Data-based mechanistic modelling and forecasting globally averaged surface temperature

The main objective of this paper it to model the dynamic relationship between global averaged measures of Total Radiative Forcing (RTF) and surface temperature, measured by the Global Temperature Anomaly (GTA), and then use this model to forecast the GTA. The analysis utilizes the Data-Based Mechanistic (DBM) approach to the modelling and forecasting where, in this application, the unobserved component model includes a novel hybrid Box-Jenkins stochastic model in which the relationship between RTF and GTA is based on a continuous time transfer function (differential equation) model. This model then provides the basis for short term, inter-annual to decadal, forecasting of the GTA, using a transfer function form of the Kalman Filter, which produces a good prediction of the ‘pause’ or ‘levelling’ in the temperature rise over the period 2000 to 2011. This derives in part from the effects of a quasi-periodic component that is modelled and forecast by a Dynamic Harmonic Regression (DHR) relationship and is shown to be correlated with the Atlantic Multidecadal Oscillation (AMO) index.     

The power of positivity? The influence of positive psychological capital language on crowdfunding performance

We extend the entrepreneurship literature to include positive psychological capital — an individual or organization's level of psychological resources consisting of hope, optimism, resilience, and confidence — as a salient signal in crowdfunding. We draw from the costless signaling literature to argue that positive psychological capital language usage enhances crowdfunding performance. We examine 1726 crowdfunding campaigns from Kickstarter, finding that entrepreneurs conveying positive psychological capital experience superior fundraising performance. Human capital moderates this relationship while social capital does not, suggesting that costly signals may, at times, enhance the influence of costless signals. Post hoc analyses suggest findings generalize across crowdfunding types, but not to IPOs.     

Capital gains lock-in and governance choices

Differences in accrued gains and investors’ tax-sensitivity induce variation in a capital gains lock-in effect across mutual funds even for the same stock at the same time. Exploiting this variation, we show this effect influences funds’ governance decisions: higher capital gains decrease the likelihood a fund exits prior to contentious votes and increase the likelihood a fund votes against management. Consistent with tax motivation, these findings are concentrated among funds with tax-sensitive investors. Further, high aggregate capital gains across funds holding a stock predict a higher likelihood management loses a vote and a lower likelihood a contentious vote is proposed.     

Co-movement in Stock Prices in Emerging Economies: The Case of the Caricom Region

The Grand Anse Declaration of 1989 recognised the need for financial integration within the emerging economies that comprise the CARICOM region, as a way of furthering the wider process of economic integration and, indeed, economic development in that region. Using co-movement as a measure of financial integration, this paper investigates the co-movement in stock prices among the Barbados, the Jamaica and the Trinidad and Tobago Stock Exchanges, the three major exchanges within the CARICOM region. It also examines how integrated these exchanges are with the New York Stock Exchange. The GARCH-Copula methodology and, to a lesser extent, estimated correlation coefficients, are used to attain this objective. There appears to be co-movement in stock prices and returns within the CARICOM stock markets and significant dependence structures between the returns of the three CARICOM stock markets. However, there is considerably less evidence of integration between the CARICOM markets and the New York Stock Exchange.     

The US financial crisis and corporate dividend reactions: for better or for worse?

Review of Quantitative Finance and Accounting - We examine how changes in dividend policy in 2008 as the financial crisis was unfolding influenced firm risk-adjusted returns in the following years....     

Using performance-based warranties to influence consumer purchase decisions

Abstract

Traditional warranty analysis focuses on the reliability of a product and offers warranty designs that compensate a consumer if the item fails. We introduce the concept of a performance-based warranty (PBW) that guarantees that a product will operate at or above some baseline level of performance, such as a minimum energy efficiency for an appliance. We illustrate how consumer behavior can change in the presence of a PBW and define the parameters for which a manufacturer may increase revenue. Finally, we present an algorithm to solve for the optimal PBW design given a consumer’s belief about the expected performance of the product.     

Alliances and the innovation performance of corporate and public research spin-off firms

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs either from other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large- or small- and medium-sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small- and medium-sized firms.     

COVID-19 and business renewal: Lessons and insights from the global airline industry

The emergence of the COVID-19 pandemic has adversely affected the fortunes of multiple companies around the globe. Accordingly, questions are increasingly being asked about how organizations can revitalize during and after a crisis. Yet, we have limited understanding of how organizations renew themselves during crises over time. We explore this question through the lens and examination of two South-Asian airlines: Pakistan International Airlines and Sri Lankan Airlines. The cases offer important insights into the reasons behind underperformance of state-controlled enterprises and renewal activities. We shed light on strategic renewal (SR) in the wake of increasing liberalization and deregulations in the global airline industry. To this end, we propose a four-stage approach towards renewing such underperforming organizations to respond effectively to black swan events and external shocks.