Optimal Reinsurance Arrangements Under Tail Risk Measures

Regulatory authorities demand insurance companies control their risk exposure by imposing stringent risk management policies. This article investigates the optimal risk management strategy of an insurance company subject to regulatory constraints. We provide optimal reinsurance contracts under different tail risk measures and analyze the impact of regulators' requirements on risk sharing in the reinsurance market. Our results underpin adverse incentives for the insurer when compulsory Value-at-Risk risk management requirements are imposed. But economic effects may vary when regulatory constraints involve other risk measures. Finally, we compare the obtained optimal designs to existing reinsurance contracts and alternative risk transfer mechanisms on the capital market.     

Ambiguity and the process of knowledge transfer in strategic alliances

This research examines the role played by the ‘causally ambiguous’ nature of knowledge in the process of knowledge transfer between strategic alliance partners. Based on a cross‐sectional sample of 147 multinationals and a structural equation methodology, this study empirically investigates the simultaneous effects of knowledge ambiguity and its antecedents—tacitness, asset specificity, prior experience, complexity, partner protectiveness, cultural distance, and organizational distance—on technological knowledge transfer. In contrast to past research that generally assumed a direct relation between these explanatory variables and transfer outcomes, this study’s findings highlight the critical role played by knowledge ambiguity as a full mediator of tacitness, prior experience, complexity, cultural distance, and organizational distance on knowledge transfer. These significant effects are further found to be moderated by the firm’s level of collaborative know‐how, its learning capacity, and the duration of the alliance. Copyright © 1999 John Wiley & Sons, Ltd.     

Academic brands and their impact on scientific endeavour: The case of business market research and researchers

This paper examines the significance of the rapid development of so-called “academic brands” in Marketing for the process of academic research and for the work and the careers of researchers: It focuses on the specific case of business market research and researchers. The paper starts by exploring the ideas behind the development of Consumer Culture Theory (CCT) and its impact on the academic community: CCT appears as an emblematic case of branding of an academic community. The paper then discusses the rapid emergence of the Service-Dominant Logic (SDL) as a case of branding which has a direct impact on business market research. The paper then relates the emergence of these two “brands” to developments in business market research and more specifically to the development of IMP as a brand. Finally, the paper draws some conclusions about the role of academic branding and its impact on scientific endeavour with emphasis on the future of business marketing research and researchers.     

Pollution Abatement Subsidies and the Eco-Industry

This paper considers the combination of pollution taxes and abatement subsidies when some polluting firms procure their abatement goods and services from an oligopolistic eco-industry. The regulator must here cope with two simultaneous price distortions: one that comes from pollution and the other which is caused by the eco-industry’s market power. In this context, we show that taxing emissions while subsidizing polluters’ abatement efforts cannot lead to first-best, but the opposite occurs provided it is the eco-industry’s output which is subsidized. When public transfers also create distortions, welfare can be higher if the regulator uses only an emission tax, but subsidizing abatement suppliers while taxing emissions remains optimal when the eco-industry is concentrated.     

The Impact of Perceived Ethical Culture of the Firm and Demographic Variables on Auditors’ Ethical Evaluation and Intention to Act Decisions

Studies into corporate social responsibility (CSR) in small and medium-sized enterprises (SMEs) have suggested that small businesses are different to the large companies on which CSR research usually focusses. Extending this argument, this article raises the question what differences in approaches to CSR there are within the SME category. Analysing the CSR strategy and performance of a medium-sized fashion retailer in the United Kingdom through manager interviews as well as customer and employee surveys, the article develops an analytical framework of CSR in small, medium and large firms. The argument is developed that medium-sized firms occupy a transition stage, where some CSR features that are reminiscent of small enterprises are still important but get overlaid with aspects that are more typical of large companies.     

Comparing two territory partitions in districting problems: Indices and practical issues

Planning as part of public sector decision-making situations is an activity of critical importance, with direct relevance for urban planners. The ramifications of such decisions generally have significant effect on peoples’ lives. The current paper deals with the comparison between territorial maps in the context of districting problems with a strong socio-economic component. The theoretical problem involves the comparison of two partitions in a connected, undirected, and planar graph. In considering this problem, we introduce three new indices to compare territory partitions: compatibility, inclusion, and distance, all of which have importance for real-world planning situations. Numerical experiments of these indices were carried out for the communes network in (Iˆle de France), France.     

Existence of financial equilibria with restricted participation

We consider a two-date model of a financial exchange economy with finitely many agents having nonordered preferences and portfolio constraints. There is a market for physical commodities at any state today or tomorrow and financial transfers across time and across states are allowed by means of finitely many nominal assets or numéraire assets. We prove a general existence result of equilibria for such a financial exchange economy in which portfolios are defined by linear constraints, extending the framework of linear equality constraints by Balasko et al. (1990), and the existence results in the unconstrained case by Cass (1984, 2006), Werner (1985), Duffie (1987), and Geanakoplos and Polemarchakis (1986). Our main result is a consequence of an auxiliary result, also of interest for itself, in which agents’ portfolio constraints are defined by general closed convex sets and the financial structure is assumed to satisfy a “nonredundancy-type” assumption, weaker than the ones in Radner (1972) and Siconolfi (1989).     

Development and Pricing of a New Participating Contract

Abstract

This article designs and prices a new type of participating life insurance contract. Participating contracts are popular in the United States and European countries. They present many different covenants and depend on national regulations. In the present article we design a new type of participating contract very similar to the one considered in other studies, but with the guaranteed rate matching the return of a government bond. We prove that this new type of contract can be valued in closed form when interest rates are stochastic and when the company can default.     

The impact of perceived ethical intensity on audit-quality-threatening behaviours

Although there has been significant interest among researchers in audit-quality-threatening behaviours (QTBs), the decision process through which staff auditors engage in those behaviours has received relatively little attention. It seems likely that the ethical intensity of the behaviours perceived by auditors may play an important role in that process; to date, this has not been tested. This study examines the mediating role of perceived ethical intensity in the relationship between perceived ethical culture of the firm and the auditors' ethical evaluation of, and intention to engage in, three different forms of QTBs. A multi-item measure of ethical intensity is developed and the findings provide the first empirical evidence of a direct relationship between perceived ethical intensity and ethical decision-making regarding QTBs. Moreover, the findings show that perceived ethical intensity fully mediates the relationship between perceived ethical culture and ethical decision-making. Implications of the findings for accounting firms and for researchers are discussed and areas for future research on the mediating role of perceived ethical intensity are suggested in the paper.