Articles

The Political Economy of Financial Innovation: Evidence from Local Governments

C. PERIGNON, B. VALLEE

Review of Financial Studies

juin 2017, vol. 30, n°6, pp.1903-1934

Départements : Finance, GREGHEC (CNRS)

https://academic.oup.com/rfs/article/30/6/1903/3098538/The-Political-Economy-of-Financial-Innovation


We investigate the development of an innovative and high-risk type of borrowing for local governments, known as structured loans. Using transaction data for more than 2,700 local governments in France, we show that the adoption of these instruments is more frequent for politicians from highly indebted local governments, from politically contested areas, and during political campaigns. Taking on structured loans helps incumbents win a reelection, and initially allows them to maintain lower taxes. Our findings illustrate how financial innovation can amplify principal-agent problems within the political system

The Recursive Nature of Institutional Change: An Annales School Perspective

M. CLEMENTE, R. DURAND, T. ROULET

Journal of Management Inquiry

janvier 2017, vol. 26, n°1, pp.17 - 31

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Annales School, Institutional change, Institutional logics, Events

http://ssrn.com/abstract=2805362


In this essay, we propose a recursive model of institutional change building on the Annales School, one of the 20th century’s most influential streams of historical research. Our model builds upon three concepts from the Annales—mentalities, levels of time, and critical events—to explore how critical events affect different dimensions of institutional logics and exert short- or long-range influences. On these bases, organizations make choices, from decoupling to radical shifts in logics, leading to severe institutional changes that become the matter of history. As much as organizations are influenced by events and the prevalent institutional logics, their choices trigger macro-level changes in a recursive manner. More broadly, we comment on how fruitful is our approach to historicize organization studies

Thinking Justice Outside the Dock: A Critical Assessment of the Reform of the EU's Court System

A. ALEMANNO, L. PECH

Common Market Law Review

février 2017, vol. 54, n°1, pp.129-176

Départements : Droit et fiscalité, GREGHEC (CNRS)


The 2015 reform of the EU’s court system will go down in history as the most radical transformation of the EU judicial architecture since the establishment of the General Court in 1989. It entails not only the doubling of the number of General Court judges but also the dissolution of the Civil Service Tribunal. This article offers a critical assessment of these two major, structural changes, by focusing on both the process by which they were adopted and its overall merits. After providing a detailed examination of its tortuous legislative history and highlighting its unique underlying procedural feature – with the Court itself initiating the reform process -, this article identifies and systematises the major reform’s shortcomings. It criticises both the diagnosis underpinning the reform and the cure administered. It concludes by presenting this reform process as a missed opportunity to address, in a more holistic manner, the pressing non-docket related challenges faced by the EU judicial system and, in particular, to reform a governance structure which is no longer fit for purpose considering the massive transformation of the EU judicial branch since the CJ was first established in 1951

Topological network design of closed finite capacity supply chain networks

L. KERBACHE, J. MAC GREGOR SMITH

Journal of Manufacturing Systems

octobre 2017, vol. 45, pp.70-81

Départements : Informations Systems and Operations Management

Mots clés : Closed;Finite networks;M/M/1/K;M/G/c/c;M/G/∞ queues

http://www.sciencedirect.com/science/article/pii/S027861251730122X


In this paper, we examine the layout, location, and general topological arrangement of queues in a closed finite queueing network environment for supply chains. Since our focus is on manufacturing environments, then maximizing throughput is a worthy performance measure objective. We are given a network topology G(V, E) with a finite set of nodes and edges and we wish to assign the queues to the nodes V ∈ G such a way that the maximum throughput is achieved. This is a nonlinear continuous optimization problem with implicit integer variables so the problem is at least NP-Hard. We also examine the impacts of Additive Manufacturing (AM) on the throughput of the supply chain. Decentralization of the supply chain topology as evidence by the increased dispersal of nodes within the topology tends to increase the throughput of the system, so the AM leaf nodes can have a measurable and significant impact on SCM throughput.

Toxic Arbitrage

T. FOUCAULT, R. KOZHAN, W. W. THAM

Review of Financial Studies

avril 2017, vol. 30, n°4, pp.1053-1094

Départements : Finance, GREGHEC (CNRS)

https://academic.oup.com/rfs/article/30/4/1053/2758635/Toxic-Arbitrage


Short-lived arbitrage opportunities arise when prices adjust with a lag to new information. They are toxic because they expose dealers to the risk of trading at stale quotes. Hence, theory implies that more frequent toxic arbitrage opportunities and faster responses to these opportunities should impair liquidity. We provide supporting evidence using data on triangular arbitrage. As predicted, illiquidity is higher on days when the fraction of toxic arbitrage opportunities and arbitrageurs’ relative speed are higher. Overall, our findings suggest that the price efficiency gain of high-frequency arbitrage comes at the cost of increased adverse selection risk

When It Could Have Been Worse, It Gets Better: How Favorable Uncertainty Resolution Slows Hedonic Adaptation

Y. YANG, Y. GU, J. GALAK

Journal of Consumer Research

février 2017, vol. 43, n°5, pp.747–768

Départements : Marketing, GREGHEC (CNRS)

Mots clés : hedonic adaptation, happiness, uncertainty, favorable uncertainty resolution


Thankfully, most product consumption experiences are positive. Unfortunately, however, those positive experiences are not always guaranteed to occur, and defects creep into the consumer experience. Though its assertion runs counter to most prescriptions, the current research proposes that exposing consumers to the mere possibility of these negative experiences, occurring in a consumption sequence increases consumers’ happiness with those experiences overtime. Six studies demonstrate this effect and further show that this effect is driven by hedonic responses as a result of favorable uncertainty resolution. That is, with the mere possibility of a negative experience, a consumer, who actually experiences a positive outcome, is likely to feel relief or pleasantness from not having to experience the negative experience. This research enriches existing literature on hedonic adaptation and uncertainty and has significant implications for consumer behavior

Where Do Market Categories Come From and How? Distinguishing Category Creation from Category Emergence

R. DURAND, M. KHAIRE

Journal of Management

janvier 2017, vol. 43, n°1, pp.87-110

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : market category, category formation, strategic agency

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2833208


This paper reviews several streams of research on market category formation. Most past research has largely focused on established category systems and the antecedents and consequences of categorical positioning (i.e. categorical purity vs. spanning; combination vs. replacement) but relatively ignored the formative processes leading to new categories. In this review, we address this lacuna to posit that scholarship would benefit from clearly disentangling category emergence from category creation. We analytically describe the differences between the two and elaborate the boundary conditions that guide and define which process is more likely to occur in a given market. Our review contributes to illuminating the role of organizational agency and strategic actions in market categories and their formation, which deserve greater attention due to their theoretical and practical implications

Where the Risks Lie: A Survey on Systemic Risk

S. BENOIT, J. E. COLLIARD, C. HURLIN, C. PERIGNON

Review of Finance

mars 2017, vol. 21, n°1, pp.109-152

Départements : Finance, GREGHEC (CNRS)

Mots clés : Banking, Macroprudential Regulation, Systemically Important Financial In- stitutions, Financial Crises, Too-Big-To-Fail

https://academic.oup.com/rof/article/21/1/109/2670094/Where-the-Risks-Lie-A-Survey-on-Systemic-Risk


We review the extensive literature on systemic risk and connect it to the current regulatory debate. While we take stock of the achievements of this rapidly growing field, we identify a gap between two main approaches. The first one studies different sources of systemic risk in isolation, uses confidential data, and inspires targeted but complex regulatory tools. The second approach uses market data to produce global measures which are not directly connected to any particular theory, but could support a more efficient regulation. Bridging this gap will require encompassing theoretical models and improved data disclosure


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