Allocate Capital and Measure Performances in a Financial Institution

This paper provides a model for allocating capital and measuring performances for financial institutions. The methodology relates the economic valuation of the balance sheet to the market value of the firm. In so doing, each business unit is evaluated on an economic basis, and the capital allocated to these units is related to the risk premiums that the market demands. The paper's results have broad applications for corporate managers, risk managers, and other market participants in managing financial institutions to increase shareholders' value.     

Cosmopolitan risk community in a bowl: a case study of China’s good food movement

Abstract

Ulrich Beck fundamentally transformed our way of thinking about human interdependence through his three core theses on risk, individualisation and cosmopolitanisation. However, two commonly observed deficiencies in Beck’s grand theory were its Eurocentric orientation and a lack of empirical grounding. Based on 5 focus groups and 14 interviews with participants of the emerging Clean Food Movement in China, this paper extends the Beckian discussion outside Europe. Through examining how individuals understand both ‘traditional’ and ‘new’ risks associated with contemporary food consumption, this paper demonstrates that in the face of unpredictable and incalculable harms, risks are not seen as a ‘thing’, but are translated into ‘causal relations’. Subsequently, for Chinese stakeholders, the best way to safeguard food risks is to enact more visible and functioning interdependent relations in the food system. This in turn has given rise to new forms of communities which cut across conventional geographic, socio-economic and political boundaries. The paper deepens a Beckian theorisation in two ways. First, it demonstrates that the ‘enabling’ effect of risk towards a cosmopolitan society is not limited to obvious global crises, such as climate catastrophes and financial meltdown. In fact, the mundane yet intimate concern of putting ‘good’ food in one’s dinner bowl already presses actors to form new social solidarities that are cosmopolitan in nature. Second, it goes beyond Beck’s assertion that the risk society has culminated in a cosmopolitan moment, and explores how a performative cosmopolitan community reshapes the ‘relations of definition’ to mitigate risks on the ground.     

Efficiency Considerations in Online Auction Markets

The main contention of this article is that online auction markets are amenable to efficiency considerations akin to traditional financial markets. While the underlying assets traded are dissimilar between the financial and online auction markets, the fundamental principles that drive these markets are consanguineous in that similar efficiency notions are applicable. Based on the principles of arbitrage, we develop a set of efficiency criteria to evaluate the auction activity of new and identically described items. Two arbitrage principles, seller arbitrage and buyer arbitrage, are developed. These principles can be employed to evaluate the price behavior of temporally proximate auctions and to generate a useful benchmark to make efficiency evaluations. We find evidence of inefficiency for each of the items we empirically tested based on the data from eBay, currently the largest online auction house.     

Environmental Governance of Enterprises and their Economic Upshot through Corporate Reputation and Customer Satisfaction

Drawing on resource‐advantage and signalling theories, we investigate two mechanisms, namely corporate reputation and customer satisfaction, by which the environmental governance of enterprises can benefit their economic performance. Based on secondary data from the 500 largest US enterprises compiled from multiple sources, our findings contribute to the literature by establishing the link between corporate reputation and green reputation. We also establish the economic performance paths of environmental governance via corporate reputation and customer satisfaction. This study expounds on why ‘green’ matters and identifies the performance roles of two corporate strategic resources extractable from the environmental governance of enterprises. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

Supplier–supplier relationships in buyer–supplier–supplier triads: Implications for supplier performance

A growing number of studies and evidence from industries suggest that, besides managing the relationship with its suppliers, a buyer needs to proactively manage the relationships between those suppliers. In a buyer–supplier–supplier relationship triad, the buyer, as the contracting entity, influences the suppliers’ behaviors and the relationship between them. By considering the relationships in such a triad, we are able to gain a richer and more realistic perspective of buyer–supplier relationships. In this study, our goal is to examine supplier–supplier relationships in buyer–supplier–supplier triads, focusing on how such relationships impact the supplier performance. We frame the supplier–supplier relationship as co-opetition—one in which competing suppliers work together to meet the buyer's requirements. We investigate the role of the buyer on such relationships, and how the buyer and co-opetitive supplier–supplier relationships affect supplier performance. We find mixed empirical support for our hypotheses. However, we are able to demonstrate the dynamics of supplier–supplier co-opetition in the buyer–supplier–supplier triad. We point out the need for further studies in this area.     

The mixing ratio in the Indonesian dairy industry

The Indonesian dairy industry has been viewed by the Indonesian government as an industry that has the potential to improve the welfare of low income and landless farmers through providing them with an additional source of farm income. As well, the government sees the industry as a vehicle for providing opportunities for employment in rural areas. From an economy wide viewpoint, its development is viewed as a way Indonesia might save foreign exchange since a large share of its dairy requirements have to be imported. A variety of measures have been used to assist the industry. This paper investigates one of the measures, the BUSEP scheme or mixing ratio regulation which requires domestic processors to use Indonesian produced milk before imported milk.     

Contract theory and agricultural policy analysis: a discussion and survey of recent developments*

This paper surveys some recent developments in contract theory and illustrates how this theory might be useful for conceptualising policy issues related to vertical coordination and contracting in the agro‐food industry. The article begins by surveying contract theory to identify key economic distortions that can potentially justify government involvement. Next, the general ingredients of agricultural contracts that are most likely to create inefficiencies are discussed. Finally, controversial aspects of real‐world agricultural contracts are highlighted and lessons from the theory are used to determine whether government intervention is justified. Actual legislation that has been proposed in the USA is analysed where appropriate and topics that await further research are also discussed.     

Socially responsible investment fund performance: the impact of screening intensity

Perhaps the most common criticism of socially responsible investment funds is that imposing non‐financial screens restricts investment opportunities, reduces diversification efficiencies and thereby adversely impacts performance. In this study we investigate this proposition and test whether the number of screens employed has a linear or curvilinear relation with return. Moreover, we analyse the link between screening intensity and risk. Screening intensity has no effect on unadjusted (raw) returns or idiosyncratic risk. However, we find a significant reduction in α of 70 basis points per screen using the Carhart performance model. Increased screening results in lower systematic risk – in line with managers choosing lower β stocks to minimize overall risk.