HEC Paris

About: HEC Paris is a education organization based out in Jouy-en-Josas, France. It is known for research contribution in the topics: Investment (macroeconomics) & Market liquidity. The organization has 584 authors who have published 2756 publications receiving 104467 citations. The organization is also known as: Ecole des Hautes Etudes Commerciales & HEC School of Management Paris.

Too Risky to Hold? The Effect of Downside Risk, Accumulated Equity Wealth, and Firm Performance on CEO Equity Reduction

Abstract: Although the alignment effect of equity ownership is often studied with emphasis on changes in firm strategy, the exposure of CEOs' firm-specific wealth to firm risk is more easily controlled by changing their level of equity holdings than by changing firm strategic risk. We rely on prospect theory and the behavioral theory of the firm to examine the antecedents of CEO equity reduction and investigate whether it serves to decouple CEO wealth from firm risk. Given its central role in loss avoidance, we underline the effect of the firm's downside risk and distinguish the total loss potential on equity holdings from the loss potential due to firm-specific factors. Allowing for own-performance referents, we also consider firm performance and the value of a CEO's equity holdings in the analysis. Based on a sample of 208 U.S. CEOs for the years 1997--1999, we find empirical support for the role of downside risk and firm performance in CEO equity reductions. Implications on incentive alignment through equity ownership are presented.

Marketing as a Means to Transformative Social Conflict Resolution: Lessons from Transitioning War Economies and the Colombian Coffee Marketing System

Abstract: Social conflicts are ubiquitous to the human condition and occur throughout markets, marketing processes, and marketing systems. When unchecked or unmitigated, social conflict can have devastating consequences for consumers, marketers, and societies, especially when conflict escalates to war. In this article, the authors offer a systemic analysis of the Colombian war economy, with its conflicted shadow and coping markets, to show how a growing network of fair-trade coffee actors has played a key role in transitioning the country’s war economy into a peace economy. They particularly draw attention to the sources of conflict in this market and highlight four transition mechanisms—empowerment, communication, community building, and regulation—through which marketers can contribute to peacemaking and thus produce mutually beneficial outcomes for consumers and society. The article concludes with a discussion of implications for marketing theory, practice, and public policy.

Does academic entrepreneurship pay

Abstract: We investigate the private returns for academics that start new businesses. Total earnings for the universe of 478 individuals working at Swedish universities who quit to become full-time entrepreneurs between 1999 and 2008 are compiled. To the best of our knowledge, this is the first analysis of entrepreneurial returns to include capital gains. Entrepreneurship for academics appears a gradual process and episodic. Earnings are similar before and after becoming an entrepreneur, and dividends and capital gains are inconsequential. But the income risk is more than three times higher in entrepreneurship.

Fact-Free Learning

Abstract: People may be surprised by noticing certain regularities that hold in existing knowledge they have had for some time. That is, they may learn without getting new factual information. We argue that this can be partly explained by computational complexity. We show that, given a database, finding a small set of variables that obtain a certain value of R^2 is computationally hard, in the sense that this term is used in computer science. We discuss some of the implications of this result and of fact-free learning in general.

Extracting Information from Options Markets; Smiles, State-Price Densities and Risk-Aversion

Abstract: In this paper, recent techniques of estimating implied information from derivatives markets are presented and applied empirically to the French derivatives market We determine nonparametric implied volatility functions, state-price densities and historical densities from a high-frequency CAC 40 stock index option dataset Moreover, we construct an estimator of the risk aversion function implied by the joint observation of the cross-section of option prices and time-series of underlying asset value We report a decreasing implied volatility curve with the moneyness of the option The estimated relative risk aversion functions are positive and globally consistent with the decreasing relative risk aversion assumption