Maximal submarkets that replicate any option

In this article we study the replication of options in security markets X with a finite number of states. Specifically, we study the existence of maximal submarkets (subspaces) Y of X so that any option written on the elements of Y is replicated by a marketed asset x of X. So inside these subspaces the pricing problem is simple because any option is priced by the replicating portfolio. Using the theory of lattice-subspaces and positive bases developed by Polyrakis (Trans Am Math Soc 348:2793–2810, 1996; 351:4183–4203, 1999), we identify the set of all maximal replicated subspaces. In particular, for any maximal replicated subspace we determine a positive basis of the subspace. Moreover we show that the union of all maximal replicated subspaces is the set of all marketed securities x ? X{xin X} so that any option written on x is replicated. So we determine also the set of securities with replicated options.     

Insights on CFOs’ Perceptions about Impairment Testing Under IAS 36

We survey CFOs of Italian listed companies and examine their views on the complexities involved in implementing IAS 36 requirements and the perceived usefulness of national guidelines aiming at assisting preparers in this respect. We find that IAS 36 is perceived as an atypical standard among IFRS, it demands subjective interpretation, its requirements can be made adaptable to managerial needs and do not limit creative accounting. Further, respondents do not see a strong link between IAS 36 disclosure requirements and market variables, except for stock returns. Moreover, the impairment testing process became more difficult during the recent financial crisis and guidelines issued by the Italian authorities do not appear to assist in implementing the recoverable amount estimation process or compliance with mandatory disclosure. The respondents explicitly call for a revision in IAS 36 and/or issuance of separate guidance. These findings inter alia respond directly to the IASB’s current quest on financial statements preparers’ concerns about the application of the IAS 36 requirements.     

Reciprocal Loyalty and Union Mediation

This study investigates the concept of loyalty in the employment relationship using a stated preference approach and a dataset obtained through purpose‐built questionnaires. Reciprocal loyalty is defined as a gift exchange. Workers' good performance is rewarded by the employer by the provision of a job with a low likelihood of job loss. The study shows that such reciprocal employer–employee loyalty is highly rated by the workers as a desirable job attribute. Loyalty in the employer–employee relationship is differently valued by unionized and nonunionized workers. Overall, the evidence suggests that unionized workers are more receptive to arrangements involving reciprocal loyalty. This may be an outcome of adaptation to internalized norms of union behavior.     

Firm‐Level Collective Bargaining and Wages in Greece: A Quantile Decomposition Analysis

This article analyzes the effect of firm‐level contracting on the wage structure in the Greek private sector. Using a matched employer–employee dataset for 2006, unconditional quantile regressions and relevant decomposition methods, we identify a wage premium associated with firm‐level contracting, which follows a hump‐shaped profile across the wage distribution. Further, the wage differential between workers under firm‐level and broader‐level collective agreements can be primarily attributed to the differences in the regime‐specific wage setting structure, for those below the median of the unconditional wage distribution, and to differences in worker and firm‐specific characteristics for those in the upper tail.     

The Impact of Psychological Distance and Construal Level on Consumers' Responses to Taboos in Advertising

To date, the use of taboos in advertising has produced mixed results. Such discrepancies require explanation. Relying on construal-level theory and the concept of psychological distance, this research focuses on taboo ads' effects on consumers' responses. The findings from three studies show that for different product categories (Study 1: perfume; Studies 2 and 3: alcohol) and across different taboo types (sex, violence, and a mixture of sex and violence), different distance dimensions (Study 1: spatial; Study 2: social), and different construal-level manipulations (low, high), an increase in the psychological distance (or construal) level attenuates consumers' unfavorable attitudinal and behavioral reactions while a decrease in the psychological distance (or construal) level intensifies consumers' responses. Furthermore, response intensity varies depending on the taboo type used, such that both violent and mixed taboo types produce more negative responses. Finally, gender has an impact, such that women react more negatively than men to different taboos, both across distance dimensions and across distance (construal) levels. A discussion of these findings and their implications, as well as suggestions for future research, concludes the article.     

Pairs‐trading and spread persistence in the European stock market

In this paper, we adapt the demand and supply framework introduced by Figuerola‐Ferretti and Gonzalo (Journal of Econometrics, 2010) to illustrate the dynamics of Pairs‐trading. We underline the process by which a finite elasticity of demand for spread trading determines the speed of mean reversion and pairs‐trading profitability. A persistence‐dependent trading trigger is introduced accordingly. Applied to STOXX Europe 600–traded equities, our strategy exploits price leadership for portfolio replication purposes and delivers Sharpe ratios that outperform the benchmark rules used in the literature. Portfolio performance and mean reversion are enhanced after firm fundamental factor restrictions are imposed.     

Knowledge management in enterprises: a research agenda

Knowledge management (KM) is an emerging area, which is gaining interest by both enterprises and academics. The effective implementation of a KM strategy is considering as a ‘must’ and as a precondition of success for contemporary enterprises, as they enter the era of the knowledge economy. However, the field of KM has been slow in formulating a universally accepted methodology, due to the many pending issues that have to be addressed. This paper attempts to propose a novel taxonomy for KM research by co‐instantaneously presenting the current status with some major themes of KM research. The discussion presented on these issues should be of value to researchers and practitioners. Copyright © 2005 John Wiley & Sons, Ltd.     

Firm resilience in regions of Eastern Europe during the period 2007–2011

Firms are important economic agents in regions, and their survival and prosperity in crisis periods is closely related to the evolution and welfare of the regions in which they are located. This ability of firms to respond to and recover from shocks is conceptualised by the notion of firm resilience. This paper studies the determinants of firm resilience in the regions of Eastern Europe during the period 2007–2011 using a novel, dynamic, spatial and broad conceptual framework aspect. The analysis shows through a variety of determinants that firms of Eastern EU countries have greater resilience, while it also highlights that the resilience of firms is defined, firstly, not only by current structural transformations but also by the initial conditions and, secondly, not only by the firms’ characteristics and capabilities but also by the spatial characteristics and irregularities of their broader environment.     

Output fluctuations with bargained wages and a competitive tradeable goods sector in the economy: Empirical estimates for the group of five, 1970.1 — 1985.4

Zusammenfassung Produktionsschwankungen bei ausgehandelten L?hnen und einem Wettbewerbssektor mit handelbaren Gütern. Empirische Befunde für die Fünfergruppe von Industriel?ndern für die Periode 1970–1985. — Der Verfasser untersucht die Beziehungen zwischen Lohnanpassung, Wettbewerbsf?higkeit, Fiskalpolitik und den Fluktuationen der gesamtwirtschaftlichen Produktion in den fünf wichtigsten Industrienationen vom ersten Quartal 1970 bis zum vierten Quartal 1985. Das von ihm benutzte Modell hat zwei besondere Merkmale: (i) unterschieden wird zwischen dem Sektor der handelbaren und dem der nicht handelbaren Güter; (ii) die L?hne sind das Ergebnis von Verhandlungen in dem Sektor, in dem Wettbewerb herrscht und in dem es handelbare Güter gibt. Als Ergebnis zeigen sich erhebliche Unterschiede zwischen den L?ndern — nicht nur bei den Gleichgewichtswerten, sondern auch bei den kurzfristigen Anpassungen.

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Resumen Fluctuaciones de la production en una economía con salarios negociados y un sector comercial competitivo: estimaciones empíricas para el Grupo de los Cinco 1970:I-1985:IV. — En este trabajo se investiga las relaciones entre ajuste salarial, competitividad, politica fiscal y fluctuaciones agregadas en las economías industriales más importantes durante el periodo 1970–1985. El modelo utilizado exhibe dos caracteristicas particulares: (a) la distinción entre bienes comerciados y bienes no comerciados y (b) negociaciones salariales que tienen lugar en el sector competitivo de bienes comerciados. Los resultados revelan diferencias substanciales entre los países, no sólo en sus relaciones de equilibrio, sino también en sus ajustes de corto plazo.

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Résumé Fluctuations de l’output dans une économie aux salaires négociés et au secteur compétitif des biens commerciaux: estimations empiriques pour le Groupe de Cinq, 1970:I à 1985:IV. — Dans cette étude l’auteur analyse les relations entre l’ajustement des salaires, la compétitivité, la politique fiscale et les fluctuations de production dans les économies industrialisées les plus importantes pendant la période 1970 à 1985. Le modèle a deux caractéristiques particuliers: (i) la distinction entre un secteur commercial et un secteur non-commercial, et (ii) la négociation des salaires qui a lieu au secteur compétitif des biens commerciaux. Les résultats rélèvent des différences substantielles entre les pays et pas seulement concernant les relations d’équilibre, mais aussi concernant leurs ajustements à court terme.