As President Franklin D. Roosevelt famously once observed: “The only thing we have to fear is fear itself”. At the tail of end of an historic bull market, with an ongoing trade war, bond bubble and worrying signs of impending recession, policymakers should take note of, given the findings of research by Philippe Bacchetta and Eric van Wincoop into the causes of the Great Recession. As the two academics reveal, it can be a comparatively short step from boom to bust, once negative sentiment begins to drive a self-fulfilling chain of events that can quickly evolve into a panic driven, full-blown global economic crisis. A panic that would make the difference between an economic slowdown and another deep global recession.
Like many other sectors, the world of transportation is experiencing a period of profound disruption. From the sharing economy to mobility-as-a-service, autonomous vehicles to solid state batteries, new technologies, business models and social trends are transforming the way passengers and freight travel. Olivier Gallay, Assistant Professor at HEC Lausanne and an expert in operations research, explains how his work in transport optimization is helping to shape the future of transportation.
Using environmental, social, and governance (ESG) scores of firms belonging to the MSCI World universe, we measure the impact of score-based exclusion on both passive investment and smart beta strategies. We find that exclusion leads to improved scores of otherwise standard portfolios without deterioration of their risk-adjusted performance. Smart beta strategies exhibit a similar pattern, often in a more pronounced way. Moreover, our results demonstrate that exclusion also implies regional and sectoral tilts as well as (possibly undesirable) risk exposures of the portfolios.
As an academic and lawyer specializing in taxation, Pierre-Marie Glauser was closely involved in the corporate tax reform campaign in Switzerland that culminated in the referendum held on May 19th. An advocate of the proposed reforms, Glauser was a member of a number of working groups involved with the reforms and gave presentations at various conferences on the implications of accepting or refusing the reforms. Here he discusses the government backed provisions approved by 64.4% of Swiss voters on May 19th and their impact.
Guido Palazzo, professor of business ethics, highlights a case where entrepreneurial ingenuity has turned environmentally and socially toxic, threatening the health and economic welfare of thousands of people living and working in Italy.
After nearly three years of negotiations, Brexit is proving a seemingly intractable problem, with all routes out of the EU looking costly for the UK. With emotions running high, opinions polarised, and reasoned argument often elusive, maybe a risk management perspective can offer some useful insights, suggests Professor Anette Mikes (HEC Lausanne, UNIL).
Marketers are well aware that social media sites can play a role in influencing consumers, whether it is through product endorsement or building customer loyalty, for example. However, research by Christian Hildebrand and Tobias Schlager suggests that the effect of Facebook on consumers is both more subtle and powerful than commonly realized. They demonstrate that merely browsing this social media site has a significant impact on subsequent consumer decision making.
In a global economy where countries compete fiercely for foreign direct investment, Prof. José Mata offers some insights for policymakers wishing to extract maximum value from specific tax related investment incentives—notably tax holidays.
Corporate governance rules are designed to ensure that firms are well run – that management decisions do not unjustly deprive certain stakeholder groups of value, for example. A major challenge for policymakers, however, as regular reports of poorly run companies in the media show, is devising effective governance provisions. Now though, using a novel approach, academics Boris Nikolov, Erwan Morellec, and Norman Schürhoff have devised a framework which can be used to gauge the actual impact on a firm’s value of some common governance problems and the relative impact on different stakeholder groups.
In 1641 Massachusetts legalized slavery, the first North American colony to do so. Slavery was to persist in the colonies and territories, and then the United States for another two centuries, until formally abolished by the Thirteenth Amendment in 1865. Numerous theories have been advanced about why the US, a nation that values individual liberty so highly, introduced and institutionalized the practice of slavery. And why the slavery of African slaves in the southern states, in particular, became the prevalent form of slavery. Now, Elena Esposito publishes new research showing how the spread of malaria in North America may explain the pattern of growth of slavery in the US.