The effect of the financial crisis on systemic trust

Policymakers throughout Europe are faced with the challenge of re-establishing trust, and especially systemic or institutional trust, that has been lost in the wake of the financial crisis. This paper looks at recent empirical evidence concerning the reaction to the crisis in terms of citizens’ diminished levels of systemic trust. Special attention is paid to the confidence invested in political institutions at the European and the national level, on the one hand, and in the free market economy, on the other.     

Einkommensentwicklung und Bevölkerungsbewegung

Ohne ZusammenfassungMit 3 Textabbildungen     

Duplik zur vorstehenden „Erwiderung“ F. Mertschs

Ohne Zusammenfassung     

Corporate governance and IPO underpricing in a cross‐national sample: A multilevel knowledge‐based view

Prior studies of IPO underpricing, mostly using agency theory and single‐country samples, have generally fallen short. In this study, we employ the knowledge‐based view (KBV) to explore underpricing across 17 countries. We find that agency indicators are insignificant predictors, board of director knowledge limits underpricing, and external knowledge both substitutes for and complements internal board knowledge. This third finding suggests that future KBV studies should consider how internal and external knowledge states interact with each other. Our study offers new insights into the antecedents of underpricing and extends our understanding of comparative governance and the KBV of the firm. Copyright © 2014 John Wiley & Sons, Ltd.     

Why Do Banks Provide Leasing?

Banks are engaging in leasing activities at an increasing rate, which is demonstrated by aggregated data for both European and U.S. banking companies. However, little is known about leasing activities at the bank level. The contribution of this paper is the introduction of the nexus of leasing in banking. Beginning from an institutional basis, this paper describes the key features of banks’ leasing activities using the example of German regional banks. The banks in this sample can choose from different types of leasing contracts, providing the banks with a degree of leeway in conducting business with their clients. We find a robust and significant positive impact of banks’ leasing activities on their profitability. Specifically, the beneficial effect of leasing stems from commission business in which the bank acts as a middleman and is not affected by the potential defaults of customers.     

The Business Value of Process Flexibility

Promising to cope with increasing demand variety and uncertainty, flexibility in general and process flexibility in particular are becoming ever more desired corporate capabilities. During the last years, the business process management and the production/operations management communities have proposed numerous approaches that investigate how to valuate and determine an appropriate level of process flexibility. Most of these approaches are very restrictive regarding their application domain, neglect characteristics of the involved processes and outputs other than demand and capacity, and do not conduct a thorough economic analysis of process flexibility. Against this backdrop, the authors propose an optimization model that determines an appropriate level of process flexibility in line with the principles of value-based business process management. The model includes demand uncertainty, variability, criticality, and similarity as process characteristics. The paper also reports on the insights gained from applying the optimization model to the coverage switching processes of an insurance broker pool company.     

Vorschau

VORSCHAU

Vorschau     

The 52-week high strategy and information uncertainty

This paper examines the driver of the 52-week high strategy, which is long in stocks close to their 52-week high price and short in stocks with a price far below their one-year high, and tests the hypothesis that this strategy’s profitability can be explained by anchoring—a behavioral bias. To test the null, we examine whether the 52-week high criterion has more predictive power in cases of larger information uncertainty. This hypothesis is based on the psychological insight that behavioral biases increase in uncertainty. For six proxies of ambiguity, we document a positive relationship to returns of 52-week high winner stocks and a negative relationship to returns of 52-week high loser stocks. The opposite effect of information uncertainty on winner and loser stocks implies that the 52-week high profits are increasing in uncertainty measures. Moreover, the study documents that the six variables have a similar impact on momentum profits. Hence, we cannot reject the hypothesis that anchoring explains the profits of the 52-week high strategy and that it is the driver of the momentum anomaly.     

An econometric analysis of asymmetric volatility: Theory and application to patents

The purpose in registering patents is to protect the intellectual property of the rightful owners. Deterministic and stochastic trends in registered patents can be used to describe a country's technological capabilities and act as a proxy for innovation. This paper presents an econometric analysis of the symmetric and asymmetric volatility of the patent share, which is based on the number of registered patents for the top 12 foreign patenting countries in the USA. International rankings based on the number of foreign US patents, patent intensity (or patents per capita), patent share, the rate of assigned patents for commercial exploitation, and average rank scores, are given for the top 12 foreign countries. Monthly time series data from the United States Patent and Trademark Office for January 1975 to December 1998 are used to estimate symmetric and asymmetric models of the time-varying volatility of the patent share, namely US patents registered by each of the top 12 foreign countries relative to total US patents. A weak sufficient condition for the consistency and asymptotic normality of the quasi-maximum likelihood estimator (QMLE) of the univariate GJR(1,1) model is established under non-normality of the conditional shocks. The empirical results provide a diagnostic validation of the regularity conditions underlying the GJR(1,1) model, specifically the log-moment condition for consistency and asymptotic normality of the QMLE, and the computationally more straightforward but stronger second and fourth moment conditions. Of the symmetric and asymmetric models estimated, AR(1)–EGARCH(1,1) is found to be suitable for most countries, while AR(1)–GARCH(1,1) and AR(1)–GJR(1,1) also provide useful insights. Non-nested procedures are developed to test AR(1)–GARCH(1,1) versus AR(1)–EGARCH(1,1), and AR(1)–GJR(1,1) versus AR(1)–EGARCH(1,1).