66,193 research outputs found

    Evaluating IT Fashion Investments regarding Risk and Return

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    IT fashions are IT innovations within a hyped phase. They are on the rise and claimed to be “the next big thing”. Investing in IT fashions bears potential for high returns in case the technology becomes institutionalized and first mover advantages can be realized. Contrary, it bears the risk of investing in a losing technology. By waiting for others to make the first move organizations bypass this risk but accept the chance of being out-innovated. Depending on an emerging technology’s evolution and its characteristics, the extent of risk and return differ for each strategy. Literature regarding risk and return of IT investments does not address these idiosyncrasies adequately. Our aim is to outline risk/return for each strategy and characteristics of emerging technologies that determine its extent. Hence, this conceptual paper brings together IT fashion and IT investment literature to provide a basis for further research on the evaluation of fashionable IT innovations

    Crown Financial Asset Management: Objectives and Practice

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    This paper analyses key issues that may be relevant to setting the Crown's overall objectives and practices for financial asset and liability management. It examines implications of the nature of the Crown's balance sheet for asset and liability management and investigates the appropriate approach of the Crown towards managing risk (concluding that a risk averse approach is warranted). The issue of centralisation versus decentralisation of Crown asset and liability management is analysed both from a portfolio management perspective and from an organisational design perspective. Insights from private sector financial conglomerates are also incorporated. The paper concludes that individual Crown financial entities should each continue to be responsible for setting their own strategic asset allocation, after taking into account the nature of their liabilities. A central Crown body should, however, monitor and aggregate information from each of these entities and be delegated the responsibility and power to manage risks to the overall Crown balance sheet.Crown balance sheet; Public debt management

    Discounting Dollars, Discounting Lives: Intergenerational Distributive Justice and Efficiency

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    The view that intergenerational distributive justice and efficiency should be treated separately is familiar, yet controversial. This article elaborates the often-implicit justifications for separate treatment and provides a more express statement of how and when such treatment is appropriate. Substantial attention is devoted to an approach that holds constant the intra- and intergenerational distribution of well-being, which proves to be a valuable analytical device even for intergenerational policies that are not distribution neutral. Also explored are possible interrelationships between intergenerational distributive justice and efficiency, the choice of interest rate for discounting dollars, and how the present approach relates to those that would employ direct social weights to dollars at different points in time.

    HR Metrics and Strategy

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    [Excerpt] The idea that an organization\u27s people represent a key strategic resource is widely accepted. The business press is filled with examples of top executives proclaiming how important it is to engage people\u27s minds and spirits in the quest for competitive advantage (Boudreau & Ramstad, 1997; Boudreau, 1996). There is also mounting scientific evidence that certain bundles of high-performance work practices (e.g., performance-contingent pay, team-based work structures, selective recruitment and hiring, extensive training, etc.) are associated with higher organizational financial performance (Becker & Huselid, forthcoming; Ichniowski, Arthur, MacDuffie, Welbourne & Andrews)

    Investment Analysis of Agri-Food Ventures: What Risk Premia are Appropriate? The Silence of the Literature

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    Financial principles of project investment analysis deal with the cost and benefit flows over time. Invariably, the correct future cash flows and exact risks are unknown. The agricultural academic literature devotes substantial energy to discussing the estimation of the cash flows but it is relatively silent on applied estimation of risk. Empirical studies on agri-food ventures have made little or no attempt to estimate appropriate risk adjusted discount rates or other risk measures. Choice of discount rate has been arbitrary. Thus little guidance has been given to practitioners analysing agri-food investments as to the appropriate risk adjusted discounts rates. The Capital Market Line provides a relatively straightforward way to calculate risk premiums for project investments by non-diversified investors. These risk premiums can then be used in Net Present Value investment analysis.Agribusiness, Risk and Uncertainty,

    Does it pay to invest in art? A selection-corrected returns perspective : [draft october 15, 2013]

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    This paper shows the importance of correcting for sample selection when investing in illiquid assets with endogenous trading. Using a large sample of 20,538 paintings that were sold repeatedly at auction between 1972 and 2010, we find that paintings with higher price appreciation are more likely to trade. This strongly biases estimates of returns. The selection-corrected average annual index return is 6.5 percent, down from 10 percent for traditional uncorrected repeat sales regressions, and Sharpe Ratios drop from 0.24 to 0.04. From a pure financial perspective, passive index investing in paintings is not a viable investment strategy once selection bias is accounted for. Our results have important implications for other illiquid asset classes that trade endogenously

    Data envelopment analysis (DEA) and financial ratios : a pro-stakeholders’ view of performance measurement for sustainable value creation of the wind energy

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    Purpose: The purpose of the paper is to explore business performance in a rather sensitive sector that equally combines economic, environmental and social dimensions. The paper investigates the efficiency of wind farm companies, in a framework of pursuing more diverse stakeholders’ interests Design/Methodology/Approach: Ratios and DEA approaches are combined to measure economic efficiency among the DMUs of a sample of wind farms, using data from their financial statements. Findings: Productivity and effectiveness comprise the performance measured by the economic efficiency. We show that by choosing inputs and outputs that are closely related in forming an appropriate financial ratio, it helps to design and explain more fully the impact of a policy intervention aiming at improving economic efficiency. DEA supplements ratios to design, implement and assess a strategy of benchmarking towards bolstering performance, that favors a wider range of stakeholders. Originality/Value: The study provides an in-depth insight into using Data Envelopment Analysis and financial ratios to study economic efficiency. The approach combines economic, social and environmental dimensions (indirectly) of performance, and the composite ratio Return on Total Assets (ROTA). The analysis caters the specific features of the sector renewable energy and their diverse stakeholders.peer-reviewe

    Roots and Effects of Investments' Misperception

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    This work deals with the problem of investors' irrational behavior and financial products' misperception. The theoretical analysis of the mechanisms driving wrong evaluations of investment performances is explored. The study is supported by the application of Monte Carlo simulations to the remarkable case of structured financial products. Some motivations explaining the popularity among retail investors of these complex financial instruments are also provided. Investors are assumed to compare the performances of different projects through stochastic dominance rules and, to pursue our scopes, a new definition of this decision criteria is introduced.
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