How Much Does Investor Sentiment Really Matter for Equity Issuance Activity?

We study the extent to which investor sentiment matters for aggregate equity issuance activity. We focus on firms that are susceptible to investor sentiment and for which accurate measures of economic fundamentals are available. While sentiment on its own matters for equity issuance, it matters relatively little once we control for accurately measured fundamentals. Collectively, proxies for sentiment explain roughly 10 percentage points of the time-series variation of equity issuance beyond the roughly 40% explained by fundamentals. We conclude that investor sentiment does not seem to matter very much for aggregate equity issuance activity.     

The impact of the Internet upon bank marketing

Information and communication are critical to developing customer relationships. Thus, new information and communication technologies (NICTs) became a key knowledge tool for the organisation within a relationship marketing strategy. Retail banking is a good example of a sector in which the virtualisation of relationships is increasing. However, there is no consensus as to whether banking relationships are strengthened or weakened by the use of technology. This article discusses the virtualisation of the interaction processes between banks and their customers and analyses the influence of the Internet on these relationships. A questionnaire was distributed by mail to 340 Internet banking services’ users. A principal components analysis and a multiple regression analysis were conducted in order to discuss the relationship between the identified dimensions of Internet banking and relationship marketing. The research finds three factors related to the use of Internet banking which strengthen the relationships between banks and their customers: the intensity of Internet use, the diversity of access locations and the diversity of Internet applications. From a managerial point of view, these findings have implications for the development of new relationship approaches based on technology.     

Centralised order books versus hybrid order books: A paired comparison of trading costs on NSC (Euronext Paris) and SETS (London Stock Exchange)

This article compares the cost of trading large capitalisation equities on the hybrid order-driven segment of the London Stock Exchange and the centralised electronic order book of Euronext. Using samples of stocks matched according to economic sector, free float capitalisation, and trading volume, our study shows that transaction costs are lower on the centralised order book than on the hybrid order book. The presence of dealers outside the electronic order book favours the frequency of large trades, but is associated with higher execution costs for all other trades and higher adverse selection and inventory costs inside the order book.     

Risk taking in the domain of losses: experiments in several countries

This paper presents an experimental investigation of risk taking in the domain of losses. The experiments were conducted with students in several universities whilst introducing the rudiments of expected utility theory and risk behaviour. The results are partly compatible with expected utility theory, assuming an inflection point in the utility function over losses. They also show similarities in the risk perception of students across different countries, i.e. a useful validation of human behaviour in an international context.     

Multivariate Models of Equity Returns for Investment Guarantees Valuation

Abstract

In this paper we investigate the valuation of investment guarantees in a multivariate (discrete-time) framework. We present how to build multivariate models in general, and we survey the most important multivariate GARCH models. A direct multivariate application of regime-switching models is also discussed, as is the estimation of these models using maximum likelihood and their comparison in a multivariate setting. The computation of the CTE provision is further presented. We have estimated the models with a multivariate dataset (Canada, United States, United Kingdom, and Japan), and we compared the quality of their fit using multiple criteria and tests. We observe that multivariate GARCH models provide a better overall fit than regime-switching models. However, regime-switching models appropriately represent the fat tails of the returns distribution, which is where most GARCH models fail. This leads to significant differences in the value of the CTE provisions, and, in general, provisions computed with regime-switching models are higher. Thus, the results from this multivariate analysis are in line with what was obtained in the literature of univariate models.     

The Difficult but Necessary Task of Developing a Specific Project Team Research Agenda

Project teams are central to organizations everywhere; however, there is a knowledge gap between project management scholars on the one hand and organizational behavior and industrial–organizational (OB/IO) scholars on the other. This gap seriously impedes the advancement of knowledge, because scholars from both fields have not leveraged each other's considerable knowledge and might be relying on outdated models and evidence to study project team phenomena, manage project teams, or develop university curricula. A call is made for interdisciplinary research projects devoted specifically to developing a research agenda on project teams.