Reassessing the foreign ownership wage premium in Germany

This paper evaluates the effect of foreign takeover on wages of workers in German establishments, using rich linked employer–employee data from 2003 to 2014. To identify a causal effect of foreign takeover, we combine propensity-score matching with a difference-in-difference estimator. We find that a takeover by a foreign investor leads to a wage premium of 4.0 log points in the year after ownership change, which further increases to 6.3 log points 3 years after acquisition. The wage premium is largest for high-skilled workers, which is consistent with three theoretical arguments, namely rent appropriation by managers, technology protection and training on new technology. We also show that the wage premium does not pick up an exporter effect due to a platform investment of the foreign owner, that it takes about 4 years before it fully develops, that it does not vanish after foreign divestment and that the wage increase is specific to foreign acquisition instead of ownership change per se.     

Erneuerbare Energien in W?rmenetzen – eine realistische Perspektive?

The heating sector holds high potentials for cutting CO₂ emissions by using renewable energy. These potentials can be tapped either by substituting fossil fuels in individual heating units or by using renewable energy in district heating networks, which may be more efficient. This paper asks for the options to increase the share of renewable energy in Germany??s district heating infrastructure and for the restrictions that are hampering further development in this field. It critically discusses the relevant technical, political and economic challenges and determinants. District heating networks fuelled by renewable energy are not only competing with fossil fuels in individual heating units. They are also facing the more fundamental question regarding the preconditions for a profitable and worthwhile operation of grid-bound heat supply. The economic viability of heat grids has to be analyzed on a case-by-case basis, since it depends predominantly on individual framework conditions. Those include a decreasing heat demand due to improving energy performance of buildings, competing gas grids already in place and the complex interest structures of the actors involved. The growth rates that were observed in the last years were predominantly achieved in small renewably fuelled district heating networks. Even under favourable framework conditions, there is a need for additional supportive measures to increase the share of renewable energy in district heating grids. This mix of policy instruments should encompass measures to increase the implementation rates of municipal heat utilization concepts, measures to decrease the initial investments needed, as well as public relations to improve the user perception of grid-bound heat supply. However, the options to increase the share of renewable heat in existing large-scale grids are considered to be rather limited.     

Subject pool effects in price competition games: students versus professionals

Questioning the external validity of experiments that rely on student participants is an evergreen theme in experimental economics. Yet, there is ambiguous evidence of potential subject-pool bias. We add to the subject-pool debate by enlarging the set of experiments for which subject-pool differences have been studied. In a duopolistic Bertrand market setup designed to test for collusive behaviour, we test two treatments. The first is a baseline treatment, where participants cannot communicate with each other, while the second is a communication treatment in which participants are allowed to communicate. Each treatment is first conducted with students and then replicated with professionals. Our results show that student subjects and professionals differ significantly. However, these differences manifest themselves in quantitative rather than qualitative terms. Professionals do collude more, but their behavioural difference between treatments is similar. Students are thus a valid surrogate, if the research question is qualitative, but results generated by student samples should be handled with caution, if quantitative differences matter.     

The real impact of a one-off fiscal restriction: empirical evidence of a flypaper effect in Flemish municipalities

This paper analyses the effects of a one-off fiscal restriction on Flemish local government spending. The authors provide evidence of a ‘flypaper effect’: fiscal restriction stimulated the sensitivity of local spending to grants. This means that higher-level governments (regional/national/supranational) need to take a flypaper effect into account when considering one-off fiscal restrictions on lower-level governments.     

Front End Transfers of Digital Innovations in a Hybrid Agile-Stage-Gate Setting

Digital innovations often follow a more fluid innovation process and, therefore, require different ways of managing the front end of innovation. Agile as alternative to established front end management practices is often suggested, potentially combined with Stage-Gate, in what is called a hybrid Agile-Stage-Gate model, to reap the benefits from both. Implementing the hybrid model in the front end is however not sufficient for firms with separate Research and Development departments to succeed. In such organizations digital innovations still need to be transferred from Research, where the front end work on digital innovations takes place, to the Development department, where formal development actually starts. Yet, such front end transfers have been described as inefficient and ineffective. Realizing digital innovation front end transfers is likely even more challenging because of their fluid definition. In the absence of extant theory on front end transfers in such a setting, this research uses a case study approach to analyze the front end transfer experiences of the Research department of a firm in the lighting industry that is undergoing a transformation from traditional to digital lighting. The in-depth analysis of triangulated data on eight front end projects shows that Research struggles to transfer digital innovations to Development, because transfer practices in terms of management, scope, and synchronization, turn out to be inherently challenging in a hybrid Agile-Stage-Gate setting. Specifically, the results reveal that each transfer practice plays an intricate role in either facilitating (i.e., transfer management) or inhibiting (i.e., transfer scope and synchronization) front end transfers of digital innovations. The discovery of these opposing forces has important implications for novel theorizing on the use of Agile in the front end of digital innovation, transfer practices from Research to Development in a hybrid setting, as well as for theorizing about digital innovation management.     

Identity and entrepreneurship: do school peers shape entrepreneurial intentions?

We incorporate the concept of social identity into entrepreneurship and analyze the determinants of having entrepreneurial intentions. We argue that an entrepreneurial identity results from an individual’s socialization. This could be parental influence but, as argued in this paper, also peer influence. Based on Programme for International Student Assessment (PISA) 2006 data in which students report their entrepreneurial intentions at the age of 15, we find that having an entrepreneurial peer group has a positive effect on an individual’s entrepreneurial intentions. We find that the strength of the peer effect in a country is moderated by prevailing values, namely individualism.     

Beyond nudges: Tools of a choice architecture

The way a choice is presented influences what a decision-maker chooses. This paper outlines the tools available to choice architects, that is anyone who present people with choices. We divide these tools into two categories: those used in structuring the choice task and those used in describing the choice options. Tools for structuring the choice task address the idea of what to present to decision-makers, and tools for describing the choice options address the idea of how to present it. We discuss implementation issues in using choice architecture tools, including individual differences and errors in evaluation of choice outcomes. Finally, this paper presents a few applications that illustrate the positive effect choice architecture can have on real-world decisions.     

The Welfare Implications of the European Trucks Cartel

Intereconomics - This paper presents a pragmatic approach to calculating the total economic loss induced by a cartel, focusing on the European trucks cartel (1997–2011). This comprehensible...