Subsidizing technology: How to succeed

Examining the database of applications to the Regional Government of Valencia's Institute for Small and Medium-sized Industries (Spain) for subsidies to aid technological development in small and medium-sized enterprises, this study seeks to explain the approval or rejection and the success or failure of projects that look to receive state funding. The independent variables in the database are particularly concerned with reliance on path dependence. The variable length of membership of the Institute, the number of previous applications, technology level, or belonging to a particular geographical area relate to the accumulation of experience and correspond to the study hypotheses. The study highlights the importance of accumulated experience and firm path dependence for application approval and success of funded projects.     

Value at risk: Is a theoretically consistent axiomatic formulation possible?

This note identifies three properties of a risk measure, the acceptance of all of which implies the acceptance of the VaR risk measure; and the rejection of any one of which implies the rejection of the VaR risk measure. First, a risk measure should reflect weak aversion to losses. Second, only sufficiently likely threats matter. Finally, the risk measurement should be unaffected by how promising the upside may look like. These properties, by themselves, constitute a consistent set of axioms that are necessary and sufficient for the acceptance of the VaR risk measure on a given probability space. The axiomatization highlights a peculiar characteristic of VaR: it ignores the upside, while at the same time neglecting the worse of the downside.     

Loss Modeling Using Spreadsheet-Based Simulation

With the dramatic increase in the speed of personal computers and steep decline in the cost of computing, simulation has become one of the standard tools in the risk manager's toolbox and should now become one of the standard tools in the risk management and insurance student's toolbox. This teaching note aims to facilitate this process by showing how to create and run a simulation in a spreadsheet environment, and interpret simulation results to gain insight and understanding about a real-world problem. Specifically, this teaching note provides step-by-step instruction for simulating the present value of payments for losses occurring within a 1-year policy period. Losses are covered by an aggregate excess of loss treaty. The uncertainty lies in the frequency and severity of losses as well as in claim processing time, and also in the discount rate for calculating the present value of loss payments.     

Trust and Dialogue: Theoretical Approaches to Ethics Auditing

The aim of this paper is to put forward an ethical framework for the conceptualization and development of ethics audits, here understood as a catalyst for company dialogue and in general, for management of ethics in the company. Ethics auditing is understood as the opportunity and agreement to devise a system to inform on ethical corporate behavior. This system essentially aims to increase the transparency and credibility of the companys commitment to ethics. At the same time, the process of elaborating this system allows us to introduce the moral dimension into company actions and decisions, thereby completing a key dimension of the production, maintenance and development of trust capital. To this end, the following four steps are taken. First, we analyze the relation between ethics auditing and trust as a basic moral resource in the dialogue between the company and its various stakeholders. Second, we examine the social balance sheet as a precursor to ethics auditing and focus on what prevents it from going further. Third, we attempt to reconstruct the basic moral assumptions underlying the companys social responsibility from the discourse ethics approach. Finally, we present a methodological framework from which to carry out our proposal, which embraces two basic theoretical perspectives stakeholder theory and the values derived from discourse ethics as a normative framework.     

Efficiency in banking services: a comparative analysis of Internet-primary and branching banks in the US

This paper investigates the provision of financial services by banks as a two-stage production process involving three different basic activities. The first stage includes service activities, while the second stage comprises both investment-related and risk management activities. Financial services performance is assessed in terms of service efficiency and investment and risk management efficiency for years 2002–2010. The major empirical findings are that the Internet-primary bank is more efficient than most branching banks in deposit-raising activities, but with regard to investment and risk management activities, there are many brick-and-mortar banks that match the online bank performance.     

Barriers to Innovation among Spanish Manufacturing SMEs

Innovation is widely recognized as a key factor in the competitiveness of nations and firms. Small firms that do not embrace innovation within their core business strategy run the risk of becoming uncompetitive because of obsolete products and processes. Innovative firms are a perquisite for a dynamic and competitive economy.
This paper reports on the results of a study that examined barriers to firm innovation among a sample of 294 managers of small and medium-sized enterprises (SMEs) in Spain. The study examined the relation between (1) product, process, and management innovation and (2) 15 obstacles to innovation, which can limit a firm's ability to remain competitive and profitable. Findings of the study show that barriers have a differential impact on the various types of innovation; product, process, and management innovation are affected differently by the different barriers. The most significant barriers are associated with costs, whereas the least significant are associated with manager/employee resistance. Additionally, the results demonstrate that the costs associated with innovation have proportionately greater impact on small than on larger firms.
The findings can be used in the development of public policy aimed at supporting and encouraging the innovation among SMEs in Spain. Government policies that encourage and support innovation among all firms, especially small firms, can help countries remain competitive in a global market. Public policy that encourages innovation can enable firms to remain competitive and survive, both of which have direct implications for employment and a country's economic viability. The results may also be insightful for managers who are attempting to encourage innovation. Understanding barriers can assist managers in fostering an innovative culture by supporting new ideas or by avoiding an attitude that creates resistance to new ideas.     

Effects of Macroeconomic Policies on Sectoral Prices

The effect of macroeconomic policies on the relative pricesof internationally traded and domestic goods has been the subjectof extensive study. Analysis of the way in which these policiesthen affect prices at the sectoral level is complicated by theheterogeneity of sectoral production: even the prices of singleproducts usually are determined by both domestic and tradedcomponents. We present a framework which first traces the influenceof macropolicy on the relative prices of exports, imports, andhome goods. It then accounts for each sector's degree of "tradability,"which is based on the importance of trade in sectoral income,and the influence of macroeconomic policy on sectoral prices.To illustrate the use of this approach, it is applied to a simulationof trade liberalization in Argentina. Our results suggest thateconomywide policies had substantial negative effects on boththe real exchange rate and the incentives to agricultural exports.     

Los procesos α-estables y su relación con el exponente de autosimilitud: paridades de los tipos de cambio dólar estadounidense,dólar canadiense,euro y yen

In this research we analyze the performance of the exchange rates of USA Dollar, Canadian Dollar, Euro and Yen; we estimate the basic statistics, α-stable parameters, we performed tests of goodness fit Kolmogorov-Smirnov, Anderson-Darling and Lilliefors; we estimate self-similarity exponents and we performed t y F tests, ruling that the series of the exchange rates are multi-fractal; we estimate confidence intervals of the exchange rates and we conclude that the estimated α-stable distributions are more efficient than the gaussian distribution to quantify market risks and the series are self-similar; by the ? index we infer the risk of events and we indicate that exchange rates are anti-persistent, have mean reversión, short-term memory, negative correlation and high risk in the short and medium term; the estimation and validation of α-stable distributions and the exponent of self-similarity are important for pricing and the creation of innovative investment instruments by financial engineering, risk management and derivatives pricing.