How companies can offset the risks of foreign investments
Investing abroad can be a risky business for firms, so many only invest in countries that can safeguard investments through treaties. But some companies do invest in less stable countries without the protection of bilateral treaties. Pierre Dussauge, HEC Professor of Strategy and Business Policy explains how these firms instead use their political influence to get ahead of competitors.
Stopping “drug kingpins and rogue nations”: how US economic sanctions are shaping global banks
To date, at least nine international banks have paid enormous sums to the US as a result of violating US economic sanctions, including the French bank BNP Paribas, which was fined nearly $9 billion in 2014. As the US increasingly employs its punitive arsenal to force non-US banks to comply, this has resulted in their Americanization, argue two HEC professors.
Supranational Supervision: what consequences on multinational banks and on governments?
As the Single Supervisory Mechanism (SSM), the system of supervision for Euro Area banks centered on the European Central Bank (ECB), is now well into its fifth year of operation, the financial press offers constant reminders of the role of regulation and supervision in shaping the decisions of large multinational banks (MNBs). In particular, recent examples have highlighted their impact on banks’ locational choices, be it in the case of banks relocating some of their operations from London to other European cities in the anticipation of Brexit, or in the case of CommerzBank, which may soon become the target of a European cross-border bank merger.
Price formation and volatility: the role of dealers and market makers
In our recent research published in the Journal of Financial Economics, we analyze price formation in a context in which dealers repeatedly compete for the opportunity to trade with retail traders. We characterize equilibria in which dealers’ pricing strategies are optimal irrespective of the private information that each dealer may possess. We propose a robust model that predicts how the dealers share information and equilibrate the trade.
Art Markets: What you should know before investing in art
Risky investments such as stocks typically are associated with high long-term returns. However, this is not so in the case of art. Why don’t art markets follow the normal rules of investment? New research by Stefano Lovo and Christophe Spaenjers uncovers the idiosyncrasies of this very particular type of investment and offers tips for those considering putting their money into fine art.
Big Data and Investment Returns: Insights by HEC Professor Hugues Langlois
Hugues Langlois is an Assistant Professor of Finance at HEC Paris. In this short video, and developed in this complementary article, he shares the practical applications of his research about big data methodologies in finance, and how his research provides a new tool to measure expected returns in international stock markets. Another big step in the world of finance for asset managers and risk managers…
How to do good in business?
HEC Paris teaches and conducts research on how to combine corporate and financial performance with Corporate Social Responsibility and fair regulations in corporate andinstitutional sectors as well as society as a whole. In this special newsletter, find a presentation of the latest research, teaching initiatives, and events on these decisive topics.
Why "doing well by doing good" is not as simple as they say
“Socially responsible behavior leads to increased financial performance over time”, or at least this is the mantra that has come to dominate business doctrine. Studies into whether this claim is true in practice have had mixed results, and, in their new research, Professors Afshin Mehrpouya and Imran Chowdhury explore why.