Portfolio-optimization models for small investors

Since 2010, the client base of online-trading service providers has grown significantly. Such companies enable small investors to access the stock market at advantageous rates. Because small investors buy and sell stocks in moderate amounts, they should consider fixed transaction costs, integral transaction units, and dividends when selecting their portfolio. In this paper, we consider the small investor’s problem of investing capital in stocks in a way that maximizes the expected portfolio return and guarantees that the portfolio risk does not exceed a prescribed risk level. Portfolio-optimization models known from the literature are in general designed for institutional investors and do not consider the specific constraints of small investors. We therefore extend four well-known portfolio-optimization models to make them applicable for small investors. We consider one nonlinear model that uses variance as a risk measure and three linear models that use the mean absolute deviation from the portfolio return, the maximum loss, and the conditional value-at-risk as risk measures. We extend all models to consider piecewise-constant transaction costs, integral transaction units, and dividends. In an out-of-sample experiment based on Swiss stock-market data and the cost structure of the online-trading service provider Swissquote, we apply both the basic models and the extended models; the former represent the perspective of an institutional investor, and the latter the perspective of a small investor. The basic models compute portfolios that yield on average a slightly higher return than the portfolios computed with the extended models. However, all generated portfolios yield on average a higher return than the Swiss performance index. There are considerable differences between the four risk measures with respect to the mean realized portfolio return and the standard deviation of the realized portfolio return.

Does culture affect public service motivation? Evidence of sub-national differences in Switzerland

This article explores societal culture as an antecedent of public service motivation. Culture can be a major factor in developing an institution-based theory of public service motivation. In the field of organization theory, culture is considered a fundamental factor for explaining organization behavior. But our review of the literature reveals that culture has not been fully integrated into public service motivation theory or carefully investigated in this research stream. This study starts to fill this gap in the literature by using institutionalism and social-identity theory to predict how the sub-national Germanic and Latin cultures of Switzerland, which are measured through the mother tongues of public employees and the regional locations of public offices, affect their levels of public service motivation. Our analysis centers on two large data sets of federal and municipal employees, and produces evidence that culture has a consistent impact on public service motivation. The results show that Swiss German public employees have a significantly higher level of public service motivation on the whole, while Swiss French public employees have a significantly lower level overall. Implications for theory development and future research are discussed.

Ecosystem service trade-offs and stakeholder claims - a meso-scale study from a Madagascar biodiversity hotspot

The north-eastern escarpment of Madagascar has been labelled a global biodiversity hotspot due to its extremely high rates of endemic species which are heavily threatened by accelerated deforestation rates and landscape change. The traditional practice of shifting cultivation or "tavy" used by the majority of land users in this area to produce subsistence rice is commonly blamed for these threats. A wide range of stakeholders ranging from conservation to development agencies, and from the private to the public sector has therefore been involved in trying to find solutions to protect the remaining forest fragments and to increase agricultural production. Consequently, provisioning, regulating and socio-cultural services of this forest-mosaic landscape are fundamentally altered leading to trade-offs between them and consequently new winners and losers amongst the stakeholders at different scales. However, despite a growing amount of evidence from case studies analysing local changes, the regional dynamics of the landscape and their contribution to such trade-offs remain poorely understood. This study therefore aims at using generalised landscape units as a base for the assessment of multi-level stakeholder claims on ecosystem services to inform negotiation, planning and decision making at a meso-scale. The presented study applies a mixed-method approach combining remote sensing, GIS and socio-economic methods to reveal current landscape dynamics, their change over time and the corresponding ecosystem service trade-offs induced by diverse stakeholder claims on the regional level. In a first step a new regional land cover classification for three points in time (1995, 2005 and 2011) was conducted including agricultural classes characteristic for shifting cultivation systems. Secondly, a novel GIS approach, termed “landscape mosaics approach” originally developed to assess dynamics of shifting cultivation landscapes in Laos was applied. Through this approach generalised landscape mosaics were generated allowing for a better understanding of changes in land use intensities instead of land cover. As a next step we will try to use these landscape units as proxies to map provisioning and regulating ecosystem services throughout the region. Through the overlay with other regional background data such as accessibility and population density and information from a region-wide stakeholder analysis, multiscale trade-offs between different services will be highlighted. The trade-offs observed on the regional scale will then be validated through a socio-economic ground-truthing within selected sites at the local scale. We propose that such meso-scale knowledge is required by all stakeholders involved in decision making towards sustainable development of north-eastern Madagascar.

Book Review: Public Service Media and Policy in Europe

Much has happened in the past fifty years, and the broadcasting system and in fact the entire media landscape have changed in many significant ways. Yet, the debate on the role of public service media and the involvement of the state in them still perseveres. It has indeed been reinvigorated due to the tectonic shifts in media production, distribution, access and consumption caused by digital technologies in general, and the Internet in particular. The gist of the debates has however curiously remained almost the same and is still focused on a set of economic arguments that call for state intervention in public media, and not unimportantly, on the various political interpretations of these economic arguments. In Europe, the debate has another essential core too, as Public Service Broadcasting (PSB) has been traditionally entrusted to serve some higher goals intrinsically related to key democratic and cultural processes. Accordingly, PSB in Western Europe has developed as the core media institution at the national level and has become deeply embedded in many facets of the nation’s economic, political, social and cultural life. Against the backdrop of PSB’s history, its vital tasks in society, as well as the dramatic changes brought about by the digitally networked environment, the question on the future of PSB and its transition into Public Service Media (PSM) is very interesting, to say the least, and highly challenging at the same time. The book by Karen Donders, Public Service Media and Policy in Europe (Palgrave, 2012), makes an essential contribution to these complex debates, and more importantly, adds some new value to an otherwise saturated discourse.

Virtual Infrastructures as a Service enabling Converged Optical Networks and Data Centres

Abstract Cloud computing service emerged as an essential component of the Enterprise {IT} infrastructure. Migration towards a full range and large-scale convergence of Cloud and network services has become the current trend for addressing requirements of the Cloud environment. Our approach takes the infrastructure as a service paradigm to build converged virtual infrastructures, which allow offering tailored performance and enable multi-tenancy over a common physical infrastructure. Thanks to virtualization, new exploitation activities of the physical infrastructures may arise for both transport network and Data Centres services. This approach makes network and Data Centres’ resources dedicated to Cloud Computing to converge on the same flexible and scalable level. The work presented here is based on the automation of the virtual infrastructure provisioning service. On top of the virtual infrastructures, a coordinated operation and control of the different resources is performed with the objective of automatically tailoring connectivity services to the Cloud service dynamics. Furthermore, in order to support elasticity of the Cloud services through the optical network, dynamic re-planning features have been provided to the virtual infrastructure service, which allows scaling up or down existing virtual infrastructures to optimize resource utilisation and dynamically adapt to users’ demands. Thus, the dynamic re-planning of the service becomes key component for the coordination of Cloud and optical network resource in an optimal way in terms of resource utilisation. The presented work is complemented with a use case of the virtual infrastructure service being adopted in a distributed Enterprise Information System, that scales up and down as a function of the application requests.

Public service motivation and performance: a critical perspective

Purpose – A growing body of literature points to the importance of public service motivation (PSM) for the performance of public organizations. The purpose of this paper is to assess the method predominantly used for studying this linkage by comparing the findings it yields without and with a correction suggested by Brewer (2006), which removes the common-method bias arising from employee-specific response tendencies. Design/methodology/approach – First, the authors conduct a systematic review of published empirical research on the effects of PSM on performance and show that all studies found have been conducted at the individual level. Performance indicators in all but three studies were obtained by surveying the same employees who were also asked about their PSM. Second, the authors conduct an empirical analysis. Using survey data from 240 organizational units within the Swiss federal government, the paper compares results from an individual-level analysis (comparable to existing research) to two analyses where the data are aggregated to the organizational level, one without and one with the correction for common-method bias suggested by Brewer (2006). Findings – Looking at the Attraction to Policy-Making dimension of PSM, there is an interesting contrast: While this variable is positively correlated with performance in both the individual-level analysis and the aggregated data analysis without the correction for common-method bias, it is not statistically associated with performance in the aggregated data analysis with the correction. Originality/value – The analysis is the first to assess the robustness of the performance-PSM linkage to a correction for common-method bias. The findings place the validity of at least one part of the individual-level linkage between PSM and performance into question.

Portfolio-optimization models for small investors

Since 2010, the client base of online-trading service providers has grown significantly. Such companies enable small investors to access the stock market at advantageous rates. Because small investors buy and sell stocks in moderate amounts, they should consider fixed transaction costs, integral transaction units, and dividends when selecting their portfolio. In this paper, we consider the small investor’s problem of investing capital in stocks in a way that maximizes the expected portfolio return and guarantees that the portfolio risk does not exceed a prescribed risk level. Portfolio-optimization models known from the literature are in general designed for institutional investors and do not consider the specific constraints of small investors. We therefore extend four well-known portfolio-optimization models to make them applicable for small investors. We consider one nonlinear model that uses variance as a risk measure and three linear models that use the mean absolute deviation from the portfolio return, the maximum loss, and the conditional value-at-risk as risk measures. We extend all models to consider piecewise-constant transaction costs, integral transaction units, and dividends. In an out-of-sample experiment based on Swiss stock-market data and the cost structure of the online-trading service provider Swissquote, we apply both the basic models and the extended models; the former represent the perspective of an institutional investor, and the latter the perspective of a small investor. The basic models compute portfolios that yield on average a slightly higher return than the portfolios computed with the extended models. However, all generated portfolios yield on average a higher return than the Swiss performance index. There are considerable differences between the four risk measures with respect to the mean realized portfolio return and the standard deviation of the realized portfolio return.

Galileo Orbit and Clock Quality of the IGS Multi-GNSS Experiment

The Multi-GNSS Experiment (MGEX) of the International GNSS Service (IGS) aims at the data collection and analysis of all available satellite navigation systems. In particular the new global and regional satellite navigation systems are of interest, i.e., the European Galileo, the Chinese BeiDou, the Japanese QZSS as well as satellite based augmentation systems. This article analyzes the orbit and clock quality of the Galileo products of four MGEX analysis centers for a common time period of 20 weeks. Orbit comparisons of the individual analysis centers have a consistency at the 5–30 cm level. Day boundary discontinuities range from 4 to 28 cm whereas 2-day orbit fit RMS values vary between 1 and 7 cm. The accuracy evaluated by satellite laser ranging residuals is on the one decimeter level with a systematic bias of about −5 cm for all analysis centers. In addition, systematic errors on the decimeter level related to solar radiation pressure mismodeling are present in all orbit products. Due to the correlation of radial orbit errors with the clock parameters, these errors are also visible as a bump in the Allan deviation of the Galileo satellite clocks at the orbital frequency.