Saving motives and multivariate precautionary premia

This paper extends the concept of precautionary premium to a multivariate setting so as to measure the intensity of the precautionary saving motive to protect against multivariate risks. This makes it possible to disentangle and to link the various motives of precautionary saving depending on the configuration of the risks the individual wants to protect against.     

Maxbias curves of robust scale estimators based on subranges

A maxbias curve is a powerful tool to describe the robustness of an estimator. It is an asymptotic concept which tells how much an estimator can change due to a given fraction of contamination. In this paper, maxbias curves are computed for some univariate scale estimators based on subranges: trimmed standard deviations, interquantile ranges and the univariate Minimum Volume Ellipsoid (MVE) and Minimum Covariance Determinant (MCD) scale estimators. These estimators are intuitively appealing and easy to calculate. Since the bias behavior of scale estimators may differ depending on the type of contamination (outliers or inliers), expressions for both explosion and implosion maxbias curves are given. On the basis of robustness and efficiency arguments, the MCD scale estimator with 25% breakdown point can be recommended for practical use. Received: February 2000     

Financial Institutions Network and the Certification Value of Bank Loans

Social networks play an important role in mitigating informational frictions related to financial intermediation, especially bank lending. We investigate the effect of the network of financial institutions on the certification value of bank loans using data on syndicated loans to European companies. We find that the presence of more central leaders in a syndicate substantially increases the stock market's reaction to loan announcements. This certification value is reinforced when informational frictions are more important but vanishes when there are severe disruptions in the functioning of financial markets, such as during the financial crisis of 2008.     

Industry competition and firm human capital

This paper argues that objective and subjective human capital may have substantial impact upon organizational performance in a competitive context. Objective human capital pertains to such features as education and experience, whereas subjective human capital relates to personality characteristics. The argument is illustrated by presenting the results of two empirical studies: (1) a cross-section 1990–1991 analysis of about 50 incumbents in the Flemish furniture industry-concentrating on the impact of subjective human capital, particularly the Chief Executive Officer's (CEO's) locus-of-control personality, on financial performance; and (2) a longitudinal 1970–1992 analysis of a cohort of 100 entrants into the Dutch audit industry-focusing on the influence of objective human capital, particularly education and experience, on exit by merger and acquisition (M&A) or diaspora. Both studies support the claim that objective and subjective human capital matters: for example, Flemish furniture firms headed by a CEO with an internal locus-of-control trait reach higher levels of financial performance, and Dutch audit firms with a high proportion of personnel with business experience are more likely to exit the industry over the years as a result of diaspora. Finally, the data of the Flemish furniture and Dutch audit industries are re-analyzed so as to compare the impact of human capital variables on small-firm performance in both industries. This re-analysis reveals that in both industries the impact of human capital variables is more pronounced in large firms compared to small businesses.     

Investigating heterogeneity in European fiscal behaviours

The aim of this paper is to analyse the heterogeneity in fiscal behaviours in the euro zone. The fiscal behaviours are analysed according to a new specification in which the cyclically adjusted primary balance reacts to the change in the output gap, the public debt ratio, the inflation rate and the interest rate. Our study covers 12 countries in the euro zone during 1999–2010 using annual data from the AMECO database. We use the quantile regression methodology to test the fiscal rule. Our findings show the persistence in fiscal behaviour and counter‐cyclical fiscal policy. The results also show that fiscal responses differ according to the chosen quantile. In particular, a high fiscal indicator is associated with a debt‐stabilisation motive and concern about inflation. A shock analysis indicates how the fiscal dispersion could be changed according to the nature of the shock. The results of this paper are useful for understanding fiscal coordination and for improving the European fiscal framework.     

Extrinsic Rewards,Intrinsic Motivation,and New Product Development Performance

Reward structures can have a significant impact on the performance of new product development (NPD) teams. However, there are several gaps in our understanding of how different types of extrinsic rewards influence the creative performance of NPD teams. Drawing on key theoretical objectives for advancing rewards-creativity research in general, and NPD research in particular, this study incorporates a cognitive and behavioral view of rewards use. In so doing, we distinguish between three kinds of extrinsic rewards: financial, recognition, and social (based on their properties). We then draw upon self-determination theory to hypothesize the differential effects of three types of extrinsic rewards on intrinsic task motivation, and subsequently the creative performance of NPD teams. The proposed framework is tested using two rounds of survey data from 238 members of 64 NPD teams in the high-tech industry. Results of a multilevel structural equation modeling (MLSEM) analysis show that financial rewards have a negative relationship with intrinsic task motivation, while recognition and social rewards have a positive influence. Complexity of the product being developed not only helps to mitigate the negative effects of financial rewards on intrinsic task motivation, but it also reduces the positive effects of social rewards on intrinsic task motivation. Intrinsic task motivation is found to have a positive effect on NPD creative performance in terms of both the developed product’s degree of innovation and its quality. Theoretical and managerial implications are explored.     

Liquidity and CDS premiums on European companies around the Subprime crisis

This paper sheds new light on the liquidity dynamics of the credit default swaps (CDS) market in Europe around the Subprime crisis. Based on an original dataset of 94 European companies from 2005 to 2009, we use a panel regression analysis to study the relationship between CDS premiums and liquidity. We measure the level of liquidity, look at liquidity risk, and study the liquidity spillovers from the bond and equity markets to the CDS market. We show that the effect of liquidity on CDS premiums is dominated by the influence of worsening credit conditions and deteriorating investors?? expectations about default risk. Controlling for credit risk, we also find that liquidity risk is priced in the European CDS market and that liquidity spillovers from the bond market matter in determining CDS premiums.     

What can econophysics contribute to financial economics?

Econophysics presents itself as a new paradigm and a new specialty (or even a discipline), using various models and concepts imported from condensed matter and statistical physics to analyze financial phenomena. Financial economics is becoming more and more concerned by the emergence of econophysics because this new field deals with the economic reality. In this perspective, one might ask “What can econophysics contribute to financial economics?” After emphasizing the main differences between financial economics and econophysics, this paper will show that these two disciplines can be complementary. I then provide some research themes from econophysics that could be a source of inspiration for financial economists to broaden their theoretical framework.     

Implementing a Low‐End Disruption Strategy Through Multiproject Lineage Management: The Logan Case

This paper analyzes how multiproject management can build up and develop a low‐end disruptive strategy. It is based on a deep longitudinal analysis of a case within the automotive industry, namely, the Logan case developed by the Renault group. The results bring new insights into both the multiproject management and innovation strategy fields. On the project organizing side, it characterizes the complex and in some way ambiguous relations between the firm governance and the pilot project initiating the disruptive strategy. The case also formalizes project‐lineage management as a way to expand the initial move into a diversified range of products and a multi‐continent deployment, while keeping the key specificities of the pilot project. On the innovation strategy side, it demonstrates how disruptive strategy and organizational ambidexterity research fields can benefit from input from the project organizing domain.     

Entrepreneurship: From motivation to start-up

The goal of this article is to reveal the origins of entrepreneurial motivation and to identify the logics of action (entrepreneurial projects) associated with each dimension of this attitude. The study looks to answer the following questions: What needs are at the beginning of a business, what are their intensities, and to what extent does entrepreneurial motivation influence projects? Using questionnaires answered by entrepreneurs who have just created their business, we evaluate the characteristics of entrepreneurial motivation (needs and their intensities), identify the antecedents liked to this attitude, and isolate the entrepreneur logics of action (imitation, innovation–adventure, reproduction, and innovation–valorisation). This study is supported by a theoretical framework that is the result of research on motivation and entrepreneurship. A series of causal relations are isolated and then tested. Analysis enables an ensemble of conclusions to be drawn on entrepreneurial motivation. Pathways of motivation lead to logics of action linked to innovative projects and explain the phenomenon of reproduction (or imitation) found in some entrepreneurs. Development objectives and a need for personal independence are identified at the beginning stages of entrepreneurial planning. Creators hope that their business will bring tangible financial and material results. Entrepreneurs are conscious that they must make a commitment across a range of dimensions for their organisation (managerial, commercial, etc.). In their quest for valorisation, entrepreneurs take risks, exploiting advantageous business contexts, thanks to their competences, and show a need for creativity. These two dimensions (competences and creativity) are associated with the objective of independence. The logic of reproduction is characterised by self-confidence (locus of control) and responds to the objective of business development.