The Law and Economics of Hedge Fund Regulation: A Comparison between the U.S. and the EU

This doctoral dissertation seeks to assess and address the potential contribution of the hedge fund industry to financial instability. In so doing, the dissertation investigates three main questions. What are the contributions of hedge funds to financial instability? What is the optimal regulatory strategy to address the potential contribution of hedge funds to financial instability? And do new regulations in the U.S. and the EU address the contribution of hedge funds to financial instability? With respect to financial stability concerns, it is argued that despite their benefits, hedge funds can contribute to financial instability. Hedge funds’ size and leverage, their interconnectedness with Large Complex Financial Institutions (LCFIs), and the likelihood of herding behavior in the industry can potentially undermine financial stability. Nonetheless, the data on hedge funds’ size and leverage suggest that these features are far from being systemically important. In contrast, the empirical evidence on the interconnectedness of hedge funds with LCFIs and their herding behavior is mixed. Based on these findings, the thesis focuses on one particular aspect of hedge fund regulation: direct vs. indirect regulation. In this respect, a major contribution of the thesis to the literature consists in the explicit discussion of the relationships between hedge funds and other market participants. Specifically, the thesis locates the domain of the indirect regulation in the inter-linkages between hedge funds and prime brokers. Accordingly, the thesis argues that the indirect regulation is likely to address the contribution of hedge funds to systemic risk without compromising their benefits to financial markets. The thesis further conducts a comparative study of the regulatory responses to the potential contribution of hedge funds to financial instability through studying the EU Directive on Alternative Investment Fund Managers (AIFMD) and the hedge fund-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Assimilation of Meteosat Second Generation (MSG) satellite data in a regional numerical weather prediction model using a one-dimensional variational approach

The quality of temperature and humidity retrievals from the infrared SEVIRI sensors on the geostationary Meteosat Second Generation (MSG) satellites is assessed by means of a one dimensional variational algorithm. The study is performed with the aim of improving the spatial and temporal resolution of available observations to feed analysis systems designed for high resolution regional scale numerical weather prediction (NWP) models. The non-hydrostatic forecast model COSMO (COnsortium for Small scale MOdelling) in the ARPA-SIM operational configuration is used to provide background fields. Only clear sky observations over sea are processed. An optimised 1D–VAR set-up comprising of the two water vapour and the three window channels is selected. It maximises the reduction of errors in the model backgrounds while ensuring ease of operational implementation through accurate bias correction procedures and correct radiative transfer simulations. The 1D–VAR retrieval quality is firstly quantified in relative terms employing statistics to estimate the reduction in the background model errors. Additionally the absolute retrieval accuracy is assessed comparing the analysis with independent radiosonde and satellite observations. The inclusion of satellite data brings a substantial reduction in the warm and dry biases present in the forecast model. Moreover it is shown that the retrieval profiles generated by the 1D–VAR are well correlated with the radiosonde measurements. Subsequently the 1D–VAR technique is applied to two three–dimensional case–studies: a false alarm case–study occurred in Friuli–Venezia–Giulia on the 8th of July 2004 and a heavy precipitation case occurred in Emilia–Romagna region between 9th and 12th of April 2005. The impact of satellite data for these two events is evaluated in terms of increments in the integrated water vapour and saturation water vapour over the column, in the 2 meters temperature and specific humidity and in the surface temperature. To improve the 1D–VAR technique a method to calculate flow–dependent model error covariance matrices is also assessed. The approach employs members from an ensemble forecast system generated by perturbing physical parameterisation schemes inside the model. The improved set–up applied to the case of 8th of July 2004 shows a substantial neutral impact.

Relazione gestante-feto, modalità del parto e sviluppo fisico del bambino

Extensive literature outlined that the quality of the mother-foetus relationship is considered the main feature with regard to the quality of postnatal mother-infant interaction and also to the child’s psychical development. Nowadays the relationship between the pregnant woman and her foetus is viewed as the central factor of the somatic dialogue between the functioning of the maternal and the foetal organisms. This dialogue is responsible for the physic development of the child, as well as of its psychosomatic structure. Therefore the research area has necessarily had to extend to the analysis of psychological processes concerning: the pregnancy, the couple that is bound by parenthood, the influence of intergenerational dynamics. In fact, the formation of maternal identity, as well as that of the relationship between the woman and the foetus, refers to the pregnant woman’s relationship with her parents, especially with her mother. The same pregnancy, considered as a psychosomatic event, is directly influenced by relational, affective and social factors, particularly by the quality of the interiorized parental relations and the quality of the current relationships (such as that with her partner and with her family of origin). Some studies have begun to investigate the relationship between the pregnant woman and the foetus in term of “prenatal attachment” and its relationship with socio-demographic, psychological e psychopathological aspects (such as pre and post partum depression), but the research area is still largely unexplored. The present longitudinal research aimed to investigate the quality of the pregnant womanfoetus relationship by the prenatal attachment index, the quality of the interiorized relationship with woman’s parents, the level of alexithymic features and maternity social support, in relation with the modulation of the physiology of delivery and of postpartum, as well as of the physical development of the child. A consecutive sample of 62 Italian primipara women without any kind of pathologies, participated in the longitudinal study. In the first phase of this study (third trimester of the pregnancy), it has investigated the psychological processes connected to the affective investment of the pregnant women towards the unborn baby (by Prenatal Attachment Inventory), the mothers’ interiorized relationship with their own parents (by Parental Bonding Instrument), the social and affective support from their partner and their family of origin are able to supply (by Maternity Social Support Scale), and the level of alexithymia (by 20-Toronto Alexithymia Scale). In the second phase of this study, some data concerning the childbirth course carried out from a “deliverygram” (such as labour, induction durations and modalities of delivery) and data relative to the newborns state of well-being (such as Apgar and pH indexes). Finally, in the third phase of the study women have been telephoned a month after the childbirth. The semistructured interview investigated the following areas: the memory concerning the delivery, the return to home, the first interactions between the mother and the newborn, the breastfeeding, the biological rhythms achieved from newborns. From the data analysis a sample with a good level of prenatal attachment and of support social and a good capability to mental functioning emerged. An interesting result is that the most of the women have a great percentage of “affectionless control style” with both parents, but data is not sufficient to interpret this result. Moreover, considering the data relative to the delivery, medical and welfare procedures, that have been necessary, are coherent with the Italian mean, while the percentage of the caesarean section (12.9%) is inferior to the national percentage (30%). The 29% of vaginal partum has got epidural analgesia, which explains the high number (37%) of obstetrician operations (such as Kristeller). The data relative to the newborn (22 male, 40 female) indicates a good state of well-being because Apgar and pH indexes are superior to 7 at first and fifth minutes. Concerning the prenatal phase, correlation analysis showed that: the prenatal attachment scores positively correlated with the expected social support and negatively correlated with the “externally oriented thinking” dimension of alexithymia; the maternity social support negatively correlated with total alexithymia score, particularly with the “externally oriented thinking” dimension, and negatively correlated with maternal control of parental bonding. Concerning the delivery data, there are many correlations (after all obvious) among themselves. The most important are that the labour duration negatively correlated with the newborn’s index state of well-being. Finally, concerning the data from the postpartum phase the women’ assessments relative to the partum negatively correlated with the duration of the delivery and positively correlated with the assessment relative to the return to home and the interaction with the newborn. Moreover the length of permanence in the hospital negatively correlated with women’s assessments relative to the return to home that, in turn, positively correlated with the quality of breastfeeding, the interaction between the mother and the newborn and the biological regulation of the child. Finally, the women’ assessments relative to breastfeeding positively correlated with the mother-child interactions and the biological rhythms of children. From the correlation analysis between the variables of the prenatal phase and the data relative to the delivery, emerged that the prenatal attachment scores positively correlated with the dilatation stage scores and with the newborn’s Apgar index at first minute, the paternal care dimension of parental bonding positively correlated with the lengths of the various periods of childbirth like so the paternal control dimension with placental stage. Moreover, emerged that the expected social support positively correlated with the lengths of the various periods of childbirth and that the global alexithymia scores, particularly “difficulty to describe emotions” dimension, negatively correlated with total childbirth scores. From the correlation analysis between the variables of the prenatal phase and variable of the postpartum phase emerged that the total alexithymia scores positively correlated with the time elapsed from the childbirth to the breastfeeding of the child, the difficulty to describe emotions dimension of the alexithymia negatively correlated with the quality of the breastfeeding, the “externally oriented thinking” dimension of the alexithymia negatively correlated with mother-child interactions, and finally the paternal control dimension of the parental bonding negatively correlated with the time elapsed from the child to the breastfeeding of the child. Finally, from the analysis of the correlation between the data of the partum and the women’s assessments of the postpartum phase, emerged the negative correlation between the woman’s assessment relative to the delivery and the quantitative of obstetrician operations and the lengths of the various periods of childbirth, the positive correlation between the women’s assessment about the length of delivery periods and the real lengths of the same ones, the positive relation between woman’s assessment relative to the delivery and the Apgar index of children. In conclusion, there is a remarkable relation between the quality of the relationship the woman establishes with the foetus that influences the course of the pregnancy and the delivery that, in turn, influences the postpartum outcome, particularly relative to the mother-children relationship. Such data should be confirmed by heterogeneous populations in order to identify vulnerable women and to project focused intervention.

International openness in transition countries: further evidence on foreign direct investment

The thesis focuses on the process of international openness of Transition Countries. This study provides a theoretical analysis based on reference literature, and an empirical analysis which is aimed at estimating some main effects of Foreign Direct Investment. Transition has represented a highly complex phenomenon, characterized by several aspects, whose interaction has shaped the developmental path of each country involved. Although the thesis focuses on economic issues it is outstanding to underline that Transition implies political, institutional, and even social deep changes, which must be taken into consideration in the general overview of the contex. The empirical part has been developed along two different ways: a country analysis and a firm analysis, thus allowing to widen the study and delve deeper into the use of econometric instruments. More specifically, in the first empirical stage both static (Fixed Effects) and dynamic (LSDV Corrected) methodologies have been implemented, whereas in the second stage the Cox Proportional Function has been chosen in order to handle with censored data.

Volunteer-based coral reef monitoring: reliability of data, environmental education and implications for conservation

Coral reefs are the most biodiverse ecosystems of the ocean and they provide notable ecosystem services. Nowadays, they are facing a number of local anthropogenic threats and environmental change is threatening their survivorship on a global scale. Large-scale monitoring is necessary to understand environmental changes and to perform useful conservation measurements. Governmental agencies are often underfunded and are not able of sustain the necessary spatial and temporal large-scale monitoring. To overcome the economic constrains, in some cases scientists can engage volunteers in environmental monitoring. Citizen Science enables the collection and analysis of scientific data at larger spatial and temporal scales than otherwise possible, addressing issues that are otherwise logistically or financially unfeasible. “STE: Scuba Tourism for the Environment” was a volunteer-based Red Sea coral reef biodiversity monitoring program. SCUBA divers and snorkelers were involved in the collection of data for 72 taxa, by completing survey questionnaires after their dives. In my thesis, I evaluated the reliability of the data collected by volunteers, comparing their questionnaires with those completed by professional scientists. Validation trials showed a sufficient level of reliability, indicating that non-specialists performed similarly to conservation volunteer divers on accurate transects. Using the data collected by volunteers, I developed a biodiversity index that revealed spatial trends across surveyed areas. The project results provided important feedbacks to the local authorities on the current health status of Red Sea coral reefs and on the effectiveness of the environmental management. I also analysed the spatial and temporal distribution of each surveyed taxa, identifying abundance trends related with anthropogenic impacts. Finally, I evaluated the effectiveness of the project to increase the environmental education of volunteers and showed that the participation in STEproject significantly increased both the knowledge on coral reef biology and ecology and the awareness of human behavioural impacts on the environment.

Flexibility and firm value: the role of inventories

In the present thesis I study the contribution to firm value of inventories management from a risk management perspective. I find a significant contribution of inventories to the value of risk management especially through the operating flexibility channel. In contrast, I do not find evidence supporting the view of inventories a reserve of liquidity. Inventories substitute, albeit not perfectly, derivatives or cash holdings. The substitution between hedging with derivatives and inventory is moderated by the correlation between cash flow and the underlying asset in the derivative contract. Hedge ratios increase with the effectiveness of derivatives. The decision to hedge with cash holdings or inventories is strongly influenced by the degree of complementarity between production factors and by cash flow volatility. In addition, I provide a risk management based explanation of the secular substitution between inventories and cash holdings documented, among others, in Bates et al. (2009), Journal of Finance. In a sample of U.S. firms between 1980 and 2006, I empirically confirm the negative relation between inventories and cash and provide evidence on the poor performance of investment cash flow sensitivities as a measure of financial constraints also in the case of inventories investment. This result can be explained by firms' scarce reliance on inventories as a reserve of liquidity. Finally, as an extension of my study, I contrast with empirical data the theoretical predictions of a model on the integrated management of inventories, trade credit and cash holdings.