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See detailEssays on Dutch Disease and International Finance
Vermeulen, Wessel UL

Doctoral thesis (2013)

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See detailTrust Dynamics: Beliefs, Preferences, Learning and Performance
Cortesi, Maurizio UL

Doctoral thesis (2012)

Detailed reference viewed: 88 (8 UL)
See detailEmpirical Essays on Commodity Prices
Carpantier, Jean-Francois UL

Doctoral thesis (2012)

Detailed reference viewed: 49 (4 UL)
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See detailInvestment Fund Governance: An empirical investigation of Luxembourg UCITS
Hazenberg, Jan UL

Doctoral thesis (2012)

Investment funds potentially suffer from the conflict of interest between investors and fund management companies. Fund boards could help mitigate this conflict. In Luxembourg, the second largest fund ... [more ▼]

Investment funds potentially suffer from the conflict of interest between investors and fund management companies. Fund boards could help mitigate this conflict. In Luxembourg, the second largest fund domicile globally, fund boards are not required to have independent board members. Nevertheless, many firms have independent board members on their fund boards. The research question investigated is whether or not boards with (more) independent board members are more effective for investors, leading to lower costs (Total Expense Ratio) and/or better investment performance (Carhart alpha). With a multiple regression analysis, the relationship is analysed of the level of fund costs and performance with the funds’ governance characteristics, controlling for various other promoter, umbrella and fund variables. This approach did not provide consistent evidence that independent governance contributes to lower costs or better performance. The survey among board members showed that irrespective of whether or not the boards have independent board members, fund boards in the sample prioritise risk management and compliance aspects. Lower priority is given to investment performance and costs. Both for the level of costs and performance, whether or not the promoter had affiliated distribution in the group seems to be a more important driver than the composition of the fund board. [less ▲]

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See detailAn Alternative approach to extreme-risk management
Laube, Falk UL

Doctoral thesis (2011)

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See detailLa détresse financière des entreprises: trajectoire du déclin et traitement judiciaire du défaut
Fimayer, Agnès UL

Doctoral thesis (2011)

This thesis aims to evaluate the efficiency of bankruptcy laws on an ex ante and ex post point of view according to three criteria: their financial efficiency, their social efficiency and their ... [more ▼]

This thesis aims to evaluate the efficiency of bankruptcy laws on an ex ante and ex post point of view according to three criteria: their financial efficiency, their social efficiency and their macroeconomic coherence. First, we analyze the economic and financial path of default and its legal treatment in order to determine the potential costs induced by the social objectives (employment preservation) of French bankruptcy law in terms of recoveries for creditors. We find that the legal treatment of default is in France implemented in the spirit of the objectives defined and hierarchized by the law, and that the court undertakes measures in order to also protect financial interests; this result invalidates our hypothesis that these two objectives are incompatible. Subsequently, we adopt a Law and Finance approach in order to bind bankruptcy codes to national environments. We offer an appreciation of the macroeconomic degree of coherence of default, which is in our opinion an element of its efficiency. [less ▲]

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See detailRisk Management in the petrochemical industry - a game theoretic approach
Hansen, Michael UL

Doctoral thesis (2011)

The thesis studies risk management and the complex human interactions in the petrochemical industry using game theoretic methods. In a first step, the risk management problem is described as a ... [more ▼]

The thesis studies risk management and the complex human interactions in the petrochemical industry using game theoretic methods. In a first step, the risk management problem is described as a simultaneous inspection game, in which the management of a model petrochemical company makes a decision of safety rule enforcement and the worker faces a trade-off between not violating or violating these rules. Violating leads to a gain if rules are not enforced, and to a loss if enforced. In this simple model, comparative statics analyses show how increased punishment and increased management commitment increase safety standards in the company. The cost and benefit parameters of the analysis are adapted from the “real world”. In a second step, the risk management problem is described as an enhanced, sequential inspection game in which incident risks are considered. The equilibrium results are used to develop a graphical risk management tool, the “Petrochemical Organisation Risk Triangle” (PORT). The PORT demonstrates how an enhancement of safety culture in the industry decreases the risk of incident. Comparative statics analyses including the effects of technological progress, safety culture incentives, increased punishment, management commitment and external contractors are then discussed using the PORT. It is concluded that in improving a company’s safety culture, management commitment is more effective than increased punishment and that contractors are key players in achieving good safety performance. Finally, the thesis presents an economic cost and benefit analysis of a model company to quantify and evaluate current risk management practices based on industrial data. [less ▲]

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See detailEssays on corporate default process: UK and France
Nigam, Nirjhar UL

Doctoral thesis (2011)

The thesis has been conducted upon a unique and primary database manually collected through courts and various reliable sources (governmental and non-governmental offices). This is the major strength of ... [more ▼]

The thesis has been conducted upon a unique and primary database manually collected through courts and various reliable sources (governmental and non-governmental offices). This is the major strength of this thesis. With such a database, we built individual statistics on the corporate bankruptcies process in for two major European countries (France and United Kingdom). The collected data deals with the causes of financial default, the recovery rates of creditors, the process of decision making at the time of default, the efficiency of such decisions, etc. Such research project helps in distinguishing the origins of corporate financial default: are they independent from the national bankruptcy code or not? In order to test the effect of legal environment, we computed the most comprehensive legal indexes till date. Our legal indexes consist of more than 300 questions that explain the particular function of bankruptcy. We merge these indexes with the hand collected database for France and UK. This makes this thesis really unique as it is composed of original hand collected databases. To the best of our knowledge the UK database has no equivalence as for the first time we manage to include liquidations which constitute more than 85% of bankruptcies in UK. Even the scholars in UK lack such information. Such empirical work is completed by a microeconomic theoretical analysis and would yield interesting results that will be discussed in detail in the rest of the chapters of the thesis and also open avenues for future research work. Chapter 1 presents a brief introduction to the topic, explaining the research aims and research methodology. Chapter 2 presents the detailed survey of literature on bankruptcy. It starts by explaining the basic concept associated with bankruptcy, need of bankruptcy laws, the main objective of bankruptcy, the main processes associated with bankruptcy, classification of bankruptcy regimes and the law and finance approach to understand legal environment affecting bankruptcy. It explores the previous literature and findings and provides our contribution to the pre-existing literature and justifies our research goals and our approach. Chapter 3 empirically investigates the choice between informal and formal (court-supervised) restructuring of small and medium French firms in default. The procedure is depicted as a sequential game in which stakeholders first decide whether or not to engage in an informal negotiation. Then, conditional on opting for an informal workout, the creditors and the debtor can succeed or fail in reaching an agreement in order to restructure the firm’s capital structure. Based on a sample of 735 credit lines allocated to 386 French distressed firms, we test different hypotheses which captures i) coordination vs. bargaining power issues, ii) informational problems, iii) firms’ characteristics, and iv) loan characteristics. Using a sequential LOGIT approach, we first find that the probability for opting for an informal workout i) decreases when the bank is the debtor’s main creditor and ii) increases with the size of the loan. In addition, the likelihood of success of an informal workout i) decreases when the management of a badly rated firm is considered as incompetent, and ii) decreases when the bank is the debtor’s main creditor. The result concerning the bank as being the main creditor suggests that “bargaining power” argument dominates the “coordination” argument. Finally, we find no evidence of the impact of collateral on the decision between informal and formal restructuring. Chapter 4 describes the prevalent bankruptcy procedure of UK and France; in general it provides an entire macro view of the bankruptcy laws in given two countries. It presents the various formal and informal procedures, explains their functioning, how they are triggered and the underlying specificities about each process. It is very crucial to understand the working of each procedure as this forms the basis for the future chapters where we related the result of our summary statistics and econometrics to specificities of these procedure and come up with useful conclusions and insights. In chapter 5 the focus returns to the micro economic analysis. We explore the two unique hand coded databases, collected through different sources. Our database consists of 264 small and medium sized enterprises representing France and 564 small and medium sized enterprises representing UK. These countries represent two major legal systems prevailing in Europe: common law and civil law. Both legislations have features that are of interest for research. Based on are datasets we provide summary statistics on both the countries. Our descriptive statistics explains the average profile of our sample company, it provides us with the reasons that lead the company into bankruptcy, it provides us the detailed asset and liability structures of the firms and the detailed claim structure and recovery structure. In addition it also provides us with the duration of the procedure and the costs involved in the process. We also perform multivariate analysis to test the choice between continuation and liquidation for France and to test the factors that increase or decrease the chances of receivership (procedure made for the benefits of banks) and administration (regarded as reorganization procedure) in UK. The main aim of the chapter 6 is to find the legal characteristics that impact on the recovery rates. Previous studies (LLSV, Doing Business Report, World Bank) have usefully used a set of legal indexes to rank the bankruptcy law prevalent within the country. But they fail to identify the characteristics of bankruptcy procedures that create more recoveries. We give here elements of answer by taking into consideration two countries that are good representatives of the two main legal systems prevailing in Europe: France (Civil Law) and United Kingdom (Common Law). To enable this, we built original legal indexes comprising of 158 binary questions that highlight ten major dimensions of corporate bankruptcy procedures: (1) accessibility, (2) exclusivity, (3) bankruptcy costs, (4) production of information, (5) protection of the debtor’s assets, (6) protection of claims, (7) coordination of creditors, (8) decision power, (9) sanction of faulty management, and (10) inclination towards liquidation / reorganization. We then propose a mapping of procedures that shows a clear specialization between them. The French procedures (“redressement judiciaire” and “liquidation judiciaire”) are more protective of the debtor’s assets and favor more the coordination of secured claims, public claims, and unsecured claims. In UK, we find strong opposition between the procedures oriented to liquidation and the other procedures. [less ▲]

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See detailSignaling legitimacy for small and medium-size enterprises in transition environments - The case of the Bulgarian IT sector
Ivanova, Olga UL

Doctoral thesis (2010)

The process of institutional transition from one coordination mechanism to another one is an important period in the evolution of any society. Transitions are associated with fundamental political, legal ... [more ▼]

The process of institutional transition from one coordination mechanism to another one is an important period in the evolution of any society. Transitions are associated with fundamental political, legal, economic and social changes (Danis et al. 2010) affecting all aspects of life (Peng 2003). The transition from planned to open-market economy that has taken place in Central and Eastern Europe (CEE), East Asia, and the newly independent states of the former Soviet Union represents an institutional transition. An environment that goes through transition is characterized by high level of vulnerability and uncertainty which impacts all actors evolving in it, including the organizations (Peng 2003). The dynamic relationship environment-organization is reflected in the concept of legitimacy. Legitimacy is a pertinent concept to study the transition stage since it exists on the borderline between the organization and its environment. In transition environments, the processes of deinstitutionalization of the old structures and the reinstitutionalization of the new ones coexist. This leads to a lack of institutional framework to guide behavior of actors or a situation called institutional vacuum. Since institutions regulate economic exchanges (North 1990), the lack of them leads to elevated costs for all actors due to the proliferation of opportunistic behavior (Meyer 2001). In such environments, demonstrating legitimacy becomes crucial for the survival of structures and actors. Legitimation is sought by new elites (Raychev and Stoichev 2008), the government (Peng 2000a), the new laws, decrees and regulations (Stark 1992), and the private organizations (Peng 2000a). The success of the transition directly depends on the strategies of organizations evolving in such environments (Peng 2000). Small and medium-size enterprises (SMEs) play an important role as catalysts of the process of change (McIntyre 2003: 1) since they are expected to spur economic growth and employment (Peng 2000a), and maintain social peace (McIntyre 2003: 1). Despite their central role in transition environments, little is known about the challenges SMEs face and the actions that can be undertaken in order to overcome them (Danis, Chaburu and Lyles 2010). One of the main challenges of SMEs in transition environments is to demonstrate that they are legitimate players implying that they comply with the expectations of relevant stakeholders’ groups. The main objective of this study is to shed some light on how SMEs in transition environments gain organizational legitimacy necessary for obtaining stakeholders’ support. The interest of the study lies in the fact that if organizational legitimacy is problematic for all organizations due to changing norms, beliefs, and stakeholders’ expectations over time (Ashforth and Gibbs 1990), it is even more problematic for small organizations in transition environments since the norms, beliefs and expectations are not clearly defined. In order to address the legitimacy needs of small organizations in transition environments, I propose a signaling theory of legitimacy, which postulates that the legitimacy-claiming entities can rely on valid signals in order to demonstrate (communicate) their adherence to the requirements of the evaluating audiences. In general, the signaling theory of legitimacy should hold for any organization facing a liability - the discount the evaluating audiences place on it in comparison to its potential competitors. Organizations in transition environments face liability of origin (Bartlett and Ghoshal 2000) – a discount that the evaluating audiences (both domestic and foreign) may place on them based on their context of origin. For small organizations , the challenges resulting from liability of origin are even bigger because of their size, they are more prone to import instability from the environment. The higher level of vulnerability of small firms encourages them to engage in opportunistic behavior. Hence, demonstrating their legitimacy is a key issue for SMEs operating in transition environments. Organizational legitimacy becomes especially important when organizations engage in long-term arrangements since this requires an assessment of the organization not only in terms of its products/services but also in terms of its ongoing access to resources and capabilities as well as its reliability as a partner. In order to address the legitimacy needs of small firms evolving in transition environments and trying to obtain long-term partnerships, a new legitimacy typology is proposed. It is comprised of two types – functional and relational legitimacy. Functional legitimacy represents the adherence to the evaluating audiences’ requirements regarding relevant resources and capabilities. Relational legitimacy is the conformity with the evaluating audiences’ expectations regarding the reliability of an organization as a partner. Hence, this study addresses two research questions: 1. What are the dimensions (and valid signals) of functional and relational legitimacy (for small organizations in transition environment)? 2. Does using signals of specific types of legitimacy (depending on the liability faced) enhance organizational legitimacy? This doctoral research examines the legitimacy challenges of SMEs in transition environments trying to obtain long-term arrangements. In the first part of the study, the two types of legitimacy - functional and relational legitimacy - are constructed. Similar to organizational legitimacy (Deephouse and Carter 2005), functional and relational legitimacy are also multidimensional constructs comprised of different facets. In the second part, I examine whether the signals of functional and relational legitimacy help SMEs in transition environment gain organizational legitimacy. The research model is tested on data collected from the information technology (IT) sector in Bulgaria. Based on the data analysis and results, this research has several theoretical and methodological contributions. The results also have practical implications for the managers of small organizations in transition environments as well as the public policy agents. The theoretical contributions are associated mainly with the signaling theory of legitimacy. It looks at how organizations can overcome certain liabilities by communicating their adherence to the expectations of relevant stakeholders’ groups. Organizations can demonstrate their conformity to the evaluating audiences’ requirements by using valid signals – organizational characteristics that can be observed, are costly to imitate and are based on shared meaning between the sending and the receiving party. In addition, the study contributes to the literature on transition environments by looking at the particular case of SMEs and their attempt to demonstrate that they are legitimate players when trying to engage in long-term arrangements. The methodological contribution lies in the way the two types of legitimacy (functional and relational) are measured via formative measurement constructs (Diamantopoulos and Winklhofer 2001; Jarvis et al. 2003) under the partial least squares (PLS) technique. Formative constructs are associated with causality that goes from the manifest (directly observable) variable to the latent construct or in other words, the manifest variables cause/build the latent construct (Diamantopoulos 1999). This made possible to match the legitimacy claims of organizations from once side based on the functional and relational signals and the legitimacy granted by relevant stakeholders’ groups, on the other side. In addition, the research contributes to the growing number of studies in strategic management that use PLS as a structural equation modeling technique (Birkinshaw et al. 1995; Cool et al. 1989; Fornell et al. 1990; Johansson and Yip 1994; Tsang 2002). The practical implications of this research shed some light on which signals (organizational characteristics) are important for managers of small organizations in transition environments. Signals are costly and since all organizations (and especially small firms) have limited resources, managers have to know which signals to invest in. It is important to note that many managers disregard the relational aspect of their legitimacy claims which (based on the results of the study) are more important in the communication process between the legitimacy-claiming and legitimacy-granting entities. Overall, this study represents a fertile area for future research. Researchers can test the signaling theory of legitimacy in other contexts – i.e., other transition environments (Eastern Europe vs. China), as well as compare the signals used by organizations in transition environments and developed economies. Researchers can also test the signaling theory of legitimacy on organizations facing different liabilities (i.e. liability of market newness) and try to extend the existing legitimacy typologies. In addition, future studies can focus on issues of meaning construction (based on signals) in the communication process between organizations. [less ▲]

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See detailEssays in international finance
Vermeulen, Robert John Gerard UL

Doctoral thesis (2010)

Detailed reference viewed: 79 (2 UL)
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See detailPrudent ranking rules: Theoretical contributions and applications
Lamboray, Claude UL

Doctoral thesis (2007)

The subject of this PhD thesis is about ordinal ranking rules. An ordinal ranking rule is a procedure which combines several initial rankings into a global ranking. Given the difficulty and ambiguity of ... [more ▼]

The subject of this PhD thesis is about ordinal ranking rules. An ordinal ranking rule is a procedure which combines several initial rankings into a global ranking. Given the difficulty and ambiguity of aggregating ordinal data, it is worthwhile studying ranking rules which, depending on the initial data, do not lead to one, but to several global rankings, hence leaving some indeterminateness about the final result. It appears that the concept of a prudent order, initially introduced by Arrow and Raynaud, is a possible answer from such a perspective. In this approach, pairwise majority margins are computed which count for any two alternatives the number of initial rankings that prefer the first over the second alternative. A prudent order is then defined as a linear order which maximizes the smallest pairwise majority margin. It was our main objective in this thesis to gain a better understanding of the family of prudent ranking rules. According to our definition, a prudent ranking rule is a rule which outputs only prudent orders. To achieve this goal, we pursued different strategies: i) axiomatic characterizations which highlight the distinctive features of a ranking rule, ii) comparison of the properties or results of prudent ranking rules to those of other ranking rules, and iii) empirical simulations allowing for more quantitative conclusions. The thesis is divided into 3 parts. Part I contains an introduction to the ordinal ranking problem. Our main theoretical contributions can be found in Part II. Finally, Part III illustrates the use of prudent ranking rules in two fields of applications. [less ▲]

Detailed reference viewed: 176 (8 UL)