Financial constraints on sport organizations’ cost efficiency: the impact of financial fair play on Italian soccer clubs

We analyze the effect of the introduction of stricter financial constraints on the trade-off between sporting and economic results. We apply a stochastic Cobb-Douglas production frontier model to a sample of Italian Serie A teams, i.e. first division, over the period 2005–2015 to evaluate the variation in soccer clubs’ cost efficiency following the application of the UEFA Financial Fair Play (FFP) principles in 2010. FFP imposes stricter financial regulation as a requirement for a club to be admitted to Union of European Football Associations (UEFA) tournaments. Firstly, we find that FFP does not improve the average efficiency of the Italian first division teams. Secondly, we show that FFP has contributed to leveling the playing field, reducing the gap in terms of efficiency between top teams and lower-tier teams.

Abbreviations: FFP: Financial Fair Play; UEFA: Union of European Football Associations; DEA: Data Envelopment Analysis; SFA: Stochastic Frontier Analysis     

Assessing the maturity of crowdventuring for corporate entrepreneurship

Corporate entrepreneurship is a process of strategic renewal and development of an existing business through the creation of new products, services, and activities, as well as new competitive postures and independent ventures. The performance of this process, which leverages the creativity and the initiative spirit of employees and managers, thus relies on the capacity of the organization to create favorable conditions for the emergence of such latent entrepreneurial potential. The development of participatory innovation models and collective intelligence offers new insights for conducting research on factors enabling corporate entrepreneurship. In particular, the internal company ‘crowd’ can be investigated with the purpose of studying the conditions under which the corporate entrepreneurship process can be successfully nurtured and conducted. In such view, this article moves from an extended review of corporate entrepreneurship and organizational innovation literature to define the concept of crowdventuring and to present an assessment tool aimed at evaluating the maturity of the crowdventuring process within an organization. The tool, which captures both individual and organization-related factors, is also used for an illustrative application into a multinational IT company. Some implications are drawn at the theory and practitioner levels.     

Under pressure: Evolution of the social economy institutional recognition in the EU

Social Economy encompasses a wide array of private organizations that can be situated along a continuum that ranges from civil society to the business sector, e.g., associations, foundations, cooperatives, social enterprises, social business initiatives. The social sphere populated by SE/TS organizations operates in complex and multi‐layer environments and is particularly sensitive to institutional configuration. This paper deals with the institutional policy and attitude of the EU Commission towards SE/TS organizations in the field of welfare policy. We start with an illustration of the key features of the Social Investment policy framework, that stresses the adoption of an ‘active policy’ orientation and the overriding of more traditional ‘compensatory policies’. Secondly, we analyze the regulatory eco‐system of the EU towards Social Economy in the last three decades. Thirdly, we present the main results of an European research project aimed at analyzing the ‘level of recognition’ and ‘institutionalization’ of the SE sector in ten European Countries. Then, we provide some data about the consistency of the Social Economy in EU, based on several research reports promoted  by European Institutions (EESC). Finally, the main results of the analysis are summarized in order to assess the current conjuncture of the Social Economy sector in Europe.     

Differences in beliefs and currency risk premiums

This paper studies the importance of heterogeneous beliefs for the dynamics of asset prices. We focus on currency markets, where the absence of short-selling constraints allows us to perform sharper tests of theoretical predictions. Using a unique data set with detailed information on foreign-exchange forecasts, we construct an empirical proxy for differences in beliefs. We show that this proxy has a strong effect on the implied volatility of currency options beyond the volatility of macroeconomic fundamentals. We document that differences in beliefs impact also on the shape of the implied volatility smile, on the volatility risk-premiums, and on future currency returns.     

The courage to choose! Primogeniture and leadership succession in family firms

Research Summary : Building on a unique data set with information on the nuclear structure of entrepreneurial families, we integrate leadership succession into a socioemotional wealth (SEW) logic to test the antecedents and consequences of primogeniture vis‐à‐vis second‐ or subsequent‐born selection in family firm succession. Our findings suggest that appointing a family firstborn sibling is more likely when there is a high degree of SEW endowment and the family firm has pre‐succession performance below aspiration levels. Next, we find that appointing a second‐ or subsequent‐born sibling has a positive and significant effect on post‐succession firm profitability, particularly when the firm is in its second generation or later. Managerial Summary : What drives succession choices in family firms? What are the performance implications of each succession choice? These are questions of vital relevance for every business owner. Focusing on the pool of potential family heirs at the time of succession, our study adds to the debate on the drivers of succession choices by suggesting that having a family intensive governance structure fosters primogeniture as the main succession logic, even when the family firm is experiencing lower profitability. Our study informs business owners on the implications of different succession policies, suggesting that family firms that have the courage to disregard primogeniture and choose more wisely the family successor are also the ones experiencing higher post‐succession performance.     

The Role of Entrepreneurial Passion and Creativity in Developing Entrepreneurial Intentions: Insights from American Homebrewers

The study investigates the role of entrepreneurial passion and creativity as antecedents of entrepreneurial intentions, applying social cognitive theory as an underpinning framework. Specifically, this research focuses on American homebrewing, seen as a potential incubator for entrepreneurs. Results demonstrate entrepreneurial passion having a strong positive relationship with entrepreneurial intentions, even when entrepreneurial self‐efficacy is introduced as a mediator. Conversely, the relationship between creativity and entrepreneurial intentions is mediated by entrepreneurial self‐efficacy, confirming that individuals also need to feel self‐efficacious enough to pursue entrepreneurial career. The findings advance the understanding of nascent entrepreneurship phenomenon within a particular hobby context.     

Economic impacts of El Niño southern oscillation: evidence from the Colombian coffee market

El Niño Southern Oscillation (ENSO) is a naturally occurring phenomenon that affects weather around the world. Past ENSO episodes have had severe impacts on the economy of Colombia. We study the influence of ENSO on Colombian coffee production, exports, and price. Our structural econometric specification is consistent with an economic model of the market for Colombian coffee which, in the short run, is characterized by a downward‐sloping demand curve and by a vertical supply curve. We show that El Niño (i.e., positive shocks to ENSO) is beneficial for Colombian production and exports and decreases the real price of Colombian coffee. On the contrary, La Niña (i.e., negative shocks to ENSO) depresses Colombian coffee production and exports and increases price. However, the overall impact of ENSO shocks is small. Both in the short run and in the long run, shocks to international demand for Colombian coffee are more relevant than supply‐side shocks in Colombia in explaining the dynamics of the price of Colombian coffee. Our results suggest that a given coffee price shock can have beneficial, detrimental, or negligible effects on the Colombian economy, depending on its underlying cause. As a consequence, policy responses to coffee price shocks should be designed by looking at the causes of the shocks.     

Entropy martingale optimal transport and nonlinear pricing–hedging duality

The objective of this paper is to develop a duality between a novel entropy martingale optimal transport (EMOT) problem and an associated optimisation problem. In EMOT, we follow the approach taken in the entropy optimal transport (EOT) problem developed in Liero et al. (Invent. Math. 211:969–1117, 2018), but we add the constraint, typical of martingale optimal transport (MOT) theory, that the infimum of the cost functional is taken over martingale probability measures. In the associated problem, the objective functional, related via Fenchel conjugacy to the entropic term in EMOT, is no longer linear as in (martingale) optimal transport. This leads to a novel optimisation problem which also has a clear financial interpretation as a nonlinear subhedging problem. Our theory allows us to establish a nonlinear robust pricing–hedging duality which also covers a wide range of known robust results. We also focus on Wasserstein-induced penalisations and study how the duality is affected by variations in the penalty terms, with a special focus on the convergence of EMOT to the extreme case of MOT.

     

The Carbon Bubble: climate policy in a fire-sale model of deleveraging∗

Credible implementation of climate change policy, consistent with the 2 °C limit, requires a large proportion of current fossil-fuel reserves to remain unused. This issue, named the Carbon Bubble, is usually presented as a required asset write-off, with implications for investors. We embed the Carbon Bubble in a macroeconomic model exhibiting a financial accelerator: if investors are leveraged, then the Carbon Bubble might precipitate a fire-sale of assets across the economy, and generate a large and persistent fall in output and investment, impairing the economy's ability to invest in the zero carbon assets it needs to produce output in the post-climate-transition world. We find a role for macroeconomic policy protecting investors' balance sheets in mitigating the macroeconomic effects of the Carbon Bubble, and enhancing welfare.     

How to design virus containment policies? A joint analysis of economic and epidemic dynamics under the COVID-19 pandemic

Journal of Economic Interaction and Coordination - We analyze the impact of different designs of COVID-19-related lockdown policies on economic loss and mortality using a micro-level simulation...