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Specific Assets (specific + asset)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	75%

Selected Abstracts

Minimum variance cross hedging under mean-reverting spreads, stochastic convenience yields, and jumps: Application to the airline industry

THE JOURNAL OF FUTURES MARKETS, Issue 8 2009
Mark Bertus
Exchange traded futures contracts often are not written on the specific asset that is a source of risk to a firm. The firm may attempt to manage this risk using futures contracts written on a related asset. This cross hedge exposes the firm to a new risk, the spread between the asset underlying the futures contract and the asset that the firm wants to hedge. Using the specific case of the airline industry as motivation, we derive the minimum variance cross hedge assuming a two-factor diffusion model for the underlying asset and a stochastic, mean-reverting spread. The result is a time-varying hedge ratio that can be applied to any hedging horizon. We also consider the effect of jumps in the underlying asset. We use simulations and empirical tests of crude oil, jet fuel cross hedges to demonstrate the hedging effectiveness of the model. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:736,756, 2009 [source]

Supply Management Under High Goal Incongruence: An Empirical Examination of Disintermediation in the Aerospace Supply Chain

DECISION SCIENCES, Issue 3 2008
Christian L. Rossetti
ABSTRACT Aftermarket sales and profits are becoming an increasingly important part of an original equipment manufacturer's (OEM) business model. Because replacement parts often do not require further manufacturing, OEMs act as intermediaries in the aftermarket. As with any intermediary, the OEM must concern itself with suppliers disintermediating its supply chain selling replacement parts directly to the OEM's customers. We frame supply chain disintermediation (SCD) as a principal,agent contracting problem between an OEM buyer and a supplier. Hypotheses relate contract conditions, goal incongruence, supplier capabilities and contract enforcement to SCD. The data are collected from the aerospace industry using a multimethod study, combining an Internet-based survey with archival data. Causal modeling with structural equation modeling (SEM) shows general support for the hypotheses. Particularly, SCD is positively related to buyer,supplier goal incongruence. The agency model offers insights that differ from previous transaction-cost-based models of buyer,supplier relationships. OEM buyers with a lucrative aftermarket should consider aligning goals through incentives rather than relying entirely on economic hostages associated with specific assets. [source]

Federalism in an endogenous growth model with tax base sharing and heterogeneous education services,

PAPERS IN REGIONAL SCIENCE, Issue 1 2005
Thierry Madiès
Federal system; provision of education; tax base sharing; endogenous growth and human capital; "predative" governments Abstract., We examine the effects of tax base sharing on the growth path of an economy in which central and regional governments provide heterogeneous educational services (general and specific training) which increase capital productivity. Our focus is the non co-operative game between two overlapping governments , central and regional , whose objective is to maximise their net tax revenues of educational spending (Leviathan hypothesis). We will show that the dispute between centralisation and decentralisation depends on two effects; the first is a tax effect, which supports centralisation in that tax base sharing leads to overtax the common tax base, and so has a negative effect on the growth path. Second is a public good effect, which defends decentralisation because the very diversity of central and regional educational services has a beneficial effect on the growth path (educational services are imperfect substitutes and "specific assets" of each level of government). We discuss the virtue of tax base sharing in a federation, as an incentive scheme within government's grasp. [source]

Opening up Public Services to Competition by Putting Them Out to Tender: An Evaluation

ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 1 2003
P. Bance
This article examines the effects of systematizing tendering procedures when awarding public service concessions. The opening up of the water supply industry to competition is used by way of illustration. Results show that arguments in favour of systematization are not robust when focusing solely on the expected benefits of the liberalization process. The peculiarities of the contract relationship in the delegation of public services, the mobilization of specific assets, and the long duration and incompleteness of the contracts invalidate this type of argument and expose public authorities to the opportunism of operators. The efficiency of awarding public services concessions relies on cost,benefit analysis, taking into account sectoral aspects as well as specificities of the contracting organizations and structures. The public service culture of these organizations is in this respect a key factor in the choice of efficient organizations since it conditions their ability to internalize the mission of fulfilling the public interest. [source]