Endless leverage certificates

An endless leverage certificate (ELC) is a novel retail structured product that gives its holder the right to claim the difference between the value of an underlying security and an interest accruing financing level. An ELC ceases to exist if the underlying breaches a contractual knockout level, if the holder exercises, or if she/he sells it back to the issuer. We use Monte Carlo analysis to value ELCs and find that due to limited liability, a typical ELC written on a typical DAX stock can be worth 0.3% more than its intrinsic value (the difference between the value of the underlying and the financing level). Empirically, we find that in January 2007, the 5129 ELCs issued on the thirty DAX stocks traded at an average premium of 0.67% over the intrinsic value, and that the median bid-ask spread, expressed as a percentage of the underlying, was 0.18%. For covered warrants and options this spread measure was almost twice as high. Finally, we find that upon knockout, investors received on average 3.2% less than the theoretical knockout value, which is consistent with discontinuous trading of the underlying. Overall, our findings suggest that ELCs complete the market for leverage seeking retail investors.     

Key Factors that Influence Consumer Preferences for Natural-Hyped Products

Natural-hyped products are receiving greater attention from and acceptance by consumers worldwide. Environmental factors that foster the demand for natural-hyped products, specifically hemp-based products include the deregulation of the cannabis industry and greater consumer desire for natural foods. Adding to this, the strategic use of stimulant type of cues (e.g., a cannabis leaf) included in product logos, ads, and packaging, seems to create hype associations when evaluating hemp-based products. In this context, this study presents empirical evidence (three experiments and two qualitative studies) that illustrates consumer preference for hemp-based products over ones that do not include hemp as an ingredient (hemp-free). The research focuses on identifying the psychological determinant that orients consumers towards hemp-based products. Findings suggest that the perceived naturalness is the psychological mechanism behind consumers positive evaluation of hemp-based products. Moreover, this study presents evidence that this evaluation is enhanced by the consumer's need for stimulation. Implications of the findings for the role of perceived naturalness and the need for stimulation in marketing strategies are discussed.     

Assessing skewness in financial markets

It is a matter of common observation that investors value substantial gains but are averse to heavy losses. Obvious as it may sound, this translates into an interesting preference for right-skewed return distributions, whose right tails are heavier than their left tails. Skewness is thus not only a way to describe the shape of a distribution, but also a tool for risk measurement. We review the statistical literature on skewness and provide a comprehensive framework for its assessment. Then, we present a new measure of skewness, based on the decomposition of variance in its upward and downward components. We argue that this measure fills a gap in the literature and show in a simulation study that it strikes a good balance between robustness and sensitivity.     

R&D employee tenure in MNC subsidiaries: the role of institutional distance and experience

Long tenure of research and development (R&D) employees helps organisations to utilise employees' knowledge over a sustained time period and strengthen their competitive advantage. It also allows organisations to benefit from the training investments made on their R&D employees. Thus, identifying the determinants of R&D employees' tenure is crucial for designing effective R&D employee retention strategies. This paper analyses the factors explaining R&D employees' tenure in the subsidiaries of multinational corporations (MNCs). Building on institutional theory, we claim that formal and informal institutional distance between MNCs' home and host country might lead to R&D employees' short tenure in subsidiaries. We further suggest that R&D employees' international experience and MNCs' host country experience play a moderating role. We find support for our hypotheses by mobilising an original database that combines patent data and the LinkedIn profiles of 939 R&D employees in 256 MNC subsidiaries in India.     

Value added tax non-compliance in the car market

We examine value added tax (VAT) non-compliance in the European Union (EU) car market. This issue is of paramount importance because of the loss of VAT revenue, the profound distortion of market mechanisms, and the dangerous variety of fraudulent schemes employed. In addition to the usual VAT fraudulent schemes on intra-community trade, the special regimes, and the different regulations for the sale of motor vehicles in the EU member states per se, favour non-compliance in the car market. Non-compliance also takes advantage of the lack of adequate and prompt information exchange among the tax administrations of different countries and, within each country, between the tax administrations and their departments responsible for motor vehicles. We highlight the fact that the current measures are insufficient to fight VAT non-compliance and that the new rules proposed in the ‘definitive VAT system’ are inadequate to control the proliferation of scams in the car market. Accordingly, we suggest more substantial measures: well-targeted and prompt cross-checks through archives and databases, and the monitoring of their effectiveness; electronic invoices; real-time exchanges of information between the different tax and transport authorities; and increased harmonisation of the special VAT schemes that aim to eliminate one of the most exploited opportunities for illicit gain, to the detriment of the EU member states.     

Telework quality and employee well-being: Lessons learned from the COVID-19 pandemic in Italy

The coronavirus disease 2019 (COVID-19) forced organisations to implement intensive telework for many of their workers overnight. This scenario was completely new, and the emergency caused by COVID-19 created the possibility of experimenting with new ways of working with an unknown impact on employee well-being. Drawing on previous literature, we defined a model of telework quality consisting of the following four core domains: agile offices within organisations, functional remote workstations, flex-time and engaging management. We identified two high-quality and low-quality telework profiles using latent profile analysis on a data sample of 2295 insurance and financial sector employees. Demographic, occupational and procedural characteristics were associated with the probability of being in the positive or negative profiles. Our results showed that employees' emotional exhaustion and work engagement levels were related to telework quality. This study suggests that organisations need to consider the quality of telework to effectively adopt new ways of working that foster employee well-being.     

The contribution of informal learning in the integration process of immigrants into the labour market: Individual and organisational perspectives in selected sectors

In Germany and Canada, the integration of immigrants into the labour market is closely related to the various approaches towards the recognition and validation of informal learning. This paper aims to analyse the informal learning measures undertaken by immigrants as well as those offered by employers in the health and information and communication technology sectors during the labour market integration process. The study focused on nurses as well as IT project managers and programmers. The comparison focuses on the occurrence and quality of the four dimensions of the dynamic model of informal learning from an individual and an organisation perspective. The results show similarities between these two perspectives regarding the relevance of the four dimensions in the integration of immigrants into the labour market. In addition, clear differences between the two investigated sectors as well as country-specific differences appear.     

The disabling effects of enabling social policies on organisations’ human capital development practices for women

Paid parental leave and externally provided childcare are social policies designed to enhance parents' labour force participation. These policies influence not only men's and women's decisions regarding their labour market activity but also organisational decision makers' (ODMs) expectations about their employees' availability to work and thus, their willingness to invest in their employees' human capital. Using a sample of over 13,000 individuals from 19 countries, we investigate the interaction between gender and social policies on human capital development practices. In line with statistical discrimination theory, which suggests that ODMs hold different expectations about female and male productivity, we find that paid parental leave and externally provided childcare are negatively associated with the provision of human capital development for women but not for men.