Environmental attitude in the board. Who are the “green directors”? Evidences from Italy

Board members' attitudes towards environmental protection are an important antecedent of how companies define and implement sustainability initiatives, but little is known about directors' attitudes and the factors associated with these. Using survey data on Italian board members, the research sought to explore the relationships between these individual's personal attributes, especially those related to their roles on boards, and their attitudes towards environmental protection. The findings suggest that female directors, directors with financial background, and independent directors are positively related to attitudes towards environmental protection. In the financial sector, younger board members and risk committee members show stronger environmental attitudes. The results could be of interest to policymakers because the board member attributes identified may require a stronger regulatory focus in order to achieve public policy's environmental protection objectives and to governance bodies in terms of defining board committees' composition and selecting “green directors” oriented towards environmental issues.     

Convergence of inflation: A necessary prerequisite for EMU?

This article assesses the rationale for inflation convergence as a major criterion for the passage to the final stage of Economic and Monetary Union (EMU). A simple two-country model is developed to examine the effects of the change in regime under different hypotheses concerning agents' expectations. The results suggest that, in the absence of convergence, the move to EMU is likely to produce spillover effects from the high-inflation to the low-inflation country. The latter, therefore, has a strong incentive to request strict convergence criteria for inflation before moving to EMU.     

The Poisson Log-Bilinear Lee-Carter Model

Abstract

Life insurance companies deal with two fundamental types of risks when issuing annuity contracts: financial risk and demographic risk. Recent work on the latter has focused on modeling the trend in mortality as a stochastic process. A popular method for modeling death rates is the Lee-Carter model. This methodology has become widely used, and various extensions and modifications have been proposed to obtain a broader interpretation and to capture the main features of the dynamics of mortality rates. In order to improve the measurement of uncertainty in survival probability estimates, in particular for older ages, the paper proposes an extension based on simulation procedures and on the bootstrap methodology. It aims to obtain more reliable and accurate mortality projections, based on the idea of obtaining an acceptable accuracy of the estimate by means of variance reducing techniques. In this way the forecasting procedure becomes more efficient. The longevity question constitutes a critical element in the solvency appraisal of pension annuities. The demographic models used for the cash flow distributions in a portfolio impact on the mathematical reserve and surplus calculations and affect the risk management choices for a pension plan. The paper extends the investigation of the impact of survival uncertainty for life annuity portfolios and for a guaranteed annuity option in the case where interest rates are stochastic. In a framework in which insurance companies need to use internal models for risk management purposes and for determining their solvency capital requirement, the authors consider the surplus value, calculated as the ratio between the market value of the projected assets to that of the liabilities, as a meaningful measure of the company’s financial position, expressing the degree to which the liabilities are covered by the assets.     

Sentiment and Financial Health Indicators for Value and Growth Stocks: The European Experience

In this study, we analyse the effect of macroeconomic surprises on inflation compensation data – the sum of inflation expectation, risk and liquidity premia – in the euro area. The empirical analysis is based on a daily data set, which covers a wide spectrum of maturities, stemming from inflation-indexed markets between 2 January 2004 and 31 December 2007. Our results suggest that when gauging short- and medium-term inflation compensations, market operators are sensitive to surprises related to real activity and prices. Notwithstanding, long-term inflation compensations remain generally unresponsive to macroeconomic surprises, attesting the European Central Bank's high credibility on the sample under consideration. The study also cross-checks the results from two different euro area inflation-indexed instruments (bonds and swaps) which differ slightly regarding medium-term horizon but give a similar picture regarding long-term horizons.     

Codes of Ethics as Contractarian Constraints on the Abuse of Authority within Hierarchies: A Perspective from the Theory of the Firm

Abuse of authority is an unsolved problem in the new institutional theory of the firm. This paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics. From the ex-ante standpoint the paper elaborates on the idea of a Social Contract based on Co-operative Bargaining Games and deduces from it the fair/efficient 'Constitution' of the firm endorsed by means of a well-devised corporate code of ethics. From the ex-post standpoint, codes of ethics are proved to be self-enforcing norms, by showing how they put at work the mechanism of a Repeated Game of Reputation within hierarchical transactions (firms) characterised by incomplete contracts and unforeseen events. To accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event, i.e. an event to which also the ex-ante unforeseen, unimaginable states of the world belong to a certain degree.     

Secondary trading of airport slots as a combinatorial exchange

In our research we propose a market formalization of secondary trading of airport slots. This proposed market is managed through an individual rational and budget balanced combinatorial slot exchange. The suggested market mechanism allows consideration of en-route sector capacities during the slot allocation process. We quantify the potential advantage of the market by comparing it with current practice. The results show that solutions that appear optimal when neglecting en-route sector capacities can be infeasible when taking capacities into account. Finally, in the proposed market the existence of grandfather rights does not seem to affect airline costs in a significant way.     

Systematic review and analysis of efficacy of recombinant factor IX products for prophylactic treatment of hemophilia B in comparison with rIX-FP

Abstract

Aims: Prophylaxis with standard-acting recombinant factor IX (rFIX) in hemophilia B patients requires frequent injections. Extended half-life (EHL) products allow for prolonged dosing intervals, and so reduce this treatment burden. Three technologies are employed to extend the half-life of FIX; glycopegylation, Fc-fusion, and albumin fusion. rIX-FP is a novel albumin fusion protein, which allows for a prolonged dosing interval of up to 14?days. A systematic review and indirect statistical comparison was performed to evaluate the efficacy of both EHL and standard-acting rFIX products compared with rIX-FP in Phase III trials for prophylaxis in adult hemophilia B patients.

Materials and methods: A systematic search was conducted in both EMBASE and PubMed to identify Phase III trials of prophylactic rFIX treatment in previously treated hemophilia B patients aged ≥12?years (FIX ≤2%). Annualized bleeding rate (ABR), spontaneous ABR (AsBR), and joint ABR (AjBR) data were extracted from each study. A z-test was performed using the mean of each parameter, and the mean difference in outcome between studies was calculated.

Results: Seven articles investigating six rFIX products were identified. Median ABR, AsBR, and AjBR ranged from 0–3.0, 0–1.0, and 0–1.1 (means = 0.8–4.26, 0.13–2.6, and 0.34–2.85), respectively. rIX-FP achieved the lowest median and mean values in all three parameters. Z-tests showed that mean ABR was significantly lower for rIX-FP 7-day prophylaxis compared with the majority of standard-acting and other EHL rFIX products.

Limitations: The low number of appropriate trials available for comparison limits the quantity of data available for comparison, and restricts the use of methods of adjustment for variance in study design or patient characteristics. However, these limitations are shared with similar analyses published in this field.

Conclusion: This indirect comparison of Phase III trials indicates that rIX-FP efficacy compares favorably vs other rFIX products for prophylaxis in hemophilia B.     

An AHP analysis of air traffic management with target windows

The main operational concept of Single European Sky ATM Research Programme is the notion of business trajectory. One possible implementation is based on the notion of a contract of objectives; an agreement among the main air traffic management actors on spatial and temporal intervals called target windows. These 4D windows are defined prior to flight departure by the airlines, airports and air navigation service providers to increase punctuality. We use an analytic hierarchy process to assess the opportunity of implementing this concept by considering the views of experts. The findings indicate that there are net benefits for airlines and air navigation service providers but not for airports     

Excess Volatility of Exchange Rates with Unobservable Fundamentals

The authors present tests of excess volatility of exchange rates which impose minimal structure on the data and do not commit to a choice of exchange rate "fundamentals." The method builds on existing volatility tests of asset prices, combining them with a procedure that extracts unobservable fundamentals from survey-based exchange rate expectations. The method is applied to data for the three major exchange rates since 1984, and broad evidence is given of excess volatility with respect to the predictions of the canonical asset-pricing model of the exchange rate with rational expectations.