The value of tail risk hedging in defined contribution plans: What does history tell us

Hedging against tail events in equity markets has been forcefully advocated in the aftermath of recent global financial crisis. Whether this is beneficial to long horizon investors like employees enrolled in defined contribution (DC) plans, however, has been subject to criticism. We conduct historical simulation since 1928 to examine the effectiveness of active and passive tail risk hedging using out of money put options for hypothetical equity portfolios of DC plan participants with 20 years to retirement. Our findings show that the cost of tail hedging exceeds the benefits for a majority of the plan participants during the sample period. However, for a significant number of simulations, hedging result in superior outcomes relative to an unhedged position. Active tail hedging is more effective when employees confront several panic-driven periods characterized by short and sharp market swings in the equity markets over the investment horizon. Passive hedging, on the other hand, proves beneficial when they encounter an extremely rare event like the Great Depression as equity markets go into deep and prolonged decline.

How innovation and R&D happen in the upstream oil & gas industry : insights from a global survey

Few would disagree that the upstream oil & gas industry has become more technology-intensive over the years. But how does innovation happen in the industry? Specifically, what ideas and inputs flow from which parts of the sector׳s value network, and where do these inputs go? And how do firms and organizations from different countries contribute differently to this process? This paper puts forward the results of a survey designed to shed light on these questions. Carried out in collaboration with the Society of Petroleum Engineers (SPE), the survey was sent to 469 executives and senior managers who played a significant role with regard to R&D and/or technology deployment in their respective business units. A total of 199 responses were received from a broad range of organizations and countries around the world. Several interesting themes and trends emerge from the results, including: (1) service companies tend to file considerably more patents per innovation than other types of organization; (2) over 63% of the deployed innovations reported in the survey originated in service companies; (3) neither universities nor government-led research organizations were considered to be valuable sources of new information and knowledge in the industry׳s R&D initiatives, and; (4) despite the increasing degree of globalization in the marketplace, the USA still plays an extremely dominant role in the industry׳s overall R&D and technology deployment activities. By providing a detailed and objective snapshot of how innovation happens in the upstream oil & gas sector, this paper provides a valuable foundation for future investigations and discussions aimed at improving how R&D and technology deployment are managed within the industry. The methodology did result in a coverage bias within the survey, however, and the limitations arising from this are explored.

The Why, What, and How of Global Biodiversity Indicators Beyond the 2010 Target

The 2010 biodiversity target agreed by signatories to the Convention on Biological Diversity directed the attention of conservation professionals toward the development of indicators with which to measure changes in biological diversity at the global scale. We considered why global biodiversity indicators are needed, what characteristics successful global indicators have, and how existing indicators perform. Because monitoring could absorb a large proportion of funds available for conservation, we believe indicators should be linked explicitly to monitoring objectives and decisions about which monitoring schemes deserve funding should be informed by predictions of the value of such schemes to decision making. We suggest that raising awareness among the public and policy makers, auditing management actions, and informing policy choices are the most important global monitoring objectives. Using four well-developed indicators of biological diversity (extent of forests, coverage of protected areas, Living Planet Index, Red List Index) as examples, we analyzed the characteristics needed for indicators to meet these objectives. We recommend that conservation professionals improve on existing indicators by eliminating spatial biases in data availability, fill gaps in information about ecosystems other than forests, and improve understanding of the way indicators respond to policy changes. Monitoring is not an end in itself, and we believe it is vital that the ultimate objectives of global monitoring of biological diversity inform development of new indicators. ©2010 Society for Conservation Biology.

Art museums and the global tourist: Experience centres in experience-scapes

In the experience economy, the role of art museums has evolved so as to cater to global cultural tourists. These institutions were traditionally dedicated to didactic functions, and served cognoscenti with elite cultural tastes that were aligned with the avant-garde’s autonomous stance towards mass culture. In a post-avant-garde era however museums have focused on appealing to a broad clientele that often has little or no knowledge of historical or contemporary art. Many of these tourists want art to provide entertaining and novel experiences, rather than receiving pedagogical ‘training’. In response, art museums are turning into ‘experience venues’ and are being informed by ideas associated with new museology, as well as business approaches like Customer Experience Management. This has led to the provision of populist entertainment modes, such as blockbuster exhibitions, participatory art events, jazz nights, and wine tasting, and reveals that such museums recognize that today’s cultural tourist is part of an increasingly diverse and populous demographic, which shares many languages and value systems. As art museums have shifted attention to global tourists, they have come to play a greater role in gentrification projects and cultural precincts. The art museum now seems ideally suited to tourist-centric environments that offer a variety of immersive sensory experiences and combine museums (often designed by star-architects), international hotels, restaurants, high-end shopping zones, and other leisure forums. These include sites such as Port Maravilha urban waterfront development in Rio de Janiero, the Museum of Old and New Art in Hobart, and the Chateau La Coste winery and hotel complex in Provence. It can be argued that in a global experience economy, art museums have become experience centres in experience-scapes. This paper will examine the nature of the tourist experience in relation to the new art museum, and the latter’s increasingly important role in attracting tourists to urban and regional cultural precincts.

The dynamics of global visual effects and games development industries: lessons for Australia’s creative industries development policy

The paper critiques the focus of creative industries policy on capability development of small and medium sized firms and the provision of regional incentives. It analyses factors affecting the competitiveness and sustainability of the games development industry and visual effects suppliers to feature films. Interviews with participants in these industries highlight the need for policy instruments to take into consideration the structure and organization of global markets and the power of lead multinational corporations. We show that although forms of economic governance in these industries may allow sustainable value capture, they are interrupted by bottlenecks in which ferocious competition among suppliers is confronted by comparatively little competition among the lead firms. We argue that current approaches to creative industries policy aimed at building self-sustaining creative industries are unlikely to be sufficient because of the globalized nature of the industries. Rather, we argue that a more profitable approach is likely to require supporting diversification of the industries as ‘feeders’ into other areas of the economy.

Global business services: Increasing specialization and integration of the world economy as drivers of economic growth

Purpose The purpose of this paper is to explore the contribution of global business services to improved productivity and economic growth of the world economy, which has gone largely unnoticed in service research. Design/methodology/approach The authors draw on macroeconomic data and industry reports, and link them to the non-ownership-concept in service research and theories of the firm. Findings Business services explain a large share of the growth of the global service economy. The fast growth of business services coincides with shifts from domestic production towards global outsourcing of services. A new wave of global business services are traded across borders and have emerged as important drivers of growth in the world’s service sector. Research limitations/implications This paper advances the understanding of non-ownership services in an increasingly global and specialized post-industrial economy. The paper makes a conceptual contribution supported by descriptive data, but without empirical testing. Originality/value The authors integrate the non-ownership concept and three related economic theories of the firm to explain the role of global business services in driving business performance and the international transformation of service economies.

An evaluation of the effectiveness of Value-at-Risk (VaR) models for Australian banks under Basel III

This study compares Value-at-Risk (VaR) measures for Australian banks over a period that includes the Global Financial Crisis (GFC) to determine whether the methodology and parameter selection are important for capital adequacy holdings that will ultimately support a bank in a crisis period. VaR methodology promoted under Basel II was largely criticised during the GFC for its failure to capture downside risk. However, results from this study indicate that 1-year parametric and historical models produce better measures of VaR than models with longer time frames. VaR estimates produced using Monte Carlo simulations show a high percentage of violations but with lower average magnitude of a violation when they occur. VaR estimates produced by the ARMA GARCH model also show a relatively high percentage of violations, however, the average magnitude of a violation is quite low. Our findings support the design of the revised Basel II VaR methodology which has also been adopted under Basel III.

Integration of Geospatial and Built Environment - National Data Policy

Digital technology offers enormous benefits (economic, quality of design and efficiency in use) if adopted to implement integrated ways of representing the physical world in a digital form. When applied across the full extent of the built and natural world, it is referred to as the Digital Built Environment (DBE) and encompasses a wide range of approaches and technology initiatives, all aimed at the same end goal: the development of a virtual world that sufficiently mirrors the real world to form the basis for the smart cities of the present and future, enable efficient infrastructure design and programmed maintenance, and create a new foundation for economic growth and social well-being through evidence-based analysis. The creation of a National Data Policy for the DBE will facilitate the creation of additional high technology industries in Australia; provide Governments, industries and citizens with greater knowledge of the environments they occupy and plan; and offer citizen-driven innovations for the future. Australia has slipped behind other nations in the adoption and execution of Building Information Modelling (BIM) and the principal concern is that the gap is widening. Data driven innovation added $67 billion to the Australian economy in 20131. Strong open data policy equates to $16 billion in new value2. Australian Government initiatives such as the Digital Earth inspired “National Map” offer a platform and pathway to embrace the concept of a “BIM Globe”, while also leveraging unprecedented growth in open source / open data collaboration. Australia must address the challenges by learning from international experiences—most notably the UK and NZ—and mandate the use of BIM across Government, extending the Framework for Spatial Data Foundation to include the Built Environment as a theme and engaging collaboration through a “BIM globe” metaphor. This proposed DBE strategy will modernise the Australian urban planning and the construction industry. It will change the way we develop our cities by fundamentally altering the dynamics and behaviours of the supply chains and unlocking new and more efficient ways of collaborating at all stages of the project life-cycle. There are currently two major modelling approaches that contribute to the challenge of delivering the DBE. Though these collectively encompass many (often competing) approaches or proprietary software systems, all can be categorised as either: a spatial modelling approach, where the focus is generally on representing the elements that make up the world within their geographic context; and a construction modelling approach, where the focus is on models that support the life cycle management of the built environment. These two approaches have tended to evolve independently, addressing two broad industry sectors: the one concerned with understanding and managing global and regional aspects of the world that we inhabit, including disciplines concerned with climate, earth sciences, land ownership, urban and regional planning and infrastructure management; the other is concerned with planning, design, construction and operation of built facilities and includes architectural and engineering design, product manufacturing, construction, facility management and related disciplines (a process/technology commonly known as Building Information Modelling, BIM). The spatial industries have a strong voice in the development of public policy in Australia, while the construction sector, which in 2014 accounted for around 8.5% of Australia’s GDP3, has no single voice and because of its diversity, is struggling to adapt to and take advantage of the opportunity presented by these digital technologies. The experience in the UK over the past few years has demonstrated that government leadership is very effective in stimulating industry adoption of digital technologies by, on the one hand, mandating the use of BIM on public procurement projects while at the same time, providing comparatively modest funding to address the common issues that confront the industry in adopting that way of working across the supply chain. The reported result has been savings of £840m in construction costs in 2013/14 according to UK Cabinet Office figures4. There is worldwide recognition of the value of bringing these two modelling technologies together. Australia has the expertise to exercise leadership in this work, but it requires a commitment by government to recognise the importance of BIM as a companion methodology to the spatial technologies so that these two disciplinary domains can cooperate in the development of data policies and information exchange standards to smooth out common workflows. buildingSMART Australasia, SIBA and their academic partners have initiated this dialogue in Australia and wish to work collaboratively, with government support and leadership, to explore the opportunities open to us as we develop an Australasian Digital Built Environment. As part of that programme, we must develop and implement a strategy to accelerate the adoption of BIM processes across the Australian construction sector while at the same time, developing an integrated approach in concert with the spatial sector that will position Australia at the forefront of international best practice in this area. Australia and New Zealand cannot afford to be on the back foot as we face the challenges of rapid urbanisation and change in the global environment. Although we can identify some exemplary initiatives in this area, particularly in New Zealand in response to the need for more resilient urban development in the face of earthquake threats, there is still much that needs to be done. We are well situated in the Asian region to take a lead in this challenge, but we are at imminent risk of losing the initiative if we do not take action now. Strategic collaboration between Governments, Industry and Academia will create new jobs and wealth, with the potential, for example, to save around 20% on the delivery costs of new built assets, based on recent UK estimates.

A decade of supply chain collaboration and directions for future research

Purpose This paper aims to conduct a systematic review of the literature on supply chain collaboration published over a 10-year period from 2005 to 2014. It explores the nature and extent of research undertaken to identify key themes emerging in the field and gaps that need to be addressed. Design/methodology/approach The authors review a sample of 207 articles from 69 journals, after using an iterative cycle of defining appropriate search keywords, searching the literature and conducting the analysis. Findings Key themes include the meaning of collaboration; considerations for supply chain collaboration theory; emerging areas in collaboration for sustainability, technology-enabled supply chains and humanitarian supply chains; and the need for a more holistic approach, multi-tier perspectives and research into B2C collaborations. Research limitations/implications The paper provides discussion and scope for future research into the area which would contribute to the field tremendously. Originality/value There have been very few reviews in the past on supply chain collaboration, and this is one of the first extensive reviews conducted to address how well the body of knowledge on supply chain collaboration corresponds with our contemporary society.

Global Nursing Issues and Development: Analysis of World Health Organization Documents

Purpose To analyze World Health Organization (WHO) documents to identify global nursing issues and development. Design Qualitative content analysis. Methods Documents published by the six WHO regions between 2007 and 2012 and with key words related to nurse/midwife or nursing/midwifery were included. Themes, categories, and subcategories were derived. The final coding reached 80% agreement among three independent coders, and the final coding for the discrepant coding was reached by consensus. Findings Thirty-two documents from the regions of Europe (n = 19), the Americas (n = 6), the Western Pacific (n = 4), Africa (n = 1), the Eastern Mediterranean (n = 1), and Southeast Asia (n = 1) were examined. A total of 385 units of analysis dispersed in 31 subcategories under four themes were derived. The four themes derived (number of unit of analysis, %) were Management & Leadership (206, 53.5), Practice (75, 19.5), Education (70, 18.2), and Research (34, 8.8). Conclusions The key nursing issues of concern at the global level are workforce, the impacts of nursing in health care, professional status, and education of nurses. International alliances can help advance nursing, but the visibility of nursing in the WHO needs to be strengthened. Clinical Relevance Organizational leadership is important in order to optimize the use of nursing competence in practice and inform policy makers regarding the value of nursing to promote people's health.

Using a supply chain approach to guide R&D

Consumers today are presented with an increasing array of products. The growing competition for consumer expenditure requires a whole of supply chain approach to maintain market share for existing cultivars and to successfully commercialise new cultivars. The supply chain needs to deliver value and satisfaction to the end customer and profitability to their members. Critical to getting the product right is developing inherent robustness into the cultivar, and developing processes and systems through the whole supply chain that maintain product quality and add value. This paper describes the approach we have used in working with supply chains in Australia and Indonesia to identify priority areas for improvement. Our experience demonstrates the need for a champion in the supply chain with significant influence and a desire to improve. The paper also describes our approach towards improving a specific supply chain to achieve successful commercialisation of a new cultivar. The cultivar was primarily selected for good production characteristics and attractive visual appeal. The performance of the fruit is being monitored from farm to retail shelf to identify points where quality is lost and practices can be improved. A targeted R&D program is investigating ways of improving production efficiency (nutrition, flowering and canopy management), maturity standards to optimise flavour, harvesting and packing practices to reduce skin damage, and ripening and handling practices to optimise shelf life. This integrated approach is based on similar approaches used to improve the performance of existing mango and avocado cultivars.

Fundamental Principles and Rights At Work: Value, Viability, Incidence and Importance as Elements For Economic Progress and Social Justice

Working Paper prepared for the ILO by Maria Luz Vega Ruiz and Daniel Martinez, focusing on the rights at work in Latin America and the Caribbean.

Global banana disease management - getting serious with sustainability and food security

Much research in understanding plant diseases has been undertaken, but there has been insufficient attention given to dealing with coordinated approaches to preventing and managing diseases. A global management approach is essential to the long-term sustainability of banana production. This approach would involve coordinated surveys, capacity building in developing countries, development of disease outbreak contingency plans and coordinated quarantine awareness, including on-line training in impact risk assessment and web-based diagnostic software. Free movement of banana plants and products between some banana-producing countries is causing significant pressure on the ability to manage diseases in banana. The rapid spread of Fusarium oxysporum f. sp. cubense 'tropical race 4' in Asia, bacterial wilts in Africa and Asia and black leaf streak [Mycosphaerella fijiensis] in Brazil and elsewhere are cases in point. The impact of these diseases is devastating, severely cutting family incomes and jeopardising food security around the globe. Agreements urgently need to be reached between governments to halt the movement of banana plants and products between banana-producing countries before it is too late and global food security is irreparably harmed. Black leaf streak, arguably the most serious banana disease, has become extremely difficult to control in commercial plantations in various parts of the world. Sometimes in excess of 50 fungicide sprays have to be applied each year. Disease eradication and effective disease control is not possible because there is no control of disease inoculum in non-commercial plantings in these locations. Additionally, there have been enormous sums of money invested in international banana breeding programmes over many years only to see the value of hybrid products lost too soon. 'Goldfinger' (AAAB, syn. 'FHIA-01'), for example, has recently been observed severely affected by black leaf streak in Samoa. Resistant cultivars alone cannot be relied upon in the fight against this disease. Real progress in control may only come when the local communities are engaged and become actively involved in regional programmes. Global recommendations are long overdue and urgently needed to help ensure the long-term sustainable utilisation of the products of the breeding programmes.

Mitochondrial Malfunction in Tumor Formation and Neuromuscular Diseases : Consequences of defects in fumarate hydratase and in the respiratory chain

The mitochondrion is an organelle of outmost importance, and the mitochondrial network performs an array of functions that go well beyond ATP synthesis. Defects in mitochondrial performance lead to diseases, often affecting nervous system and muscle. Although many of these mitochondrial diseases have been linked to defects in specific genes, the molecular mechanisms underlying the pathologies remain unclear. The work in this thesis aims to determine how defects in mitochondria are communicated within - and interpreted by - the cells, and how this contributes to disease phenotypes. Fumarate hydratase (FH) is an enzyme of the citrate cycle. Recessive defects in FH lead to infantile mitochondrial encephalopathies, while dominant mutations predispose to tumor formation. Defects in succinate dehydrogenase (SDH), the enzyme that precedes FH in the citrate cycle, have also been described. Mutations in SDH subunits SDHB, SDHC and SDHD are associated with tumor predisposition, while mutations in SDHA lead to a characteristic mitochondrial encephalopathy of childhood. Thus, the citrate cycle, via FH and SDH, seems to have essential roles in mitochondrial function, as well as in the regulation of processes such as cell proliferation, differentiation or death. Tumor predisposition is not a typical feature of mitochondrial energy deficiency diseases. However, defects in citrate cycle enzymes also affect mitochondrial energy metabolism. It is therefore necessary to distinguish what is specific for defects in citrate cycle, and thus possibly associated with the tumor phenotype, from the generic consequences of defects in mitochondrial aerobic metabolism. We used primary fibroblasts from patients with recessive FH defects to study the cellular consequences of FH-deficiency (FH-). Similarly to the tumors observed in FH- patients, these fibroblasts have very low FH activity. The use of primary cells has the advantage that they are diploid, in contrast with the aneuploid tumor cells, thereby enabling the study of the early consequences of FH- in diploid background, before tumorigenesis and aneuploidy. To distinguish the specific consequences of FH- from typical consequences of defects in mitochondrial aerobic metabolism, we used primary fibroblasts from patients with MELAS (mitochondrial encephalopathy with lactic acidosis and stroke-like episodes) and from patients with NARP (neuropathy, ataxia and retinitis pigmentosa). These diseases also affect mitochondrial aerobic metabolism but are not known to predispose to tumor formation. To study in vivo the systemic consequences of defects in mitochondrial aerobic metabolism, we used a transgenic mouse model of late-onset mitochondrial myopathy. The mouse contains a transgene with an in-frame duplication of a segment of Twinkle, the mitochondrial replicative helicase, whose defects underlie the human disease progressive external ophthalmoplegia. This mouse model replicates the phenotype in the patients, particularly neuronal degeneration, mitochondrial myopathy, and subtle decrease of respiratory chain activity associated with mtDNA deletions. Due to the accumulation of mtDNA deletions, the mouse was named deletor. We first studied the consequences of FH- and of respiratory chain defects for energy metabolism in primary fibroblasts. To further characterize the effects of FH- and respiratory chain malfunction in primary fibroblasts at transcriptional level, we used expression microarrays. In order to understand the in vivo consequences of respiratory chain defects in vivo, we also studied the transcriptional consequences of Twinkle defects in deletor mice skeletal muscle, cerebellum and hippocampus. Fumarate accumulated in the FH- homozygous cells, but not in the compound heterozygous lines. However, virtually all FH- lines lacked cytoplasmic FH. Induction of glycolysis was common to FH-, MELAS and NARP fibroblasts. In deletor muscle glycolysis seemed to be upregulated. This was in contrast with deletor cerebellum and hippocampus, where mitochondrial biogenesis was in progress. Despite sharing a glycolytic pattern in energy metabolism, FH- and respiratory chain defects led to opposite consequences in redox environment. FH- was associated with reduced redox environment, while MELAS and NARP displayed evidences of oxidative stress. The deletor cerebellum had transcriptional induction of antioxidant defenses, suggesting increased production of reactive oxygen species. Since the fibroblasts do not represent the tissues where the tumors appear in FH- patients, we compared the fibroblast array data with the data from FH- leiomyomas and normal myometrium. This allowed the determination of the pathways and networks affected by FH-deficiency in primary cells that are also relevant for myoma formation. A key pathway regulating smooth muscle differentiation, SRF (serum response factor)-FOS-JUNB, was found to be downregulated in FH- cells and in myomas. While in the deletor mouse many pathways were affected in a tissue-specific basis, like FGF21 induction in the deletor muscle, others were systemic, such as the downregulation of ALAS2-linked heme synthesis in all deletor tissues analyzed. However, interestingly, even a tissue-specific response of FGF21 excretion could elicit a global starvation response. The work presented in this thesis has contributed to a better understanding of mitochondrial stress signalling and of pathways interpreting and transducing it to human pathology.