Partner Empowerment and Relationship Failure in Franchising

Franchisors must empower franchisees to take decisions on a package of peripheral elements in response to pressure for local adaptations and for entrepreneurial autonomy. However, little is known about which specific elements should be decentralized and to what extent adaptation of such elements affects disputes between franchisor and franchisees. This study explores these issues by analyzing which decision rights should be franchisees’ responsibility to reduce early terminations instigated by the franchisor. The results show that delegating decision rights on local advertising and personnel reduces early terminations while delegation of pricing tends to increase them, regardless of the size of the system. Interestingly, successful delegation in other decision‐areas is contingent on the brand‐name value. More specifically, only larger chains seem to benefit from delegating assortment and decoration decisions.     

The Two Sides of the Story: Network Investments and New Venture Creation

It is widely recognized that networks provide access to resources necessary for founding a new venture. However, they also come along with opportunity costs of time. We therefore argue that maintaining a set of network relationships is an investment that may not always pay off. More specifically, we develop detailed hypotheses on why the relationship between investing time in developing and maintaining a larger network and more intense network relationships and success in new venture creation may be best described by an inverted U. Testing our hypotheses on longitudinal data of 137 nascent entrepreneurs, we find broad support for our propositions.     

Financial development and international trade: Is there a link?

This paper explores a possible link between financial development and trade in manufactures. The theoretical model focuses on the role of financial intermediaries in facilitating large-scale, high-return projects and shows that economies with better-developed financial sectors have a comparative advantage in manufacturing industries. We provide evidence for this hypothesis, first proposed by Kletzer and Bardhan (Journal of Development Economics 1987;27:57-70), using a 30-year panel for 65 countries. Controlling for country-specific effects and possible reverse causality, we show that financial development exerts a large causal impact on the level of both exports and the trade balance of manufactured goods.     

Exponential Hedging and Entropic Penalties

We solve the problem of hedging a contingent claim B by maximizing the expected exponential utility of terminal net wealth for a locally bounded semimartingale X . We prove a duality relation between this problem and a dual problem for local martingale measures Q for X where we either minimize relative entropy minus a correction term involving B or maximize the Q -price of B subject to an entropic penalty term. Our result is robust in the sense that it holds for several choices of the space of hedging strategies. Applications include a new characterization of the minimal martingale measure and risk-averse asymptotics.     

Pricing and hedging of credit derivatives via?the?innovations approach to nonlinear filtering

In this paper, we propose a new, information-based approach for modelling the dynamic evolution of a portfolio of credit risky securities. In our setup, market prices of traded credit derivatives are given by the solution of a nonlinear filtering problem. The innovations approach to nonlinear filtering is used to solve this problem and to derive the dynamics of market prices. Moreover, the practical application of the model is discussed: we analyse calibration, the pricing of exotic credit derivatives and the computation of risk-minimizing hedging strategies. The paper closes with a few numerical case studies.     

Using accounting-based and loan-related information to estimate the cure probability of a defaulted company

The cure of a defaulted company has important implications for the estimation of the loss given default. In this study, we estimate the probability of a defaulted company being cured using data on a large international sample of defaulted companies. More specifically, we examine whether historic accounting information on a defaulted company and loan-related information are associated with that company's probability of being cured. The main finding of our analysis is that both accounting-based and loan-related independent variables increase the validity of cure prediction models.     

On the robustness of risk-based asset allocations

Since the subprime crisis, portfolios based on risk diversification are of great interest to both academic researchers and market practitioners. They have also been employed by several asset management firms and their performance appears promising. Since they do not rely on estimates of expected returns, they are assumed to be robust. The same argument holds for minimum variance and equally weighted portfolios. In this paper, we consider a Monte Carlo simulation, as well as an empirical global portfolio dataset, to study the effect of estimation errors on the outcomes of two recently proposed asset allocations, the equally weighted risk contribution (ERC) and the principal component analysis (PCA) portfolio. The ERC portfolio is more robust to changes in the input parameters and has a smaller estimation error than the Markowitz approaches, whereas the PCA portfolio is even more unstable than the classical approaches. In the worst-case scenario, neither approach delivers what it promises. However, in every case the resulting return?Crisk relationship is dominated by the Markowitz approaches.     

让资本赋能大湾区全球创新高地建设

粤港澳大湾区是我国实施创新驱动发展战略的重大引擎，有优势成为引领全球新一轮产业革命的"领头雁"。资本是创新发展的重要驱动力，文章认为股权投资（VC/PE）能通过筛选培育、风险分散、融资支持、要素集成、制度供给、资源重组六方面制度功能支持创新发展。巩固提升粤港澳大湾区股权投资市场优势，让股权投资赋能粤港澳大湾区全球创新高地建设，要宽化资本来源，实现投资主体多元化；强化技术攻关，发展非对称性"杀手锏"技术，培育优质项目源；深化人才激励，推进风险投资家与企业家、科学家的深度合作；优化投资环境，让创新创业创造活力竞相迸发；活化退出通道，畅通"募投管退"的投资闭环。     

Incentives and innovation? R&D management in Germany’s chemical and electrical engineering industries around 1900

The allocation of intellectual property rights between firms and employed researchers causes a principal-agent problem between the two parties. We investigate the working contracts of researchers employed by German chemical and electrical engineering firms at the turn of the 20th century and show that the firms were aware of the principal-agent problem and offered performance-related compensation schemes to their scientists. We show that past bonuses are positively correlated with current patenting, whereas past total income is negatively associated with current patenting. Thus, we discover a trade-off between level and structure of compensation on the one hand and patenting activity on the other.