Portfolio Literature Research Articles

Leveraging event portfolios for strategic business development: a case study of Singapore Changi Airport

PurposeThis research article examines event marketing in the airport business, specifically how an airport leverages event portfolios to develop its businesses by marketing itself as a destination, improving the user experience and generating revenue outside of aviation-related activities. Focusing on Singapore Changi Airport as a case study, the research underscores the airport’s business development in a competitive environment.Design/methodology/approachThe study employs thematic data analysis to examine how Changi Airport leverages an event portfolio as a strategic business development tool. It conducts documentary research by gathering a diverse range of grey literature sources from the online public domain. These sources include documents related to airports, online news and media portals and user-generated content on social media platforms. The analysis is conducted in an inductive manner.FindingsSingapore Changi Airport has recently leveraged events as a strategic marketing strategy for developing nonaeronautical business operations. As an attraction to appeal to tourists, the airport organised multiple types of events in its portfolio. Furthermore, the airport offers a wide range of event-related activities within its premises, including both sporting and cultural events. The purpose of these activities is to actively engage visitors and air travellers by offering a range of interactive experiences, including games and challenges. Such event-related activities reflect the airport’s transformation into a lifestyle platform.Originality/valueCritics commonly highlight the lack of empirical research and the restricted relevance of the findings in event and festival research. This article consolidates the existing knowledge on airport management and event business to enhance the event marketing and event portfolio literature, specifically in the setting of airport business.

Pivoting to Manage the Integration of Two Initially Separate Business Models: The Case of the Digital Transformation of Established Retailers

Due to increasing digitalization, most companies have added online retail as a new business model (BM) separate from their initial physical BM, requiring them to manage a portfolio of BMs. The literature points out that companies choose between a separation or integration strategy to manage their multiple BMs. However, business cases show that companies adopting a separation strategy may then plan for a possible integration strategy. Despite the growing knowledge in the BM portfolio literature, scholars and practitioners still lack a comprehensive understanding of the integration process of two BMs that were initially managed separately. This qualitative research draws on a cumulative multiple case study of five retailers to analyze how incumbent firms with different BMs manage their integration. We show that these firms pivoted the management of their BM portfolio. The notion of pivoting has been studied from the perspective of a single BM. In this research, we demonstrate that the process of pivoting also applies to the management of several BMs. Our results provide a generic model of the BM integration process that underlines barriers and enabling pivoting factors. Finally, by considering pivoting at this corporate level, our research adds to the ongoing discussion in strategic management regarding the way companies manage the dynamics of their BM portfolio.

What makes nonprofit organizations (NPOs) talk transparently about their connections with businesses on Twitter? Insights from nonprofit-business network portfolios and resource dependencies

Drawing on network portfolio literature and resource dependence theory, this study investigates how a nonprofit’s N2B partnership portfolio configurations (i.e., size and industry diversification), reliance on individual donations, and reliance on government grants influence the nonprofit’s transparency in disclosing N2B partnerships on Twitter. We manually coded the level of transparency reflected in 911 tweets sent by 81 leading COVID-19 NPOs mentioning 501 companies from March 1 to July 19, 2020. Social network analysis and regression models were performed to answer the research inquiries. Findings indicate that maintaining a large number of business connections is associated with lowered transparency in N2B communication on Twitter, whereas keeping diverse connections with different business industries relates to increased transparency in N2B communication. NPOs with a stronger reliance on government grants signaled more transparency in N2B parentships on Twitter, but the reliance on individual donations did not influence N2B transparency signaling.

A Boundedly Rational Perspective on the Role of Above-Aspiration in Ambidextrous Aliances Choices

This study investigates an unexplored issue: how firms make boundedly rational decisions in response to above-aspiration performance when configuring exploration and exploitation in an alliance portfolio. We employ behavioral heuristics to explore the role of above-aspiration performance and the influence of a CEO’s cognitive bias towards overconfidence. We also argue that the role of a CEO’s overconfidence in an alliance strategy depends on the degree of attention s/he pays to the latter, and how the attention allocation process is influenced by environmental factors. Three hypotheses are tested using a sample of U.S. high technology firms during 1992-2015. Our results establish that above-aspiration performance motivates firms to engage in exploration rather than exploitation alliances when configuring an alliance portfolio, and that a CEO’s overconfidence strengthens this relationship. The moderating effect of a CEO’s overconfidence decreases with environmental munificence and dynamism. Our study contributes to the literature on the behavioral theory of the firm by adopting a consistent capacity-based logic to examine a firm’s response to above-aspiration performance, and makes an additional contribution to the alliance portfolio literature by deconstructing the alliance portfolio configuration in terms of exploration versus exploitation alliances as a product of bounded rationality.

Portfolio optimization with asset preselection using data envelopment analysis

This paper uses data envelopment analysis (DEA) approach as a nonparametric efficiency analysis tool to preselect efficient assets in large-scale portfolio problems. Thus, we reduce the dimensionality of portfolio problems, considering multiple asset performance criteria in a linear DEA model. We first introduce several reward/risk criteria that are typically used in portfolio literature to identify features of financial returns. Secondly, we suggest some DEA input/output sets for preselecting efficient assets in a large-scale portfolio framework. Then, we evaluate the impact of the preselected assets in different portfolio optimization strategies. In particular, we propose an ex-post empirical analysis based on two alternative datasets: the components of S &P500 and the Fama and French 100 portfolio formed on size and book to market. According to this empirical analysis we observe better performances of the DEA preselection than the classic PCA factor models for large scale portfolio selection problems. Moreover, the proposed model outperform the S &P500 index and the strategy based on the fully diversified portfolio.

Decision-making Process in Infrastructure Projects and Losses due to Delayed Decision-making in Public Sector Projects of Pakistan

In recent years, the subject of decision-making in public infrastructure projects has become an important topic not only in project management but also in programme and portfolio management literature. Today, interdisciplinary projects are becoming a key focus in the collection, design and execution of government-sponsored programmes. With the various underlying risks and uncertainties, developed countries greatly depend on strategic planning regarding decision-making in infrastructure projects, whereas, in developing countries, the public sector programmes and projects are greatly affected by the lack of standardised and robust decision-making. This is primarily due to the lack of expertise to deal with the increasing complexity of the projects. This article aims at analysing the decision-making process in infrastructure development programmes/projects and discusses the factors affecting the decision-making process and thereby statistically chalking out the key losses caused by the delay in decision-making process in the public sector infrastructure projects of Pakistan. The findings will contribute towards understanding the criticality of decision-making process and mitigating the delay factors by encouraging to introduce standardisation in decision-making processes in the public sector. JEL Classification: C51, D7, D91, L74, O18

Mean-entropy uncertain portfolio with risk curve and total mental accounts under multiple background risks

In the previous uncertain portfolio literature on background risk and mental account, only a general background risk and a few kinds of mental accounts were considered. Based on the above limitations, on the one hand, the multiple background risks are defined by linear weighting of different background asset risks in this paper; on the other hand, the total nine kinds of mental accounts are comprehensively considered. Especially, the risk curve is regarded as the risk measurement of different mental accounts for the first time. Under the framework of uncertainty theory, a novel mean-entropy portfolio model with risk curve and total mental accounts under multiple background risks is constructed. In addition, transaction fees, chance constraint, upper and lower limits and initial wealth constraints are also considered in our proposed model. In theory, the equivalent forms of the models with different uncertainty distributions (general, normal and zigzag) are presented by three theorems. Simultaneously, the corresponding concrete expressions of risk curves are obtained by another three theorems. In practice, two numerical examples verify the feasibility and effectiveness of our proposed model. Finally, we can obtain the following unique and meaningful findings: (1) investors will underestimate the potential risk if they ignore the existence of multiple background risks; (2) with the increase of the return threshold, the return of the sub-portfolio will inevitably increase, but investors also bear the risk that the risk curve is higher than the confidence curve at this time.

Barriers to the Development of Port Operator Supply Chain Integration: An Evaluation in a Developing Country

Abstract In this multimethod research, we build on the customer portfolio literature to theorize a two-dimensional matrix between the strategic importance of a port operator's customers and the customers’ perceptions of the port operator's supply chain integration (SCI). The matrix highlights two mismatches: (1) important customers do not perceive a high degree of port operator SCI; and (2) low-importance customers perceive a high degree of port operator SCI. In the former, the port operator's investments are wasted, while in the latter the port operator reaps benefits from minimal investments. In our first study, we classify 1,441 customers of a Brazilian port operator into three levels of strategic importance: high, medium, and low. A survey instrument sent to these customers measured the perceived port operators’ SCI by 210 customers, and the analysis revealed a mismatch for 76 percent of the companies. The second study examines the reasons for the mismatch. Semi-structured interviews highlighted that the perceived unfairness of the port operator's operational decision making and negative experiences with other supply chain members negatively affected the SCI perceptions of customers. We also found a spillover effect: low-importance customers perceived a high level of SCI due to the port operator's operational investments in its important customers.

Making better foreign friendships: the effects of increased cultural diversity in alliance portfolios and portfolio configuration decisions on firm performance

PurposeThis paper aims to examine the effect of increases in alliance portfolio cultural diversity (IAPCD) on a firm’s performance and how portfolio configuration characteristics moderate this effect, aiming to enable managers to make better partner choice and portfolio configuration decisions to improve performance.Design/methodology/approachThe sample includes 2,326 focal firms from 93 countries that formed 7,616 alliances between the years 1992 and 2006. This study uses generalized method of moments estimation to examine the effects of portfolio changes on next year’s firm sales performance.FindingsResults reveal an inverted-U relationship between IAPCD and firm performance. Data limitations led to examining moderating effects only on the upslope portion of the inverted-U, indicating that an increasing percentage of joint ventures in a firm’s alliance portfolio strengthens IAPCD’s contribution to performance. Further, increased numbers of marketing alliances or research and development alliances and increased percentage of horizontal alliances in an alliance portfolio have a negative moderating effect.Research limitations/implicationsThe sample mostly covers large companies. The data indicate that nearly all firms are on the upslope of an inverted-U IAPCD–to–performance relationship, allowing testing of moderating effects pre-inflection point only.Practical implicationsFirms can leverage the additions of culturally diverse partners toward improved performance through astute configuration decisions in alliance portfolio composition.Originality/valueThis paper uses the knowledge-based view to contribute to the alliance portfolio literature. This study asserts that capacity constraints affect firms’ ability to realize performance gains when taking on culturally diverse partners, an effect moderated by portfolio configurations. This paper tests hypothesis with longitudinal data.

Knowledge Sharing in Alliances and Alliance Portfolios

We develop a model of knowledge sharing in alliances and alliance portfolios. We show that, once the issue of encouraging effective collaboration is put center stage, many standard intuitions of the learning race view and alliance portfolio literature are overturned or qualified. Partners engage in learning races in some cases, but exhibit “altruistic” behaviors in other cases. They may reduce their own absorptive capacity or increase the transparency of their own operations to facilitate their partner’s learning. In alliance portfolios, we show that not all substitutability between alliance portfolio partners is bad. We distinguish between substitutability in implementation and substitutability in rival benefits and show that the latter is conducive to knowledge sharing. Our work contributes toward putting the literature on learning alliances on a more solid foundation by emphasizing the importance of commitments that leading firms can make to encourage collaboration. This paper was accepted by David Simchi-Levi, business strategy.

Shaping the event portfolio management field: premises and integration

PurposeThis paper aims to examine how various academic disciplines shape the field of event portfolio management. Given the complex nature of portfolios comprising different genres that are studied separately from their respective disciplinary realms, the academic event portfolio landscape remains fragmented. This is against the nature of portfolios, which requires inter-disciplinarity and novel integration of genres, stakeholders and perspectives.Design/methodology/approachBased on a scoping literature review, this conceptual paper sets up a common ground for the academic study and industrial development of event portfolio management.FindingsA comprehensive view of event portfolio literature across disciplines reveals its hypostasis as a compound transdisciplinary field. The authors suggest a set of foundational premises whereby they identify 22 principal thematic areas that comprise this emerging field.Practical implicationsThe establishment of event portfolio management as a distinct field will help in the osmosis and diffusion of new ideas, models and best practices to run and leverage portfolios. The portfolio perspective highlights the need for cohesive learning to design comprehensive systems of events, implement joint strategies, solidify social networks, coordinate multiple stakeholders and develop methods of holistic evaluation.Originality/valueBy examining comprehensively event portfolio management as a transdisciplinary field, the authors have been able to identify principal research directions and priorities. This comprehensive analysis provides a synergistic ground, which at this embryonic stage of development, can be used to set out joint trajectories and reciprocal foci across the whole span of scholarship studying planned series of events.

Knowledge Framework and Evolution of Fuzzy Portfolio Research: A Bibliometric Analysis

Recently, wide applications of fuzzy set theory have attracted the attention of both researchers and practitioners. Fuzzy portfolio develops as a new area in the research field of investment portfolio. This paper investigates the major research hotspots, development trend, and evolution of fuzzy portfolio, which provides a systematic review of the current fuzzy portfolio literature. CiteSpace, the most commonly used bibliometrics software, is used in this article. According to the 602 articles with 15132 references, several conclusions can be summarized as follows: (1) Fuzzy portfolio becomes increasingly interdisciplinary with the connections among “Computer Science” and so on. (2) Most contributive authors are Markowitz and Zadeh. (3) South China University of Technology makes excellent performance in this research area and China is the most influential country. (4) European Journal of Operations Research is the cradle of plenty of crucial fuzzy portfolio investigations. (5) We find some research hotspots helpful to make scientific predictions of future trends by analyzing the keywords. By utilizing the effective bibliometric methods, we provide a comprehensive analysis and deep insights into the fuzzy portfolio research, enabling the individuals, especially the new beginners who are interested in this area to learn fuzzy portfolio, which will be of great help for their future explorations.

From Defined-Contribution Towards Target-Income Retirement Systems

The current trend towards Defined Contribution (DC) retirement systems around the world has rendered the risk management of pension funds crucial for the financial health of millions of people. Severe market downturns have put in evidence the need for more effective practices to control losses of retirement income for pension funds' investors. Although the move from the static allocation of policy portfolios toward target-date funds (TDFs) encouraged by regulators features significant improvements, the latter strategies completely ignore the variations in the cost of financing future consumption, which lessens the strategies' ability to control losses in retirement income. While optimal long-term portfolio selection literature emphasizes the importance of hedging against changes in the discount rates that determine the cost of financing future consumption, TDFs strategies, regulatory incentives, and reporting to pension funds' investors disregard the variations in long-term discount rates by focusing in absolute returns. We address these shortcomings by (i) developing performance metrics, such as DC funding-ratios, that foster appropriate incentives for pension fund managers and more sensible and simple reporting to their investors, (ii) introducing a series of asset allocation rules designed to secure a minimum level of target-income in retirement regardless of the returns of the risky assets in the portfolio. The strategies are consistent with insights from long-term portfolio theory and have the critical advantage of being free of any model or parameter estimation risks. We illustrate its advantages relative to a standard TDF strategy in terms of retirement security.

A minimax regret portfolio model based on the investor’s utility loss

The out-of-sample performance of relative robust portfolio optimization methodologies is still little explored in portfolio literature. In this paper, a new minimax regret portfolio optimization model is presented, where regret is defined as the utility loss for the investor. The real benefits of the proposed methodology were analyzed by comparing in-sample and out-of-sample performances of robust and non-robust portfolios. The results suggest that the proposed relative robust model has more value for risk-taking investors. Furthermore, the proposed relative-robust portfolio outperforms the non-robust portfolios, in many of the time windows under analysis, with the exception of the global minimum variance portfolio. Comparatively to the minimax regret model presented by Xidonas et al. (Eur J Oper Res 262:299–305,2017) and the absolute robust approach developed by Kim et al. (Econ Lett 122:154–158, 2014a), the proposed methodology presents itself as a more consistent approach since it generates portfolios that reveal greater stability concerning in-sample and out-of-sample performances. The developed relative robustness approach stands out as a valuable contribution for the assertion of robust optimization, in particular of relative robust methodologies, within the field of portfolio selection under uncertainty.

Understanding asset holdings of Vietnamese households

This paper examines household management in terms of saving and spending of financial and real (primarily gold and jewelry) asset holdings among Vietnamese households and the extent to which these are used when a major health shock or a family event-expenditure shock occurs. Using 2002–06 Vietnam Household Living Standard Surveys (VHLSS) pooled data, this study demonstrates that the range of assets households rely upon for precautionary saving is broader than those described in standard household saving portfolio literature. We find the enduring presence of non-conventional assets such as gold and other precious metals in many households, although this significantly declined during the reference period. We also found significant negative correlation between education level and household’s decision to own gold. On the other hand, the positive and significant correlation between the sale of gold and the incidence of having a hospitalized family member or a funeral suggests that Vietnamese households tend to rely on these assets as precautionary saving. This illustrates their valuable function beyond the more commonly known cultural purpose i.e. inheritance bequests, dowries and offerings. The study provides important insights for savings mobilization such as financial literacy education and reducing expenditure shocks by improving health insurance system.

Dynamic causality between the U.S. stock market, the Chinese stock market and the global gold market: implications for individual investors’ diversification strategies

ABSTRACTThis paper proposes a generalization of the prior VAR and EGARCH model to explore the linkage between returns and volatility transmissions in the U.S. stock market, the Chinese stock market, and the global gold market from 10 July 1996 to 20 July 2018. We found that past returns of the U.S. stock market can predict the current returns of the other two markets, and that significant reciprocal volatility transmission existed within and across all three markets. We further implemented average out-of-sample (OOS) forecasting to show that a risk-adjusted portfolio, such as mean-variance with sample estimator, does not outperform an equal-weighted portfolio. This provides insights for individual investors and helps to explain the ongoing disagreement in the portfolio literature concerning the effectiveness of risk-adjusted portfolios and equal-weighted portfolios when the number of assets is small.

Evolution, finance, and the population genetics of relative wealth

Attempts to use evolutionary ideas in finance have often neglected mathematical population genetics. Population genetics provides a natural approach to certain problems in finance that involve the relative wealth that accrues to competing investment strategies. In our model, competing investment strategies differ only in their allocation to a risky asset versus a riskless asset. Here we use results from the population genetics of natural selection to find the investment strategy that maximizes the expected increase in relative wealth. Though we focus on single-period analysis, some of our key findings are reminiscent of those from the growth optimal portfolio literature, e.g., the Kelly criterion.

Optimizing provision of ecosystem services using modern portfolio theory

Portfolio selection is a flexible tool that can be used to support natural resource decision-making to optimize provision of ecosystem services. The natural resource portfolio literature includes applications in fisheries, forestry, agriculture, spatial planning, invasive pest and disease surveillance, climate change adaptation, and biodiversity conservation, among others. We contribute to this growing literature by proposing a set of essential questions to guide the development and implementation of empirical portfolios for natural resource management that deal with (1) the nature and objectives of the portfolio manager, (2) the definition of assets to be included in the portfolio, (3) the way in which returns and risk are measured and distributed, and (4) the definition of constraints in the programming problem. The approach is illustrated using landings data from the Colombian Pacific, a data limited fishery, to set catch limits in fisheries at the ecosystem level. We also develop a set of constraints in the programming problem to simulate potential policy options regarding resource sustainability and social equity. The resulting efficient catch portfolios can be used to optimize the flow of provisioning ecosystem services from this fishery.

Customer portfolios – challenges of internal and external alignment

PurposeThe purpose of this paper is to extend the discussion about customer portfolios beyond simple identification of models and how they can be used for balanced resource allocation to a discussion about how portfolios should take into account views from relationship partners and how they should be aligned in internal as well as a relational context.Design/methodology/approachThe portfolio literature is reviewed (most recent, seminal, IMP related) and considered in the context of both the sales organization and the customers involved in the portfolio. A conceptual framework is introduced that helps improve the understanding of how customer portfolio models can actually be applied from a relational perspective.FindingsThe key aspects of the conceptual framework relate to how alignment of the relationships in the portfolio is achieved. Critical to this are the interaction spaces that facilitate communication relating to alignment and provide the context for the legitimacy of these actions to be discussed.Research limitations/implicationsThis framework needs to be empirically explored.Practical implicationsUnderstanding of alignment and misalignment processes in customer portfolios gives managers a tool to help to cope with the dynamic aspects of the customer portfolio. Recognition of the importance of communication to the process, the development of trust and the role of legitimacy also provides areas that managers can focus upon in their relationship management processes.Originality/valueThis conceptualization moves the consideration of relationship/customer portfolios beyond simply that of a resource allocation tool into a process that facilitates the use of the portfolio in relational processes and thus aids their understanding of how portfolios can be usefully applied.

Evolution, Finance, and the Population Genetics of Relative Wealth

Attempts to use evolutionary ideas in finance have often neglected mathematical population genetics. Population genetics provides a natural approach to certain problems in finance that involve the relative wealth that accrues to competing investment strategies. In our model, competing investment strategies differ only in their allocation to a risky asset versus a riskless asset. Here we use results from the population genetics of natural selection to find the investment strategy that maximizes the expected increase in relative wealth. Though we focus on single-period analysis, some of our key findings are reminiscent of those from the growth optimal portfolio literature, e.g., the Kelly criterion.