Boards of directors in family firms: a generational perspective

The purpose of this study is to advance the understanding of boards of directors in family firms. Building on generational changes in family attributes, we argue that firms in a different generational phase have different governance needs and characteristics. With regard to board task needs, the empirical results indicate a convex generational evolution in the need for board advice, and a rise over the generations in the need for board control. With regard to board composition, we find that the likelihood of having an outside director on the board has a convex generational trend. This relationship seems to be fully mediated by the firm’s board task needs. Furthermore, the number of family directors seems to increase over the generations. This study demonstrates that it is important to consider the generational phase of the family firm in order to understand its governance system.

TESTING THE NET BUYING PRESSURE HYPOTHESIS DURING THE ASIAN FINANCIAL CRISIS: EVIDENCE FROM HANG SENG INDEX OPTIONS

We investigate net buying pressure in the Hong Kong Hang Seng Index options market during the Asian financial crisis from July 1997 to August 1998. Our findings suggest that during this period, the dramatic changes in volatility overwhelmed the dynamics of supply and demand in the options market. The extremely high realized volatility drove market participants' expectations about future market volatility in the early months of the crisis. Findings during the late‐crisis, pre‐crisis, and post‐crisis periods are consistent with the net buying pressure hypothesis.     

The Effects of Reduced Social Security Contributions on Employment: An Evaluation of the 2003 French Reform*

In 2003, the French government decided to reform the system managing the different minimum wage regulations and the targeted reductions to employers' social security contributions. The main objective of the Fillon reform was to simplify the complex regulations that were created by the progressive introduction of the 35‐hour week. The reform incidentally created large variations in labour costs, depending on the type of firm and the wage level within the firm. This paper presents an evaluation of the impact of this reform on employment using a balanced panel of firms with more than five employees, drawn from a matching between several administrative data sources from 2000 to 2005.     

The Impact of In‐Store Greenery on Customers

The incorporation of greenery in retail areas has scarcely been explored in environmental psychology studies. In a 2 × 2 experimental design, the effect of in‐store vegetation on consumer emotions and responses toward the store was studied, considering the moderating role of the information rate of the retail setting. While introducing foliage in the store environment did not evoke feelings of excitement, it was found to elicit pleasure and to reduce stress in a “complex” store interior. Given the impact of pleasure and stress on consumers’ approach/avoidance responses, these findings support the potential of integrating greenery, particularly in “spatially dense” stores.     

Numerical pricing of American options under infinite activity Lévy processes

Under infinite activity Lévy models, American option prices can be obtained by solving a partial integro‐differential equation (PIDE), which has a singular kernel. With increasing degree of singularity, standard time‐stepping techniques may encounter difficulties. This study examines exponential time integration (ETI) for solving this problem and the performance of this scheme is compared with the Crank–Nicolson (CN) method and an implicit–explicit method in conjunction with an extrapolation (IMEX‐Extrap), in terms of computational speed and convergence orders. These findings indicate that ETI is faster and more accurate among PIDE‐based methods for solving the system of ordinary differential equations resulting from spatial discretization of the PIDE. For very singular problems, it is shown that the IMEX‐Extrap scheme becomes unfavorable compared with the other schemes as it is relatively more time consuming and the global convergence deteriorates from quadratic to linear, whereas the ETI scheme yields both point‐wise and global quadratic convergence. For illustration, under the infinite variation process, the IMEX‐Extrap achieves a precision of the order of 10^?4 in 663.016 s, whereas for the same set of parameters, the CN method and the ETI scheme reach an accuracy of the order of 10^?5 in 237.891 s and 22.772 s, respectively. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:809–829, 2011     

SPATIAL PANELS: RANDOM COMPONENTS VERSUS FIXED EFFECTS*

This article investigates spatial panel data models with a space–time filter in disturbances. We consider their estimation by both fixed effects and random effects specifications. With a between equation properly defined, the difference of the random versus fixed effects models can be highlighted. We show that the random effects estimate is a pooling of the within and between estimates. A Hausman‐type specification test and an Lagrangian multiplier test are proposed for the testing of the random components specification versus the fixed effects specification.     

Central bank credibility and the expectations channel: evidence based on a new credibility index

This article investigates the relationship between central bank credibility and the volatility of the key monetary policy instrument. First, we propose a time-varying measure of central bank credibility based on the gap between inflation expectations and the official inflation target. While this new index addresses the main limitations of the existing indicators, it also appears particularly suited to assess the monetary experiences of a large sample of inflation-targeting emerging countries. Second, by means of EGARCH estimations, we formally prove the existence of a negative effect of credibility on the volatility of the short-term interest rate. In line with the expectations channel of monetary policy, the higher the credibility of the central bank, the lower the need to move its instruments to effectively fulfill its objective.