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The purpose of the paper is to show that research on the internet's impact on B2B inter‐firm relations is limited, while findings are anecdotal and sometimes contradictory. This study investigates inter‐firm relations amongst Business Travel Management (BTM) firms and their clients by examining the impact of online BTM solutions on the creation and reinforcement of relational bonds.

The paper shows that two major approaches were combined for examining inter‐firm relations: economic (transaction costs economics) and socio‐psychological (social exchange; inter‐organisation; and industrial network) theories. A model illustrating the interrelations amongst the use of online BTM solutions, two structural (communication, dependence) and two social bonds (trust, satisfaction) was proposed for investigating the impact of online BTM solutions on BTM‐clients relations. Data were gathered from a convenience sample of BTM managers in the UK, Greece, and Cyprus and 194 usable responses were analysed using structural equation modelling.

The paper finds that the impact of online BTM solutions on trust, satisfaction and dependence was not confirmed. However, the hypotheses reflecting the interactions between structural and social bonds were supported, which confirmed the mediating impact of internet‐enabled communication on fostering inter‐firm relations.

In this paper the sample is convenient, while data are gathered only from the buyer‐traveller perspective. Larger scale, cross‐industry studies that also combine buyers' and sellers' perspectives are required.

The paper shows that the internet's ability to foster relational bonds was found to be dependent on its exploitation for enhancing inter‐firm communications. When using the internet for enhancing clients' relations and satisfaction, firms should exploit the internet's communication tools and identify clients' information needs for customising the communications' content.

The paper sees that the internet's impact on forming relational bonds and building B2B relations in the BTM context has not been previously researched.

This article examines how reinsurance coupled with new financial instruments can expand coverage to areas exposed to catastrophe losses from natural disasters, and demonstrates how reinsurance and the catastrophe‐linked financial instruments can be combined to lower the price of protection from its current level. A simple example illustrates the relative advantages and disadvantages of pure catastrophic bonds and pure indemnity reinsurance in supporting a structure of payments contingent on certain extreme events occurring. The authors suggest ways to combine these two instruments using customized catastrophe indices to expand coverage and reduce the cost of protection. This article states six principles for designing catastrophic risk transfer systems and discusses practical issues for implementation, and then concludes with suggestions for future research.

The use of social networking sites (SNSs) can promote life satisfaction mainly because of their social relationship benefits. Although prior studies examined the roles of different types of social capital (SC), the association between online and offline SC is ignored. This research addresses this gap by uncovering a mechanism of transformation between online and offline SC in terms of bonding and bridging types when linking SNSs usage and life satisfaction.

Categorizing the concept of SC into four sub-types from bonding/bridging and online/offline dimensions, the paper establishes a theoretical framework based on the transformation mechanism among these four kinds of SC. A component-based approach, partial least square method, is chosen for hypothesis testing with a survey-based sample collected from WeChat users.

First, SNSs usage is positively related to life satisfaction and four types of SC (i.e. online/offline and bonding/bridging SC). Second, both online bonding SC and offline bridging SC are positively related to life satisfaction and can mediate the relationship between SNSs usage and life satisfaction. Third, offline bonding SC is positively related to online bonding SC and can mediate the relationship between SNSs usage and online bonding SC; on the contrary, online bridging SC is positively related to offline bridging SC and can mediate the relationship between SNSs usage and offline bridging SC.

In the environment of SNSs, users can take vigorous strategies to better balance online and offline spaces and improve life satisfaction by adapting to the characteristics of SNSs in developing different types of SC. Specifically, it is encouraged for users to transfer online bridging SC into offline space and offline bonding SC into online space.

To the best of the authors’ knowledge, this is the first study exploring the association between online and offline SC when linking SNSs usage and life satisfaction. Instead of the single transformation direction from online to offline in prior Internet research, this research has revealed different transformation directions between online and offline SC in terms of bonding and bridging types in the context of SNSs.

As the management discussion and analysis (MD&A) section contains discretionary narrative disclosures regarding a government's yearly financial changes and status, the authors investigate several municipal debt market consequences of linguistic tone within these disclosures.

The authors textually analyze municipal MD&As with Linguistic Inquiry and Word Count (LIWC) software and develop narrative tone measures based on existing financial-specific dictionaries. Using a final sample of 446 municipal bond issuances from 2012 to 2016, the authors modify the current bond regression models to examine the association between MD&A disclosure tone and future bond interest costs or rating disagreements.

This study’s empirical analysis suggests that more negative MD&A tone is associated with higher future debt costs and greater future disagreements among bond rating agencies.

Overall, the evidence implies that municipal bond stakeholders use the information in narrative disclosures when evaluating risk, but that the qualitative nature can introduce differences in interpretation between users. Furthermore, additional training in MD&A writing and further standard guidance in MD&A disclosures could improve the MD&A's informativeness for bond market decision-making and state-level monitoring.

This study is first to incorporate narrative tone measures into bond models in a governmental context.

Current US tax laws provide investors an incentive to time the sales of their bonds to minimize tax liability. This gives rise to a tax-timing option that affects bond value. In reality, corporate bond investors’ tax-timing strategy is complicated by risk of default. Existing term structure models have ignored the effect of the tax-timing option, and how much corporate bond value is due to the tax-timing option is unknown. In this chapter, we assess the effects of taxes and stochastic interest rates on the timing option value and equilibrium price of corporate bonds by considering discount and premium amortization, multiple trading dates, transaction costs, and changes in the level and volatility of interest rates. We find that the value of the tax-timing option accounts for a substantial proportion of corporate bond price even when interest rate volatility is low. Ignoring the timing option value results in overestimation of credit spread, and underestimation of default probability and the marginal investor’s income tax rate. These estimation biases generally increase with bond maturity and credit risk.

The purpose of this paper is to investigate whether a firm’s undertaking of a bond IPO influences the monitoring of the private loans granted to the firm by private lenders. If it does, in which direction the monitoring changes?

The author uses both univariate and multivariate analyses to test the hypothesis. For the purposes of this research, the author’s primary data sources are LPC Dealscan, which provides data on private loans; Mergent FISD, which provides data on public bond issues; and the Compustat Industrial Annual Database, which provides the required financial data for the sample firms. The author’s sample covers non-financial US firms for the period of 1991-2010. The author’s final sample consists of nearly 23,000 private loans granted to about 5,500 non-financial US firms.

The major finding of this research is that private lenders increase their degree of monitoring of loans that they extend to a firm after it issues a bond IPO. The results of the two-stage bond IPO anticipation model further strengthen the findings. The evidence suggests that as the firm issues public debt for the first time, private lenders get concerned about the potential increase of agency problems and leverage, and consequently, find it valuable to increase the degree of monitoring of loans. Also, the magnitude of change in monitoring is strongly influenced by the degree of information asymmetry, leverage, profitability, and potential to waste free cash flow.

This paper enhances one’s understanding of the contracting dynamics between private lenders and the firm as it issues in the public debt market. The findings can aid firms anticipate the borrowing conditions they will face if they undertake a bond IPO. Further, the cross-sectional analysis on covenant changes from pre- to post-bond IPO period identifies specific firm characteristics that impact the magnitude of change of covenant intensity and comprehensiveness. As a result, uncertainty regarding post-bond IPO outcomes is reduced for borrowing firms.

This paper shows that for a large class of single and multi‐factor term structure models, including the affine class, the market price of risk is directly related to the parameters of the stochastic processes of the underlying factors of the economy. It is shown that the market price of risk is proportional to the limit of the volatility of zero coupon bond returns. This means that the market price of risk is not entirely arbitrary. Not only it must be consistent with no arbitrage conditions, also it must be consistent with the parameters of stochastic processes of the factors that describe the economy. If the market price of risk is not correctly specified, then it could lead to profit opportunities of the type discussed in Backus et al (1996). Another consequence of our result is that in empirical tests of interest rate processes, the market price of risk should not be specified exogenously since its value is a function of the parameters of the model. We extend our result to forward processes. The market price of risk is shown to be a function of the volatility of the forward rate processes.

The purpose of this paper is to examine the impact of board gender diversity on bond terms and bondholders’ returns.

The authors perform pooled OLS regression, simultaneous regressions and propensity score matching to a panel data set of bond data for 319 US firms from 2007 to 2014.

The authors find that firms with gender-diverse boards have lower yields, higher ratings, larger issue size and shorter maturity. They also find that bondholders require fewer returns from firms with gender-diverse boards. However, the effect is more pronounced when women, constitutes at least 29.67 percent of the board.

This analysis supplements the findings that board gender diversity is essential for bondholders. It shows that bondholders should look at board gender diversity as a criterion to invest because bonds issued by firms with gender-diverse board have less risk. For practitioners, this study shows that more women participation on boards leads to a reduction in borrowing costs.

Social networking services (SNSs) have been praised for their social capital (SC) benefits. However, the time displacement hypothesis in Internet research may challenge such an optimistic view. In response to this challenge, this study aimed to develop a theoretical model that uncovers the transformation, rather than displacement among online and offline SC in terms of bonding and bridging types during SNSs use.

The concept of SC was divided into the following four types: offline bonding, online bonding, offline bridging and online bridging. A theoretical model grounded in individual ambidexterity theory was developed that uncovered the transformation among these types of SC, and it was tested a sample of WeChat users in China. Furthermore, the theoretical model included the concept of cognitive ambidexterity, which promotes transformation.

As an exploitation process, offline bonding SC mediated the relationship between SNSs use and online bonding SC. As an exploration process, online bridging SC mediated the association between SNSs use and offline bridging SC. In addition, cognitive ambidexterity moderated the exploration and exploitation processes positively.

This study demonstrated that SNSs users strategically and successfully manage SC benefits through exploitation and exploration processes, and ambidextrous individuals can do this more effectively. Accordingly, this study proposed the transformation hypothesis in the SNSs context.