Using column generation to solve extensions to the Markowitz model

Abstract

We introduce a solution scheme for portfolio optimization problems with cardinality constraints. Typical portfolio optimization problems are extensions of the classical Markowitz mean–variance portfolio optimization model. We solve such types of problems using a method similar to column generation. In this scheme, the original problem is restricted to a subset of the assets resulting in a master convex quadratic problem. Then the dual information of the master problem is used in a subproblem to propose more assets to consider. We also consider other extensions to the Markowitz model to diversify the portfolio selection within given intervals for active weights.     

Employment and SMEs during crises

The persistent increasing duration of unemployment has become an issue during economic crises. Although lay-offs at large firms normally make headlines during crises, we still know little about the potential impact of firm size on adjustment behavior in a crisis. We studied effects of firm size on employment growth during economic slowdowns using a rich microeconomic database for the 1988–2007 period in Portuguese manufacturing industry. The results show that economic downturns affect firm growth negatively. This negative effect is found to be higher for larger firms, both during and immediately following crisis periods. Small and medium-sized enterprises (SMEs) emerge as potential stabilizers in downturn periods. However, larger firms seem to be able to quickly recover from downturn periods. Our results contribute to the scarce literature and to the understanding of the Portuguese case, where many SMEs secure most jobs. These first results may be useful, because SMEs play a determinant role in other European Union economies.     

Future Changes in British Agriculture: Projecting Divergent Farm Household Behaviour

The recent decline in farm incomes has focused attention on farmers' uneven propensity to adjust and adapt. Changes in farm policies are slowly redirecting the support paid to farmers in Europe, and further reforms are envisaged. This paper argues that farmers in Britain are likely to pursue highly diverse strategies in this changed context, according to their individual circumstances, values and attitudes. These groups (essentially ideal types) are derived both from in‐depth qualitative interviews and from a cluster analysis of variables relating to the farm and to the farm household's socialisation and attitudes. The paper seeks to draw out the implications of divergent farm household behaviour for future structural change, and for agricultural and rural policy. Opportunities are identified for the UK government to implement the EU Rural Development Regulation in ways that would suit the varied circumstances of British farmers in the postproductivist transition.     

Dark Side or Bright Light: Destructive and Constructive Deviant Content in Consumer Ideation Contests

Firms use ideation contests to generate ideas from consumers. This type of collaboration provides access to new knowledge and reveals latent consumer needs. But it also is risky, as firms give up control to an unknown crowd. Some contestants use ideation contests to post content that is unintended and unwanted by contest hosts, a behavior that represents deviant co‐creation. Drawing on literature from sociology and consumer research, deviance is defined as a relative, norm‐violating behavior that has the potential to activate others. We report the results from a netnography study to define the phenomenon of deviant co‐creation in ideation contests. Based on these findings, we provide a theoretical foundation for deviant co‐creation and conceptualize and empirically illustrate various patterns of deviant content, ranging from destructive to constructive. The study reveals that deviant content in ideation contests includes illegitimate as well as legitimate content. Legitimate content includes five themes: humorous, provocative, unique, violation from technical, and social norms. Deviant content usually bewilders evaluators and draws their attention to the content. Destructive deviant content may trigger visible and malicious protests or result in mocking and ridicule on the contest platform and other social media, thereby exposing the contest host to reputational risks. Constructive deviant content can lead to positive discussions in comment sections and other social media outlets, as well as foster further development of an initial idea, thereby contributing to the firm's innovation potential. This article provides managers a deeper understanding of deviant content raising awareness for the dark side risks as well as indicating how to leverage it to achieve constructive co‐creation.     

Human resource management and developing proactive environmental strategies: The influence of environmental training and organizational learning

The need to implement advanced approaches to protect the environment is forcing companies to refocus their internal procedures and actions. To match employees' capabilities and the organization itself to these new requirements, the human resource management department can offer some key tools. This article analyzes whether environmental training (ET) and organizational learning (OL) positively influence the development of proactive environmental strategies (PESs) and compares the two processes, which differ in the time, costs, and difficulty required to implement them. Companies in the tourism sector are currently facing a highly dynamic environment where innovativeness is a decisive factor for achieving competitiveness. As such, we analyze whether the presence or absence of innovativeness influences the development of these two mechanisms. Using a sample of 252 tourism companies, we tested these relationships using structural equation modeling. The findings showed that (1) innovativeness is an antecedent of implementing ET and OL in the companies sampled, (2) both mechanisms promote implementing PESs, and (3) ET is equally as effective as OL for this purpose. Managers should take these findings into account when deciding which mechanism to apply when striving to achieve environmental proactivity.     

ARE LONG‐RUN PRICE STABILITY AND SHORT‐RUN OUTPUT STABILIZATION ALL THAT MONETARY POLICY CAN AIM FOR?

A central tenet of the so‐called new consensus view in macroeconomics is that there is no long‐run trade‐off between inflation and unemployment. The main policy implication of this principle is that all monetary policy can aim for is (modest) short‐run output stabilization and long‐run price stability, i.e. monetary policy is neutral with respect to output and employment in the long run. However, research on the different sources of path dependency in the economy suggests that persistent but nevertheless transitory changes in aggregate demand may have a permanent effect on output and employment. If this is the case, then, the way monetary policy is run does have long‐run effects on real variables. This paper provides an overview of this research and explores conceptually how monetary policy should be implemented once these long‐run effects are acknowledged.