Due to political and economic integration, firms face increasing opportunities for locating their activities in countries, regions and cities that provide the best business environment for their specific needs. In our study, we focus on the impact of economic risk and risk preferences upon...

Abstract This paper considers a model of spatial allocation of investment capital under uncertainty. We demonstrate that the spatial concentration of economic activity depends upon properties of risk preferences deeper than risk aversion. The degree of so-called relative prudence unambiguously...

In this paper, we study how a competitive banking firm can use a variable deposit rate to insure against profit risk from risky assets and how the utility of the bank manager is affected by this kind of risk management policy. Furthermore, we study the advantage of a risk management policy which...

In this study the hedging behaviour of a competitive risk-averse exporting firm is examined which produces under exchange rate uncertainty and which owns other sources of risky income. It is shown that the well-known separation theorem holds, when a forward market for foreign exchange is...