bluuebunny/crossref_metadata_2025 huggingface dataset:
Intellectual capital and financial returns of companies
Authors: Pew Tan Hong , Plowman David , Hancock Phil
Published: January 2007

Purpose

The purpose of the paper is to investigate the association between the intellectual capital (IC) of firms and their financial performance.

Design/methodology/approach

The paper uses the Pulic framework, has an Asian focus, and draws on data from 150 publicly listed companies on the Singapore Exchange. It is an empirical study using partial least squares (PLS) for the data analysis. The paper tests four elements of IC and company performance.

Findings

The findings show that: IC and company performance are positively related; IC is correlated to future company performance; the rate of growth of a company's IC is positively related to the company's performance; and the contribution of IC to company performance differs by industry.

Research limitations/implications

The data sample is restricted to 150 companies listed on the Singapore Exchange between the years 2000 and 2002.

Practical implications

IC is an area of interest to numerous parties, such as shareholders, institutional investors, scholars, policymakers and managers. The findings help to embolden modern day managers to better harness and manage IC.

Originality/value

The study of IC has undergone a number of stages, from early conscious awareness efforts to classification of IC, and to the search for appropriate measures of IC. This paper builds on the current research on IC and provides empirical evidence on the relevance of IC (as measured by the Pulic model) to the financial performance of companies.
A dynamic monetary model for evaluating employees
Authors: Milost Franko
Published: January 2007

Purpose

The paper seeks to develop an original monetary model for evaluating employees of a company. Employees are an important element of the business process. However, apart from their role as a means of production, their value is not disclosed on the assets side of the classical balance‐sheet. Employees may be disclosed among the assets only if they are expressed in value terms. Therefore, the fundamental aim of the paper is to provide an appropriate monetary mode for valuating employees.

Design/methodology/approach

A descriptive approach is sued to identify the basic problems of existing monetary models for valuating employees. According to these findings a totally different approach is taken and an original dynamic model is developed to evaluate employees.

Findings

Existing criteria do not offer appropriate solutions for expressing the value of an employee in monetary terms. The model presented here efficiently overcomes most of the practical problems and can be used as an appropriate estimator of employees' value expressed in monetary terms.

Research limitations/implications

The model presented has not been sufficiently verified in practice. The model could prove to be directly applicable in those enterprises that would like to define the value of their employees.

Originality/value

The model presented is original and presents one possible approach to the solution of the problems mentioned above.
Intellectual and environmental capital
Authors: Claver‐Cortés Enrique , Dolores López‐Gamero Maria , Molina‐Azorín José Francisco , Del Carmen Zaragoza‐Sáez Patrocinio
Published: January 2007

Purpose

Faced with increasing environmental problems, traditional methods for transmitting information regarding corporate environmental actions are insufficient. Accordingly, the purpose of this paper is to suggest the environmental capital report, the knowledge map and the balanced scorecard as alternative instruments to provide the environmental information needed to develop internal corporate activity and meet the requirements of society.

Design/methodology/approach

A practical approach is applied to facilitate understanding of some sections of these tools, analysing the GRI reports of certain environmentally proactive firms.

Findings

The findings show that the environmental information provided relates mainly to collaborations established with stakeholders and to the development of internal processes aimed at preserving and protecting the environment. Accordingly, it could be said that the environmental capital report proposed in this paper seems to be materialized in the GRI report. Moreover, the production and R&D sections of the knowledge map and the internal processes and relational perspective sections of the balanced scorecard are the most common environmental information given by the companies analyzed.

Originality/value

The value of this paper lies mainly in showing several tools that could be used by companies in order to spread their efforts in protecting and preserving the environment.
Integrating vacuum insulation panels in building constructions: an integral perspective
Authors: Tenpierik Martin J. , Cauberg Johannes J.M. , Thorsell Thomas I.
Published: January 2007

Purpose

Although vacuum insulation panels (VIPs) are thermal insulators that combine high thermal performance with limited thickness, application in the building sector is still rare due to lack of scientific knowledge on the behaviour of these panels applied in building constructions. This paper, therefore, seeks to give an overview of the requirements for and the behaviour of VIPs integrated into building components and constructions. Moreover, the interaction between different requirements on and properties of these integrated components are discussed in detail, since a desired high quality of the finished product demands an integral approach regarding all properties and requirements, especially during the design phase. Therefore, the importance of an integral design approach to application of VIPs is shown and emphasized in this paper.

Design/methodology/approach

To achieve this objective, the legally and technically required properties of VIPs and especially their interrelationships have been studied, resulting in a relationship diagram. Based on these investigations of thermal‐ , service life‐ and structural‐properties have been selected to be studied more elaborately using experimental set‐up for structural testing and simulation software for thermal and hygrothermal testing.

Findings

Two relationships between requirements or properties were found to be of principal importance for the design of façade components in which VIPs are integrated. First, thermal performance requirements strongly interact with structural performance, principally through the edge spacer of this façade component. A high thermal performance requires minimization of the thermal edge effect, in most cases reducing the structural performance of the entire panel. Second, an important relationship between thermal performance and service life has been recognised. The operating phenomenon mainly governing this interaction is thermal conductivity aging.

Originality/value

Most research in the field of vacuum insulation until now has been directed towards gaining knowledge on specific properties of the product, especially on thermal and hygrothermal properties. The relationships and interactions between these properties and the structural behaviour, however, have been neglected. This paper, therefore, addresses the need for an integral design (and study) approach for the application of VIPs in architectural constructions.
Sustainable design of supporting structures
Authors: van den Dobbelsteen Andy , Arets Martijn , Nunes Ricardo
Published: January 2007

Purpose

In order to establish sustainable development, there is a need to focus on solutions effectively improving environmental performance. Effectiveness is the product of significance and improvement potential. For buildings, the supporting structure is the predominant environmental load by materials, hence significant. The purpose of the studies presented in this paper is to determine the improvement potential of the supporting structure of buildings and explore other sustainable solutions effectively enhancing environmental performance.

Design/methodology/approach

For the same office layout, various combinations of structural components at different spans were studied. The environmental load of these variants was determined by means of an life cycle analysis (LCA)‐based model.

Findings

The studies presented in the paper demonstrated an environmental difference by a factor of 5 between the solutions performing worst and best. The optimal combination is the uncommon solution of TT‐slabs with timber beams and columns, expecting to establish an improvement factor of 4 with respect to common practice.

Practical implications

The findings of the studies presented suggest another way of building, with common structural components but whose combination is not common at present.

Originality/value

So far, sustainable building has not focused enough on effective solutions and has had little means to do so. Approaching the supporting structure of buildings rather than small, ineffective adaptations will significantly improve environmental building performance. An elaborate LCA of supporting structures had never been done before. The paper, on the one hand, rationalises sustainable building and, on the other hand, supports effective sustainable design.
Sensitivity of executive wealth to stock price, corporate governance and earnings management
Authors: Weber Margaret
Published: January 2007

Purpose

This paper seeks to investigate whether executive wealth sensitivity to stock price fluctuations serves as an incentive for earnings management.

Design/methodology/approach

Using a sample of 475 chief executive officers (CEOs) from 410 randomly selected Standard and Poor's (S&P) 1500 firms, the relation between executive stock‐based compensation, corporate governance, and earnings management is empirically examined.

Findings

CEO wealth sensitivity is positively associated with abnormal accrual usage and the relation is consistent with income‐smoothing. Also find that governance does not significantly influence the association between CEO stock‐based wealth sensitivity and earnings smoothing.

Research limitations/implications

This study has several limitations. First, it is assumed that the accruals models used provide accurate measures of abnormal accruals. Several recent studies question the reliability of these models. Second, the wealth sensitivity measures in this paper are based on Black Scholes option pricing. A number of the assumptions underlying Black Scholes do not hold for executive options. Finally, governance factors that influence the examined relations may not be effectively captured by the measures in this paper.

Practical implications

The findings have implications for compensation design. Unintended consequences of high CEO exposure to firm‐specific risk may not be effectively mitigated by governance. These results also have potential policy implications. In the wake of recent accounting scandals regulators tightened governance standards for corporate. The findings suggest that reliance on these standards as deterrents to earnings management may not be warranted.

Originality/value

The study contributes to both the earnings management and corporate governance literatures. The results of this study suggest that CEO stock‐based wealth sensitivity is an earnings management incentive.
Disaggregated earnings and prediction of future profitability: evidence from industrial groups in Japan
Authors: Habib Ahsan
Published: January 2007

Purpose

This paper seeks to examine the predictive ability of disaggregated earnings in forecasting future profitability conditional on keiretsu affiliation in the context of Japan.

Design/methodology/approach

Industry‐adjusted future profitability measure is regressed on current profitability measures and on interaction terms of keiretsu affiliation and profitability measures. Out‐of‐sample forecasting test is conducted by regressing future profitability on current profitability measures for keiretsu‐affiliated and independent firms.

Findings

Disaggregated earnings improve out‐of‐sampling forecasting for firms not affiliated with keiretsu networks. For the keiretsu‐affiliated firms industry adjustments actually diminish the out‐of‐sample forecasting accuracy.

Research limitations/implications

The boundary between keiretsu‐affiliated and independent firms is not so obvious.

Originality/value

Examining industry competitiveness in Japan using accounting information is a significant contribution to the literature.
Bankruptcy studies and ad hoc variable selection: a canonical correlation analysis
Authors: LeClere Marc J.
Published: January 2007

Purpose

To determine the relationship among covariates used in financial distress studies.

Design/methodology/approach

The study selects four specific bankruptcy studies and employs canonical correlation analysis to determine the relationship among the different variable sets that these studies used as predictors of financial distress. Canonical correlation analysis identifies the relationship and provides an indication of the amount of redundancy that exists between two variable sets. The four studies are representative of the genre, similar as to choice of statistical technique, and frequently cited by researchers.

Findings

The research findings indicate that the relationships between the alternative variable sets are very weak and alternative variable sets do not represent similar financial relationships. Redundancy coefficients suggest that, if one variable set is redundant to another variable set, it is because the redundant variable set, is much smaller than the predictor variable set.

Research limitations/implications

The results suggest that there is not much similarity among the variable sets used in financial distress studies; to the extent that there is any similarity, it is due to variables common to each set or one variable set being larger than the other variable set. Ad hoc variable selection in financial distress studies results in the use of alternative variable sets containing heterogeneous variables unrelated to one another.

Originality/value

A common criticism of financial distress research is that a theory of corporate failure does not exist. Variable selection is not prompted by economic theory but is based upon suggestions in the literature, the success of variables in earlier studies, or the selection of a large set of variables with an accompanying data reduction procedure. Despite nearly 30 years of research in the area, the absence of an inter‐correlational structure among alternative variable sets highlights the atheoretical nature of financial distress research.
The glass ceiling in Irish healthcare: a nursing perspective
Authors: Tracey Catherine
Published: January 2007

Purpose

The purpose of this study is to describe and explore from the perspectives of top‐level nurses holding the formal position of director of nursing their perceptions and interpretations of their experiences in the Irish healthcare system.

Design/methodology/approach

This paper presents some findings from a nation‐wide study, which is qualitative in approach using grounded theory methodology. Semi‐structured interviews were conducted with 50 directors of nursing representing general and psychiatric nursing.

Findings

The study in this paper was conducted in the context of a changing healthcare system, which emphasises the flattening of organisational pyramids. However, this study's findings indicate that, while structures might be changing, behaviours remain unaltered. In particular, the medicine nursing power base remains unchanged, while the power shift between nursing and general management continues to widen in favour of general management.

Research limitations/implications

Research in this paper shows that directors of nursing who chose to participate in this study may have different perceptions of experiences from those who chose not to participate.

Originality/value

In the paper the reality is neither medicine nor general management, individually or collectively, are going to share or devolve power and influence to nursing. This study's findings indicate that nursing needs to confront this power imbalance. Nursing needs to take the first steps towards shattering the glass ceiling by really examining its own behaviours, in maintaining the status quo, in the traditional balance of power.
Time‐based management of patient processes
Authors: Kujala Jaakko , Lillrank Paul , Kronström Virpi , Peltokorpi Antti
Published: January 2007

Purpose

The purpose of this paper is to present a conceptual framework that would enable the effective application of time based competition (TBC) and work in process (WIP) concepts in the design and management of effective and efficient patient processes.

Design/methodology/approach

This paper discusses the applicability of time‐based competition and work‐in‐progress concepts to the design and management of healthcare service production processes. A conceptual framework is derived from the analysis of both existing research and empirical case studies.

Findings

The paper finds that a patient episode is analogous to a customer order‐to‐delivery chain in industry. The effective application of TBC and WIP can be achieved by focusing on through put time of a patient episode by reducing the non‐value adding time components and by minimizing time categories that are main cost drivers for all stakeholders involved in the patient episode.

Research limitations/implications

The paper shows that an application of TBC in managing patient processes can be limited if there is no consensus about optimal care episode in the medical community.

Practical implications

In the paper it is shown that managing patient processes based on time and cost analysis enables one to allocate the optimal amount of resources, which would allow a healthcare system to minimize the total cost of specific episodes of illness. Analysing the total cost of patient episodes can provide useful information in the allocation of limited resources among multiple patient processes.

Originality/value

This paper introduces a framework for health care managers and researchers to analyze the effect of reducing through put time to the total cost of patient episodes.
Health service staff attitudes to community representatives on committees
Authors: Nathan Sally , Harris Elizabeth , Kemp Lynn , Harris‐Roxas Ben
Published: January 2007

Purpose

This paper sets out to report attitudes of staff on key health service committees towards community participation before and after appointment of community representatives.

Design/methodology/approach

The paper shows a self‐completed questionnaire administered to staff on committees as a baseline measure and 12 months after community representatives had been appointed.

Findings

The paper finds that significantly more staff at the follow‐up survey reported that they and other staff were clear about the role of community representatives and how to work with them on committees. Significantly more staff at follow‐up felt that the health service was ready for this type of initiative. There was no significant increase in the percentage of staff who felt that financial and other supports for community representatives were sufficient and no significant changes in staff views about the potential for community representatives to influence decision making, although there were strong trends in a positive direction.

Research limitations/implications

The study in this paper was conducted in one health service and did not follow changes in attitudes of particular staff over time. Larger samples would be necessary to assess generalisability of findings and future studies should examine in more depth staff beliefs about the role and influence of community members on committees.

Practical implications

The paper implies that the development of ongoing and constructive relationships between health services and communities clearly takes time and, at least in part, results from direct experience working alongside community members.

Originality/value

The paper shows that this is the first study examining how the attitudes of health service staff to community participation change over time and as a direct result of interaction with community members on committees. A better understanding of health service staff attitudes to community participation is important for health care managers to effectively address structural and attitudinal barriers to community participation.
Effect of audit on critically ill pregnant women
Authors: Pattinson R.C. , Macdonald A.P. , Backer F. , Kleynhans M.
Published: January 2007

Purpose

The purpose of this research is to ascertain whether there has been a change in the outcome of critically ill pregnant women from the indigent South African population from a clearly defined region in Pretoria, after the introduction of new management protocols supported by regular audit and feedback.

Design/methodology/approach

A comparison of outcome of all women with severe acute maternal morbidity or maternal deaths was made between 1997/1998 (original protocol) and 2002/2004 (new protocol) was performed.

Findings

It was found that there was a significant increase in the prevalence of critically ill pregnant women between 1997/1998 (8.40/1,000 births) and 2002/2004 (10.22/1,000 births; p<0.014), but a reduction in the MMR 133.2/100,000 births to 104.9/100,000 births (Odds Ratio 0.79, 95 Confidence Intervals 0.51 and 1.2) and in the mortality index from 15.9 per cent to 10.3 per cent (Odds Ratio 0.61, 95 per cent Confidence intervals 0.39 and 0.96). The pattern of primary obstetric causes of critically ill pregnant women has remained unchanged during the study period, but the prevalence of each disease category increased. The average number of dysfunctional organ systems per patient declined from 1.41 in 1997/1998 to 1.19 in 2002/2004. There were significant reductions in the number of critically ill pregnant women with renal dysfunction, metabolic dysfunction and cerebral dysfunction. The number of patient related, administrative related and medical personnel avoidable factors all decreased.

Originality/value

The new protocols, audit and feedback have been associated with a reduction in the number of preventable and manageable complications experienced by critically ill pregnant women over the past five years.
Improving the management of the child with an unexplained limp
Authors: Lalanda M. , Alonso J.A.
Published: January 2007

Purpose

A clinical governance project is set up following the delayed diagnosis of two children with life‐threatening conditions (osteomyelitis and Ewing's sarcoma). They attended A&E with a simple limp. The aim is to improve the management of this very common presentation. With this purpose, a series of algorithms was created and then its use with a prospective study assessed

Design/methodology/approach

The study was carried out for nine months. A total of 113 children were included in it. Some 65 per cent were diagnosed, treated and followed up by the A&E department exclusively. Only 15 per cent required hospital admission. No hip aspirations were required to diagnose septic arthritis, as the exclusion of this condition was based on the four predicting factors (pyrexia, raised WCC, raised PV and CRP and fluid in the hip joint demonstrated by hip ultrasound).

Findings

It is believed that the management of this group of children is greatly improved.

Originality/value

The protocol presented in this study is cost‐effective as unnecessary hospital admissions are avoided, fewer patients are referred to specialised clinics and appropriate use of the radiology service is made out of hours. Diagnosis and treatment of serious conditions such as septic arthritis, or Perthe's disease, does not get delayed.
Getting an executive education relationship off to a great start … don't forget the memorandum of understanding
Authors: Haskins Mark E. , Shaffer George R.
Published: January 2007

Purpose

This paper is intended to convey the importance of, and a framework for, crafting a memorandum of understanding (MOU) between an executive education (EE) provider and a client.

Design/methodology/approach

The paper presents general experience and case examples.

Findings

Through experience and over time, the authors have found certain potentially problematic issues that can be prudently and positively dealt with in an MOU, crafted early in an EE/client relationship. Those important issues constitute the framework presented in the article.

Practical implications

The framework presented in this article can be immediately and effectively used by practitioners in crafting useful MOUs.

Originality/value

The authors are not aware of any prior papers on the role of, and framework for, MOUs. This paper addresses the value of an MOU in fostering great EE provider/client relationships.
Closing the management skills gap: a call for action
Authors: Longenecker Clinton O. , Fink Laurence S.
Published: January 2007

Purpose

This article is intended to provide the necessary tools to attack the causes of management training failures.

Design/methodology/approach

The top ten managerial training failures identified from a sample of 323 seasoned managers in rapidly changing organizations are discussed along with specific suggested solutions.

Findings

A revised content analysis revealed the most frequently cited causes of why organizations fail to train their managers properly.

Originality/value

The findings provide an up‐to‐date list of the causes of ineffective training and the discussion focuses on ways to close the managerial skills gap by providing specific solutions to identified problems.
Reflective Notes: a tool for individual and team learning
Authors: Honold Linda
Published: January 2007

Purpose

The purpose of this paper is to identify and delineate a practical tool that assists teams in organizations and the individuals in those teams in reflecting and learning from their own conversations

Design/methodology/approach

For more than three years, the author acted as a Reflective Analyst for a team focusing on new product development.

Findings

By reflecting back to the themes of their conversations and by asking questions that caused them to reflect on the dynamics of the group, what was said and not said, and how people responded the team is able to understand themselves in a new way.

Originality/value

The Reflective Note process will be of value to learning facilitators, leaders of work teams, and individuals interested in finding new learning processes.
Big talk, small talk: the perils of a networked world
Authors: Cunningham Ian
Published: January 2007

Purpose

The purpose of this paper is to show how interactions in organizations need to move beyond the superficial.

Design/methodology/approach

The paper is a think piece based on experience.

Findings

The paper finds that the need is to get beyond small talk into big talk.

Practical implications

The practical implications of the paper are that managers and developers need to consider the ways in which they develop trust in organiszations, and the need is for people to engage in dialogue around things that really matter.

Originality/value

The critique of networking in this paper is new and original.
Using employee volunteering programs to develop leadership skills
Authors: Bell Christine
Published: January 2007

Purpose

The purpose of the paper is to examine the use of employee volunteering programs to develop leadership skills.

Design/methodology/approach

The study used a series of interviews carried out in ten companies in the north of the UK in 2004.

Findings

The paper finds that employee volunteering programs provide a potentially rich source of learning for team leaders and other volunteers. Such a strategy can encourage employees to recognize learning opportunities for their own leadership skills.

Originality/value

The paper provides valuable information on the development and use of employee volunteering programs.
Creating older entrepreneurs: a development dilemma
Authors: Gray Harry
Published: January 2007

Purpose

The aim of this paper is to examine retired workers and the development of entrepreneurs.

Design/methodology/approach

The paper looks at aspects of retirement such as transfer of learning and limitations to ambition with a view to the possibility of the development of entrepreneurship.

Findings

The paper finds that the would appear to be a need for a new kind of support service that helps retired people to be economically active.

Originality/value

The paper provides useful information on the development of entrepreneurs among the retired.
Women leaders: how to help them “hit the ground running”
Authors: Cornish Liz
Published: January 2007

Purpose

The aim of the paper is to look the development of women leadership.

Design/methodology/approach

The paper looks at how organizations can help women at crucial leadership transition stages.

Findings

The paper finds that the first months in any leadership challenge can be both exiting and vulnerable. Used well, it is an unparalleled opportunity to accelerate success and create long‐term positive momentum.

Originality/value

The paper provides useful suggestions for supporting women in the leadership transition.
An analysis of the riverine contribution to the solid wastes contamination of an isolated beach at the Brazilian Northeast
Authors: Christina Araújo Maria , Costa Monica
Published: January 2007

Purpose – The purpose of this paper is to evaluate the origin of the solid wastes contamination for an isolated beach (Várzea do Una), through the classification of the plastics fraction into specific use‐related categories along a full seasonal cycle. Design/methodology/approach – The assessment was made through the sampling of a transect along a full hydrological year, delimited at an isolated tropical beach under the direct influence of a river. The registered items were then classed according to their most probable sources, with emphasis to plastics of riverine origin. Findings – Results indicated an exceptionally high level of contamination of the beach by plastics of urban origin. The main items found were related to household activities. Hospital wastes were also present, highlighting the riverine contribution to the solid wastes contamination of the beach. Practical implications – The work reports the gravity of the situation in the urban centers of this river basin concerning basic sanitation. It compels the local administrations to act in order to abate the solid wastes collection and final destination. Originality/value – In Brazil, as well as in other tropical/developing countries, there is a lack of scientific reports on the theme. However, they are in great need, since the local, State and Federal administrations' disregard the basic sanitation problem of small and/or isolated coastal communities. The solid wastes generated by these populations easily reach the coastal and marine environments with a number of consequences, themselves also unassessed.
Does sustainability sell? Market responses to sustainability certification
Authors: Harris Susan M.
Published: January 2007

Purpose

The purpose of this paper is to describe the results of two projects aimed at testing market responses to the first‐ever fast moving consumer goods (FMCG) independently certified as sustainable.

Design/methodology/approach

The method used comprised three phases: independent sustainability certification of products using a full life cycle assessment; nationwide roll‐out of seven certified household products in retail outlets throughout New Zealand, and trials of certified lamb meat in three butcher shops in Brisbane, Australia; and monitoring of sales data and consumer responses to certified products.

Findings

Record sales averaging +52 per cent above historical were achieved and sustained for the seven household products over a period of 18 months. Certified lamb meat product was well received, with 95 per cent of customers surveyed indicating that they would consider buying certified meat in future.

Practical implications

The paper indicates that there is consumer demand for products that are clearly identified as genuinely sustainable, even though they may be perceived to be more expensive than traditional products. The market for certified sustainable products may become more mainstream as consumer concern regarding sustainability increases, and product disclosure standards become more stringent.

Originality/value

The paper describes the results of the first‐ever market tests of independently certified sustainable products in the FMCG sector. It gives an early indication that some consumers will select independently certified sustainable products in preference to others, provided that the product is clearly labeled and well marketed. The results also indicate that sales of certified sustainable products can be sustained over time.
Slovenia and its new environmental mechanisms for reduction of greenhouse gas emissions
Authors: Kranjcevic Evald
Published: January 2007

Purpose

The purpose of this paper is to evaluate different greenhouse gas (GHG) mitigation policy instruments implemented in Slovenia, especially their impact on industrial competitiveness.

Design/methodology/approach

Analysis of existing mitigation policies.

Findings

The introduction of new policy instruments in Slovenia has not been very effective in curbing GHG emissions, but it certainly brought attention to the problem. As there is still a lot of space for improvements, additional effort should be made to improve existing instruments or to propose additional mitigation measures.

Practical implications

The paper evaluates existing policy instruments, which are still in their evolutional phases. The significance of this paper is to help to intensify indirect influence on GHG emissions reduction, especially on the national level, as proper introduction and understanding of the problem leads to more comprehensive and credible solutions regarding GHG emission reduction strategies. In addition, some new steps and/or measures are also indicated with this paper, especially concerning future evolution of EU emission trading scheme and national CO2 tax regulation.

Originality/value

The paper is a new source of information about implementation of GHG mitigation policy measures in Slovenia. Analysis of adaptation and mitigation activities as well as integration of all aspects of climate change issues into strategies for sustainable development is of significant importance for the relevant decision makers – to monitor the impact of their own policies for domestic assessment purposes, that is to choose a policy strategy, to understand the implications of existing and alternative policy strategies, and to understand the joint interactions of multiple, individual policy strategies.
The fund of hedge funds reporting puzzle
Authors: Amenc Noël , Malaise Philippe , Vaissié Mathieu
Published: January 2007

Purpose

The development of alternative investment has not yet been accompanied by genuine consideration of the specific characteristics of the risks and returns of hedge funds with regard to the provision of information to investors. To fill the gap, in 2004 EDHEC launched an international consultation process, seeking to implement a new framework for funds of hedge funds reporting.

Design/methodology/approach

The consultation process was based on a series of recommendations proposed by EDHEC with regard to the academic state‐of‐the‐art on risk measurement in the alternative universe. The findings of the survey, which brought together the opinions of 98 institutional investors and fund managers, allow a consensus to be established on the information required for the implementation of a relevant reporting method in the field of alternative investment.

Findings

Interestingly, despite somewhat conflicting goals, investors and fund managers, except for slight discrepancies, globally agree on the definition of relevant information, and as a result on the content of the reports of tomorrow.

Originality/value

A very large majority of hedge fund managers are satisfied with a reporting method based on a mean‐variance structure, which is totally inappropriate for the risk and return profiles of alternative investment. To address this issue, the paper presents a series of indicators relying on a basic return‐based analysis that allow a true and fair picture of the risk and return characteristics of alternative investment to be drawn. This paper therefore offers a pragmatic but robust answer, for both investors and fund managers, to the fund of hedge funds reporting quandary.
Stationarity and stability of underwriting profits in property‐liability insurance
Authors: Leng Chao‐Chun
Published: January 2007

Purpose

To examine whether the properties of the combined‐ratio series, an indicator of underwriting profitability in property‐liability insurance, have changed over time.

Design/methodology/approach

Using the autocorrelation function (ACF) and partial autocorrelation function (PACF), we check whether combined ratios are stationary.

Findings

Underwriting profit has worsened in recent years, and combined ratios are non‐stationary. This characteristic of combined ratios needs further analysis for its impact on underwriting cycles.

Practical implications

Traditional concepts of underwriting cycles, such as predictable cycle lengths and trends, may have changed.

Originality/value

The possibility of a non‐stationary combined‐ratio series is recognized, and the possible existence of non‐stationarity and breaks in combined ratios is introduced.
Multi‐national underwriting cycles in property‐liability insurance
Authors: Meier Ursina B.
Published: January 2007

Purpose

The purpose of this article is to examine the existence of underwriting cycles in property‐liability insurance for Switzerland, the USA, and Japan over a period of 40 years (1957‐1997), it aims to overcome some of the limitations of a pure autoregressive process of second order (AR(2)).

Design/methodology/approach

Loss‐ratio data for the three countries are used for the recent period 1957‐1997. To test for the existence of cycles and calculate their length, we start with autoregressive processes of second order and include more variables that should be taken into account. We also estimate a cointegration model in order to separate long‐term and short‐term dynamics.

Findings

The hypothesis of cycles of six years in length no longer holds globally and it is necessary to go further than estimating simple AR(2) processes. Different models or specifications seem adequate for different countries because of the varying structure of the insurance markets. Cycles are still found for the USA and most estimations for Switzerland, whereas most specifications for Japan have not revealed cycles.

Originality/value

Most empirical work on underwriting cycles has so far been done on US data. This study investigates insurance cycles for three countries on three continents. Based on the autoregressive process of second order and the estimations presented in the companion to this article (i.e. Part I), the model is extended by inclusion of more variables and some of the time‐series characteristics that were ignored in many previous studies are dealt with.
Dynamic monitoring of financial intermediaries with subordinated debt
Authors: González‐Rivera Gloria , Nickerson David
Published: January 2007

Purpose

The purpose of this paper is to show that subordinated debt regulatory proposals assume that transactions in the secondary market of subordinated debt can attenuate moral hazard on the part of management if secondary market prices are informative signals of the risk of the institution. Owing to the proprietary nature of dealer prices and the liquidity of secondary transactions, the practical value of information provided by subordinated debt issues in isolation is questionable.

Design/methodology/approach

A multivariate dynamic risk signal is proposed that combines fluctuations in equity prices, subordinated debt and senior debt yields. The signal is constructed as a coincident indicator that is based in a time series model of yield fluctuations and equity returns. The extracted signal monitors idiosyncratic risk of the intermediary because yields and equity returns are filtered from market conditions. It is also predictable because it is possible to construct a leading indicator based almost entirely on spreads to Treasury.

Findings

The signal for the Bank of America and Banker's Trust is implemented. For Bank of America, the signal points mainly to two events of uprising risk: January 2000 when the bank disclosed large losses in its bond and interest‐rate swaps portfolios; and November 2000 when it wrote off $1.1 billion for bad loans. For Banker's Trust, the signal points to October/November 1995 after the filing of federal racketeering charges against Banker's Trust; and October 1998 when the bank suffered substantial losses from its investments in emerging markets.

Originality/value

The signal is a complementary instrument for regulators and investors to monitor and assess in real time the risk profile of the financial institution.
Human mortality: written in the stars?
Authors: Powers Michael R.
Published: January 2007

Purpose

This paper seeks to consider certain characteristics of the human mortality table, and the possibility that mortality rates are governed by an underlying natural law.

Design/methodology/approach

After providing a brief overview of the mathematics of the mortality table, explores the reasonableness of using a simple analytic function to model the mortality hazard rate.

Findings

By comparing the perceived accuracy of Makeham's Law in actuarial science with that of the Titius‐Bode Law in astronomy, it is seen that simple mathematical rules are not always as useful as they may appear initially.

Originality/value

The editorial identifies a problem common to all branches of the natural and social sciences: the possibility of “discovering” formal mathematical relationships where none in fact exists.
Managing credit risk with info‐gap uncertainty
Authors: Beresford‐Smith Bryan , Thompson Colin J.
Published: January 2007

Purpose

The paper aims to provide a quantitative methodology for dealing with (true) Knightian uncertainty in the management of credit risk based on information‐gap decision theory.

Design/methodology/approach

Credit risk management assigns clients to credit risk categories with estimated probabilities of default for each category. Since probabilities of default are subject to uncertainty the estimated expected loss given default on a loan‐book can be subject to significant uncertainty. Information‐gap decision theory is applied to construct optimal loan‐book portfolios that are robust against uncertainty.

Findings

By choosing optimal interest‐rate ratios among the credit risk categories one can simultaneously satisfy regulatory requirements on expected losses and an institution's aspirations on expected profits.

Research limitations/implications

In the analysis presented here only defaults over specific time frames have been considered. However, performance requirements expressed in terms of defaults and profits over multiple time frames that allow for transitions of clients between credit risk categories over time could also be incorporated into an information‐gap analysis.

Practical implications

An additional management analysis tool for applying information‐gap modeling to credit risk has been provided.

Originality/value

This paper provides a new methodology for analyzing credit risk based on information‐gap decision theory.
Mapping corporate drift towards default
Authors: Bandyopadhyay Arindam
Published: January 2007

Purpose

The purpose of this article is to discuss a Black‐Scholes‐Merton (BSM)‐based market approach to quantify the default risk of publicly‐listed individual companies.

Design/methodology/approach

Using the contingent claim approach, a framework is presented to optimally use stock market and balance sheet information of the company to predict its probability of failure as well as ordinal risk ranking over a horizon of one year.

Findings

By applying the methodology, yearly estimates of the risk neutral and real probability of default for 150 Indian corporates from 1998 to 2005 were constructed, that give up‐to‐date point‐in‐time perspective of their risk assessment. It was found that option model can provide ordinal ranking of companies on the basis of their default risk which also has good early warning predictability.

Originality/value

The option‐based default probability estimation may be an innovative approach for measuring and managing credit risk even in the emerging market economy. The asset value model developed in this paper based on the BSM model can facilitate the Indian banks as well as investors to get an early warning signal about the company's default status.
Value‐at‐risk concept by Swiss private banks
Authors: Rogachev Andrey
Published: January 2007

Purpose

The purpose of this paper is to consider the problem of using the Value‐at‐Risk (VaR) technique and examine its practical implementation by Swiss Private Banks.

Design/methodology/approach

The paper is based on a survey originally undertaken in 2003 and updated in 2005. The research results provide details on how asset and portfolio managers understand and apply VaR methodology in their daily business.

Findings

From the banks' perspectives, VaR has both positive and negative points. It is like a common denominator for various risks. The reason is that VaR is used by portfolio managers as comparable risk measurement across different asset classes and business lines.

Originality/value

This analysis shows how banks can implement VaR concept more effectively through its practical implementation areas in: portfolio management decisions and asset allocation; the “what‐if” modeling of candidate traders; and measuring and monitoring market risk.
Recent developments in hedge fund enforcement and regulation by the SEC under the leadership of Chairman Cox suggest that he may not be the free market advocate everyone once thought he was
Authors: Morgan Nicolas , Totino Edward , Weiner Perrie
Published: January 2007

Purpose

This paper aims to draw conclusions about the likelihood that Securities and Exchange Commission (“SEC”) Chairman Christopher Cox will take significant action to reduce regulation affecting hedge funds based on how the SEC has dealt with hedge fund regulation in both the rule making and enforcement arenas since Mr. Cox became Chairman.

Design/methodology/approach

Assesses actions taken by the SEC under Mr Cox's leadership with regard to PIPE (private investment in public equity) transactions by hedge funds, hedge fund registration rules, portfolio disclosure requirements, and alleged collusion among short‐selling hedge funds, research firms, and journalists.

Findings

The SEC's enforcement activities with respect to hedge funds that make short sales before the announcement of a PIPE transaction indicate that the SEC has no plans to lighten the regulatory or enforcement burden on hedge funds. The SEC's response to the DC Circuit Court's decision striking down the hedge fund registration rule likewise indicates that additional hedge fund regulation remains an SEC priority. While it remains to be seen how the SEC investigations and civil actions regarding the alleged collusion between short‐selling hedge funds, research firms and journalists will turn out, it appears unlikely that Chairman Cox will take any bold action to protect freedom of expression and the marketplace of ideas from attacks by disgruntled companies.

Originality/value

Provides a timely and insightful view of the near‐term outlook for SEC regulatory and enforcement policy toward hedge funds.