Do Incentives Contracts Lead to Higher Risk-taking? The Impact of Executives' Characteristics

2019 ◽  
Author(s):  
François Desmoulins-Lebeault ◽  
Jean-Francois Gajewski ◽  
Luc Meunier
Keyword(s):  
Risk Taking ◽  
The Impact

The impact of index‐insured loans on credit market participation and risk‐taking

2021 ◽  
Vol 52 (1) ◽  
pp. 141-156
Author(s):  
Richard A. Gallenstein ◽  
Jon Einar Flatnes ◽  
John P. Dougherty ◽  
Abdoul G. Sam ◽  
Khushbu Mishra
Keyword(s):  
Risk Taking ◽  
Credit Market ◽  
Market Participation ◽  
The Impact

scholarly journals Effects of the COVID-19 Pandemic on Sports Entrepreneurship

2020 ◽  
Vol 12 (20) ◽  
pp. 8493
Author(s):  
Paloma Escamilla-Fajardo ◽  
Juan M. Núñez-Pomar ◽  
Ferran Calabuig-Moreno ◽  
Ana M. Gómez-Tafalla
Keyword(s):  
Service Quality ◽  
Risk Taking ◽  
Non Profit ◽  
Paired Sample ◽  
Sports Clubs ◽  
Before And After ◽  
The Impact ◽  
The Relationship ◽  
Linear Regressions ◽  
Crisis Situations

Sports entrepreneurship has been considered an important part of sports organisations when overcoming crisis situations. The aim of this study is to determine the impact of the crisis derived from COVID-19 on sports entrepreneurship and whether there are differences in the prediction of entrepreneurship on service quality in non-profit sports clubs. To this end, 145 sports clubs were analysed before and after the outbreak of the virus in society. Paired sample-t tests were carried out to determine the differences in variables studied before (Time I) and after (Time II) the COVID-19 outbreak, and correlations and hierarchical linear regressions were used to analyse the relationship between the variables studied in the two different stages. The results obtained show that risk-taking and innovation are significantly higher after the appearance of COVID-19, while proactivity has not undergone significant changes. Finally, the relationship between sports entrepreneurship and service quality is positive and significant in both stages but stronger before the crisis.

Should Fast-Food Franchisees Pursue Entrepreneurial Orientation?

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Ehsan Asgharian ◽  
Misagh Tasavori ◽  
Jim Andersén
Keyword(s):  
Firm Performance ◽  
Significant Role ◽  
Risk Taking ◽  
Entrepreneurial Orientation ◽  
Fast Food ◽  
Business Systems ◽  
Unidimensional Construct ◽  
Different Dimensions ◽  
Competitive Aggressiveness ◽  
The Impact

Abstract Although it is widely accepted that entrepreneurial orientation (EO) improves firm performance, scholars have advised that particular attention should be paid to the context. In this research, we investigate a less explored context of franchising where business systems and procedures are usually dictated to franchisees by franchisors. Therefore, whether a franchisor should allow franchisees to pursue EO (innovativeness, proactiveness, risk-taking, competitive aggressiveness, and autonomy) is not clear. In the context of franchising, the majority of prior studies have mainly focused on the employment of EO as a unidimensional construct and at the franchisor level. In this research, we take a bottom-up perspective and evaluate the impact of different dimensions of EO on franchisees’ performance. Our analysis of a multi-group of 183 restaurant franchisees located in Sweden and Iran reveals that only the pursuit of proactiveness and competitive aggressiveness improves a franchisee’s performance and other dimensions do not play a significant role in improving performance in this context.

scholarly journals The Scams Among Us: Who Falls Prey and Why

2021 ◽  
pp. 096372142199548
Author(s):  
Yaniv Hanoch ◽  
Stacey Wood
Keyword(s):  
Risk Taking ◽  
Current Knowledge ◽  
Demographic Characteristics ◽  
Popular Media ◽  
Personality Variables ◽  
The Impact

Not a week goes by without stories about scams appearing in popular media outlets. Given the ease with which scams can be circulated, they have become one of the most common crimes globally, inflicting high emotional, financial, and psychological tolls on millions of individuals. Despite their profound and pervasive impact, researchers know relatively little about why some individuals fall victim to scams but others remain immune to the techniques utilized by scammers to lure potential victims. For example, research thus far provides mixed results about the impact of demographic characteristics (e.g., age) as well as personality variables (e.g., risk taking) on individuals’ susceptibility to scams. Even less is known about how the nature or type of scam affects an individual’s susceptibility. Gaining a deeper understanding of these issues is the key to being able to develop preventive programs and reduce the prevalence of victimization. Here, we discuss some promising directions, existing gaps in current knowledge, and the need for decision scientists to address this important problem.

Shareholder risk-taking incentives in the presence of contingent capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Fatouh ◽  
Ayowande A. McCunn
Keyword(s):  
Risk Taking ◽  
Banking System ◽  
Capital Requirements ◽  
Content Type ◽  
Basic Model ◽  
Conversion Rates ◽  
A Minor ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to present a model of shareholders’ willingness to exert effort to reduce the likelihood of bank distress and the implications of the presence of contingent convertible (CoCo) bonds in the liabilities structure of a bank. Design/methodology/approach This study presents a basic model about the moral hazard surrounding shareholders willingness to exert effort that increases the likelihood of a bank’s success. This study uses a one-shot game and so do not capture the effects of repeated interactions. Findings Consistent with the existing literature, this study shows that the direction of the wealth transfer at the conversion of CoCo bonds determines their impact on shareholder risk-taking incentives. This study also finds that “anytime” CoCos (CoCo bonds trigger-able anytime at the discretion of managers) have a minor advantage over regular CoCo bonds, and that quality of capital requirements can reduce the risk-taking incentives of shareholders. Practical implications This study argues that shareholders can also use manager-specific CoCo bonds to reduce the riskiness of the bank activities. The issuance of such bonds can increase the resilience of individual banks and the whole banking system. Regulators can use restrictions on conversion rates and/or requirements on the quality of capital to address the impact of CoCo bonds issuance on risk-taking incentives. Originality/value To model the risk-taking incentives, authors generally modify the asset processes to introduce components that reflect asymmetric information between CoCo holders and shareholders and/or managers. This paper follows a simpler method similar to that of Holmström and Tirole (1998).

The impact of bank liquidity risk on risk-taking and bank lending: evidence from European bank

2021 ◽  
Vol 6 (2) ◽  
pp. 82-97
Author(s):  
Hongyan Liang ◽  
Zilong Liu
Keyword(s):  
Growth Rate ◽  
Risk Taking ◽  
Fixed Effects ◽  
Liquidity Risk ◽  
Bank Lending ◽  
Basel Iii ◽  
European Banks ◽  
Risk Taking Behavior ◽  
Loan Growth ◽  
The Impact

Objective – This paper uses a sample of annual observations of European banks to examine whether the liquidity risk affects a bank’s risk-taking behavior and its future loan growth. Methodology – A sample of European banks (27 member countries of the European Union plus U.K.) over the period of 2005 to 2019 are used in this study. Liquidity risk is measured by the ratio of liquid assets to total assets. Given the longitudinal nature of the data, the authors use panel regression with bank fixed effects to control for unobserved characteristics that might affect the dependent variable. Findings – The authors find that banks holding more liquid assets take less risk and show a higher subsequent loan growth rate. These results hold for both small and large banks. Novelty – To the authors’ best knowledge, this is one of the earliest studies to carefully examine the effects of liquidity risk on risk-taking behavior and loan growth rate for European banks. Our research suggests that the current Basel III requirement on liquidity ratio can decrease bank’s risking-taking behavior while not necessarily impact their future loan growth. Type of Paper: Empirical JEL Classification: G21, G01, G18. Keywords: Bank Liquidity Risk; Risk-taking Behavior; Loan Growth; Basel III

Financial and social efficiency analysis of Islamic microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marwa Fersi ◽  
Mouna Bougelbène
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
Risk Taking ◽  
Negative Impact ◽  
Microfinance Institutions ◽  
Social Efficiency ◽  
Content Type ◽  
Islamic Microfinance ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.Design/methodology/approachThe stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.FindingsThe overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.Originality/valueThis paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

Sign in / Sign up

Export Citation Format

Share Document