Coming attraction

Francesca Cornelli, Richard D'Aveni, Andrew Kakabadse, Rosabeth Moss Kanter, Markus Reitzig, Fons Trompenaars and Kim Warren share their latest research.     

The effect of IMF lending on the probability of sovereign debt crises

This paper explores empirically how the adoption of IMF programs affects sovereign risk over the medium term. We find that IMF programs significantly increase the probability of subsequent sovereign defaults by approximately 1.5–2 percentage points. These results cannot be attributed to endogeneity bias as they are supported by specifications that explain sovereign defaults and program participation simultaneously. Furthermore, IMF programs turn out to be especially detrimental to fiscal solvency when the Fund distributes its resources to countries whose economic fundamentals are already weak. Our evidence is therefore consistent with the hypothesis that debtor moral hazard is most likely to occur in these circumstances. Other explanations that point to the effects of debt dilution and the possibility of IMF triggered debt runs, however, are also possible.     

An information-based adaptive strategy for resource exploitation in competitive scenarios

Given an exploitation problem, in which a number of agents compete for a limited renewable resource, the optimal harvesting strategy depends on the ratio between resource availability and exploitation effort. For scarce resource a purely competitive, greedy strategy outperforms a more collaborative approach based on the Collective Intelligence, while for more abundant resource the opposite holds. The rationale for this behaviour lies in the amount of information each strategy is able to provide and a combined strategy is possible according to which agents choose dynamically the most informative strategy according to a minimum entropy criterion. This approach, which provides best performance for both under and over-exploited scenarios, can be used to monitor the resource status for management purposes and is effective in both centralised and decentralised decision making.     

Home-field advantage or a matter of ambiguity aversion? Local bias among German individual investors

This paper investigates whether familiarity induced by ambiguity aversion can help explaining the local bias phenomenon among individual investors. Using geographic closeness as a proxy for investor familiarity, we find that investors pull out of (unfamiliar) remote stocks and pour into (familiar) local stocks during times of increased market uncertainty. Moreover, the magnitude of this ‘flight to familiarity’ increases in the spread of an investor's ambiguity (about expected returns) between local and remote stocks. Our results prove robust to a number of alternative explanations of local bias. Specifically, we rule out a ‘home-field advantage’, where investors are able to translate information advantages about nearby companies into excess returns on their local stockholdings. We conclude that individual investors’ local bias is induced by ambiguity aversion in the portfolio selection process rather than a trading strategy based on superior information about local companies.     

On the competition enhancing effects of exclusive dealing contracts

Antitrust scholars have argued that exclusive contracts have anticompetitive, or at best neutral effects, if no efficiencies are generated. In contrast, this paper shows that exclusive contracts can have procompetitive effects, provided buyers are imperfect downstream competitors and contract breach is feasible. In that case, an efficient entrant is not necessarily foreclosed through exclusive contracts but induces buyers to breach. Because breaching buyers have to pay expectation damages to the incumbent, the downstream profits they obtain when breaching must be large enough. Therefore, the entrant needs to set a lower wholesale price than absent exclusive contracts, leading to lower final consumer prices and higher welfare.     

EU–Finanzverhandlungen gescheitert: Chance zum Nachdenken

Nach den gescheiterten Referenden zur EU-Verfassung in Frankreich und in den Niederlanden wurde den Verhandlungen über eine neue finanzielle Vorausschau für die Jahre 2007 bis 2013 eine neue Bedeutung beigemessen. Gerade auf dem ohnehin schwierigen Feld der Finanzen sollte die in die Krise geratene EU Handlungsfähigkeit beweisen. Dieses Ziel wurde offenbar gründlich verfehlt. Woran sind die EU-Finanzverhandlungen gescheitert? Wie könnte eine Einigung erreicht werden?

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Dr. Markus Euler, 30, ist wissenschaftlicher Mitarbeiter am Institut für Finanzwissenschaft der Universität Mainz.     

Die Pfandpflicht für Einweggetränkeverpackungen

Am 20. Januar 2005 wurde die dritte Novellierung der Verpackungsverordnung vom Bundestag beschlossen und die Pfandpflicht für Einweggetränkeverpackungen neu geregelt. Sind Mehrwegverpackungen immer umweltfreundlicher als Einwegverpackungen? Dient die neue Regelung langfristig als Vorbild für eine europaweite Pfandpflicht?Markus Groth, 29, Dipl.-Ökonom, ist wissenschaftlicher Mitarbeiter am Forschungs- und Studienzentrum Landwirtschaft und Umwelt (ZLU) an der Georg-August-Universität in Göttingen.