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Since the introduction of VIX to measure the spot volatility in the stock market, VIX and its futures have been widely considered to be the standard of underlying investor sentiment. This study aims to examine how the magnitude of contango or backwardation (MCB volatility risk factor) derived from VIX and VIX3M may affect the pricing of assets.

This paper focuses on the statistical inference of three defined MCB risk factors when cross-examined with Fama–French’s five factors: the market factor R_m–R_f, the size factor SMB (small minus big), the value factor HML (high minus low B/M), the profitability factor RMW (robust minus weak) and the investing factor CMA (conservative minus aggressive). Robustness checks are performed with the revised HML-Dev factor, as well as with daily data sets.

The inclusions of the MCB volatility risk factor, either defined as a spread of monthly VIX3M/VIX and its monthly MA(20), or as a monthly net return of VIX3M/VIX, generally enhance the explanatory power of all factors in the Fama and French’s model, in particular the market factor R_m–R_f and the value factor HML, and the investing factor CMA also displays a significant and positive correlation with the MCB risk factor. When the more in-time adjusted HML-Dev factor, suggested by Asness (2014), replaces the original HML factor, results are generally better and more intuitive, with a higher R² for the market factor and more explanatory power with HML-Dev.

This paper introduces the term structure of VIX to Fama–French’s asset pricing model. The MCB risk factor identifies underlying configurations of investor sentiment. The sensitivities to this timing indicator will significantly relate to returns across individual stocks or portfolios.

The purpose of the instrument is to favour and strengthen, in a timely and relevant manner, the processes of design, planning, investment, execution and evaluation of various public and private initiatives in the territory, thereby strengthening the preventive, responsive and adaptive capacities of the communities, institutions and territory. The instrument allows the generation of a single single-community diagnosis, a definition of a baseline which leads to progress assessment at different levels and provides specific risk management recommendations to municipalities.

The definition of the purpose and design of this tool was the result of the work in a year by a group of national experts from the public, private, organised civil society and academia members of the National Platform for Disaster Risk Reduction. This initial stage has sought to capture the different sectoral visions with a multidimensional approach that considers the territorial differences cautioning that local governments are key actors to achieve risk reduction, and they are also the first respondents and responsible for managing their territory and community. In order to help local governments, to understand their situation, the experts’ group established that the assessment should consist of a guided self-diagnosis using a survey. The dimensions considered are as follows: governance, territorial planning, socio-economic and demographic conditions and climate change and natural resources. The four dimensions encompass in total 41 variables that are considered relevant for the disaster risk management discipline.

The rural to semiurban municipalities classified as medium or low development, according to the national standard, present a high-risk level in the dimension of territorial ordering. The municipalities that show a moderate to low dependence on the common municipal fund have a low risk in all the evaluated dimensions, related to greater financial autonomy and own or self-management of resources. The municipalities with low percentage of poverty by income are better evaluated in all the dimensions showing a low level of the Communal Underlying Risk Factors Index (CURFI). A high percentage of communes with a low level of the CURFI have low-urban growth in the last 15 years.

One of the main difficulties was raising awareness amongst the mayors that the reduction of the underlying factors does not necessarily imply monetary investment, understanding the scarcity of local government resources. The important thing was to sensitise them that the diagnosis per se was already a result to manage risk in their community.

To be able to count for the first time in Chile with a methodology that allows diagnosing risk-based conditions and to target structural and non-structural measures aimed at reducing these factors in local governments. Additionally, it will be possible to monitor the reduction of the underlying risk factors (URF), for accompanying the work of the municipalities in terms of knowing if they have been able to implement the individualised recommendations that are provided.

The methodology was formulated by reviewing and considering the methodologies applied in different regions of the world, which generally coincide in the dimensions that group the main underlying factors of disaster risk. However, the numerical treatment of the variables obeys to novel statistical processing (multicriteria method), which provides robustness to the model and, therefore, to the results obtained.

The purpose of this paper was to examine the transformation of fire prevention processes via improved targeting of fire prevention interventions over a four-year period.

A four-year case study of the transformation of fire prevention processes involving a UK fire and rescue service, local council, National Health Service primary care trust and a police force was undertaken.

Understanding the socio-economic causal factors underlying unintentional dwelling fires, and the need to work in collaborative partnerships to achieve change in such factors can support more targeted and effective fire prevention activities.

Analysis of underlying causal factors and their relationships, together with population segmentation and working in coordinated collaborative partnerships, can support enhanced fire risk assessment and community safety. This supported more pro-active early intervention fire risk management.

Analysis of socio-economic causal factors and socio-economic groups associated with unintentional dwelling fires can assist in targeting fire prevention activities in a more effective and efficient manner. This enabled the fire and rescue service to target fire prevention to social groups most at risk of dwelling fires and the types of fires (for example, kitchen fires) relevant to the different social groups.

Collaborative public sector partnerships can achieve change in the socio-economic circumstances of at-risk individuals to support fire prevention. This enables the social- and health-related factors underlying fire risk to be addressed by the relevant partner health or social services agencies.

The detailed analysis of the transformation of fire prevention activities that led to an implemented approach to enhance community safety. In particular, the analysis and evaluation of the move to collaborative multi-agency partnerships to support and improve fire prevention activities.

The purpose of this paper is to discuss the findings from the body of case studies offered in the issue, combined with three external perspectives on local voices and action.

Using as its basis the eight key case studies and three external contributions to the special issue, the paper offers a theoretical framework as a basis for discussion of this material. Through this, it identifies possible modes of action understood through the theoretical framework and elaborated through the specific cases. It concludes with proposals for further work.

The discussion finds that from a local perspective, the ambitions of local populations and local NGOs to achieve emancipatory change depend on the scope for local collaboration and partnerships to exercise influence on underlying risk factors. It resolves the suggested tension between operating within, and outside the system through the concept of “legitimate subversion”.

It is felt that the original recording of case studies of local level action combined with the process of iterative critical reflection on the part of the contributors offers a novel approach to knowledge creation from practice, and offers insights bridging theoretical and practitioner perspectives into means of addressing underlying risk factors affecting local populations.

School-going young people in South Africa engage in HIV risk behaviour despite high levels of HIV knowledge and a variety of interventions focusing on HIV prevention. The lack of empirical evidence on the effectiveness of current interventions leaves programme implementers with little consensus about how best to prevent HIV infection among young people. This research was done to explore factors underlying HIV risk of young people with the aim of developing HIV prevention in the third decade of the epidemic. Focus group discussions were conducted with young people, educators and parents in eight schools in four provinces of the country. A thematic analysis revealed risk factors especially on the interpersonal and community level. Peer pressure, gender norms and culture, poverty and financial gain and a culture of alcohol use were prominent themes. Negative family relationships, lack of role models and lack of sexual education from home contributed to risk behaviour. Community processes such as exposure to media, lack of recreational facilities, and an erosion of supportive culture and community structures created an environment which did not support healthy behaviour. Factors that prevented risk behaviour were identified as self-respect, open communication with parents, implementation of school programmes, positive peer pressure and a focus on young people's future. Prevention programmes should therefore not only focus on individual factors but should be multi-layered interventions involving various community structures aimed at changing the social ecology in communities to support an alternative lifestyle for young people.

In today's increasingly globalized world, foreign direct investment (FDI) is a hotbed for discussion. Numerous studies have been undertaken regarding FDI, its determinants and benefits, but very few works provide importance to the effect of political risk on the inflow of FDI. Some papers introduce institutional or governance issues in determining FDI inflow, but a comprehensive framework in this respect is non-existent. With this end in view, the authors take 146 countries worldwide over a period of 1984-2009 and then classify countries as OECD or non-OECD members to see whether there is any difference in the nature of the effect. The study keeps other possible determinants of FDI – market size, growth rate of real GDP, trade openness, infrastructural facilities as control variables while considering the effect of underlying political risk factors in deterring the FDI.

This paper looks at the effect of political risk on FDI by using a systematic approach of factor analysis, in reducing the number of variables into their underlying factors and then generating factor scores. Then it uses a panel regression approach combined with factor analysis to examine which particular aspect of political risk contributes more towards deterring FDI inflow.

The empirical results of this study refute the conventional notion that government failure is the primary contributing factor for poor FDI inflow. Rather, cultural conflict and the attitude of the partner country towards the host country are found to be mostly responsible for deterring FDI inflow. The result holds significantly even after controlling for traditional determinants regardless of whether it is an OECD member country or not.

It is not just governance failure but the cultural factors and development partners' attitude about the country which mostly determines FDI inflow.

This is the first paper which combines the factor analysis in a panel regression framework to examine the impact of political risk on FDI inflow.

The purpose of this paper is to individually examine the findings from eight case studies presented in this special issue and comparatively identify the findings regarding local learning and action.

Underlying research questions regarding power and powerlessness in regard to addressing underlying risk factors affecting local populations form the basis for the discussion. Proceedings of a collaborative workshop conducted with the contributing authors are analysed qualitatively to identify learning relating to the research questions emerging from the case studies individually and collectively.

A number of strategies and tactics for addressing underlying risk factors affecting local populations were identified from the case studies, including collaboration and cohesion. Campaigning, lobbying, communications and social mobilisation in an attempt to bridge the gap between local concerns and the decision-making of government and other powerful actors. Innovation and local mobilisation to address shortcomings in government support for disaster reduction and development. Communications as a first base to influence behaviour of both communities and government. Social change through empowerment of women to act in disaster reduction and development.

The outcomes of the action research conducted by the authors individually and collectively highlight the necessity for bridging different scales of action through a range of strategies and tactics to move beyond local self-reliance to influence on underlying risk factors. The action research process employed may have wider applications in gathering and formalising local-level experience and knowledge.

The case studies and their analysis present a range of practical strategies and tactics to strengthen local resilience and address underlying risk factors which are replicable in other contexts.

Practitioners are activists and do not often engage in critical reflection and analysis. The method presented here offers a means of achieving this in order to generate learning from local-level experience. The findings contribute to the consideration of cross-scale action to address underlying risk factors which impact local communities.

This paper aims to analyse various failures that Indian innovative start-ups (ISs) are exposed to and proposes interventions from management accounting tools (MATs) that can tackle their failure-causing risks. This paper justifies the applicability of contingency theory (CT) for applying MATs for failure prevention and risk management.

This paper uses multimethod research while undertaking two sequential studies. The methods include a Survey via semi-structured interviews of 51 specialists and media reports and the Delphi method.

Reasons for the failures of Indian ISs have been identified and grouped based on eight broad underlying risk factors. Appropriate MATs relevant to ISs have been identified and examined by relating them with the risk factors underlying failure. Applicability of CT is shown while using the MATs for failure prevention and risk management of ISs.

This study is limited to the Indian context. Empirical validation of the applicability of MATs for each type of failure along the lifecycle stages of ISs needs to be undertaken.

Founders/owners of ISs can use this conceptual framework to tackle the risks underlying the failure of their firms. Policymakers can introduce appropriate policies to enhance the survival of ISs. Researchers can further explore the application of CT for failure prevention and risk management of ISs.

A conceptual framework has been developed relating failure-causing risk factors relevant to ISs and appropriate MATs, which justifies the applicability of CT.

I survey applications of Markov switching models to the asset pricing and portfolio choice literatures. In particular, I discuss the potential that Markov switching models have to fit financial time series and at the same time provide powerful tools to test hypotheses formulated in the light of financial theories, and to generate positive economic value, as measured by risk-adjusted performances, in dynamic asset allocation applications. The chapter also reviews the role of Markov switching dynamics in modern asset pricing models in which the no-arbitrage principle is used to characterize the properties of the fundamental pricing measure in the presence of regimes.

Purpose – This research pinpoints the limitations of conventional models for evaluating the performance of hedge funds and attempts to provide a new framework for modeling the dynamics of risk structures of hedge funds.

Methodology/approach – This chapter aims to explore how the systematic risk exposures of hedge funds vary over time and depend on exogenous variables that managers are supposed to use in their dynamic investment strategies. To achieve this, we used a Bayesian time-varying CAPM-based beta model within a state space technology.

Findings – The results showed that the volatility, term spread rate, and shocks in liquidity influence significantly on the time variation of hedge funds. Besides, the dynamics of beta indicates that the transmission channels of systematic risk are mainly the leverage levels of hedge funds and liquidity shocks.

Originality/value of chapter – These results are original because they help to explain how expected and unexpected hedge fund returns are correlated with the systematic risk factors via the beta dynamics.