Is corporate social responsibility an agency problem? An empirical note from takeovers

We rely on the agency motives of the takeover premium to empirically examine whether and how the acquirer’s corporate social responsibility (CSR) performance influences the premiums paid in takeovers. Using a large sample of US takeovers that took place over the period from 1992 to 2014, our results mainly reveal that higher CSR performance at the acquirer level is associated with higher takeover premium which is consistent with the shareholder expense view. Our results continue to hold after a battery of additional analyse

Risk Taking Behaviour and Diversification Strategies: Do Financial Literacy and Financial Education Play a Role?

This study investigates whether financial education and financial literacy influence the risk taking of non-professional investors and the diversification strategies they pursue. To this purpose, we submitted a questionnaire to 711 US residents. Our results show that financial education prevents financial illiteracy and changes the investment process of investors. On the other hand, financial literacy, measured according to the synthetic metric introduced by Lusardi and Mitchell, does not influence risk taking. Financial education indirectly exerts its influence also on a simple diversification behaviour, the so-called naïve diversification, pursued equally splitting wealth among investment classes. In fact, whereas for uneducated investors there is no relationship between risk diversification strategies with both financial literacy and the main investor features, for educated investors financial literacy fosters such diversification behaviour. These results have important policy implications showing that financial education can trigger relevant changes in the investment patterns of investors. Our study introduces a series of novelties. First, we focus on how financial education and financial literacy simultaneously affect the investment process of investors. Moreover, we attempt to disentangle their effects on the risk taking dimension and diversification strategies, which are the most effective way to contain the potentially disruptive effects of risks taken

Why do you trust me? A structural equation model of trustworthiness in financial advisory

The paper provides a comprehensive model of trust formation in financial advisory using a dataset of 1,184 Italian advisors that differ across some specific characteristics (bank advisors or tied agents, market maturity of the bank/institution they work for, classified as new player or incumbent). The goal is twofold: on one side, we aim at demonstrating the validity of a trust-formation model that explicitly accounts for both a professional and a relational component; on the other, we wish to investigate whether different types of financial advisory induce different trust formation processes. The latter goal is of particular relevance with respect to the introduction of the MiFiD II Directive, as different trust formation processes may rely on features that are differentially affected by the regulatory changes. Through the estimation of a structural equation model, we are able to prove both its validity and the differential impact of the two dimensions in the trust-formation process. In particular, we find that the novelties introduced by the legislator, favouring the anticipated reciprocation dimension, could help increasing competition in the advisory industry. In fact, this dimension is the one that plays a fundamental role for the advisors of new entrant institutions and that could help support their accreditation in the market

I servizi d'investimento

Il capitolo sviluppa un’analisi sistematica della fornitura di servizi d’investimento, allo scopo di: i) determinare i criteri aziendali e normativi che devono essere usati per identificarli e classificarli; ii) definire le condizioni in base alle quali essi hanno un valore netto positivo per gli utenti; iii) descrivere i metodi che sono usati per fornirli. Per tali motivi, oltre ai requisiti basati su logiche di efficienza ed efficacia, vi sono leggi e regolamenti che specifici che devono essere seguiti nella fornitura dei servizi. Nello specifico, tali regole sono state stabilite tenendo presente la prospettiva del contraente debole, vale a dire l’investitore. La tutela della fiducia degli investitori è uno degli aspetti fondamentali nella determinazione delle regole di funzionamento del mercato dei servizi d’investimento

Investment services

The chapter carries out a systematic analysis of the provision of investment services, in order to: i) determine the corporate economic and legislative criteria that must be used to identify (and therefore classify) them; ii) define the conditions under which they have economic value for the users bringing them a net benefit; iii) describe the methods of providing these services. In this sense, in addition to the requirements laid out on economic efficiency and effectiveness, there are laws and supervisory regulations that must be followed when providing these services. In particular, these laws have been established with the weaker contracting party in mind (that is, the investor). The trust that they show is a fundamental part of regulating the financial services and investment market