Manufacturing restructuring and the role of real exchange rate shocks

Using a new and extensive micro data set we investigate the impact of a change in international competitive pressure on industrial performance and restructuring. Unlike previous studies we are able to account for the heterogeneity across firms in their exposure to foreign competition. We focus on a situation akin to a natural experiment, and examine the impact of a sharp real appreciation of the Norwegian Krone in the early 2000s on Norwegian manufacturing firms which differ substantially in their trade orientation. A change in the real exchange rate (RER) affects a firm through three different channels: (i) firm's export sales, (ii) firm's purchases of imported inputs, and (iii) import competition faced in the domestic market. Unlike previous studies, we are able to examine all three channels. Both net exporters and import-competing firms were exposed to increased competition due to the real appreciation. Both groups reacted by shedding labor, but only the first group experienced increasing labor productivity. Partly, the productivity improvements came from measured TFP gains, while capital deepening does not appear to have been affected by the shock.     

Herding,contrarianism and delay in financial market trading

Herding and contrarian behaviour are often-cited features of real-world financial markets. Theoretical models of continuous trading that study herding and contrarianism, however, usually do not allow traders to choose when to trade or to trade more than once. We present a large-scale experiment to explore these features within a tightly controlled laboratory environment. Herding and contrarianism are more pronounced than in comparable studies that do not allow traders to time their decisions. Traders with extreme information tend to trade earliest, followed by those with information conducive to contrarianism, while those with the theoretical potential to herd delay the most. A sizeable fraction of trades is clustered in time.     

Contradictory approaches? On realism and constructivism in the social sciences research on risk, technology and the environment

This article discusses approaches to researching the risk-problems of industrial societies. It examines why the risk-constructivism neglects questions of the material production of risks in favor of questions of their communicative construction, while the risk-realism does it the other way round. Subsequently the possibilities of a synthesis of both approaches are being considered. The societal functions of risk-constructions are accordingly not limited to their efficacy in the sphere of social communication processes. They lie as well in the field of regulation of the metabolism of societies and their ecological environment. The validity of risk-constructions is consequently not only bound to their cultural weightiness, whether one believes in them or not, but to their capacity to manage realities, measured by their ability to bring expectations in accordance with events. Risk-constructions are not only transformed in the milieu of discourses, but also in the context of social practices which give the opportunity to acquire experiences and to perform learning processes in order to optimize risk-constructions as regulative instruments.     

The Britney Spears universe: Social media and viral marketing at its best

Britney Spears is one of the most successful female recording artists in contemporary music, world-wide. Herein, we analyze how Britney Spears and her team of employees rely on social media applications to communicate around this pop icon, and create and maintain her celebrity brand image. Specifically, we look at the use of social media during the launch of her single ‘Hold It Against Me’ and the associated album Femme Fatale in early 2011. The interplay of postings on Twitter, YouTube, and Facebook—combined with comments on her webpage, BritneySpears.com—can be seen as a prime example of social media usage to support new product introductions.     

PARADIGM DEPLETION,KNOWLEDGE PRODUCTION AND RESEARCH EFFORT: CONSIDERING THOMAS KUHN'S IDEAS

This paper deals in a Stackelberg differential game with Kuhn (1962) ideas of paradigm depletion and resiliency. Paradigm is considered as potential knowledge, as a stock of ideas that can be harvested to produce science. The results are: (i) paradigm depletion can be optimal, (ii) the optimal editor's shadow price of potential knowledge must be non‐positive, if it is positive, the editor is a keeper of the orthodoxy rather than a scientist, (iii) editor's and/or researcher's impatience is bad for science, and (iv) in equilibrium editor's behavior does not matter for research effort, while only editor's behavior matter for the paradigm.     

It is all about the emotional state: Managing tourists’ experiences

When consuming tourism and leisure services tourists do not only expect professional services but also desire satisfying emotional experiences. To measure satisfaction with emotional experiences traditional service quality and satisfaction research is outdated because those models are based on cognitive components and neglect emotional aspects of customer satisfaction. This research investigates factors determining the service setting that enhance customers’ emotional reactions and lead to psychological states and behaviours. Referring to existing theories and empirical evidence in environmental psychology, a research model is developed explaining the relationship between different components of service settings influencing emotional states and satisfaction. Guests’ emotions are assessed during service consumption in hotel settings in order to investigate the importance of emotional states. The paper derives three main factors (leisure experience, hardware and human ware) significantly influencing emotional states of customers in high-quality hotels.     

Unemployment,institutions, and interdependencies: identifying successful reforms

Labor market reforms, which reduce institutional rigidities, are assumed to be a well-suited approach to lower unemployment. However, it is still not perfectly clear which reforms actually lead to a fall in unemployment. One crucial issue is that reforms do not work in isolation, but have labor market effects which depend on other institutional factors. Such institutional interactions have rarely been considered in empirical macroeconomic studies in a systematic way, mainly due to model uncertainty. As a solution to this problem, a Bayesian model averaging approach is adopted in this paper to identify robust and significant institutional interactions for unemployment. Using a panel data-set for 17 OECD countries from 1982 to 2005, five robust and significant interaction terms are identified, and country-specific reform effects for the institutional indicators are derived.     

Verteilungswirkungen des Erneuerbare-Energien-Gesetzes

The ongoing economic criticism of the German Renewable Energy Act (EEG) recently started focusing on distributional effects, too. A team of authors at the Cologne Institute for Economic Research is worried about high costs for electricity consumers. They argue since electric power consumption is only slightly correlated with income, the fi nancial burden of the EEG is substantially higher for low-income households than for high-income households. This regressive effect is even increased since particularly high-income households have installed photovoltaic systems and thereby gain from green power subsidies. In contrast, other authors argue that this debate on distributional effects, while desirable, often scandalizes rather common issues of everyday economic events while ignoring the real EEG-induced redistribution effects, that is to say the EEG reallocation charge privilege for energy-intensive industries. These authors advise against drawing on partial analysis when discussing distribution-related issues of the EEG. A team of authors at the ZEW are concerned about the cost-effi ciency of the EEG which is the underlying reason for the recent discussions on distributional effects. The energy transition will entail large additional cost which will have to be carried. Increasing the effi ciency of governmental energy and climate policies will increase acceptance and attenuate distributional effects.