Should there exist secondary markets for executive stock options?

This paper investigates the potential disadvantages of the secondary markets for executive stock options (ESOs). The benefits of such markets are evident, but they might also have negative effects for shareholders. Executives might, for example, use inside information to time their ESO selling. We investigate two personal motives of managers that can be assumed to affect their optimal selling decision, that is, managers' personal portfolio management issues and the use of inside information. We explore these motives by analyzing unique data from Finland, where there are secondary markets for ESOs. The results of the study support the traditional portfolio diversification hypothesis according to which managers tend to sell their ESOs when holding an ESO is equivalent to holding the underlying stock; that is, in such a case a manager's wealth is closely tied to the stock price of the firm. With respect to the use of inside information the results indicate that ESO selling activity is not related to future stock price behaviour, suggesting that managers do not use inside information to determine the selling time of their ESOs. These results imply that the existence of secondary markets for ESOs does not weaken the usefulness of ESOs as the management compensation, although the benefits of such markets are evident.     

Systematic review of sourcing and 3D printing: make-or-buy decisions in industrial buyer–supplier relationships

Management Review Quarterly - Additive manufacturing (AM) is regarded as a technology that has transformative and disruptive potential in nearly all industries. However, AM is not only about new...     

Evaluating Projects and Assessing Sustainable Development in Imperfect Economies

We are interested in three related questions:(1) How should accounting prices be estimated?(2) How should we evaluate policy change in animperfect economy? (3) How can we check whetherintergenerational well-being will be sustainedalong a projected economic programme? We do notpresume that the economy is convex, nor do weassume that the government optimizes on behalfof its citizens. We show that the same set ofaccounting prices should be used both forpolicy evaluation and for assessing whether ornot intergenerational welfare along a giveneconomic path will be sustained. We also showthat a comprehensive measure of wealth,computed in terms of the accounting prices, canbe used as an index for problems (2) and (3)above. The remainder of the paper is concernedwith rules for estimating the accounting pricesof several specific environmental naturalresources, transacted in a few well knowneconomic institutions.     

Wealth and sustainable development: the role of David Pearce

Green net national product was thought to be one way of measuring sustainable income. However, David Pearce understood that a better measure of sustainable development was to look at what a generation is leaving in form of capital assets to later generations. In this article, his arguments and insights are highlighted against recent theoretical advances.     

Environmental problems in Belarus

Résumé By far the most pressing problbem facing Belarus is the radioactive contamination resulting from the accident at the Chernobyl nuclear power station and the on-going threat to the environment posed by the destroyed reactor and those blocks which continue to produce electricity. The country is clearly not in a position to cope with the repercussions of the disaster. Western aid is required here, particularly to provide medical care for the population, decontaminate polluted areas, provide reliable measuring equipment and to analyse the level of contamination in food supplies. Air pollution, although worrying in some cities, is not as dramatic as in most of the polluted industrial centres of Russia and the Ukraine. Water pollution, too, is less serious than in most of the successor states to the Soviet Union. A serious problem is, however, posed by salification of the water supply by the potash industry. Recently environmental charges were introduced with the aim of improving environmental protection. Yet given rapid inflation and the persistence of soft budget constraints for enterprises, such charges are unlikely to have so far provided a significant incentive to more ecologically sustainable production in Belarus.     

Corporate Governance,Social Responsibility,and Data Breaches

We study whether corporate governance and social responsibility are related to data breaches. We find that socially responsible companies with smaller boards and greater financial expertise are less likely to be breached. The financial impact of a breach is visible in the long term. Specifically, data‐breach firms have –3.5% one‐year buy‐and‐hold abnormal returns. Additionally, banks with breaches have significant declines in deposits and nonbanks have significant declines in sales in the long run. Finally, we find that following a data breach, companies are more likely to replace their chief executive officer and chief technology officer as well as improve their governance and social responsibility.