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Going concern opinions and IPO pricing accuracy
No full textIn a marked shift, it has become relatively more common for ordinary initial public offerings (IPOs) to contain going concern opinions (GCOs) in their offering documents. Examining the implications of such GCOs for IPO investors in a sample of ordinary IPOs from 2001 to 2012, we find that GCOs increase price accuracy by reducing price revisions and underpricing. Further, we show that GCO IPOs with reputable underwriters experience higher price revisions. Our underpricing analysis supports the lawsuit avoidance theory. We also provide novel evidence that the market can distinguish between temporarily constrained GCO IPOs and those with persistent problems that receive a second GCO post-IPO. Overall, this paper contributes to the existing literature by shedding light on whether GCOs contained in IPO prospectuses provide material information and result in better pricing mechanisms
Flexibility markets : Q&A with project pioneers
No full textFlexibility markets are recognised as a promising tool to make better use of existing distribution grids and thereby also reduce the need for grid investments. In this paper, we analyse four pioneering projects implementing flexibility markets: Piclo Flex, Enera, GOPACS and NODES. Based on a literature review, we develop a six-question framework and we then analyse the projects with that framework. The questions are: (1) Is the flexibility market integrated in the existing sequence of EU electricity markets; (2) Is the flexibility market operator a third party; (3) Are there reservation payments; (4) Are the products standardised; (5) Is there TSO-DSO cooperation for the organisation of the flexibility market; (6) Is there DSO-DSO cooperation for the organisation of the flexibility market. We find that all the considered flexibility markets are operated by a third party. All projects also engage with multiple DSOs in order to become the standardised platform provider. Important differences between the projects are the extent to which the flexibility markets are integrated into other markets, the use of reservation payments, the use of standardised products and the way TSO-DSO cooperation has been implemented
Reliability Options: Can they deliver on their promises?
No full textCapacity mechanisms have been controversial in theory as well as practice. Lessons from experience with different capacity mechanisms led to the development of the reliability options. This mechanism promises two advantages over other types of capacity mechanisms. Firstly, it ensures the availability of capacity contracted via the capacity mechanism during scarcity. Secondly, the reliability option mechanism limits any energy market distortion due to its implementation and provides the consumer a hedge from high prices. We assess the ability of reliability options in delivering the two promises by analysing the reliability option designs in Italy and Ireland. We find that they deliver on the first promise but only partly on the second
Option‐implied information and stock herding
No full textAbstract In this paper, we examine if herding behaviour in the equity market can be explained by option‐implied information. Our empirical results confirm the commonly reported absence of herding as a general tendency in the U.S. equity market. However, we find evidence of significant herding behaviour during periods when option‐implied information reflects a pessimistic view about the future prospects of the equity market. More specifically, we find that individual stock returns tend to cluster more closely around the market consensus during days of high implied index volatility, more pronounced negative implied skewness, and higher trading volume in index puts
Similarity as a Double-Edged Sword: The Positive and Negative Effects of Showcasing Similar Previous Winners on Perceived Likelihood of Winning in Sweepstakes
No full textThis research demonstrates a new effect of consumer similarity in a chance context. Six studies show how similarity with previous winners can positively or negatively affect potential participants’ perceived likelihood of winning the subsequent independent sweepstakes draw. Attributions of winning outcomes to a personal cause or randomness change potential participants’ expectations regarding the sequence of more or less similar winners. When personal attribution is prevalent, exposure to more (vs. less) similar winners causes potential participants to feel they are more likely to win and, as a consequence, judge the sweepstakes as more attractive. This positive effect of similarity is mediated by the expectation of more repetitions of similar winners consistent with the belief that luck can be transferred among similar people. When randomness is presented as the salient cause for winning, though, people’s subjective conception of randomness leads them to expect more alternations in the sequence of more and less similar winners, thus prompting a reversal of the similarity effect. That is, they feel less likely to win when the sweepstakes features a more compared to a less similar winner
Sensuous Learning for Practical Judgment in Professional Practice
No full textIn this chapter, we introduce the background of theatrical improvisation and a model in which it is applied outside the theatreTheatre. We illustrate the sensuous qualityQuality of Applied Improvisation by a case study of a developmental aid organization, employing the mind- and skill set to adapt the organization to the volatile and uncertain conditions it is operating in
Risk governance of financial institutions: The effect of ownership structure and board independence
No full textThis paper investigates how the risk governance practices of European financial institutions quantitatively cluster on the corporate governance characteristics of the corporation, particularly ownership structure and board independence. Using hand-collected data on a sample of 54 banks and 33 insurance companies, we find that financial institutions with powerful owners (i.e., those with >20% ownership) have a lower chief risk officer (CRO) presence and lower risk committee presence. In addition, state-controlled institutions and institutions with more independent boards have more independent risk committees
Advanced analytics in pharmaceutical innovation: The use of real-world evidence in oncology
No full textThe smart use of real-world evidence (RWE) is known to enable more flexible forms of access to novel medicines. This flexibility may be especially promising for targeted cancer medicines, which often do not align with the traditional approach to medicinal development, and for which therapeutic innovation (i.e. favourable and clinically significant benefits at an affordable price) in routine clinical practice is becoming ever more difficult to achieve due to its highly complex nature. Amongst others, RWE should include information on the performance of those medicines for every individual patient. However, the current estimation of this patientlevel performance using conventional methods from pharmaceutical and medical sciences is challenging. This is because these methods are unable to derive causal conclusions on medicinal performance from the complex real-world environment, as opposed to controlled and randomised clinical trial settings. Simultaneously, the increasing emergence of novel medicines, and their promising combined effects are now creating a new combinatorial complexity level on the captured data. At the same time, new and advanced analytical methods within the field of data science are continuously being developed and have recently been applied to pharmaceutical and medical research, including the domain of pharmacoepidemiology. These powerful methods include techniques such as machine learning and Bayesian approaches, both being recognised as having a transformative potential in clinical research and practice. Specifically, they may be used to gain new insights into the patient-level performance of novel medicines in the messy real world, thereby providing a better understanding of RWE. In doing so, studies may generate new hypotheses through the exploration of data sets, or test existing hypotheses prespecified during prior clinical research. In this dissertation, I present the specific methods of advanced analytics to unravel the complexity of RWE , therefore, increasing our understanding of the individual performance of cancer treatments. These methods are investigated for their use in both hypothesis generation (part 1) and hypothesis testing (part 2) studies. A general ntroduction into the field is provided in Chapter 1, followed by the research objectives. In Chapter 2, I validate the use of an advanced modelling technique, i.e. machine learning, as a personal performance prediction model for glioblastoma. Optimisations of this model to be used on novel medicines in more complex situations are proposed in Chapter 3. In Chapter 4, the importance of multi-product RWE assessments is explored, for which hypotheses. Lastly, for these investigated analytics to become useful in healthcare, the need for an insight-providing federated network is introduced in Chapter 6. Chapter 7, the last chapter of this dissertation, presents a general conclusion with discussion of the research contributions
International Business in a VUCA World: The Changing Role of States and Firms
No full textAbstract The macroenvironment constitutes a widely acknowledged source of firms’ risk in international business. A substantial body of research on macroenvironmental risks encapsulates a variety of measurement approaches, antecedents, and managerial consequences. However, a review of established macroenvironmental risk measures reveals that these measures strongly focus on the quality of the macroenvironment, assuming a rather static perspective and mainly excluding dynamic aspects. Building on prior research on macroenvironmental risk as well as on environmental dynamism, we argue that macroenvironmental dynamism – i.e. the frequency, intensity, and predictability of macroenvironmental variation – is a pivotal source of risk in international business, which so far only received limited attention. Moreover, we suggest that macroenvironmental dynamism influences firms’ risk management activities, a measure we use to empirically investigate firm implications of macroenvironmental dynamism. We explore this effect using primary survey data on risk management activities from 158 foreign subsidiaries in six emerging countries and secondary data on the macroeconomic context in these countries. We find evidence that macroenvironmental dynamism, if compared to macroenvironmental quality, exerts a strong influence on firms’ risk management activities. Our findings enhance the understanding of the dynamic nature of macroenvironmental risk in international business as well as provide a concept to more comprehensively measure macroenvironmental dynamism that future research can build upon
Governance: The art of aligning interests. Liber Amicorum Lutgart Van den Berghe
No full textIn this paper we argue that the outperformance of family listed firms is not a result of the ownership difference per se, but the combination between the characteristics of such ownership, entrepreneurial drive and multi-generational time horizon amongst others, on the one hand and the fiduciary quality of the company's governance context, both at the country level and ultimately at the company level on the other hand