Derivative warrants typically cost more than otherwise identical options, a situation that on the surface seems to defy logic. However, they are preferred by traders who trade frequently so there is something else at play besides price. Chu Zhang of HKUST and co-author Gang Li investigated and found some distinct, non-price advantages. Derivative warrants ... Read More

Expatriate managers can find themselves facing two conflicting demands: carrying out the strategy of their MNE, and adapting to the circumstances of their subsidiary and host country. A manager's success at juggling these demands can make a difference in whether the subsidiary succeeds. The MNE therefore has a vital stake in understanding how to make the ... Read More

Asset market liquidity varies considerably over time a fact that became painfully clear during the recent financial tsunami. "Illiquidity" can be defined as the price impact of buying or selling a given quantity of assets. "Liquidity" is the opposite of illiquidity and fell precipitously during 2008. Until recently, there have been limitations to empirically ... Read More

The extent to which employees identify with their work groups can be influenced by demographics. Women working in male-dominated groups, for example, tend to be evaluated negatively by their male peers and have to work harder for similar rewards. That imbalance can affect not only work-group identification but also perceptions of conflict in the workplace ... Read More

Decision makers are frequently called upon to make choices between gains and losses. A lot of research has been devoted to how people choose among risky choices, with a focus on either/or situations: a loss or a gain. But Alex B. Markle of HKUST and George Wu argue this may not be a realistic approach. "Most important real-world decisions are mixed gambles ... Read More

A new overseas market opens and a few foreign companies move in to establish themselves and their products. These early prominent players can play an important role in establishing the legitimacy of their "population". And interestingly, their success can benefit their seeming competitors - those who follow them into the market or who have a lower profile ... Read More

The "momentum effect" holds that stocks that performed well in the recent past will continue to do so in the near future. Yet this is far from a universal effect. Although momentum profits can be substantial in places such as the U.S., the effect is much weaker in other places, notably East Asia. New research suggests there may be cultural-related factors at ... Read More

A company's relations with its stakeholders can have an important bearing on its financial performance. And while this obviously holds true for shareholders, it is also the case for non-financial stakeholders such as employees, suppliers and the community. In fact, the state of relations with this group can also be a determining factor in affecting the ... Read More

Manufacturers who want to launch a new product or upgrade an old one would do well to consider the channels they use to disclose the product's quality to their consumers. Going down the wrong route may reduce profitability. That's the recommendation of Liang Guo of HKUST, who constructed a model to look at the format options for disclosing information about ... Read More

Do individual investors, or those with little information about a company's prospects, affect stock prices? Over the past decade, this question has been at the forefront of research and debate in financial economics. On one side are the traditional "Chicago School" economists who believe that those with no valuable information have little impact on stock ... Read More