Energiewende für die Modernisierung des Industriestandorts Deutschland nutzen

The German industrial sector is a central component of its economic success. However, its investment activities are weak in comparison internationally. There are concerns that the high costs of the energy transition — one major part of climate change policy — could decrease industrial competitiveness and Germany’s allure as an industrial production location. To prevent this, German policymakers offer substantial exemptions for energy intensive industries in order to keep costs low. This study shows that only a few industrial branches have both high energy costs and a high export intensity, however. They generally feature a comparatively old capital stock. Overall, industry benefits from the demand for climate protection technologies. This calls for a shift in current policy, which should focus on incentives for innovative low carbon technologies. Exemptions should be granted to a limited number of energy intensive industries only for a limited time.     

Risk,Liability, and Monopoly

The paper explores a monopolist's safety and output choices when there are potentially large-scale claims that can lead to firm insolvency. Analysis of a monopolized market yields different conclusions than models of rule choice where perfect competition or simple cost-minimization are assumed. The following are shown to be true when consumers do not internalize expected, uncompensated hazard costs: (1) potentially insolvent firms may make more efficient safety and output choices than fully capitalized firms and (2), for any level of capitalization, compliance with a negligence rule—where liabilities are removed—may in fact result in less output and safety than under strict liability, where hazard costs are at least partially internalized. When consumers fully discount risks, a negligence rule dominates strict liability because it allows for less costly, credible commitments to profit- and welfare-maximizing safety investments. The analysis demonstrates that the optimal legal system—including financial responsibility requirements—is particularly sensitive to market structure and the characteristics of firms’ risk reduction technology     

Overhead aversion and facial expressions in crowdfunding

Overhead aversion—donors’ negative attitudes toward their donated money being used for overhead costs—has been explored in many contexts. In this study, we first confirm findings from prior research that high overhead costs imposed on project initiators have a negative effect on supporters' funding decisions and that higher overhead costs make project funding less successful in crowdfunding. Thereafter, we investigate how the negative effect of overhead costs on funding performance is moderated by the project initiator's facial expressions in the image on the project webpage. A smiling face mitigates overhead aversion, whereas a sad face amplifies it. We collected a large sample of data from Kiva, a loan-based crowdfunding platform, and used a deep learning algorithm to categorize the facial expressions of project initiators. Subsequently, a propensity score weighting approach was applied to minimize confounding effects. This empirical study indicates that the project initiator's smiling face, rather than a sad face, can alleviate supporters' overhead aversion.     

Hedging costs and joint determinants of premiums and spreads in structured financial products

Evaluating more than 317,000 discount certificates in the German secondary market, we find that premiums and spreads are endogenous and negatively related but depend on different key determinants. The fundamental determinants of the premiums are mainly profit-related, that is, dividends of the underlying, issuers’ credit risk, lifecycle effect, and competition, whereas hedging costs are less important. However, initial hedging costs (IHC) are priced into the premium in the case of large inventory changes. The spread is mostly determined by hedging costs and risk components, such as IHCs, rebalancing costs, volatility, scalper risk, and overnight gap risk—but also by dividends.     

Flight-to-liquidity: Evidence from China's stock market

In an order-driven and strictly regulated stock market, illiquidity risks' effects on asset pricing should be highlighted, particularly in such extreme market conditions as those in China. This paper utilizes panel data from China's stock market in an attempt to answer whether the illiquidity risk in various dimensions—including price impacts, the transaction speed, trading volume, transaction costs, and asymmetric information—can explain stock returns. We find that almost all dimensions of stock illiquidity are positively associated with excess stock returns. More importantly, smaller, less-liquid stocks suffer more liquidity costs, providing a strong evidence for “flight-to-liquidity.” Additionally, the transaction costs and asymmetric information, denoted by bid-ask spreads, robustly account for these illiquidity effects on stock pricing and differ from the findings in the U.S. market. We also find that the “flight-to-liquidity” can partially explain the idiosyncratic volatility puzzle, investors' gambling, and herding psychologies. This study provides substantial policy implications in regulation and portfolio management for emerging markets.     

The Economics of Business Process Design: Motivation,Information and Coordination Within the Firm

This paper presents a transaction cost analysis of the internal business processes of firms. Business processes are collections of activities which are technologically or managerially linked so that they jointly affect value added. Their organisation is characterised by their ‘architecture’—the allocation of responsibilities amongst individuals and groups and communication between them for information and coordination—and their incentive structure. The overall costs of organisation are determined by losses due to imperfect motivation of process members, which flows from the incentive structure, and imperfect information and coordination, which flow from the architecture, together with the resource costs associated with incentives and architecture. Perfect motivation corresponds to ‘team behaviour’ and a quantitative model, based on team theory, indicates how the best architecture depends on the degree interaction between activities comprising the business process.     

Lessons from Credit Bureaus for Improving the Market for Electronic Medical Records

Electronic medical records (EMRs) have tremendous potential to lower consumer medical costs and improve quality, yet their use in the United States remains extremely low. We explain the reasons for this market failure and then document the strikingly parallel problems in the lending market one hundred years ago. We investigate how the evolution of credit bureaus helped address market limitations in lending, and ask whether similar entities—what we call health information bureaus—might overcome similar problems in EMR adoption and interconnection.     

Competitive Industry Dynamics with Constant Costs

This paper integrates investment and production decisions in a dynamic model of a competitive industry where producers, facing a technology involving fixed input–output coefficients, employ quantity adjustment rules. Whether complex dynamic price behaviour is consistent with producers breaking-even over time is explored. The proportion of costs which are sunk through investment is shown to have a potentially dramatic impact on the price dynamics. The implications of an alternative hypothesis— that producers ‘normally’ use their avail able capacities and only do otherwise if events are sufficiently dramatic—are explored     

Brand equity,warranty costs,and firm value

Warranty management is frequently discussed in the context of businesses’ ongoing efforts to reduce costs. However, how marketing can contribute to warranty cost reduction is empirically unclear. This opacity led to the current study, which focused on how warranty claim costs and abnormal warranty accrual costs mediate the relationship between brand equity and firm value—as well as the contingencies for the mediation. The result shows that brand equity reduces warranty claim rate and abnormal warranty accrual rate through which it increases firm value. In addition, product innovativeness decreases the association between brand equity and warranty claims and between brand equity and abnormal warranty accruals. As such, the findings revealed the roles of brand equity and product innovation in warranty cost reduction and thus suggested the need for managers to build and leverage their marketing resources when attempting to control warranty costs.     

The social dimension and cohesion: Complementary or contradictory?

It is again being argued that the low labour costs and social standards in countries on the periphery of the EC—Greece, Ireland, Portugal and Spain—jeopardise employment in the northern EC countries and the social safety net they have constructed. A common social policy harmonising employment and social standards to safeguard the social status quo is therefore being advocated. How valid is this argument? What consequences would the implementation of such a “social action programme” have for the economies on the periphery? How are the Community’s objectives with regard to cohesion and social policy to be reconciled?     

Will the Health Care Cost Curve be Bent? Where We Stand at the Start of 2011

This overview shows the change in health care costs in the aggregate, as a share of GDP, and—along with other programs—the share of entitlements in the federal budget. These trends are unsustainable. Many current proposals for reform imply a one-time downward shift in the curve but do not affect its long-run shape. Thus, they simply postpone consequences for a few years rather than solve the main problem. What must be done is to bend the health care cost curve so that its rate of growth is more in line with that of GDP.     

MODELING UNCERTAIN FORECAST ACCURACY IN SUPPLY CHAINS WITH POSTPONEMENT

We examine a situation where a manufacturer operates in a two‐mode production environment. The first mode could involve overseas vendors and manufacturing facilities. If additional units are later required, the company must use its second mode—more expensive last‐minute domestic vendors and manufacturing sites. We develop a new methodology for analyzing the impact of forecast accuracy on the decision to postpone production. We examine the interaction of forecast accuracy, shortage vs. holding costs, transportation costs and the cost of postponing production in the supply chain of a single product facing uncertain demand. Our model can be used to analyze the cost of important changes, such as increasing forecast accuracy, reducing the cost of backorders, lowering the cost of delaying production, or lowering transportation costs. Our model allows a firm to understand its overall cost structure so that it can accurately evaluate the impact of improved forecast accuracy and lowered costs in the context of postponement.     

The Consumer Costs of Food Certification: A Pilot Study and Research Opportunities

Certification labels have become a ubiquitous feature on food products across grocery store shelves. Although it is widely acknowledged that certified products often garner higher prices than their noncertified competition, less is known regarding what those price differences are based on, and what the personal, political, or ethical implications are for consumers. This research note argues for greater attention to the implications of certified food prices—which we conceptualize as the “consumer costs” of food certification. The paper discusses the theoretical linkages between food certifications and prices, and outlines the resulting consumer costs of which we are concerned. Through a pilot study in Salt Lake City, Utah, we investigate prices found on certified grocery store rice, and consider the causes and implications of the consumer costs of food certification.     

TRUST AND VIRTUAL DISTRICTS: EVIDENCE FROM THE MILAN INTERNET EXCHANGE

Peering decisions between Internet Service Providers (ISPs) contain substantial non‐measurable aspects requiring trust and informal cooperation among peering partners. We study whether virtual districts are observed between Internet peers. Our empirical analysis of the bilateral peering decisions at the Milan Internet Exchange confirms that these decisions are significantly influenced by: travel time either between ISPs' headquarters or towards the exchange—a proxy for distance, bandwidth—a proxy for size, and European connectivity. Proximity still plays a role in reducing the transaction costs of monitoring and punishing deviant behavior within an industry where trust is essential for Internet universal connectivity.     

Transactions data tests of efficiency: An investigation in the Singapore futures markets

The aim of this article is to test the profitability of technical trading rules in the intra‐day currency futures market. A wide range of technical strategies are applied to tick data over a two‐year period for two currency futures—Japanese Yen (JY) and Deutschemark (DM)—traded in the Singapore International Monetary Exchange. The study finds that after incorporating transactions costs and testing for the significance of the profits using a bootstrap methodology, none of the technical trading systems produce significant returns. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20:687–704, 2000     

Local costs of distribution,international trade costs and micro evidence on the law of one price

This paper connects trade flows to deviations from the law of one price (LOOP) in a structural model of trade and retailing. It accounts for the observed cross-country dispersion in prices of goods, based on retail price survey data, by focusing on two sources of goods market segmentation — (i) international trade costs, and (ii) non-traded input costs of distribution. I find that a multi-sector Ricardian trade model, ala Eaton–Kortum, augmented with a distribution sector, can account for the average price dispersion for a basket of goods fully and generates 70% of the variation in price dispersion across goods within the basket. While tradability of goods is important in explaining the average price dispersion for the basket of goods, distribution costs are important in explaining why, within the basket, some goods show more price dispersion than others.     

A personal adversity model of justifying the costs of entrepreneurial action: The case of oil thieves in the Niger DELTA

While entrepreneurship can generate economic and social benefits, it can also be a source of negative outcomes. We need to gain a deeper understanding of how individual entrepreneurs interpret their context and engage in entrepreneurial action that can generate substantial negative outcomes. In this paper we shed light on the entrepreneurial process at the micro-level by exploring how bunkerers—oil thieves—engage in, justify, and persist with entrepreneurial action that, while generating some benefits for the entrepreneurs and the local community, causes substantial destruction to the local environment, community, and the entrepreneurs' health. By inductively generating a personal adversity model of justifying entrepreneurial action that generates substantial negative outcomes (for the local community and environment), we provide new insights into (1) the link between aspects of entrepreneurship under adversity and substantial costs (and some benefits) experienced by local communities already facing adverse conditions, (2) how entrepreneurs' claim varying levels of agency in the same justification of the same action and its negative consequences, and (3) how entrepreneurs entangle the self and others to justify their actions and its costs.     

Why do companies issue convertible bond loans? An empirical analysis for the Canadian market

To identify issuer motives, we study the determinants of announcement effects of convertible debt issues in the Canadian market. Classified into equity‐ and debt‐like, wealth effects are significantly more negative for equity‐like convertible bond issuers. Equity‐like convertibles are significantly negatively affected by agency costs of equity. However, agency costs of debt have no significant effect on debt‐like convertibles. Consistent with Stein (1992), this suggests convertibles in particular represent a substitute for equity. Moreover, convertible debt offers announced by income trusts experience significantly less negative wealth effects than offers by nontrusts—a finding explained by a more debt‐like convertible design, very low agency costs of equity in case of income trusts, or both. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.     

Added distance,entry mode choice,and the moderating effect of experience: The case of British MNEs in emerging markets

Distance has been viewed as a crucial determinant of the internationalization strategy of firms. Nonetheless, in recent years, there has been considerable debate with regards to, first, the type of distance considered most important when it comes to explaining the internationalization strategy of firms, and, second, how distance should be measured. In our study, we argue that a developed market multinational enterprise (DMNE)’s decision regarding the mode of entry into an emerging market (EM) will be affected by the geographic and administrative distance between the locations in which the MNE has previously held operations. Drawing our arguments on transaction costs economics (TCE) and Internalization Theory, we propose that, for low and high geographic and administrative distance, DMNEs will opt to enter EMs via a wholly owned subsidiary, while for moderate levels of distance via a joint venture. Furthermore, we argue that DMNEs’ previous international experience in EMs will have a positive effect on the suggested U‐shaped relationship, alleviating the negative effects associated with the coordination and knowledge dissipation costs incurred as a result of the level of distance. Our study contributes to existing literature both theoretically—notably via the examination of under‐researched facets of distance on entry mode choice—and also methodologically—through the adoption of a novel methodological approach in measuring distance. We test our hypotheses against a data set comprising 316 entries of FTSE 250 British MNEs in 39 EMs spanning the period 1971–2010.     

A guide to the seen costs and unseen benefits of e-commerce

As consumer shopping preferences shift from traditional retail channels toward e-commerce, the negative effects of e-commerce are easy to see and are often noted in the popular press. Yet, the benefits of this shift are often unseen. In this article, we first consider empirical evidence that suggests technological innovation is generally a net positive for society. We look at the unseen benefits along with each of the seen costs of e-commerce growth to fully understand the impacts on society. To do this, we consider packaging and waste, traffic and emissions, and energy and resource consumption—all considered costs of e-commerce. Based on this evidence, we propose that policymakers should exercise caution before developing policies that may alter this shift and limit innovation.