Bank capital regulation, diversification loss and the probability of bank failure

This paper investigates the effect of bank capital regulation on the probability of bank failure. Utilizing a two-parameter approach, it is shown that the relationship between bank capital ratio and probability of bank failure is not necessarily negative, and that capital ratio regulation may increase the probability of bank failure. This is because an increase in bank capital ratio may lead to diversification loss via a decrease in the number of borrowers to which a bank offers loans.     

Explaining business groups started by habitual entrepreneurs in the Italian manufacturing sector

The technical (plant) and legal (company) units normally used in official statistics do not take into consideration the phenomenon of business groups: i.e. sets of companies controlled by the same entrepreneur. The main aims of this paper are to assess the presence of such groups in the Italian small firm manufacturing sector and to examine the causes of their formation. Two data sets are used: the first is a representative sample of Italian manufacturing firms while the second is a small sample of groups localized in the Region of the Marches. They show that groups are widely present among small and medium-sized enterprises (SMEs). Starting from the premise that the group is the result of the expansion of activities controlled by the same entrepreneur, this paper reports a first attempt to discriminate among three alternative propositions regarding the causes of such growth and the reasons for the adoption of the group form: (1) as the result of the firm's growth policy; (2) as the result of entrepreneurial dynamics; and (3) as the result of the capital accumulation process on the part of the entrepreneur or his/her family. The empirical analysis on the whole favours the first hypothesis.     

The impact of supply-side electronic integration on customer service performance

Although information technologies have been expected to directly enhance firm performance in specific value chain activities (e.g., supplier performance or customer service performance), their advanced capabilities offer the promise of organizational integration and spill-over benefits. Enterprise systems provide firms with platforms for electronically integrating their supplier and demand chain activities. Spill-over benefits refer to the impacts that occur when IT investments in one organizational domain benefit performance in a different value chain side of the firm. Supply-side electronic integration (SEI) refers to the use of electronic means to integrate the exchange of information and transactions with suppliers through enterprise systems. In our research, we examine whether SEI generates spill-over effects on customer service performance, over and beyond firms’ direct investments in customer-side digitization. We also examine whether structural attributes of the firm (e.g., vertical integration, diversification, and centralization) moderate the effects of supply-side electronic integration on customer service performance. Our analysis of a secondary dataset of InformationWeek 500 firms shows that SEI helps firms realize cost-savings in their customer service performance, especially if they are less vertically integrated. In addition, SEI investments help diversified and centralized firms achieve cross-selling with their customers. We also find that SEI is more likely to help decentralized and diversified firms achieve customization in their customer service activities. These results suggest that SEI helps firms achieve twin goals in customer service: cost reduction and revenue expansion. Overall, our research reveals how supply-side electronic integration could generate benefits in customer service performance in firms.     

Diversification discount and investor sentiment

While previous research has linked the diversification discount to suboptimal managerial decisions, recent empirical work and methods have shown these relationships are not as strong. A rational learning framework indicates the diversification discount is related to economic activity. Building on this framework, we test and find support for the hypothesis that investor sentiment explains the diversification discount. Investor sentiment favors riskier firms when sentiment is high, thereby increasing returns and relative valuations. As a result, diversified firms imputed value based on these multiples leads to a larger diversification discount and reverses when sentiment falls.     

Securitization and the dark side of diversification

Diversification by banks affects the systemic risk of the sector. Importantly, Wagner (2010) shows that linear diversification increases systemic risk. We consider the case of securitization, whereby loan portfolios are sliced into tranches with different seniority levels. We show that tranching offers nonlinear diversification strategies, which can reduce the failure risk of individual institutions beyond the minimum level attainable by linear diversification without increasing systemic risk.     

Defence contractors and diversification into the civil sector: Rolls-Royce, 1945–2005

A number of studies have shown that defence contractors have exhibited a marked reluctance to diversify away from defence and develop civil applications. However, the aero engine manufacturer Rolls-Royce is one defence contractor to which this does not apply. Over a 60-year period it has moved from being almost entirely dependent on defence work to a point where defence now constitutes barely one-fifth of its turnover. This article examines the development of the company's civil aerospace business over the period since 1945. It focuses specifically on the strategies used by Rolls-Royce in the civil aerospace field. These strategies are explored in the context of changes in market conditions, technology, and governance arrangements. The effectiveness of the various strategies, including their contribution to the company's current position, is evaluated.     

所有权性质、多元化经营与现金持有

笔者区分所有权性质并以股改后(2007年～2009年)上市公司非平衡面板数据为样本,检验多元化与现金持有关系,研究发现,中国上市公司多元化与现金持有不存在统计显著的相关性。但国有控股企业多元化与现金持有量显著正相关,而非国有控股企业中两者显著负相关。国有控股企业多元化反而降低了现金管理效率,而非国有控股企业通过多元化实现了更高的内部资本市场效率,从而持有更少现金。研究结果间接支持了现金持有的委托代理理论。     

基于代理理论的经营多元化对企业业绩的影响研究

基于中国制造业上市公司2003～2009年的财务数据,讨论多元化经营和企业内部代理对企业业绩的影响,结果表明:多元化经营对企业业绩具有负向影响,股东与管理层之间的代理成本、经理层之间的代理成本对企业的业绩具有显著的负向影响,控股股东与中小股东之间的代理问题对企业业绩不具有负向影响;多元化经营导致企业股东与管理层之间代理成本增加,同时使得控股股东与中小股东之间的代理成本减少。     

Diversification versus optimality: is there really a diversification puzzle?

In this paper, we provide a general valuation of the diversification attitude of investors. First, we empirically examine the diversification of mean-variance optimal choices in the US stock market during the 11-year period 2003–2013. We then analyze the diversification problem from the perspective of risk-averse investors and risk-seeking investors. Second, we prove that investors’ optimal choices will be similar if their utility functions are not too distant, independent of their tolerance (or aversion) to risk. Finally, we discuss investors’ attitude towards diversification when the choices available to investors depend on several parameters.     

浅析体育场馆建设融资方式的多元化

随着中国经济的快速发展,中国体育产业面临重要发展机遇.体育场馆在北京和中国其他各地的建设数量迅速增加.文章分析了多种融资方式,通过多种方式利用社会资金,解决体育场馆建设中的资金需求问题.