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Poland was coined a ‘green island’ during the Global Financial Crisis (GFC) of 2007–2009 with a stable growth in Gross Domestic Product (GDP), while other countries experienced a dramatic drop in the GDP growth. We assumed that this is due to the stronger resilience of Polish economy and Polish companies.

The aim of the research is to identify the companies' stability (resilience) in the crisis situations (especially the GFC and COVID-19 crisis). We also wonder whether corporate resilience is accompanied by the financial flexibility.

We use GDP growth rate and Profitability as the measures of the resilience. Additionally, we include in our research financial flexibility measured by debt and cash ratio as factors affecting corporate resilience. Our research covers the period 2000–2021. Our data refer to three European countries: France and Germany as the leading European countries and Poland as the leader of changes in Central and Eastern Europe.

We found that Polish economy – against German and French – have higher GDP growth and profitability ratio over the 2000–2021 period. These ratios also show lower volatility around the trend. We proved that higher corporate resilience is accompanied by higher financial flexibility of Polish companies.

The main objective of this study is to examine whether firms follow the financing hierarchy as suggested by the Pecking Order Theory (POT). The External Funds Needed (EFN) model offers a financing hierarchy that can be used for examining the POT. As far as the EFN considers growth of sales as a driver for changing capital structure, it follows that shall firms plan for a sustainable growth of sales, a sustainable financing can be reached and maintained. This study uses data about the firms listed in two indexes: Dow Jones Industrial Average (DJIA30) and NASDAQ100. The data cover quarterly periods from June 30, 1999, to March 31, 2012. The methodology includes (a) cointegration analysis in order to test for model specification and (b) causality analysis in order to show the generic and mutual associations between the components of EFN. The results conclude that (a) in the majority of the cases, firms plan for an increase in growth sales but not necessarily to approach sustainable rate; (b) in cases of observed and sustainable growth of sales, firms reduce debt financing persistently; (c) firms use equity financing to finance sustainable growth of sales in the long run only, while in the short run, firms use internal financing, that is, retained earnings as a flexible source of financing; and (d) the EFN model is quite useful for examining the hierarchy of financing. This study contributes to the related literature in terms of utilizing the properties of the EFN model in order to examine the practical aspects of the POT. These practical considerations are extended to examine the use of the POT in cases of observed and sustainable growth rates. The findings contribute to the current literature that there is a need to offer an adjustment to the financing order suggested by the POT. Equity financing is the first source of financing current and sustainable growth of sales, followed by retained earnings, and debt financing is the last resort.

The purpose of this chapter is to discuss the potential contribution of the option applications to economic instability. To this end, the chapter briefly reviews the extant literature on financial option pricing and its applications to corporate assets and liabilities. It focuses on the direct relationship between the volatility of the underlying asset and the value of the option. It shows that the theory of option applications by its one-sided emphasis on the value-creating role of volatility promotes excessive risk-taking. Then the chapter discusses how the theory of option applications through the educational system encourages economic agents to make excessively risky decisions. Furthermore, the interactions among these risk-welcoming agents lead to an economic system which becomes increasingly risky. This risky economy, combined with the fact that more than half of the value of the option applications is constituted by the highly volatile value of the options embedded in such applications, translates into wide variations in real investments and the economy.

Although strategic changes and management control systems are relevant, there is the need for an evolution in the tools of performance measurement, analysis and control to understand the ability of the firms, at first, to face environmental variability and, then, to achieve objectives through the strategic change management. This study was dedicated to the issue of what measures are relevant during the strategic change process. It also proposes a multidimensional control system for strategic changes. The framework is based on: the literature review and analysis about strategic change, change management and performance measurement; a two-stage empirical research. Overall, the proposed control system can help firms in managing strategic changes.

The objectives of this study are to reveal the relationship between strategic options and competence building processes and to investigate the effect of environmental and firm-related factors on competence building. Competence building is defined as the qualitative change in firms' existing assets and capabilities; exercising strategic options may trigger this process. In this study an empirical model is developed and tested using structural equation modeling techniques. Many researchers have examined the relationship between strategic options and competence building theoretically, and this study aims to support these theoretical efforts with empirical research.

We provide a comprehensive synthesis and extension of the real option (RO) literature on joint ventures (JVs), contributing in three main areas. First, we examine major alternative theoretical perspectives on JVs – learning, bargaining, transaction cost and agency theory – to elaborate how they complement or contradict RO predictions. Second, we compare arguments and variables used to explain different JV stages – initial RO explicitness and equity shares, JV stability, and performance consequences – and highlight research opportunities. Third, we discuss and extend research about behavioral aspects of making RO (JV) investments. Overall, we offer new predictions and suggestions for a better integration within the RO literature, and between RO and related literatures on JVs.

This paper develops a Bayesian real options model to determine the optimal amount of sampling information to acquire before project activation. The approach is then applied to evaluate parts manufacturing approval (PMA) licenses for an aerospace firm in the maintenance, repair, and overhaul industry. The model explicitly accounts for project and sampling uncertainty, estimated cash inflows, capital outlays, and sampling costs. Upper and lower thresholds for delay option inputs are identified for immediate project activation and indefinite delay scenarios. In general, it is shown that high sampling costs encourage and low sampling costs postpone project activation, the magnitude of which dependent upon sampling reliability, project uncertainty, and moneyness of the delay option.

We develop and test an innovative approach to teaching financial statement analysis (FSA) and assessing student learning outcomes based on making complex stock investment decisions compared to professional analysts. We train students to apply FSA and emphasize interdisciplinary factors and high integrative complexity. Our innovative FSA teaching approach, which we apply in an MBA financial reporting course, involves the instructor lecturing on FSA as a tool for integrative and complex decision making, students researching and applying FSA to public companies, and presenting the rationale for individual and group stock investment decisions. The instructor gives high-quality and timely feedback on the students’ application of FSA with a focus on investment judgments involving critical thinking, problem-solving, and teamwork skills. Our detailed efficacy analysis shows that our FSA teaching approach is effective. Students who perceive a public company to have credible management, effective competitive strategy, and an acceptable level of financial flexibility make comparable individual and group stock investment decisions as professional analysts.

This chapter deals with the estimation of the effect of exchange rate flexibility on financial account openness. The purpose of our analysis is twofold: On the one hand, we try to quantify the differences in the estimated parameters when exchange rate flexibility is treated as an exogenous regressor. On the other hand, we try to identify how two different degrees of exchange rate flexibility (intermediate vs floating regimes) affect the propensity of opening the financial account. We argue that a simultaneous determination of exchange rate and financial account policies must be acknowledged in order to obtain reliable estimates of their interaction and determinants. Using a panel data set of advanced countries and emerging markets, a trivariate probit model is estimated via a maximum simulated likelihood approach. In line with the monetary policy trilemma, our results show that countries switching from an intermediate regime to a floating arrangement are more likely to remove capital controls. In addition, the estimated coefficients exhibit important differences when exchange rate flexibility is treated as an exogenous regressor relative to the case when it is treated as endogenous.