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Aims to explore the future challenges and opportunities for business schools.

Reviews the existing situation for business schools, and draws inferences for the future.

In rapidly developing markets the traditional business school model will most likely survive, assuming that it can be scaled up successfully to meet strong but standard demand for management education. In mature countries it will have to evolve to satisfy a more complex environment with peculiar demands from both students and their employers.

In mature markets, top business schools will either transform themselves to meet those demands or cede some of the terrain to alternative providers of business education.

A number of recent trends are influencing business schools towards better teaching and accounting for the role of “business in society” (BiS). The following article looks at selected results from the most comprehensive survey ever of BiS teaching and research in European academic institutions – undertaken in 2003 by the European Academy of Business in Society and Nottingham University Business School’s International Centre for Corporate Social Responsibility (ICCSR), with the support of the European Foundation for Management Development (efmd). The survey found, among other things, that there is a clear demand from business and students for research, education and training on BiS issues; that teaching on the role of BiS is still far from being “mainstream” to the business curriculum; and that the diversity of European approaches and terms signal both a strength and a challenge for the BiS debate. The article looks at how a wide range of initiatives are being undertaken by both business schools and business, and often in unique partnerships, to address these challenges and move the BiS research and education agenda forward. Finally, the thorny issue of accreditation is tackled. Improving accreditation processes will play an important part in bringing the business education community up to speed with the new roles and responsibilities they are being asked to fulfill by a wide range of stakeholders (students, society, business and government). As both educators and mediators in the debate, business schools have a valuable contribution to make. In turn, they too are increasingly being made accountable for their own social and environmental impact. The article argues that business schools can choose whether they want to lead, respond, or partner with business to meet these challenges. However, it seems they can no longer afford to ignore it as a passing fad.

Using Japan REITs stock data, this paper examines the risk‐return relations conditional on up and down markets periods. The results show that beta is significantly and positively (negatively) related to realized returns in up (down) markets before and after controlling for extra risk factors. The same conditional results are found for unsystematic risk and total risk, providing evidence that investors do not hold well‐diversified portfolios. Though skewness is significantly priced, the coefficients are unexpectedly positive (negative) in up (down) markets, indicating that investors dislike positively skewed portfolios and would ask for compensation if they are required to hold them during up markets. One possible reason is that the investors have a poor concept of skewness and/or they are too aggressive during bullish markets and so they ignore the benefit of positive skewness. Subsidiary results highlight that there is no seasonal effect in the conditional relation between beta/unsystematic risk/total risk/skewness and returns. This study is the first comprehensive study of the risk‐return relations in Japan REITs market, which provides out‐of‐sample evidence relative to earlier tests on Asian and international stock markets. The findings give important insights and provide useful guidance on investing in Japan REITs market.

A thick cost frontier methodology is used to estimate pre‐ and postmerger X‐inefficiency in 348 mergers approved by the OCC in 1987/88. Efficiency improved in only a small majority of mergers, and these gains were unrelated to the acquiring bank's efficiency advantage over its target. These results are not consistent with the traditional market for corporate control story, in which well‐managed firms acquire poorly managed firms and subsequently improve their performance. Rather, the results suggest motivations other than cost efficiencies were driving U.S. bank mergers in the late 1980s. Efficiency gains were concentrated in mergers where acquiring banks made frequent acquisitions, suggesting the presence of experience effects.

This paper determines a simple transformation that nearly linearizes the bond price formula. The transformed price can be used to derive a highly accurate approximation of the change in a bond price resulting from a change in interest rates.

A logarithmic transformation exactly linearizes the price function for a zero coupon bond and a reciprocal transformation exactly linearizes the price function for a perpetuity. A power law transformation combines aspects of both types of transformations and provides a superior approximation of the bond price sensitivity for both short-term and long-term bonds.

It is demonstrated that the new formula, based on power-law transformation, is a much better approximation than either the traditional duration-convexity approximation and the more recently developed approximations based on logarithmic transformation of the price function.

The new formula will be used by risk managers to perform stress-testing on bond portfolios. The new formula can easily be inverted, making it possible to relate the distribution of prices (which are observable in the market) to the distribution of yields (which are numerical solutions that are not directly observable).

The purpose of this paper examines some of the controversies facing business schools in their future evolution and pays particular attention to their competitive positioning as centres of management research.

The paper combines and builds on current literature to provide an analytic overview of the environment and competitive challenges to management research in business schools.

The paper assesses the impacts of a globalized environment and ever‐changing competitive dynamics, for example in terms of the supply of high‐quality faculty, on the activity of management research in business schools. It points out that research impacts must be judged not only in terms of theoretical development but also managerial and policy impact. However, managerial impact is difficult to measure and the “voice of practice” must be carefully identified.

The paper identifies the current challenges for undertaking innovative research in business schools in light of their competitive environment. Three interrelated conjectures focusing particularly on managerial impact are raised which identify problems and limitations of current debates on management research in business schools.