A generalization of the Hull and White formula with applications to option pricing approximation

By means of Malliavin calculus we see that the classical Hull and White formula for option pricing can be extended to the case where the volatility and the noise driving the stock prices are correlated. This extension will allow us to describe the effect of correlation on option prices and to derive approximate option pricing formulas.A previous version of this paper has benefited from helpful comments by two anonymous referees.     

Status in a strange land? Context‐dependent value of status in cross‐border venture capital

Research Summary: While recent literature has depicted status as an intangible asset that is firm‐specific and mobile, we have a limited understanding of whether status confers advantage in a way similar to other intangible assets. This study examines the macro‐structural contingencies that influence the marginal value of firm status as firms expand to new markets. Building on the literatures on status and social approval assets, as well as globalization and international management, we hypothesize that two conditions influence how valuable home‐country status will be in a given host country: the interconnectedness of the home and host countries, and their relative position in the global network. We test our hypotheses in a study of 187 venture capital (VC)‐backed biotechnology ventures in 19 countries between 1990 and 2006. Managerial Summary: Startups typically prefer high‐status VC investors for endorsements, network connections, and resources. One might expect the benefits of high‐status VCs to be even higher when they invest across borders. Yet, we show that status is ingrained in context, and that the performance advantage of partnering with high‐status cross‐border VC firms depends on the relationship between the country of the VC firm and that of the startup. We find that, when the VC industries in the two countries are more connected, the positive effect of cross‐border VC firm status on successful exit is amplified. However, when the VC firm comes from a more central country than the startup, the benefits of VC firm status are less pronounced and vice versa.     

The dynamics of switching between governmental and independent venture capitalists: theory and evidence

Small Business Economics - In this paper, we study the switching dynamics between independent VCs (IVCs) and governmental VCs (GVCs) by means of a theoretical model and an empirical analysis. By...     

The Moderating Role of Local vs. Foreign Shopping Context in Consumer Experience

The current study seeks to provide a better understanding of how consumers experience shopping and whether it is contingent on local vs. foreign contexts (i.e., local vs. foreign brand department store). Using data collected by an intercept method with shoppers at a local and foreign brand department store in China, the current study finds that different types of values (i.e., emotional and intellectual) are associated with a local vs. foreign shopping context, which, in turn, affects consumer trust and customer loyalty. Results contribute to consumer experience and branding literature, and suggest that domestic companies should not blindly replicate management and operational practices of foreign companies.     

Retail service quality as a key activator of grocery store loyalty

This paper demonstrates the crucial role of retail service quality as a key activator in the formation of customer loyalty to the store; the latter is understood in a conative and action sense. Applying a modified version of the RSQS scale, a model is tested by administering a questionnaire to 450 customers in an under-investigated retail setting, i.e. supermarkets, within the Italian context. Structural equation modelling was employed. The results prove that customers consider retail service quality as a second-order dimension and recognize the main contribution of physical aspects and reliability first-order dimensions. Findings corroborate the crucial role played by perceived service quality and the mediating role of customer satisfaction and conative loyalty within the relationship between service quality and action loyalty.     

Ageing-related services as a key element for social cohesion

The aim of this article is to carry out an empirical analysis of certain factors related to dependence in Spain and additionally to study the intensity of the use of health resources by dependents. Age appears to be the main socio-demographic factor related to dependence, which confirms the need for measures to deal with the demographic changes taking place. Thus, providing services to cover long-term care could become an important instrument for social cohesion. Multivariate analysis does not reveal a strong link between the use of healthcare services and dependence that would justify the joint management of the two systems. This means that self-regulating management of dependence and healthcare systems may be adequate except in the case of severe dependency.     

Trade,foreign direct investments (FDI) and income inequality: Empirical evidence from transition countries

The aim of the article is to verify whether trade and inward foreign direct investments (FDI) may affect income distribution in a sample of 17 Transition Countries (TCs) over the period 1990–2006. In line with most of the previous literature, FDI do not have significant effects on income inequalities, whereas trade, especially when occurs with developed countries, seems to be more relevant. Different results are found when we take into consideration the educational system which represents an important channel through which FDI and trade may affect inequality.     

Meta-Analysis of the Long- and Short-Term Effects of Sales Promotions on Consumer Behavior

ABSTRACT

This article presents a meta-analysis aiming to assess the short- and long-term effects of sales promotions on consumer behavior. We found 221 studies addressing this relationship. Our final sample provided 139 observations. First, the results revealed a significant relationship between sales promotion and both purchase intentions and sales volume. Second, we identified significant and positive connections with brand loyalty, perceptions of quality, consumer attitudes, and switching costs for consumers. Third, we noted that the sample type, the number of promoted products and sample size partially moderated the relationship between sales promotion and short/long-term effects.     

How can firms access bank finance for circular business model innovation?

Access to bank finance has emerged as a key challenge for firms engaged in circular business model innovation (circular BMI), both in practice and in the academic literature. Through interviews, focus groups and archival documents, we document the experience of firms accessing finance for circular BMI and assess bank willingness to lend to firms that engage in circular BMI. Our findings offer potential strategies for firms who look for external (bank) finance to realise circular BMI. Using a case study-based theory-refining approach, we identify three core strategies that firms can use to obtain bank finance for circular BMI. First, firms can signal future cash flow expectations by aiming to secure customer contracts and preorders. Second, relationship building with banks, suppliers and customers improves the banks' risk perception of firms. Third, firms can design standardised, long-lasting circular assets that can serve as bank collateral, especially once secondary markets develop, overcoming the difficulty of lending based on innovative, firm-specific assets.     

A Survey of Transparency: An Intrinsic Aspect of Business Strategy

Well‐managed organizations must handle transparency strategically, but although research about transparency constitutes a great concern in businesses, management, society, and ethics, definitions are very diverse depending on the environment. The concept of transparency is revisited in this contribution, aiming to map the territory of transparency by surveying the terms and definitions in literature. The overview of these terms identifies two approaches of analysis: according to the content and according to the context. According to the context, two perspectives have been found: collective perspective and individual perspective. According to the content of the definition, two perspectives have been found: instrumental perspective and purposeful perspective. This survey helps to determine that transparency is an intrinsic aspect of business strategy since it is interweaved with all organizational components and systems of the strategic management process. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment