Essays on risk-taking in corporate finance

This thesis consists of three independent essays on risk-taking in corporate finance. The first essay explores how community-level social capital (CSC), framed as a cultural characteristic of individuals born in different provinces of Italy, affects investment behavior in equity crowdfunding. Results show that investors born in high-CSC provinces invest more money in ventures characterized by an enhanced risk profile. Observed risk-taking is theoretically linked to higher generalized trust endowed to people born in high-CSC areas. The second essay focuses on how convexity of Chief Financial Officers’ stock options affects their hedging decisions in the oil and gas industry. Highly convex CFOs hedge less commodity price risk, even if the Chief Executive Officer’s incentives are consistent with a more conservative hedging strategy. Finally, the third essay is a systematic literature review on how different sources of compensation-based risk-taking incentives of Chief Executive Officers affect decision-making in corporate finance.

Essays on Bank Risk

This PhD Thesis is composed of three chapters, each discussing a specific type of risk that banks face. The first chapter talks about Systemic Risk and how banks get exposed to it through the Interbank Funding Market. Exposures in the said market have Systemic Risk implications because the market creates linkages, where the failure of one party can affect the others in the market. By showing that CDS Spreads, as bank risk indicators, are positively related to their Net Interbank Funding Market Exposures, this chapter establishes the above Systemic Risk Implications of Interbank Funding. Meanwhile, the second chapter discusses how banks may handle Illiquidity Risk, defined as the possibility of having sudden funding needs. Illiquidity Risk is embodied in this chapter through Loan Commitments as they oblige banks to lend to its clients, up to a certain amount of funds at any time. This chapter points out that using Securitization as funding facility, could allow the banks to manage this Illiquidity Risk. To make this case, this chapter demonstrates empirically that banks having an increase in Loan Commitments, may experience an increase in risk profile but such can be offset by an accompanying increase in Securitization Activity. Lastly, the third chapter focuses on how banks manage Credit Risk also through Securitization. Securitization has a Credit Risk management property by allowing the offloading of risk. This chapter investigates how banks use such property by looking at the effect of securitization on the banks’ loan portfolios and overall risk and returns. The findings are that securitization is positively related to loan portfolio size and the portfolio share of risky loans, which translates to higher risk and returns. Thus, this chapter points out that Credit Risk management through Securitization may be have been done towards higher risk taking for high returns.

Interfacial interactions, charge transport and growth phenomena in Organic Field Effect Transistors

Organic electronics is an emerging field with a vast number of applications having high potential for commercial success. Although an enormous progress has been made in this research area, many organic electronic applications such as organic opto-electronic devices, organic field effect transistors and organic bioelectronic devices still require further optimization to fulfill the requirements for successful commercialization. The main bottle neck that hinders large scale production of these devices is their performances and stability. The performance of the organic devices largely depends on the charge transport processes occurring at the interfaces of various material that it is composed of. As a result, the key ingredient needed for a successful improvement in the performance and stability of organic electronic devices is an in-depth knowledge of the interfacial interactions and the charge transport phenomena taking place at different interfaces. The aim of this thesis is to address the role of the various interfaces between different material in determining the charge transport properties of organic devices. In this framework, I chose an Organic Field Effect Transistor (OFET) as a model system to carry out this study as it An OFET offers various interfaces that can be investigated as it is made up of stacked layers of various material. In order to probe the intrinsic properties that governs the charge transport, we have to be able to carry out thorough investigation of the interactions taking place down at the accumulation layer thickness. However, since organic materials are highly instable in ambient conditions, it becomes quite impossible to investigate the intrinsic properties of the material without the influence of extrinsic factors like air, moisture and light. For this reason, I have employed a technique called the in situ real-time electrical characterization technique which enables electrical characterization of the OFET during the growth of the semiconductor.

Do Academic and Private Entrepreneurs differ? An empirical analysis of the Micro-Foundation of Entrepreneurial Orientation

This Doctoral Thesis focuses on the study of individual behaviours as a result of organizational affiliation. The objective is to assess the Entrepreneurial Orientation of individuals proving the existence of a set of antecedents to that measure returning a structural model of its micro-foundation. Relying on the developed measurement model, I address the issue whether some Entrepreneurs experience different behaviours as a result of their academic affiliation, comparing a sample of ‘Academic Entrepreneurs’ to a control sample of ‘Private Entrepreneurs’ affiliated to a matched sample of Academic Spin-offs and Private Start-ups. Building on the Theory of the Planned Behaviour, proposed by Ajzen (1991), I present a model of causal antecedents of Entrepreneurial Orientation on constructs extensively used and validated, both from a theoretical and empirical perspective, in sociological and psychological studies. I focus my investigation on five major domains: (a) Situationally Specific Motivation, (b) Personal Traits and Characteristics, (c) Individual Skills, (d) Perception of the Business Environment and (e) Entrepreneurial Orientation Related Dimensions. I rely on a sample of 200 Entrepreneurs, affiliated to a matched sample of 72 Academic Spin-offs and Private Start-ups. Firms are matched by Industry, Year of Establishment and Localization and they are all located in the Emilia Romagna region, in northern Italy. I’ve gathered data by face to face interviews and used a Structural Equation Modeling technique (Lisrel 8.80, Joreskog, K., & Sorbom, D. 2006) to perform the empirical analysis. The results show that Entrepreneurial Orientation is a multi-dimensional micro-founded construct which can be better represented by a Second-Order Model. The t-tests on the latent means reveal that the Academic Entrepreneurs differ in terms of: Risk taking, Passion, Procedural and Organizational Skills, Perception of the Government, Context and University Supports. The Structural models also reveal that the main differences between the two groups lay in the predicting power of Technical Skills, Perceived Context Support and Perceived University Support in explaining the Entrepreneurial Orientation Related Dimensions.

How to cope with air transport disruptions: airport airside resilience and vulnerability

The efficiency of airport airside operations is often compromised by unplanned disruptive events of different kinds, such as bad weather, strikes or technical failures, which negatively influence the punctuality and regularity of operations, causing serious delays and unexpected congestion. They may provoke important impacts and economic losses on passengers, airlines and airport operators, and consequences may propagate in the air network throughout different airports. In order to identify strategies to cope with such events and minimize their impacts, it is crucial to understand how disruptive events affect airports’ performance. The research field related with the risk of severe air transport network disruptions and their impact on society is related to the concepts of vulnerability and resilience. The main objective of this project is to provide a framework that allows to evaluate performance losses and consequences due to unexpected disruptions affecting airport airside operations, supporting the development of a methodology for estimating vulnerability and resilience indicators for airport airside operations. The methodology proposed comprises three phases. In the first phase, airside operations are modelled in both the baseline and disrupted scenarios. The model includes all main airside processes and takes into consideration the uncertainties and dynamics of the system. In the second phase, the model is implemented by using a generic simulation software, AnyLogic. Vulnerability is evaluated by taking into consideration the costs related to flight delays, cancellations and diversions; resilience is determined as a function of the loss of capacity during the entire period of disruption. In the third phase, a Bayesian Network is built in which uncertain variables refer to airport characteristics and disruption type. The Bayesian Network expresses the conditional dependence among these variables and allows to predict the impacts of disruptions on an airside system, determining the elements which influence the system resilience the most.

Evaluation of fluid transport processes in dental enamel. Methods to assess the relevance of enamel permeability in caries prevention and etching treatments.

This thesis evaluated in vivo and in vitro enamel permeability in different physiological and clinical conditions by means of SEM inspection of replicas of enamel surface obtained from polyvinyl siloxane impressions subsequently later cast in polyether impression ma-terial. This technique, not invasive and risk-free, allows the evaluation of fluid outflow from enamel surface and is able to detect the presence of small quantities of fluid, visu-alized as droplets. Fluid outflow on enamel surface represents enamel permeability. This property has a paramount importance in enamel physiolgy and pathology although its ef-fective role in adhesion, caries pathogenesis and prevention today is still not fully under-stood. The aim of the studies proposed was to evaluate enamel permeability changes in differ-ent conditions and to correlate the findings with the actual knowledge about enamel physiology, caries pathogenesis, fluoride and etchinhg treatments. To obtain confirmed data the replica technique has been supported by others specific techniques such as Ra-man and IR spectroscopy and EDX analysis. The first study carried out visualized fluid movement through dental enamel in vivo con-firmed that enamel is a permeable substrate and demonstrated that age and enamel per-meability are closely related. Examined samples from subjects of different ages showed a decreasing number and size of droplets with increasing age: freshly erupted permanent teeth showed many droplets covering the entire enamel surface. Droplets in permanent teeth were prominent along enamel perikymata. These results obtained through SEM inspection of replicas allowed innovative remarks in enamel physiology. An analogous testing has been developed for evaluation of enamel permeability in primary enamel. The results of this second study showed that primary enamel revealed a substantive permeability with droplets covering the entire enamel sur-face without any specific localization accordingly with histological features, without changes during aging signs of post-eruptive maturation. These results confirmed clinical data that showed a higher caries susceptibility for primary enamel and suggested a strong relationship between this one and enamel permeability. Topical fluoride application represents the gold standard for caries prevention although the mechanism of cariostatic effect of fluoride still needs to be clarified. The effects of topical fluoride application on enamel permeability were evaluated. Particularly two dif-ferent treatments (NaF and APF), with different pH, were examined. The major product of topical fluoride application was the deposition of CaF2-like globules. Replicas inspec-tion before and after both treatments at different times intervals and after specific addi-tional clinical interventions showed that such globule formed in vivo could be removed by professional toothbrushing, sonically and chemically by KOH. The results obtained in relation to enamel permeability showed that fluoride treatments temporarily reduced enamel water permeability when CaF2-like globules were removed. The in vivo perma-nence of decreased enamel permeability after CaF2 globules removal has been demon-strated for 1 h for NaF treated teeth and for at least 7 days for APF treated teeth. Important clinical consideration moved from these results. In fact the caries-preventing action of fluoride application may be due, in part, to its ability to decrease enamel water permeability and CaF2 like-globules seem to be indirectly involved in enamel protection over time maintaining low permeability. Others results obtained by metallographic microscope and SEM/EDX analyses of or-thodontic resins fluoride releasing and not demonstrated the relevance of topical fluo-ride application in decreasing the demineralization marks and modifying the chemical composition of the enamel in the treated area. These data obtained in both the experiments confirmed the efficacy of fluoride in caries prevention and contribute to clarify its mechanism of action. Adhesive dentistry is the gold standard for caries treatment and tooth rehabilitation and is founded on important chemical and physical principles involving both enamel and dentine substrates. Particularly acid etching of dental enamel enamel has usually employed in bonding pro-cedures increasing microscopic roughness. Different acids have been tested in the litera-ture suggesting several etching procedures. The acid-induced structural transformations in enamel after different etching treatments by means of Raman and IR spectroscopy analysis were evaluated and these findings were correlated with enamel permeability. Conventional etching with 37% phosphoric acid gel (H3PO4) for 30 s and etching with 15 % HCl for 120 s were investigated. Raman and IR spectroscopy showed that the treatment with both hydrochloric and phosphoric acids induced a decrease in the carbonate content of the enamel apatite. At the same time, both acids induced the formation of HPO42- ions. After H3PO4 treatment the bands due to the organic component of enamel decreased in intensity, while in-creased after HCl treatment. Replicas of H3PO4 treated enamel showed a strongly reduced permeability while replicas of HCl 15% treated samples showed a maintained permeability. A decrease of the enamel organic component, as resulted after H3PO4 treatment, involves a decrease in enamel permeability, while the increase of the organic matter (achieved by HCl treat-ment) still maintains enamel permeability. These results suggested a correlation between the amount of the organic matter, enamel permeability and caries. The results of the different studies carried out in this thesis contributed to clarify and improve the knowledge about enamel properties with important rebounds in theoretical and clinical aspects of Dentistry.

Food safety and zoonotic enteric pathogens: sources, risk factors and transmission routes of human salmonellosis and campylobacteriosis

Salmonella and Campylobacter are common causes of human gastroenteritis. Their epidemiology is complex and a multi-tiered approach to control is needed, taking into account the different reservoirs, pathways and risk factors. In this thesis, trends in human gastroenteritis and food-borne outbreak notifications in Italy were explored. Moreover, the improved sensitivity of two recently-implemented regional surveillance systems in Lombardy and Piedmont was evidenced, providing a basis for improving notification at the national level. Trends in human Salmonella serovars were explored: serovars Enteritidis and Infantis decreased, Typhimurium remained stable and 4,[5],12:i:-, Derby and Napoli increased, suggesting that sources of infection have changed over time. Attribution analysis identified pigs as the main source of human salmonellosis in Italy, accounting for 43–60% of infections, followed by Gallus gallus (18–34%). Attributions to pigs and Gallus gallus showed increasing and decreasing trends, respectively. Potential bias and sampling issues related to the use of non-local/non-recent multilocus sequence typing (MLST) data in Campylobacter jejuni/coli source attribution using the Asymmetric Island (AI) model were investigated. As MLST data become increasingly dissimilar with increasing geographical/temporal distance, attributions to sources not sampled close to human cases can be underestimated. A combined case-control and source attribution analysis was developed to investigate risk factors for human Campylobacter jejuni/coli infection of chicken, ruminant, environmental, pet and exotic origin in The Netherlands. Most infections (~87%) were attributed to chicken and cattle. Individuals infected from different reservoirs had different associated risk factors: chicken consumption increased the risk for chicken-attributed infections; animal contact, barbecuing, tripe consumption, and never/seldom chicken consumption increased that for ruminant-attributed infections; game consumption and attending swimming pools increased that for environment-attributed infections; and dog ownership increased that for environment- and pet-attributed infections. Person-to-person contacts around holiday periods were risk factors for infections with exotic strains, putatively introduced by returning travellers.

Model reduction of stochastic groundwater flow and transport processes

This work presents a comprehensive methodology for the reduction of analytical or numerical stochastic models characterized by uncertain input parameters or boundary conditions. The technique, based on the Polynomial Chaos Expansion (PCE) theory, represents a versatile solution to solve direct or inverse problems related to propagation of uncertainty. The potentiality of the methodology is assessed investigating different applicative contexts related to groundwater flow and transport scenarios, such as global sensitivity analysis, risk analysis and model calibration. This is achieved by implementing a numerical code, developed in the MATLAB environment, presented here in its main features and tested with literature examples. The procedure has been conceived under flexibility and efficiency criteria in order to ensure its adaptability to different fields of engineering; it has been applied to different case studies related to flow and transport in porous media. Each application is associated with innovative elements such as (i) new analytical formulations describing motion and displacement of non-Newtonian fluids in porous media, (ii) application of global sensitivity analysis to a high-complexity numerical model inspired by a real case of risk of radionuclide migration in the subsurface environment, and (iii) development of a novel sensitivity-based strategy for parameter calibration and experiment design in laboratory scale tracer transport.