Business Commons^™

The Role Of Risk Management Departments In Banking Institutions, Enver Daci

UBT International Conference

The topic of risk and risk management is a topic where the interest of academics, field professionals but also ordinary people has increased enormously. When this topic is dealt with in the banking system, the dominant element in the overall financial system of a country, then the interest rate is even higher, especially after the global financial crisis. In the case of the banking system, credit risk is one of the main risks to which the system is exposed. Over the last decades, loans have occupied the main weight among the assets of the banking system. Moreover, in recent years, …

International Portfolio Prospects And Concerns, Dimitrios V. Siskos

Publications

The recent financial crisis amplifies the need for an updated and more universal investment strategy for both individuals and corporate investors. Diversification satisfies that condition, as it provides access to different economies operating in different countries while, simultaneously, it spreads the risk across different asset allocation[1]. However, to benefit the advantages of a diversified portfolio, a sophisticated decision making process and appeal to re-planning are required. Otherwise, international investors have to face the consequences of political-country risk and currency risk. The goal of this research is to correlate the benefits of diversification with risk undertaking for either individual …

Being Watched In An Investment Game Setting: Behavioral Changes When Making Risky Decisions, Z. Tingting Jia, Matthew J. Mcmahon

Economics & Finance Faculty Publications

We design a laboratory experiment to test for behavioral differences due to observation within a novel arena: investment games. We find that fund managers are more risk-averse when investors can observe their investment allocations. This effect is more pronounced when investors, in addition to observing the allocations, can also observe the investment outcomes. Interestingly, allowing investors to observe how their investment is allocated does not impact how much they invest. Last, when the outcome of the risky investment is public knowledge, disclosing managers’ allocations leads them to return more tokens to investors and to expropriate fewer tokens for themselves at …

The Ocean Lifeguard Intervention Continuum: A Cognitive Aid For Surf Lifeguard Education, William A. Koon, Ryan M. Gates, Shane Scoggins, Paul Andrus, Jack A. Futoran

International Journal of Aquatic Research and Education

Ocean lifeguards are constantly engaged in beach risk analysis, required to efficiently evaluate a variety of environmental and other factors quickly in order to triage and prioritize who needs help. Teaching these skills is a challenge for introductory training programs. We sought to improve new lifeguards’ understanding of the interaction of various risk components in the beach environment and aid decision-making related to when a lifeguard should intervene in a situation. We developed a two-part cognitive aid for introductory ocean lifeguard education depicting individual and interacting elements of a beach goer’s risk of drowning or injury and the process by …

Cash For Gold: An Economic Analysis Of The Olympic Games, Connor De Faber-Schumacher

Business and Economics Presentations

No abstract provided.

Application Of Theory Of Constraints (Toc) In Managing Project Information Constraints, Ferdinand Z. Prantl

Engineering Management & Systems Engineering Projects for D. Eng. Degree

The scope of this doctoral project is the non-traditional application of Drum-Buffer-Rope (DBR) from the area of Theory of Constraints (ToC) in mitigating disruption in distribution facilities during phased upgrades caused by information constraint. The relevance of this project is that industrial equipment upgrades pose a significant risk of disrupting the operation of automated distribution facilities. It is partly due to a very high expected availability rate, as well as tight coupling with other upstream and downstream elements of the larger supply chain network. As a consequence of disruption in this scenario, losses incurred not only within the facility being …

Private Accounts And Social Security: The Issue Of Risk, Robert J. Angell

Southern Business Review

Robert J. Angell, DBA, is a professor of finance. Department of Business Administration, North Carolina Agricultural and Technical State University, Greensboro, North Carolina 27411.

A High Stakes Game Of Risk For The Independent Auditor, J. Ralph Byington, Jo Ann Christensen

Southern Business Review

J. Ralph Byington, PhD, is professor of accounting, School of Accounting, Georgia Southern University, Statesboro, GA 30460-8141.

Jo Ann Christensen, DBA, is assistant professor of accounting, School of Professional Accountancy, Louisianna Tech University, Ruston, LA 71272.

The Paradox Of Insurance, Gideon Parchomovsky, Peter Siegelman

All Faculty Scholarship

In this Article, we uncover a paradoxical phenomenon that has hitherto largely escaped the attention of legal scholars and economists, yet it has far-reaching implications for insurance law: loss-creation by uninsured parties caused by the presence of insurance. Contrary to the conventional wisdom, we show that insurance can create significant negative externalities by inducing third parties to engage in antisocial, illegal and unethical activities in order to extract money from insureds or insurers. Moreover, as the amount and scope of insurance grows, so does its distortionary effect on third parties. We term this phenomenon the paradox of insurance. The risk …

Effective Capital Budgeting Decisions By Firms, Manunath M. S., Praveen B.

International Review of Business and Economics

Finance is the life blood of business. Finance is said to be the circulatory system of the economy body, making possible the required cooperation between the innumerable units of activity. Finance guides and regulates investment decisions and expenditure of administers economic activities. Capital budgeting means planning for capital assets. Capital budgeting decisions are complex process of paramount importance in financial decisions, because efficient allocation of capital resources is one of the most crucial decisions of financial management. Capital budgeting is budgeting for capital projects.Because the long-term profitability of most enterprises depends on the nature and quality of their capital project …

The Effects Of Inter-Industry Mergers And Acquisitions On The Long-Term Volatility Of Equity Returns, Collin Myers

Undergraduate Honors Theses

The objective of this research was to discover whether a significant relationship exists between the theoretically diversifying effects of inter-industry mergers and acquisitions (“M&A”) and changes in the volatilities of acquisitive firms’ publicly-traded equity security returns (measured as the standard deviation of percentage changes in price) from pre-transaction announcement to post-transaction completion. My hypothesis is that a negative relationship should exist between changes in a firm’s equity return volatility over time and whether the firm completes a diversifying acquisition, which I define as one in which the target firm primarily operates in a different industry than the acquirer. 980 diversifying …

Stock Liquidity And Default Risk Around The World, Sivathaasan Nadarajah, Huu Nhan Duong, Searat Ali, Benjamin Liu, Allen Huang

Faculty of Business - Papers (Archive)

We document the negative effect of stock liquidity on default risk for a sample of 46 countries. We further find that default risk declines following the introduction of the Directive on Markets in Financial Instruments (MiFID)—an exogenous shock that increases liquidity. The effect of liquidity on default risk is more pronounced in countries with poorer investor protection and information environments. Further, this effect is attenuated (strengthened) for firms with greater information efficiency (governance monitoring). Overall, our findings highlight the important role of regulatory settings in shaping the impact of stock liquidity on default risk in international markets.

Effect Of Corporate Tax Avoidance Activities On Firm Bankruptcy Risk, Anirudh Dhawan, Liangbo Ma, Maria H. Kim

Faculty of Business - Papers (Archive)

Corporate tax avoidance has been shown to raise the cost of bank debt and lower credit and bond ratings. However, it is unclear whether tax avoidance actually increases a firm’s bankruptcy risk or whether it is just viewed negatively by banks and rating agencies. We find that firms engaging in tax avoidance and firms that are thinly capitalized face higher bankruptcy risk. To account for endogeneity and functional form misspecification, we verify our results using instrumental variable and propensity score matching methods. Our findings are consistent with the view that tax avoidance is a risk-enhancing activity.

Market Effects Of Local Media Employment Reductions On The Idiosyncratic Risk Of Nearby Firms; Returns, Valuation, And Debt; And Firm Meet-Beat Behavior And Ceo Turnover And Compensation, C. Kyle Jones

Open Access Theses & Dissertations

This research examines the effects of reductions in local and regional media employment on firms' information environment. A reduction in the number of local media employees available to provide coverage of firms is associated with persistent levels of increased idiosyncratic risk. The source of that firm-level risk appears to be increased estimation risk among investors, rather than decreased awareness about the investment opportunities or real effects on firms' product market competition. I also demonstrate that overall levels of local media coverage are associated with differences in returns similar to those associated with coverage in national outlets. While a reduction in …

Communication Of Fiduciary Risk For Workplace Retirement Plans, George Blount

Walden Dissertations and Doctoral Studies

More than 100 new 401(k) plan complaints were filed between 2016-2017, the highest two-year total since 2008-2009. Plan sponsors of retirement plans face personal financial liability for the risks associated with litigation focusing on their fiduciary responsibility. Grounded in the behavioral governance framework, the purpose of this qualitative case study was to explore the communication of risk for workplace retirement plans. The participants comprised 10 business leaders who are fiduciaries responsible for their company’s retirement plan with a national geographic footprint. Data were collected from semistructured interviews. Thematic analysis was used to analyze the data. Themes of benchmarking, the efficacy …