Search results

The purpose of this paper is to examine the risks caused by “hazardously immoral” contracts which force external parties to bear significant losses without their consent.

The expectation of substantial future losses raises the question of how investors can become profitable by entering into such risky contracts. The authors investigate the use of such contracts, which obscure the expected cost of failure by not only concentrating risks but ultimately not taking routine charges for predictable, albeit uncertain, future losses. In their investigation, the authors look at a risk concentration strategy and discuss expected profits (losses) under conditions of limited and unlimited liability.

It is found that companies are more likely to minimize losses and maximize profits if they can obtain credit at a low enough interest rate and externalize the majority of the risk. Risks are more likely to be externalized when government and/or international agencies bail out the offending organizations to limit total damages and stabilize the economy.

The main contribution of the paper is to show that a risk concentration strategy can be used to make the overall probability of winning arbitrarily large, even when individual trials have less than a 50 percent chance of obtaining positive profits. The corollary lesson is that credit is valuable, and having substantial credit obtainable at low rates is so valuable that significant gains are probable despite negative expected profits.

The purpose of this paper is to analyze strategies for gamblers/investors to increase their chances of reaching certain monetary and/or survival goals while facing a losing proposition.

The paper investigates the use of credit by gamblers/investors as a means of increasing their expected survival time and thus their likelihood of winning. The paper considers a strategy in which a gambler/investor engages in bet doubling and uses credit to maximize the probability of winning a specified amount.

The model presented in this paper identifies the amount of credit that will make it possible for a gambler/investor to become a winner with an arbitrarily high degree of probability, even while facing a losing proposition. However, bet doubling can lead to large losses, and negative profits can be expected if the gambler/investor is faced with unfavorable odds. As an extension, the paper considers the impact of limited liability and finds that in that case, total losses are restricted and the gambler/investor can expect a positive net gain even while facing a losing proposition. It is also shown that the cost of obtaining credit is an important consideration and that it is ill‐advised for a gambler/investor to engage in such a strategy when the cost of credit is high relative to the probability of winning.

Although bet doubling is not new to the gambling literature, this paper considers the use of credit as a means of increasing survival time and expected net gain. Applications of the model are particularly useful to gamblers/investors when credit can be obtained at low costs.

The influence of sustainability practices, especially those related to the environment and society in driving business growth is evident from the annual sustainability reports of big corporations. Also, there has been a plethora of research relating sustainability performance to the financial performance of these companies. However, in the case of small and medium-sized enterprises, a very limited research study has been done so far considering the societal and environmental aspects of their business operations. Small and medium enterprises (SMEs), especially those in the emerging economy have grossly neglected their responsibilities and obligations towards the environment and society. SMEs are considered as growth engines for any nation. However, literature has shown that a large percentage of SMEs across the world fail within a few years of their incorporation. This paper aims to verify the relationship between sustainability performance and business growth for SMEs in the developing economy.

In the paper, the authors have tried to develop a model taking a sample of 200 SMEs from Indian leather and chemical sectors and find out how the factors like collaborative synergy and government policy initiatives impact the sustainability performance of small and medium firms and how in turn, their improved sustainability performance helps them to drive sustainable business growth. Data were mainly collected through primary survey and also from the company websites.

Empirical results of the study reveal that both policy initiatives and collaborative synergy positively influence the firm’s sustainability performance and, in turn, the company’s business growth is positively impacted by their enhanced sustainability performance. Company size was found to have a moderating effect on this relationship.

There are theoretical and conceptual papers elaborating on the importance of adoption of sustainability practices in SME business operations but no empirical study has been conducted to mathematically relate the factors of sustainability and business growth. The authors have tried to build a model relating the factors of sustainability improvement with those of the business growth of the firm and also verified the influence of control variables like company size on the proposed relationship.