London Business School

About: London Business School is a education organization based out in London, England, United Kingdom. It is known for research contribution in the topics: Portfolio & Equity (finance). The organization has 1138 authors who have published 5118 publications receiving 437980 citations. The organization is also known as: LBS.

Optimal Versus Naive Diversification: How Inefficient is the 1/N Portfolio Strategy?

Abstract: We evaluate the out-of-sample performance of the sample-based mean-variance model, and its extensions designed to reduce estimation error, relative to the naive 1/N portfolio Of the 14 models we evaluate across seven empirical datasets, none is consistently better than the 1/N rule in terms of Sharpe ratio, certainty-equivalent return, or turnover, which indicates that, out of sample, the gain from optimal diversification is more than offset by estimation error Based on parameters calibrated to the US equity market, our analytical results and simulations show that the estimation window needed for the sample-based mean-variance strategy and its extensions to outperform the 1/N benchmark is around 3000 months for a portfolio with 25 assets and about 6000 months for a portfolio with 50 assets This suggests that there are still many “miles to go” before the gains promised by optimal portfolio choice can actually be realized out of sample

The Braggart’S Dilemma: on the Social Rewards and Penalties of Advertising Prosocial Behavior

Abstract: People often brag about, or advertise, their good deeds to others. Seven studies investigate how bragging about prosocial behavior affects perceived generosity. The authors propose that bragging conveys information about an actor's good deeds, leading to an attribution of generosity. However, bragging also signals a selfish motivation (a desire for credit) that undermines the attribution of generosity. Thus, bragging has a positive effect when prosocial behavior is unknown because it informs others that an actor has behaved generously. However, bragging does not help—and often hurts—when prosocial behavior is already known, because it signals a selfish motive. In addition, the authors demonstrate that conspicuous cause marketing products have effects akin to bragging by signaling an impure motive for doing good deeds. Finally, the authors argue that bragging about prosocial behavior is unique because it undermines the precise information that the braggart is trying to convey (generosity). In contrast, bra...

The Competitiveness of European Manufacturing — A Four Country Study

Abstract: This article reports the results of a study of operational practice and performance in 663 manufacturing sites in Finland, Germany, the Netherlands and the UK. It reviews the competitiveness of manufacturing in each country against a “world class”scale. The results are examined in more detail examining differences between countries, factors influencing competitiveness such as site size and origin of parent, and agendas for individual countries. Overall a broad spread is found in Northern Europe with disappointingly few world class sites but many reasons for cautious optimism. The best companies are realistic about their position, but the worst are dangerously over-optimistic.

Evolutionary Psychology and Family Business: A New Synthesis for Theory, Research, and Practice:

Abstract: The article seeks to show that the ideas of evolutionary psychology have not only a unique contribution to make to the study of family business but have an overarching capacity to integrate theory, resolve empirical debates, and lead research in new directions. The article considers, first, what is different about family firms before outlining the Darwinian framework and its implications, and then moves on to an analysis of kinship dynamics as central to understanding the roots of cooperation and conflict in the family firm. The article concludes with a discussion of the scope for theoretical synthesis, practical implications, and the position this analysis leads us to about the unique performance potential and liabilities of the family firm.

Who Pays the Price of Brokerage? Transferring Constraint through Price Setting in the Staffing Sector:

Abstract: This article analyzes how a broker's ability to affect prices and extract superior value from its position has economic consequences for the actors tied to it. I argue that intermediaries may exercise partial control in price setting by transferring the price constraints imposed on them by the actors on one side of the market to those on the other side. In so doing, they generate unequal returns for the brokered parties, who then receive different prices due to the nature of the tie between the broker and its other exchange partners. I investigate this argument using a novel mix of quantitative and qualitative data gathered from an intermediary in the staffing sector. The results show that the broker is able to transfer discounts offered to valued buyers (clients) on to the sellers (workers) matched with them, instead of reducing its own margins. As a result, actors with the same resource endowments receive different prices depending on the relationships among other exchange partners in a given triadic ne...