Let us suppose that presently unimagined is possible, that “the unexpected may happen” (Marshall, 1920, p. 347). Then “human decisions affecting the future, whether personal, political or economic, cannot depend on strict mathematical expectation since the basis for making such...

Risk-return association is one of the major concerns for economics and business disciplines. While the standard economics and finance theory assume that the sign of the relationship should be positive (individuals are assumed to be risk adverse), since Bowman (1980) many researchers have found...

Venture capital (VC) funds are supplied by a wide range of individual and institutional investors with varied risk profile. The funds vary in size and given funds life VC fund managers thus face two tiers of issues with liquidity and risk management. First the fund managers could face a set of...

We analyze the effects of CEOs' layoff risk on their risk choice while overseeing a firm. A CEO, whose managerial ability is unknown, is fired if her expected ability is below average. Her risk choice changes the informativeness of output and market's belief about her ability. She can decrease...

Firms seem to care a lot about "risk management": the practice of hedging risks whether they are correlated with market risk or not. The standard reasons why widely held corporations might be averse to idiosyncratic risk are based on the principal-agent problem, bankruptcy costs, external...

We provide empirical evidence on the adverse effects of supplier firms' environmental risk exposures on their relationships with principal customers. We document that supplier firms with high environmental risk are less likely to have principal customers. Moreover, from the principal customers'...

This paper investigates the effect of economic uncertainty on the performance of small and medium enterprises (SMEs) over the period 2007–2016. This paper also examines the effects of ownership structure on the relation between Economic Uncertainty and firm performance. We find that an...

This study examines the exposure of microfinance institutions to liquidity, interest rate and foreign exchange (FX) risk. It builds on a manually collected set of data on FX positions and the maturity structure of assets and liabilities of the largest microfinance institutions worldwide. The...

For years, the insurance industry was essentially about mathematical quantification and financial transformation of physical risks. But our world has become more interconnected with the advent of the internet, blockchain etc.: as a consequence, cyber risk is expanding rapidly. Here, Prof. W....

This study examines the exposure of microfinance institutions to liquidity-, interest rate and foreign exchange (FX) risk. Using manually collected data from microfinance institutions' financial reporting, I find that the microfinance sector faces minimal liquidity risk, high interest rate risk...