Trend derivatives: Pricing,hedging, and application to executive stock options

Both institutional and private investors often have only limited flexibility in timing their investment decision. They look for investments that will ideally be independent of the timing decision. In this article, a new class of derivative products whose payoff is linked to the trend of the underlying instrument is introduced. By linking the trend to the payoff, the timing of the decision becomes less important. Therefore, trend derivatives offer some time‐diversification benefits. How trend derivatives are designed and priced is shown. Due to their peculiar features, trend derivatives offer some interesting applications such as executive stock option plans. © 2007 Wiley Periodicals, Inc. Jrl Fut Mark 27:151–186, 2007     

Stability and variety - Products, organization and institutionalization in farm tourism

Products, collective organization and institutions are factors that shape farm tourism. The aim of this paper is to present new knowledge of the way these factors are designed and provide lessons for management in the sector. Research findings to date suggest these factors are varied but similarities within findings exist. However, while there have been a number of studies on the importance of each of the factors, few studies focus on the combined impact of them. This study attempts to go some way toward filling this knowledge gap. The empirical cases for the study are derived from three European locations: two regions in the Alps: North Tyrol in Austria and South Tyrol in Italy, and Norway. The breadth and variety of the product range differ. We also find clear contrasts between the cases when it comes to the structure of farm tourism organizations. However, the goals of the organizations are quite similar emphasizing three types of tasks: marketing, competence building and quality assurance. Concerning systems for quality assurance, a type of institutional factor, two cases are similar, while the third case (Norway) has a different (less strict) system. Based on a comparative analysis of the cases we develop a conceptual model showing the interdependence between products, organization and institutions in the farm tourism sector, and the influence of market and location. We provide some examples of application of the findings by various actors and agencies in tourism.     

Überschreitet die EZB mit ihren Staatsanleihekäufen ihr Mandat?

The ECB’s government bond purchases have become an issue for the German constitutional court. The authors see the OMT programme as falling within the bounds of its mandate but call for the ECB’s crisis policies to be strictly temporary. They argue that the OMT programme was necessary to safeguard fi nancial stability and that it does not endanger price stability in the short term. Moreover, they present evidence for the breakdown of the monetary policy transmission mechanism in the crisis countries and argue that the conditions for forbidden monetary government fi nancing are not met — provided the ECB sticks to certain conditions. Particularly, the ECB’s government bond purchases must maintain a clear distinction between the primary market and a functioning secondary market.     

Modeling FDI based on a spatially augmented gravity model: Evidence for Central and Eastern European Countries

Based on a spatially augmented gravity model, the current paper isolates spatial interrelationships in foreign direct investment (FDI) to Central and Eastern European Countries (CEECs) not only across the destination but also across the origin country dimension of FDI. Results show that (i) spatial interrelationships across destination countries are present and are consistent with the predominance of vertical-complex FDI in total FDI; (ii) spatial correlation across origin countries is given in earlier years of transition, while spillover and competition effects cancel over the whole sample period; and (iii) agglomeration forces gain in importance for FDI to CEECs.     

Language competencies,policies and practices in multinational corporations: A comprehensive review and comparison of Anglophone,Asian, Continental European and Nordic MNCs

The importance of language differences in multinational companies (MNCs) can hardly be overlooked. This paper therefore provides the first large-scale quantitative overview of language competencies, policies and practices in MNCs. It is based on data from more than 800 subsidiaries, located in thirteen different countries with headquarters in more than 25 different countries, which were aggregated into four distinct home country clusters. This comprehensive study allows us to differentiate prior conceptual or case-based findings according to home, host and corporate languages and to develop managerial implications which vary according to the different country clusters.     

Die Bedeutung von Transaktionskosten und Verfügungsrechten

Ronald H. Coase z?hlt zu den bekanntesten und bedeutendsten ?konomen. In seinen Werken hat er den Grundstein für die Neue Institutionen?konomie gelegt und die Theorie der Verfügungsrechte entwickelt. Die Arbeiten von Coase fi nden über die Wirtschaftswissenschaften hinaus weitreichende Beachtung. Die Autoren würdigen das Lebenswerk von Coase in diesem Beitrag.     

Gift Giving,Guanxi and Illicit Payments in Buyer–Supplier Relations in China: Analysing the Experience of UK Companies

This paper explores the relationship between gift giving, guanxi and corruption through a study of the relationships between UK manufacturing companies in China and their local component suppliers. The analysis is based on interviews in the China-based operations of 49 UK companies. Interviews were carried out both with senior (often expatriate) staff and with local line managers who were responsible for everyday purchasing decisions and for managing relationships with suppliers. The results suggest that gift giving is perceived to be a significant problem in UK-owned companies in China. However the relationship between these payments and established understanding of gift giving within guanxi-networks appears to be weak. Gift giving appears to be associated with illicit payments, corruption and the pursuit of self-interest. Firms seek to reduce the incidence of illicit transactions by changing staff roles, instituting joint responsibilities, which include the separation of different aspects of sourcing/purchasing, ineasing the involvement of senior staff in the process and through the education of employee and suppliers.