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This paper aims to examine the impact of executive compensation on firm risk-taking behavior, measured by the volatility of stock price returns. Specifically, this analysis explores three hypotheses. First, the impact of short-term and long-term executive compensation packages on firm risk is analyzed to assess whether the packages incentivize risk-taking behavior. Second, the authors test how these compensation and risk relationships were impacted by the financial crisis. Third, they expand the analysis to see if the relationship varies across different industries.

The econometric approach used to examine the executive compensation and firm risk relationship takes the form of two different panel model specifications. The first model is a pooled model using the panel data of executive compensation, the firm-level control variables and volatility of stock market returns. The second model highlights the differences in the relationship between executive compensation and riskiness of firm behavior across industries.

The authors find a significant and robust relationship, showing that during the post-financial crisis period firms tended to use long-term compensation shares to reduce firm risk. They also find that the relationship between various compensation components and firm risk varies across industries. Specifically, the bonus share of compensation negatively impacted firm risk in the financial services industry, while it positively impacted risk in the transportation, communication, gas, electric and services sectors. Additionally, long-term compensation share exhibits an inverse relationship with firm risk in the financial services, manufacturing and trade industries.

The conclusions of this paper suggest that there is indeed a relationship between executive compensation and firm risk across industries. There was a notable change in the relationship however between firm risk and long-term compensation following the financial crisis, where firms used long-term compensation to reduce firm riskiness. In other words, the financial crisis changed the nature of this relationship across S&P 1500 firms. The last key finding is that there exist differences in risk and compensation relationships across industries, and these differences across industries are highlighted across both bonus share and long-term incentive share variables. This is the first study to explore this relationship across industries.

The purpose of this paper is to examine firms' strategies to change long‐ and short‐term debt financing in Egypt. It aims to examine a list of capital structure determinants that include the basic assumptions of the three well‐known theories of capital structure: tradeoff, pecking order, and free cash.

The paper utilizes the properties of partial adjustment model for three heterogeneous systematic risk classes: high, medium and low. The sensitivity analysis is carried out using the “extreme bound analysis”.

The results indicate that Egyptian firms adjust short‐ and long‐term debt according to the class of systematic risk; long‐term debt is a source of financing at all classes of systematic risk; firms have obvious tendency to extent short‐ to long‐term one; medium risk firms adjust long‐term debt according to the industry average debt, and depend heavily on long‐term debt financing; firms depend significantly and constantly on the liquidity position to adjust short‐term debt levels; and medium risk firms are relatively affected by the basic assumptions of free cash flow and low‐risk firms are relatively affected by the assumptions of the pecking order theory.

In general, the results provide evidence that the three theories have transitory effect from developed markets to transitional markets. In addition, the firm‐specific variables (industry characteristic, size and time) provide an additional support to the robustness of the results.

Few, if any studies, have been carried out in Egyptian data.

With the growth of unstructured data, opportunities to generate insights into supply chain risks in low cost countries (LCCs) are emerging. Sourcing risk has primarily focused on short-term mitigation. This paper aims to offer an approach that uses newsfeed data to assess regional supply base risk in LCC’s for the apparel sector, which managers can use to plan for future risk on a long-term planning horizon.

This paper demonstrates that the bulk of supplier risk assessments focus on short-term responses to disruptions in developed countries, revealing a gap in assessments of long-term risks for supply base expansion in LCCs. This paper develops an approach for predicting and planning for long-term supply base risk in LCC’s to address this shortfall. A machine-based learning algorithm is developed that uses the analysis of competing hypotheses heuristic to convert data from multiple news feeds into numerical risk scores and visual maps of supply chain risk. This paper demonstrates the approach by converting large amounts of unstructured data into two measures, risk impact and risk probability, leading to visualization of country-level supply base risks for a global apparel company.

This paper produced probability and impact scores for 23 distinct supply base risks across 10 countries in the apparel sector. The results suggest that the most significant long-term risks of supply disruption for apparel in LCC’s are human resource regulatory risks, workplace issues, inflation costs, safety violations and social welfare violations. The results suggest that apparel brands seeking suppliers in the regions of Cambodia, India, Bangladesh, Brazil and Vietnam should be aware of the significant risks in these regions that may require mitigative action.

This approach establishes a novel approach for objectively projecting future global sourcing risk, and yields visually mapped outcomes that can be applied in forecasting and planning for future risks when considering sourcing locations in LCC’s.

Despite the common focus on studying future events, the study of risk management and foresight have developed as two segmented scientific fields. This study aims to investigate whether current risk management methodology is sufficient for long-term planning against threats from terrorism and other black swan events, and whether perspectives from foresight studies can contribute to more effective long-term security planning.

This study investigates the planning process of the rebuilding of the Norwegian Government Complex destroyed during a terrorist attack in 2011. The study examines whether security risk managers find current security risk management methodology sufficient for dealing with long-term security threats to the Norwegian Government Complex.

Current security risk management methodology for long-term security planning is insufficient to capture black swan events. Foresight perspectives could contribute by engaging tools to mitigate the risk of these events. This could lead to more robust security planning.

The main contribution of this paper is to investigate whether perspectives and methodology from foresight studies can improve current security risk management methodology for long-term planning and look for cross-fertilization between foresight and risk studies. A framework for scenario development based on security risk management methodology and foresight methodology is proposed that can help bridge the gap.

One of the most significant recent developments in the risk measurement and management area has been the emergence of value at risk (VaR). The VaR of a portfolio is the maximum loss that the portfolio will suffer over a defined time horizon, at a specified level of probability known as the VaR confidence level. The VaR has proven to be a very useful measure of market risk, and is widely used in the securities and derivatives sectors: a good example is the RiskMetrics system developed by J.P. Morgan. VaR measures based on systems such as RiskMetrics' sister, CreditMetrics, have also shown their worth as measures of credit risk, and for dealing with credit‐related derivatives. In addition, VaR can be used to measure cashflow risks and even operational risks. However, these areas are mainly concerned with risks over a relatively short time horizon, and VaR has had a more limited impact so far on the insurance and pensions literatures that are mainly concerned with longer‐term risks.

This study aims to analyze how cultural variations impact the relationship between long-term debt use and managerial overconfidence. Investigate into how the relationship between growth prospects and the utilization of long-term debt is moderated by managerial overconfidence. In addition, the research explores the moderating effect of managerial overconfidence on cash flow levels.

The study used long-term debt as the dependent variable and used generalized method of moments–instrumental variables regression analysis to examine data from 356 firms across 11 Middle East and North Africa (MENA) countries and 5 industries between 2013 and 2021.

CEO overconfidence moderately boosts the link between long-term debt maturity and growth potential, particularly for firms with limited internal funding. Cultural factors, such as masculinity and uncertainty avoidance, play a significant role in moderating the relationship between managerial overconfidence and debt maturity choices.

To understand the impact of managerial overconfidence on a company’s debt maturity decision, it is essential for boards and shareholders to consider and monitor the CEO’s behavioral traits, particularly for growing companies. Regulators and policymakers must also be wary of the risk of internal control weakening due to overconfident managers, especially in MENA markets.

The authors’ contribution to the literature lies in exploring how managerial overconfidence moderates the agency conflict between shareholders and debtholders in MENA region firms, which has received minimal attention in previous studies. This study expands the knowledge of the impact of managerial overconfidence on emerging economies and provides evidence that national culture plays a vital role in determining debt financing decisions.

This paper aims to investigate the long-term relationships of long-term European Monetary Union (EMU) government bond yields. From an asset managers’ or risk managers’ perspective during the euro crisis, the relevance of sovereign credit and redenomination risk became a major issue. Furthermore, it has to be differentiated between core and non-core EMU member countries.

Methods of applied time series analysis are used to investigate EMU government bond yields and EMU government bond yield spreads for Spain, Italy, The Netherlands, Austria and Germany. Both standard unit root testing procedures and breakpoint unit root tests are used to examine cointegrating relationships and structural changes in these relationships.

The empirical results deliver clear evidence for structural shifts in the long-term relationship between German and the two non-core EMU countries (Italy and Spain). The timing of the breaks coincides with the timing of the euro crisis. On the contrary, the results for Austria and The Netherlands are different from the findings for the two non-core countries.

One major limitation of the study is the limited availability of data regarding to the reaction of asset managers or risk managers to the euro crisis. Especially in the context of the discussion with regard to the relevant risk-free rate for investors, this strand of research is relatively new.

A deeper understanding of changes in the long-term relationship between government bond yields and the re-emergence of redenomination risk is important for asset managers and risk managers in the financial services industry. This is especially true for German life insurers.

The study provides various empirical contributions to the literature on the euro crisis and sovereign credit risk. First, previous results with regard to the structural changes in the long-term relationship between German and Spanish, German and Italian, German and Austrian as well as Germany and Dutch government bond yields are confirmed using unit root breakpoint tests. Second, investigating the autoregressive coefficient and the timing of the breaks delivers evidence that non-core countries have been more exposed to the fear of redenomination risk. Third, we raise the question which risk free interest rate is relevant for the affected countries.

In this paper, we discuss methods to integrate ecological resources, ecosystem services, risk, and the transition to long-term stewardship on Department of Energy lands. Three types of information are required about ecological resources before decisions can be made about remediation, site transitions, and long-term stewardship: (1) the ecological resources and ecosystem functions (such as productivity) present on site and their spatial pattern, (2) the ecosystem services these resources provide to people, and (3) the risks from the interactions between people and these ecosystems. Once the ecological resources and ecosystem services are evaluated, then decisions about future land use, preservation, conservation, or protection of ecological resources within a designated land use can be implemented. Long-term stewardship requires both ecosystem protection in terms of biological resources and ecosystem function as well as biomonitoring to ensure minimal radiological or chemical risk and to inform future management. In some cases, protection of ecological resources may be preferable to cleanup that is physically disruptive, provided land use designation is consistent with ecological protection. In such instances, less site cleanup can prove preferable to more.

The future retirement of US Air Force (USAF) legacy weapon systems (WSs) removes their associated funding from within the Air Force Working Capital Fund and their parts from its organic supply chain inventory. The trending outsourcing of product support to contracted logistics support and its potential long-term consequences to the USAF government-owned, government-operated, organic supply chain and the reconstitution capabilities it enables in the USAF’s organic industrial base, suggests the need to assess its risks. Although there is an existing body of research into the risks of outsourcing the USAF’s industrial repair, and federal legislation such as Core 50/50 laws enacted to institutionalize its risk management, there is comparatively little research into the outsourcing risks to the long-term viability of the supply chain on which that repair capability is dependent. The aim of this research is to fill that research gap by assessing and modeling those risks. This research concludes by providing several future research directions that may be evaluated to provide more detail.

Leveraging a conceptual model derived from research and a multi-criteria analysis framework to assess supply chain risk. Quantifying the predicted impact of retirements on funding and inventories of unique parts. Modeling the potential risk due to WS retirement.

Results indicated long term enterprise risks to the Air Force’s supply chain correlated to the retirement of WSs and their associated funding and spare parts inventory.

This research provides an in-depth evaluation of the USAF’s supply chain to assess the holistic risk of product support outsourcing and its long-term impacts on viability by using resource-based view and contingency theory as theoretical underpinnings. In addition, insights and implications for defense supply chain managers and decision-makers.