jean-louis bertrand
ESSCA School of Business, Finance department, Faculty Member
Abstract Franchisees are often small business owners whose sales, profitability, and financial equilibrium in the first years of operation are increasingly being impacted by weather variability. The literature has analysed the... more
Abstract Franchisees are often small business owners whose sales, profitability, and financial equilibrium in the first years of operation are increasingly being impacted by weather variability. The literature has analysed the effectiveness of various guarantees offered by franchisors in franchise agreements, but the case of hedging the local weather risk to which each franchisee is exposed has never been addressed. Using Design Science, we show that franchisors operating in one of the activities which are among the 70% of activity sectors exposed to weather risks, can support the setup of franchises, measure their weather risk and incorporate financial protections against the consequences of adverse weather in the franchise agreement. By doing this they can reduce the risk of financial distress, provide an innovative service, and reinforce the quality of the relationship with their franchisees.
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While India is set to become the world’s most populous country by 2050, it is also the home to the world’s largest number of unbanked individuals. This paper aims to investigate the profitability issue with a focus on public banks. Using... more
While India is set to become the world’s most populous country by 2050, it is also the home to the world’s largest number of unbanked individuals. This paper aims to investigate the profitability issue with a focus on public banks. Using a new methodology based on comparisons tests and panel analysis that test unobserved heterogeneities between banks. We show that public banks are not low performers, nor can private banks be considered high performers Finally, we show that the proportion of non-performing assets (NPAs) is a real concern and requires urgent attention of government and regulators for Indian banks to serve profitability their home market. Banks that make more profits on non-interest income are not necessarily less profitable than others. Further, outcomes favour the ideas that if public banks are able to clean-up their non-performing assets as well as follow a sound prudential regulation, their profits could strongly grow. Future reforms must consider the public bank’s...
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The influence of weather on stock markets has mainly been studied in the framework of behavioural finance. Using a weather-extended CAPM applied to European energy firms, we show that weather-related disclosures have little influence on... more
The influence of weather on stock markets has mainly been studied in the framework of behavioural finance. Using a weather-extended CAPM applied to European energy firms, we show that weather-related disclosures have little influence on returns, and highlight a significant market inefficiency due to a lag effect of weather. We find that the error between expected and observed returns decreases on average by 20% when using weather-extended CAPM compared to the traditional CAPM. As climate variability increases, these results should encourage analysts to consider the impact of weather on the stock returns of the 70% of companies exposed to the weather.
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Résumé Les dérivés climatiques sont des instruments financiers qui permettent aux entreprises de se prémunir contre les aléas du climat. En 2006, ce marché a connu une croissance sans précédent, mais les volumes sont encore faibles au... more
Résumé Les dérivés climatiques sont des instruments financiers qui permettent aux entreprises de se prémunir contre les aléas du climat. En 2006, ce marché a connu une croissance sans précédent, mais les volumes sont encore faibles au regard du montant des risques que subissent les entreprises. Cet article analyse la place que les entreprises européennes accordent aujourd'hui au risque climatique et à sa gestion en s'appuyant sur deux études menées auprès de trésoriers de grands groupes et de chefs d'entreprises de PME. Il définit également les risques climatiques et retrace l'évolution des outils de gestion en évoquant les limites et contraintes qui pèsent encore sur ces marchés. Abstract Weather derivatives are financial products which enable companies to hedge against adverse weather conditions. In 2006, the derivatives market experienced a dramatic growth, even if volumes remained extremely weak when compared to the amount of corporate exposure to weather risks. ...
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Ce papier expose les limites d’une microfinance commercialisee, et contribue a l’analyse des risques en microfinance notamment pour les economies rurales des PED. Une analyse de risque meteorologique appliquee au monde cooperatif agricole... more
Ce papier expose les limites d’une microfinance commercialisee, et contribue a l’analyse des risques en microfinance notamment pour les economies rurales des PED. Une analyse de risque meteorologique appliquee au monde cooperatif agricole francais permet d’illustrer le chemin parcouru et les limites qui subsistent. Les derives climatiques utilises comme couverture aux prets d’exploitation agricole meritent davantage d’investissement et de recherche.
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La crise financiere de 2008 est-elle imputable aux incessantes innovations financieres ou, au contraire, a la forte resistance des acteurs de la finance a l’evidente amelioration qu’apporteraient d’autres approches que celles des modeles... more
La crise financiere de 2008 est-elle imputable aux incessantes innovations financieres ou, au contraire, a la forte resistance des acteurs de la finance a l’evidente amelioration qu’apporteraient d’autres approches que celles des modeles dominants actuels.
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Purpose Retailers have long been aware that weather affects the sales of a myriad of products, but until now, most were not in a position to manage the risks weather presents. Rising weather variability combined with advances in... more
Purpose Retailers have long been aware that weather affects the sales of a myriad of products, but until now, most were not in a position to manage the risks weather presents. Rising weather variability combined with advances in weather-index financial instruments have prompted new interest in investigating the relationship between sales and weather. The purpose of this paper is to explore the impact of changes in weather on UK retail sales, to estimate the contribution of weather to sales, and evaluate the maximum potential loss caused by adverse weather, for each season and retail sector. Design/methodology/approach The authors present a methodology to identify and quantify the extent to which a company is exposed to weather risks, in order to incorporate them into its risk management policy and take actions to mitigate these risks. For each season and each retail category, the authors provide a measure of the impact of weather on sales that can be used as a benchmark to analyse s...
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Retail activities are increasingly exposed to unseasonal weather causing lost sales and profits, as climate change is aggravating climate variability. Although research has provided insights into the role of weather on consumption, little... more
Retail activities are increasingly exposed to unseasonal weather causing lost sales and profits, as climate change is aggravating climate variability. Although research has provided insights into the role of weather on consumption, little is known about the precise relationship between weather and sales for strategic and financial decision-making. Using apparel as an illustration, for all seasons, we estimate the impact on sales caused by unexpected deviations of daily temperature from seasonal patterns. We apply Seasonal Trend decomposition using Loess to isolate changes in sales volumes. We use a linear regression to find the relationship between temperature and sales anomalies and construct the historical distribution to determine sales-at-risk due to unseasonal weather. We show how to use weather derivatives to offset the potential loss. Our contribution is twofold. We provide a new general method for managers to understand how their performance is weather-related. We lay out a ...