We analyze the relation between expected option returns and the volatility of the underlying securities. The expected return from holding a call (put) option is a decreasing (increasing) function of the volatility of the underlying. These predictions are supported by the data. In the cross section of equity option returns, returns on call (put) option portfolios decrease (increase) with underlying stock volatility. This finding is not due to cross-sectional variation in expected stock returns. It holds in various option samples with different maturities and moneyness, and is robust to alternative measures of underlying volatility and different weighting methods.

While much has been documented about the construction of an individual's personal values, very little attention has been paid to how personal values connect with core aspects of leadership such as purpose, behavior and legacy. Through an expansion of Ken's recent work on this topic, the authors explore the impact of personal values-led leadership. A model of how personal values shape leadership purpose, behavior and legacy is introduced. These dimensions are then illuminated through interview data from senior managers from the financial services sector. The personal value impacts are examined in the context of the literature and implications for organizations and managers are drawn together.

Research worldwide reports low levels of employee engagement reflecting employee well-being. This observation spells dire consequences for enterprise performance, expressed as goal achievement, and attained via strategy. Strategy implementation failure adds to enterprise performance pressures, while reducing employee well-being. Research investigating employee engagement as driver of strategy implementation through dimensions of organisation is limited. This paper conceptually examines how employee engagement can be enhanced while driving strategy implementation through dimensions of organisation. The Nienaber and Martins (2015, Journal of Contemporary Management, 12(1), 401–425) survey results serve as illustration. The conclusions arrived at here show that all six factors – at individual, team/unit, and enterprise levels – can be classified according to the dimensions of organisation. Moreover, the dimensions of organisation are not necessarily mutually exclusive, but rather interrelated, and influence employee engagement in unexpected ways. The contribution of this paper stems from the promise that dimensions of organisation serve as mechanism to drive strategy implementation via employee engagement.

I examine the ability of the U.S. investor protection regime to limit insider trading returns, absent Section 16(b) of the Securities Exchange Act of 1934 (the short-swing rule). I find that in this setting, U.S. insiders execute short-swing trades that i) beat the market by approximately 15 basis points per day and ii) systematically divest ahead of disappointing earnings announcements. These results indicate that the bright-line rule restricting short-horizon round-trip insider trading plays a substantial role in protecting outside investors from privately informed insiders in the United States.

This article studies time variation in the expected excess returns of traded claims on dividends, bonds, and stock indices for international markets. We introduce a novel dividend risk factor that complements the bond risk factor of Cochrane and Piazzesi (2005). By aggregating over 4 regions (United States, United Kingdom, Eurozone, and Japan), we create global dividend and bond factors. Our global 2-factor model captures the excess returns of most Morgan Stanley Capital International (MSCI) country indices, as well as a variety of other test assets. Our findings highlight the value of the information contained in dividend and bond forward curves and suggest substantial comovement in international risk premia.

This paper examines the relationship between economic specialization and government expenditures. We hypothesize that citizens and firms in economically specialized regions pressure politicians to invest in core economic sectors in lieu of spending on public goods that benefit the broader economy, such as education. We investigate our hypothesis through an examination of the United States and India. We confirm a negative relationship between economically specialized U.S. states and education spending, and a positive relationship between economically specialized U.S. states and firm subsidies. Next, we examine the effects of an immediate shock in a region's level of economic specialization by comparing Indian states created from federal bifurcation. We show how the creation of two highly specialized states (Bihar and Jharkhand) from a diversified state (Undivided Bihar) was associated with a decline in education spending but an increase in subsidies for core sectors.

This article contributes to the business ethics literature by applying and extending an emerging theoretical perspective—stakeholder capability enhancement (Westermann-Behaylo, Van Buren, & Berman, 2016)—to previously unexplored areas of business ethics inquiry related to work, dignity, and relationships between firms, ex-offenders, and other stakeholders. In particular, I direct attention to ex-offenders as critical community-based stakeholders pursuing employment opportunities with employers in these communities. I discuss how prevailing hiring practices in firms restrict opportunities for ex-offenders to obtain meaningful work and undermine stakeholder capabilities and dignity. I consider three primary pathways for expanding employment opportunities for ex-offenders, enhancing the capabilities and dignity of ex-offenders and other community-based stakeholders, and maintaining critical employer rights. The article concludes with a discussion of potential directions for future research.

Ken Parry once asked me why I wanted to take the lead on a particular initiative. This paper summarises the answer I'd like to have given him. Taking the lead is pleasurable in three principle ways: it affirms or modifies self-concept, confirms a degree of control over the external world and promises self-transcendence through relationship with others. The paper proposes three categories: identity, influence and interaction, as the basis of an analytic framework for further research into the pleasures of power.

Size is an important antecedent of firm survival, and several studies theoretically sustain and empirically support a ‘liability of middleness’. Indeed, it is widely believed that companies should act strategically to either become large or remain small and occupy a niche position, because mid-sized firms face the strongest market selection pressures. This study challenges that logic in renewable natural resource industries. Measuring size as product-line scale and firm-level portfolio breadth, we argue that in industries characterized by cost competition, the lack of product differentiation, large capital investments, and sharp price oscillation, scale and breadth have a curvilinear effect on survival that favors mid-sized firms rather than penalizing them. An empirical analysis of the US pulp and paper (P&P) industry over the period 1970–2000 strongly supports our arguments. This study is particularly relevant for emerging economies, in which natural resource industries represent an important portion of the total economic activity.

This study examines how cognitive categorization by host-country investors give rise to negative spillovers among host-country foreign-listed firms from the same home country when one of these foreign-listed firms discloses a financial reporting irregularity. This study further examines how attributes of host-country independent directors mitigate such negative spillover effects through signaling fulfilment of their fiduciary duties. Our results based on Chinese foreign-listed firms on the Singapore Stock Exchange from 2007–2014 reveal that host-country independent directors increase spillover effects among foreign-listed Chinese firms from financial reporting irregularities. However, such increase is attenuated when these directors signal fulfilment of their fiduciary duties through home-country, industry, or task-related experiences, and the observed mitigating effect is stronger when they possess a combination of these experiences.

This study examined the intermediate role job satisfaction and organizational commitment play between leaders' perceived use of power and followers' performance. Based on a sample of 365 cadets at the U.S. Air Force Academy, this study found followers' job satisfaction and commitment mediated the positive relationships between their leaders' use of expert, referent, and reward power and the followers' organizational citizenship behavior. Further, while the use of legitimate or coercive power were both related negatively to followers' in-role job performance, these relationships were not mediated by the followers' job satisfaction or organizational commitment. This study then discusses the practical implications of these findings, highlights its theoretical contributions toward understanding power's direct and indirect relationships with performance in the leadership dynamic, and recommends future research avenues to leverage and build upon these findings.

Drawing on the experience of firms of various sizes from Francophone Africa, we explore how the internationalization trajectories of frontier economy firms may vary from those predicted by theory. The firms studied followed social, linguistic, cultural, and institutional gradients to internationalize first to France, rather than to neighboring countries, and did so in search of not only markets and resources but also legitimacy. In turn, the sales, resources, and legitimacy acquired in France supported further international expansion, sometimes even to neighboring countries. Although our insights derive from the experience of Francophone firms from Africa, we argue that for firms from all former colonies, the internationalization trajectory leads through the colonial center. Our findings underline the roles of legitimacy-seeking and network ties in the internationalization of frontier market firms and serve as a salutatory reminder of the lingering influence of colonial ties on international business.