Using an APT model where global temperature shocks are a systematically priced factor, the risk premium is significant and positive. Evidence is provided that positive exposure to temperature shocks is related to increasing CO2 emissions by industry. The global impact on the cost of equity could be as high as 2.8% per year, implying a global GDP loss of $2.2 Trillion per year due to global temperature shocks.

Greenwashing has long been considered a viable strategy in the literature and academic research has explored its drivers from an institutional viewpoint. This paper extends the literature by considering greenwashing from a financial management viewpoint. It is found that when firm stock volatility is low, when the weighted average cost of capital is high, when firm pricing power is strong, and when information asymmetry is high, that the financial incentives for greenwashing are strong. The potential returns to greenwashing are weakly related to the level of systemic risk of the firm. The simulation results of the model indicate that in the current era that the returns to greenwashing are quite limited without a lot of information asymmetry. The results indicate that in previous eras, there were more opportunities for greenwashing. Overall, the results suggest that for low-and average-beta firms that organizational-level drivers and individual-level psychological drivers are more important in driving greenwashing decisions. The results also show why stock-based incentives do not support corporate social responsibility.

Airlines wanting to cooperatively set prices for their international air travel service must apply to the relevant authorities for antitrust immunity (ATI). Whether consumers, on net, benefit from a grant of ATI to partner airlines has caused much public debate. This paper investigates the impact of granting ATI to oneworld alliance members on their price, markup, and various measures of cost. The evidence suggests that implementation of the oneworld alliance without ATI did not have a statistically significant impact on the markup of products offered by the members, and there is no evidence that the subsequent grant of ATI to various members resulted in higher markups on their products. We find evidence suggesting that the grant of ATI facilitated a decrease in partner carriers’ marginal and fixed costs. Furthermore, member carriers’ price did not increase (decreased) in markets where their services do (do not) overlap, implying that consumers, on net, benefit from the grant of ATI in terms of price changes.

Using traditional health capital model of Grossman (The human capital model of the demand for health. NBER, Working Paper 7078, 1972) and Wagstaff (Bull Econ Res 38(1):93–95,1986a) this paper attempts to fill in the theoretical missing link between mothers’ autonomy and household consumption behavior. We focus specifically on the consumption of child health inputs. In our paper it has been shown that working mothers’ children should be of better health. Further, independent of working status of the mother, higher autonomy always reallocates family budget to induce more consumption of child health inputs. The basic results of our model are further reinforced when autonomy is dependent on mothers’ income. In fact, the income effect derived from our extended model indicates that income-induced autonomy may result in redefining the composite consumption good for the family as an inferior one.

No description available.

Using a dataset of 7757 firms in Brazil, China, India, and Russia from 2009 to 2014, this article examines the effect of political risk variables on financial flexibility and the effects of financial flexibility on future firm value, capital investment, cash holdings and the probability of default while controlling for firm-level effects and political variables. Effective representation of the majority is found to be associated with a higher level of financial flexibility. In terms of the effects of financial flexibility on firm value, results that are much stronger than previously reported are found. However, unlike previous work, the current research does not find that increased financial flexibility leads to increased capital expenditures. It is found that financially flexible firms in these countries lower their probability of default on average by about 0.6 %. It is also found that giving greater voice to the majority and greater adherence to the rule of law adds to the value of firms.

Purpose: The purpose of this study is to examine the bi-directional causality between political uncertainty and the market risk premium in the US. Design/methodology/approach: I use a theoretical model to motivate signs and then check signs based on a vector autoregression. Findings: I find that political uncertainty has a small positive, delayed effect on the market risk premium. The market risk premium, on the other hand, has a large permanent, negative effect on political uncertainty. Originality/value: This is the first research paper to consider the bi-directional effects of political uncertainty on the market risk premium and vice versa. It also finds interesting empirical results.

published_or_final_version / Business Administration / Master / Master of Business Administration

Thesis submitted in partial fulfillment of the requirements for the degree of Master of Management in Finance and Investment Wits Business School University of the Witwatersrand, Johannesburg, South Africa October 2016 / This thesis addresses affordability of private financing for infrastructure in the context limited public sources of funding and a low level development of Uganda’s financial sector. The thesis addresses the factors that influence the cost of private financing of public infrastructure; the influence of the level of development of domestic financial markets in the determination of private financing costs of infrastructure projects; the private sector options feasible for financing Uganda’s infrastructure development and the scope for public sector interventions to reduce the cost of private finance in infrastructure. The research project was undertaken between June 2015 and March 2016.The research methodology was mainly library based and qualitative in nature. However, the approach was dual in nature since both existing sources of information and primary data were used. The study has established that in the face of limited public funding and a deficit in infrastructure development expenditure, private financing for public infrastructure is indispensable. However, it is relatively more costly, with good reason. However, there is scope for the public sector to affect favorably the cost of private financing for infrastructure. In particular, steps to address regulatory, political and country risk are critical. Equally important are measures to address macroeconomic instability and strengthen balance of payment positions as well as reforms to widen and deepen the financial sector. In addition, optimizing project selection and preparation as well as a establishing a credible pipeline of infrastructure projects coupled with suitable financing plans can positively impact the cost of private financing for infrastructure. / MT 2018

Social enterprises (SEs) are playing an increasingly important role in fostering a more sustainable and equitable society around the world. Previous studies have suggested that developing capabilities to manage knowledge is a key driver of an SE's success (Domenico et al., 2010; Guclu et al., 2002; Tracey et al., 2011). An SE operates much like a business, but manages operations and directs its surpluses towards the pursuit of social goals (Austin et al., 2006; Dart, 2004; Dees, 2001; Granados et al., 2011; Mair & Marti, 2006; Nicholls, 2006) in an unstable or unpredictable market (Jaworski & Kohli, 1993; Mair & Marti, 2009; Nicholls, 2010; Sharir & Lerner, 2006). When the market is highly turbulent, customers' product expectations and preferences change over time. In such a situation, an SE has to pay more attention to the development of high-quality new innovative products and solutions that satisfy the social needs of specific customer segments, including underprivileged groups and socially responsible consumers, thereby more effectively addressing societal problems in a sustainable way. Indeed, the question of how absorptive capacity contributes to an SE's financial and social return is largely under-researched (Dacin et al., 2011; Granados et al., 2011; Haugh, 2005). Drawing on the dynamic capabilities perspective, this study proposes a research model in which absorptive capacity affects an SE's firm performance in both financial and social terms via marketing capabilities. It advances the existing SE-related literature by investigating the mediating role of marketing capabilities in the relationship between absorptive capacity and firm performance in the context of SEs. Also, market turbulence is theorized to moderate the relationship between marketing capabilities and performance. To perform this study, I collected data using questionnaires based on a list generated randomly from the database of the Hong Kong Council of Social Service SE Directory, and the contacts obtained from other sources such as Fullness Social Enterprises Society and the Workforce Development Agency, Ministry of Labour Taiwan. The data collection was performed over an eight-month period, with 109 valid responses being collected for this study. Multiple regression and a bootstrapping approach were used to test the hypotheses. The results provide support for most of the proposed hypotheses. Specifically, an SE's absorptive capacity is positively related to its marketing capabilities. Likewise, an SE's marketing capabilities are positively linked to its financial performance. In addition, an SE's marketing capabilities mediate the relationship between its absorptive capacity and its financial performance. Furthermore, the results show a positive moderating role of market turbulence in an SE's marketing capabilities-financial performance relationship. In summary, this study lends support to previous studies that show dynamic capabilities do not necessarily result in better financial performance directly in the context of SEs. It contributes to unpacking the black box of the absorptive capacity-financial performance relationship, and it shows that an SE's marketing capabilities play an important role as an underlying mediation mechanism. It also extends and contributes to the social enterprises literature by revealing the mediating role of marketing capabilities between absorptive capacity and financial performance, and the moderating effect of market turbulence on the relationship between marketing capabilities and financial performance in the context of SEs.