, northern Australia. We used 80 years of historical climate and yield data to develop an excessive rainfall index. The index was developed and tested using generalized additive regression models (allowing for non-linear effects) and quantile regression, which allows relationships with lower quantiles (i.e. low yield events) to be assessed. From the regression models we derived relationships between the excessive rainfall index and sugar cane yield losses that were converted to insurance fair premiums (i.e. premiums that cover expected losses). Finally, we used efficiency analysis, based on Conditional Tail Expectation (CTE), Certainty Equivalence of Revenue (CER) and Mean Root Square Loss (MRSL), to quantify financial benefits to farmers if they purchased excessive rainfall index insurance. The regression model predicted sugar cane yields well (cross-validated R2 of 0.65). The efficiency analysis indicated there could be financial benefit to sugar cane farmers if they were to use excessive rainfall index insurance. Index insurance (based on the assumption of a fair premium) could make farmers better off by $269.85 AUD/ha on average in years with excessive rainfall (i.e. years with rainfall over the 95th percentile). Index insurance could offer a viable method for managing the financial risks posed by excessive rainfall for sugar cane producers in northern Australia. We are not aware of any other study demonstrating the potential benefits of excessive rainfall index insurance in the literature, but our results suggest this type of insurance may be viable for sugar cane producers, and other crops, in parts of the world where extreme rainfall poses a risk to the financial sustainability of production. Keywords: Weather index, Flooding, Extreme precipitation, Climate, Crop loss, Crop variability

Agricultural climate index-based-insurance (IBI) compensates farmers for losses from adverse climatic conditions. Using a systemic review, we show that research related to agricultural climate index-based-insurance efficacy and application is lacking in many climate and food security vulnerable countries. We concluded that there are countries with high climate and food insecurity risk based on several climate and food security indicators that lack agricultural climate index-based-insurance research that could help farmers in these countries. Research to date has also largely focused on cereal crops and drought, which only represent a fraction of the crops and climate risks that agricultural climate index-based-insurance could be beneficial in managing. Our paper provides evidence-based recommendations for countries that should be focused on to redress the current disparities in agricultural climate index-based-insurance research.

Agriculture is the trade of rural Australians and managing weather risk have implications for Australian demographics. Consequently, we looked into the strategies farmers adopted to manage their revenue risk due to drought with a focus on wheat farmers. The prospects of managing the challenges of indemnity-based insurance with rainfall index insurance were discussed. We established the relationship between yield and cumulative standardized precipitation indices and concluded that a strong relationship between the rainfall index and yield does not necessarily lead to high hedging efficiency. The hedging efficiency of the product was analyzed using the mean root square loss, conditional tail expectation and certainty equivalence of revenue while the spatial and temporal nature of the risk were captured with loss ratios. It was observed that the inverse relationship between price and yield offsets some risks and reduces the efficiency of weather hedges. Differences were observed in the hedging efficiency across locations and efficiency was noted to be dependent on the methodology adopted. The results from the loss ratio analysis showed that pooling insurance contracts reduced risk to the insurer. We concluded that other variables would have to be taken into consideration in order to make the design of weather-index insurance more robust and that tax incentives on insurance premium would motivate farmers to be profitable. Refereed/Peer-reviewed

In this paper, we report the findings of a study on the impact of school category and parental assistance with homework on the mathematics attitude and achievement of senior secondary school students in Botswana. We adopted a quantile regression (QReg) method to analyse the relationship between attitudes and achievement, and also adopted a chi-square and independent sample t-test analyses. The advantage of the quantile regression (QReg) is that it establishes the relationship at the quantile (percentile) levels and does not require the parametric assumptions usually used in the Ordinary Least Square Regression (OReg). The findings showed that positive attitude significantly influenced the mathematics achievement of students across all the achievement quantiles of the QReg. The QReg also indicated that the school category had an effect across all quantiles except at the 5th percentile. Furthermore, the QReg indicated that at the 95th percentile, parental assistance with homework was very crucial in mathematics achievement. These findings implied that the OLS did not sufficiently capture the extreme tail characteristics of the mathematics achievement-attitude relationship. In particular, we observed that at the uppermost tail of mathematics achievements, parental assistance with homework explained better mathematics achievements than attitude. The authors concluded that the QReg method was an innovation to bridge the methodological gaps in previous similar studies. DOI: 10.5901/jesr.2014.v4n6p221