The Future of Risk Management, Volume II : Perspectives on Financial and Corporate Strategies

With contributions presented during the Second International Risk Management Conference, this second volume addresses important areas of risk management from a variety of angles and perspectives. The book will cover two separate tracks--financial risk management and risk management and corporate strategies--and will be of interest to academic researchers and students in risk management, banking, and finance Preface 5 Contents 7 List of Contributors 10 List of Figures 14 List of Tables 19 Part I Financial Risk Management 23 Chapter 1 Risk Management Instruments Offered by P2P Lending Platforms. A Cross-Country Empirical Analysis Based on a Scoring System 25 1 Introduction 25 2 Literature Review and Conceptual Framework 26 3 Overview and Organisational Features of Our Sample 31 4 Diversification Opportunities and Capital Allocation Tools 39 5 Risk Mitigation Tools 44 5.1 Lender Risk Mitigation 45 5.2 Borrower Risk Mitigation 49 5.3 The Risk Mitigation Sub-score 49 6 Quality and Quantity of Information Available to Platform Users 51 7 Conclusions 60 References 62 Chapter 2 Equity Crowdfunding and Risk Management: The Attitude of Italian Platforms 65 1 Introduction 65 2 Theoretical Backbone 67 2.1 Fundamental Principles of Crowdfunding 67 2.2 Defining Equity Crowdfunding 69 2.3 Risk Management Theory 70 3 Risk and Regulation in Crowdfunding Platform: Focus on Equity Crowdfunding 71 3.1 Italian Regulation 71 3.2 Crowdfunding Risks 75 3.3 Equity Crowdfunding Risks 76 4 Risk Management Approaches in Crowdfunding Platforms 81 5 Conclusions, Implications, and Future Lines of Research 82 References 84 Chapter 3 Fair Value Measurement Under Level 2 Inputs: Do Market and Transaction Multiples Catch Firm-Specific Risk Factors? 89 1 Introduction 89 2 Quality of Information, Fair Value Measurement and Firm Value 90 3 Research Design, Methodology and Data Collection 93 4 Data Analysis and Discussion of Findings 97 4.1 Analysis of the Portfolio Fair Values: Estimation of the Biases Introduced by Market and Transaction Multiples and Their Effect on Asset Values and Balance Sheet 97 4.1.1 P/E Fair Values 99 4.1.2 EV/SALES Fair Values 100 4.1.3 EV/EBITDA Fair Values 100 4.1.4 EV/EBIT Fair Values 101 4.1.5 Transaction Multiples (EBITDA) Fair Value 102 4.2 Analysis of the Portfolio Trends and Volatility in the Financial Statements: Estimation of the Variation of the Portfolio Evaluation and Its Effects on P/L Statement 103 4.3 Descriptive Statistics and Distribution of the Estimated-to-Real Fair Value Ratios 106 5 Comments and Conclusions 107 Appendix 108 References 125 Chapter 4 Non-financial Information and Risk Disclosure: Compliance Levels with Mandatory Requirements in the Italian Market 127 1 Introduction 127 2 Literature Review 129 2.1 Background on Non-financial Information Disclosure 129 2.2 Related Risk Disclosure Studies 133 3 Methodology and Data Collection 135 4 Discussion of Findings 138 4.1 The Level of Compliance of NFI 141 4.2 The Level of Compliance of Risk Disclosure 147 5 Conclusions 154 Appendix A 157 Bibliography 160 Chapter 5 Mutual Correlation and Interaction on Capital Markets in Countries of Development, Certain EU Member Countries and Development Countries: Evidence of Federation of Bosnia and Herzegovina 165 1 Introduction 165 2 Brief Review of Relevant Literature 167 3 Research Hypothesis 168 4 A Brief Overview of the Performance of the Capital Markets of the Countries of Western Balkans, EU Member Countries and Developed Countries 168 5 Research Methodology 170 5.1 Research Results 171 6 Conclusion 176 References 177 Chapter 6 Who Uses Trade Finance? Case-Based Evidence from Italian Exporters 178 1 Introduction 178 2 A Primer on Bank-Intermediated Export Finance Instruments 182 3 Literature Review and Hypotheses’ Development 186 4 Empirical Analysis: Data, Model, and Findings 188 5 Conclusions 198 References 199 Chapter 7 Patient Investors Taxonomy: A Behavioral Approach 202 1 Introduction 202 2 Literature Review 203 2.1 Patience Between Attitudes and Time 203 3 Methodology 205 4 Findings Discussion: Patience Between Traits, Propensity, Needs and Time: A Motivational Approach to Invest 206 4.1 Introduction to the Taxonomy 206 4.2 Taxonomy Variables 209 4.3 A New Taxonomy Building 211 4.4 Patient Investors: Who Are They? 213 4.5 Critical Perspectives 217 5 Conclusions and Limitations 218 References 220 Chapter 8 A Nonlinear Approach to Assess the Risk–Reward Ratio Using the Machine Learning Technique 224 1 Introduction 224 2 Literature Review 226 3 Methodology and Data Collection 230 3.1 Data Description 235 4 Findings Discussion 244 5 Conclusion and Limitations/Further Steps 251 Annex 252 Bibliography 255 Part II Risk Management and Corporate Strategies 260 Chapter 9 Board Diversity, Risk Management and Efficiency Evaluation: Evidence from European Listed Manufacturing Companies 262 1 Introduction 262 2 Theoretical Background 264 3 Data and Methodology 267 3.1 Data 267 3.2 Description of Variables 268 3.2.1 On Corporate Performance 268 3.2.2 On Board Diversity 269 3.3 Research Methodology 269 3.3.1 First Stage: Estimated Efficiency Scores 269 3.3.2 Second Stage: Relationship with Diversity Board 270 4 Results 271 5 Discussion and Conclusion 272 References 274 Chapter 10 An Examination of Factors Affecting Excess Liquidity, Evidence from Islamic Banks in Malaysia 280 1 Introduction 280 2 Literature Review 282 3 Reasons for Excess Liquidity 284 3.1 Inevitability of Sukuk in Islamic Banks 285 3.2 Our Research Hypothesis 286 4 Data and Methodology 286 4.1 Empirical Analysis 288 5 Conclusion and Research Limitations 291 Appendix 292 References 292 Chapter 11 Going Beyond Formalization: Effective Risk Management in a Medium Company 297 1 Introduction 297 2 Literature Review 299 2.1 Risk and Uncertainty: The Importance of Managing Risks 299 2.2 Risk Management in SMEs: The State of the Art 301 2.3 The Decision-Making Process in SMEs 303 3 Methodology and Data Collection 305 3.1 The Fieldwork 305 3.2 Data Collection and Research Design 306 4 Findings and Discussion 308 4.1 Risk Management in Company Alpha 308 4.2 New Perspectives in Managing Risks in SMEs 309 5 Conclusion and Limitations/Further Steps 312 Bibliography 314 Chapter 12 Between Climate and Social Changes: How to Struggle Against Adverse Conditions in the Coffee Industry 320 1 Introduction 320 2 Literature Review: Impact of Climate Change in the Coffee Industry 323 3 Methodology Design 326 4 Data Analysis and Discussion 328 4.1 Uganda: Behind the Coffee Cup and Before the Climate Crisis 328 4.2 Lavazza and Its Sustainability Projects: Inside the Sustainable Development Goals and Against the Climate Change Risk 329 4.3 The Sucafina Project: Supporting Coffee-Growing Communities Through Sustainable Farming Practices 331 5 Conclusions and Field Analysis Implications 335 References 336 Chapter 13 Direct Compensation and Risk Management: A Key Study from the Insurance Sector 339 1 Introduction 339 2 Analysing the Literature 340 2.1 Key Risks and Their Management 341 2.2 The New Way of Managing Risk 343 3 Objectives and Methodology 343 3.1 In Context: The Insurance Business (Summary of Data) 344 3.2 Damages Branch 346 3.3 Life Branch 347 3.3.1 The TIS Case Study 349 3.3.2 The Business Currently Offered 351 3.3.3 Developing the Business 356 4 Findings and Conclusions 358 References 359 Chapter 14 Sharing Economy Risks: Opportunities or Threats for Insurance Companies? A Case Study on the Iranian Insurance Industry 361 1 Introduction 361 2 Research Background 363 2.1 Sharing Economy 363 2.1.1 Sharing Economy in Iran 366 2.2 Iranian Insurance Industry 367 3 PESTLE Analysis and Sharing Economy Challenges for the Insurance Companies 368 4 Discussion and Results 372 5 Conclusion and Future Research 375 Bibliography 376 Chapter 15 Integrated Communication for Start-Ups Toward an Innovative Framework 379 1 Introduction 379 2 Literature Review 380 3 Methodology and Data Collection 382 3.1 Statistical Sample 383 3.2 Survey and the Research Questions 385 3.3 The Analysis 387 4 Findings Discussion 388 4.1 Focus on Reward Crowdfunding 392 5 Findings Discussion 395 6 Survey Administered to Start-Ups: Best Practices Emerged 399 7 The Start-Up Integrated Communication Model 400 8 Conclusion and Further Steps 403 Appendix—Survey 405 Bibliography 415 Chapter 16 Thinking Food Safety: The Consumers’ Perception 420 1 Introduction 420 2 Literature Review 424 3 Methodology and Data Collection 429 4 Findings 431 5 Discussion and Conclusions 436 Bibliography 437 Chapter 17 Product Risks and Life Cycle 442 1 Introduction 442 2 Literature 443 3 Methodology and Data Collection 443 4 Finding Discussion 444 4.1 Risk Management “Drivers” 444 4.2 Evolution of Risk Management. Towards an Integrated Vision 445 4.3 Business Risk 448 4.4 Product Risks 451 4.5 Product Life-Cycle 452 4.6 Risk of Dependence on Customers or Suppliers 454 5 Conclusions and Limitations/Further Steps 454 Bibliography 455 Index 462 Front Matter ....Pages i-xxiv Front Matter ....Pages 1-2 Risk Management Instruments Offered by P2P Lending Platforms. A Cross-Country Empirical Analysis Based on a Scoring System (Marina Damilano, Paola De Vincentiis, Eleonora Isaia, Patrizia Pia, Cristina Rovera)....Pages 3-42 Equity Crowdfunding and Risk Management: The Attitude of Italian Platforms (Nicola Miglietta, Enrico Battisti, Elvira Anna Graziano)....Pages 43-66 Fair Value Measurement Under Level 2 Inputs: Do Market and Transaction Multiples Catch Firm-Specific Risk Factors? (Vera Palea, Christian Rainero, Alessandro Migliavacca)....Pages 67-104 Non-financial Information and Risk Disclosure: Compliance Levels with Mandatory Requirements in the Italian Market (Fabio Rizzato, Donatella Busso, Simona Fiandrino, Valter Cantino)....Pages 105-142 Mutual Correlation and Interaction on Capital Markets in Countries of Development, Certain EU Member Countries and Development Countries: Evidence of Federation of Bosnia and Herzegovina (Almir Alihodžić)....Pages 143-155 Who Uses Trade Finance? Case-Based Evidence from Italian Exporters (Francesco Baldi, Ruggero Di Mauro, Marina Damilano)....Pages 157-180 Patient Investors Taxonomy: A Behavioral Approach (Christian Rainero, Giuseppe Modarelli)....Pages 181-202 A Nonlinear Approach to Assess the Risk–Reward Ratio Using the Machine Learning Technique (Pasquale Merella, Roberto Schiesari)....Pages 203-238 Front Matter ....Pages 239-240 Board Diversity, Risk Management and Efficiency Evaluation: Evidence from European Listed Manufacturing Companies (Simona Alfiero, Massimo Cane, Ruggiero Doronzo, Alfredo Esposito)....Pages 241-258 An Examination of Factors Affecting Excess Liquidity, Evidence from Islamic Banks in Malaysia (Md Hakim Ali, Saiful Azhar Rosly, Maha Radwan, Silvana Secinaro)....Pages 259-275 Going Beyond Formalization: Effective Risk Management in a Medium Company (Bernd Britzelmaier, Chiara Crovini, Giovanni Ossola)....Pages 277-299 Between Climate and Social Changes: How to Struggle Against Adverse Conditions in the Coffee Industry (Elena Candelo, Cecilia Casalegno, Giacomo Büchi, Mario Cerutti)....Pages 301-319 Direct Compensation and Risk Management: A Key Study from the Insurance Sector (Valter Gamba, Francesco Venuti, Canio Forliano, Mattia Franco)....Pages 321-342 Sharing Economy Risks: Opportunities or Threats for Insurance Companies? A Case Study on the Iranian Insurance Industry (Meisam Ranjbari, Zahra Shams Esfandabadi, Simone Domenico Scagnelli)....Pages 343-360 Integrated Communication for Start-Ups Toward an Innovative Framework (Fabrizio Mosca, Serena Bianco, Claudia Pescitelli)....Pages 361-401 Thinking Food Safety: The Consumers’ Perception (Alessandro Bonadonna, Giovanni Peira, Luigi Bollani, Mojgan Rahimi)....Pages 403-424 Product Risks and Life Cycle (Anna Claudia Pellicelli, Erica Varese, Luigi Bollani)....Pages 425-444 Back Matter ....Pages 445-447