The discipline of innovation.

As managers recognize the heightened importance of innovation to competitive success, they face an apparent paradox: the orderly and predictable decisions on which a business rests depend increasingly on the disorderly and unpredictable process of innovation. How can managers expect to plan for--or count on--a process that is itself so utterly dependent on creativity, inspiration, and old-fashioned luck? Drawing on his many years' experience studying innovative and entrepreneurial companies, the author argues that this paradox is apparent only, not real. Most of what happens in successful innovations is not the happy occurrence of a blinding flash of insight but, rather, the careful implementation of an unspectacular but systematic management discipline. At the heart of that discipline lies the knowledge of where to look for innovation opportunities and how to identify them. It is to this study of the sources of innovation that Mr. Drucker here addresses himself.     

The bond event study methodology since 1974

In the spirit of methodology reviews for stock event studies, like the one prepared by Binder (Rev Quant Financ Account 11:111–137, 1998), this paper discusses the development of the event study methodology for corporate bonds since its first application with Katz (J Financ 29:551–559, 1974). The motivation to conduct this review stems from two sources: First, the methodology utilized for stocks cannot simply be applied to bonds, as bonds present several features that strongly distinguish them from stocks. An erroneous model could lead to false conclusions about the impact of new information on a firm’s debt. Second, the availability of new sources for bond data enables the application of bond event studies for an increasing number of research frameworks. Thus, future research ought to be interested in the selection of the proper methodology. Consequently, this paper illustrates past and present event study methods utilized to calculate abnormal bond returns and reviews the applied parametric and non-parametric test statistics. Besides, insight on how the availability of corporate bond data has evolved through the last four decades, as well as the impact on prevailing methodology is provided. Altogether, this paper provides a first extensive snapshot of the current bond event study methodology and offers guidance for future research.     

Community health care in developing countries

Health care systems in many developing countries have shared characteristics. Government expenditures in poor countries are low for health care. The majority of people cannot easily reach a modern health facility. Most spending is for high-cost curative medicine, e.g., hospitals. Programs are often inefficient in their use of funds. The tragedy of disease in developing countreis is that many of the most serious problems are either preventable or curable by simple, inexpensive, safe methods. About 16 million children under age 5 died in 1979 in developing countries; 5 million of these deaths could have been prevented by immunization against measles, polio, tetanus, diphtheria, whooping cough, and typhoid. Many countries are establishing community-level health care facilities that use community health workers instead of doctors. A 3-tiered program is being adopted in some areas: the community health center, the rural or urban polyclinic, and the referral hospital. The community health center seeks to provide two-thirds of the needed services, including supervision of pregnancy, midwifery, care of new-born children, treatment of endemic diseases, and emergency care for injuries. Early experience has taught that it is more important for the community health worker to have practical experience and the respect of the people he serves than formal education. Improvements in nutrition, hygiene, and sanitation are needed to reach the full health potential of most communities.     

Duality for pathwise superhedging in continuous time

Finance and Stochastics - We provide a model-free pricing–hedging duality in continuous time. For a frictionless market consisting of $d$  risky assets with continuous price...     

Financial Opacity and Firm Performance: The Readability of REIT Annual Reports

We examine the capital market pricing implications of firm disclosure opacity as measured by the linguistic readability of REIT annual reports. The SEC has expressed concern that firms selectively manage the transparency of disclosures in order to hide adverse information. After controlling for other non-experimental factors that influence the readability of REIT financial statements, we find (1) financial opacity is negatively related to reported firm performance, and (2) the residual opacity that remains after controlling for other determinants of annual report readability has incremental explanatory power for returns beyond the Fama and French (1992, 1993) risk factors. The opacity risk-return premium persists after controlling for a (heretofore undocumented) stark monotonic decrease in annual report readability following the Sarbanes-Oxley Act of 2002.     

Testing Market Efficiency: Evidence From The NFL Sports Betting Market

This article examines the efficiency of the National Football League (NFL) betting market. The standard ordinary least squares (OLS) regression methodology is replaced by a probit model. This circumvents potential econometric problems, and allows us to implement more sophisticated betting strategies where bets are placed only when there is a relatively high probability of success. In-sample tests indicate that probit-based betting strategies generate statistically significant profits. Whereas the profitability of a number of these betting strategies is confirmed by out-of-sample testing, there is some inconsistency among the remaining out-of-sample predictions. Our results also suggest that widely documented inefficiencies in this market tend to dissipate over time.